United States District Court, S.D. New York
OPINION & ORDER
RICHARD J. SULLIVAN UNITED STATES DISTRICT JUDGE
before the Court is a motion filed by Interpleader-Plaintiff
PVH Corp. ("PVH") for reasonable attorneys'
fees and costs that it incurred in connection with this
litigation. (Doc. No. 16.) For the reasons set forth below,
PVH's motion is denied.
March 3, 2007, Steven Houle enrolled in an employee
retirement plan (the "Plan") administered by his
employer, PVH, and named his then wife, Leah Keith-Houle, as
his sole primary beneficiary. (Doc. No. 1
("Compl.") ¶ 10.) Although Mr. Floule and Ms.
Keith-Houle divorced on September 11, 2013, Mr. Houle never
changed his beneficiary election before he died on October 8,
2014. (Id. at ¶¶ 11-13; Doc. No. 1-3.) On
January 9, 2015, Mr. Houle's Estate filed an objection
with PVFI to any payout of the Plan's $48, 756.79 in
proceeds (the "Plan Proceeds") to Ms. Keith-Houle.
(Compl. ¶ 14.)
February 23, 2016, PVH, in its capacity as administrator and
fiduciary of an employee retirement plan covered by the
Employment Retirement Insurance Security Act of 1974
("ERISA"), initiated this action by filing a
Complaint seeking a declaratory judgment as to whether the
Estate or Ms. Keith-Houle was the proper beneficiary of the
Plan Proceeds. (Doc. No. 1.) On June 6, 20]6, the Court
issued an Order finding that Ms. Keith-Houle was the proper
beneficiary under the Plan and entered a declaratory judgment
to that effect. (Doc. No. 15 at 1 (citing Kennedy v. Plan
Adm 'rfor DuPont Sav. & Inv. Plan, 555 U.S. 285
(2009).) In addition, the Court directed PVH to file its
contemplated motion for attorneys' fees and a declaration
in support of the motion.
Court is now in receipt of PVH's unopposed motion for
$12, 066 in attorneys' fees and $637.87 in costs incurred
in connection with bringing this action, to be paid from the
Plan proceeds. (Doc. Nos. 16, 17 ("'Mem.").)
The Court is also in receipt of the declaration of Robert J.
Kipnees, which attaches PVH's attorneys'
contemporaneous time records. (Doc. No. 18.)
has discretion to award reasonable attorneys' fees and
costs in an interpleader action to: :”(1) a
disinterested stakeholder, (2) who had conceded liability,
(3) has deposited the disputed funds into court, and (4) has
sought a discharge from liability." Septemberlide
Pub,, B. V, v. Stein & Day, Inc., 884 F.2d 675, 683
(2d Cir. 1989); Estate of'Heiser v. Bank of Baroda,
N.Y. Branch, No. ll-cv-1602 (LGS), 2013 WL 4780061, at
*2 (S.D.N.Y. July 17, 2013). Even so, "'the decision
to award fees and costs is left to the sound discretion of
the district court, ' and 'courts need not award
attorneys' fees in interpleader actions where the fees
are expenses incurred in the ordinary course of
business.'" Guardian Life Ins. Co. v.
Gilmore, 45 F.Supp.3d 310, 320-21 (S.D.N.Y. 2014)
(quoting Metro. Life Ins. Co. v. Mitchell, 966
F.Supp.2d 97, 104 (E.D.N.Y. 2013)). Accordingly, courts
generally decline to award attorneys' fees and costs in
interpleader suits in connection with the payment of
insurance policies. Id. (collecting cases); see
also Travelers Indem. Co. v. Israel, 354 F.2d 488, 490
(2d Cir. 1965) ("We are not impressed with the notion
that whenever a minor problem arises in the payment of
insurance policies, insurers may, as a matter of course,
transfer a part of their ordinary cost of doing business of
their insureds by bringing an action for
interpleader."). This is particularly true where the
issues presented are "not complex, " the suit does
not present "any unique problems, " and only a
modest amount of funds are at stake. Feehan v.
Feehan, No. 09-cv-7016 (DAB) (THK), 20] 1 WL 497852, at
*8 (S.D.N.Y. Jan. 10, 2011). In fact, since an interpleader
relieves the company "of multiple suits" and
discharges the company from liability, courts have concluded
that ''such actions are brought primarily in the
company's own self-interest." Metro. Life Ins.
Co., 966 F.Supp.2d at 104-05 (alterations omitted). As a
result, "|s|everal courts" have applied the Second
Circuit's rationale in Travelers "beyond
the classic insurance context to disputes over pension
benefits, " finding that "[c]onflicting claims to
benefits owed to beneficiaries under an employee welfare
benefit plan ... are inevitable." Croskey v. Ford
Motor Co.-UAW, No. 01-cv-1094 (MBM), 2002 WL 974827, at
*10 (S.D.N.Y. May 6, 2002) (declining to award pension fund
attorneys' fees in interpleader case requiring resolution
of "conflicting claims to benefits, " which
"is an activity that a pension fund frequently
undertakes in its ordinary course of business").
it is true that PVH is a disinterested stakeholder who, faced
with competing claims by Keith-Houle and Houle's Estate
to the Plan Proceeds, offered to deposit the disputed funds
with the Court, and sought a discharge from liability by
bringing this action for a declaratory judgment. See
Septembertide Pub., B.V.. 884 F.2d at 683. Even so, as a
plan administrator, PVH must recognize that resolution of
conflicting claims to benefits is clearly an activity that it
must undertake in its ordinary course of business.
Furthermore, aside from the fact that Keith-Houle and
Houle's Estate declined to appear in this action (Mem.
4), PVH fails to point to any uniquely complicated issues
that were implicated in this litigation or "unique
problems" that it faced. Indeed, this case never
proceeded to discovery, was resolved without any motion
practice, and turned on a straightforward application of
United States Supreme Court precedent. (See Doc. No.
15); see also Croskey, 2002 WL 974827, at *10
(finding, in dispute over survivor benefits, that
"fn]either the record in this case, nor [fee
applicant's] arguments based upon that record, suggest
any extraordinary circumstances that make this dispute any
different from the types of disputes typically encountered by
pension funds"). The Court is particularly reluctant to
grant PVH's fee application given the very large
percentage (specifically, over 25%) of the Plan's very
modest proceeds that have been requested by PVH as attorneys
7 fees. See Hartford Life Ins. Co. v. Potiorff, No.
5:I3-cv-77 (MAD) (DEP), 2014 WL 1393751, at *7 (N.D.N.Y. Apr.
9, 2014) (declining to award fees in a "straightforward
interpleader action over a modest fund").
"Considering the equitable nature of interpleader relief
and the relatively small amount of funds available ... to the
vying claimants, ' 1 the Court finds that "it would
be unfair and inequitable to deplete" over 25% of the
Plan's proceeds by awarding them as attorneys' fees
and costs. See Unum Life Ins. Co. of Am. v. Scott,
No. 3:10-cv-538 (DJS), 2012 WL 233999, at *3 (D. Conn. Jan.
24. 2012) (alterations omitted) (holding similarly).
reasons set forth above, IT IS HEREBY ORDERED that PVH's
application for attorneys' fees and costs is DENIED. IT
IS FURTI1ER ORDERED that PVH shall serve copies of this Order
on the Interpleader-Defendants via first-class mail and to
file a certificate of such service no later than February 17,
2017. The Clerk is also ...