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District Court Awards Post-Judgment Interest And Reasonable Attorneys’ Fees and Costs To Plaintiff As Prevailing Party In ERISA Disability Action

In Reynolds v. Life Insurance Company of North America, No. C21-1424 TSZ, 2023 WL 8717164 (W.D. Wash. Dec. 18, 2023), on ERISA post-judgment motions, Washington Western District Judge Thomas S. Zilly denied Plaintiff’s motion to amend the judgment with respect to calculation of short-term and long-term benefits, but granted Plaintiff’s motion for prejudgment interest and attorneys’ fees.

During Plaintiff’s employment she was a participant in an ERISA employee benefit plan, which included both short-term disability (“STD”) and long-term disability (“LTD”) benefits insured under policies issued by Life Insurance Company of North America (“LINA”). In or about October 2019, Plaintiff initiated a claim for disability benefits with LINA. LINA eventually approved Plaintiff’s claim for STD benefits, but denied her LTD claim, thus prompting the instant action. On cross-motions for judgment, the Court entered judgment in favor of Plaintiff, who then filed the pending motions.

In the motion to amend the judgment Plaintiff sought a clarifying order that her STD and LTD benefits were to be calculated based on her 2015 annual salary. The Court denied the motion finding that Plaintiff failed to challenge the calculation during the administrative process or in the litigation. The Court further explained that Plaintiff failed to demonstrate that (1) all of her taxable income in 2015 originated from her employment; (2) that the higher figure she advocates for consisted solely of her base salary (and not overtime or bonuses, etc.); and (3) that her employer reported that figure to LINA.

In the motion for prejudgment interest and attorneys’ fees, Plaintiff sought interest on unpaid benefits at a rate of 5.46%. LINA did not dispute that Plaintiff was entitled to prejudgment interest and the Court found that the interest rate was appropriate. With regard to Plaintiff’s request for attorneys’ fees, the Court agreed that Plaintiff had achieved “some success on the merits” pursuant to Hartford v. Reliance Standard Life, 560 U.S. 242, 255 (2010). The Court next applied the factors outlined by the Ninth Circuit in Hummell v. S.E. Rykoff & Co., 634 F.2d 446 (9th Cir. 1980), to determine an award of attorneys’ fees. Plaintiff argued she was entitled to fees and costs because (1) LINA “was culpable” even though LINA did not operate in bad faith; (2) LINA has the ability to satisfy an award of fees; (3) an award of fees “would warn potential defendants to thoroughly investigate claims” and “encourage insurance companies to identify the specific reasons for denying claims at the administrative level;” and (4) Plaintiff’s position was relatively more meritorious.

LINA argued that: (1) the first Hummell factor weighs in its favor because Plaintiff concedes there was no bad faith; (2) an award of fees “would not act as a deterrent to others because of the exceptional circumstances and facts of this case, which are unlikely to be repeated;” (3) the fourth Hummell factor weighs in its favor “because the Plaintiff is not benefiting all plan participants;” and (4) both its position and Plaintiff’s position had merit.  The Court analyzed the factors and found they weighed in favor of awarding Plaintiff reasonable fees and costs with a reduction in the fee award. Plaintiff sought attorneys’ fees of $135,780 based on a $600 hourly rate and 226.3 hours. Applying a hybrid lodestar/multiplier approach, the Court determined that the prevailing market rate in the Seattle area for a single-plaintiff ERISA case was between $325 and $500 and concluded that a rate of $500 was reasonable for this case based on Plaintiff counsel’s 30 years of experience. The Court reduced the total number of billed hours by 16.7 hours, subtracting time for double-billed mediation and post-judgment tasks resulting in a lodestar amount of $94,320 for 188.64 hours at a rate of $500 per hour, and costs in the amount of $2,286.08.

If LINA or your insurance company has denied or terminated your disability claim, contact us for assistance.


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*Please note that this blog is a summary of a reported legal decision and does not constitute legal advice. This blog has not been updated to note any subsequent change in status, including whether a decision is reconsidered or vacated. The case above was handled by other law firms, but if you have questions about how the developing law impacts your ERISA benefit claim, the attorneys at Roberts Disability Law, P.C. may be able to advise you so please contact us.

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