Plaintiff-Appellant Michael Alves challenged Sedgwick’s termination of his short-term disability benefits and denial of his application for long-term disability benefits under the Hewlett-Packard Comprehensive Welfare Benefits Plan. The district court, Judge R. Gary Klausner, granted judgment to the Plan. On November 19, 2019, the Ninth Circuit affirmed the denial of short-term disability benefits but vacated the decision affirming the denial of long-term disability benefits. Alves v. Hewlett-Packard Comprehensive Welfare Benefits Plan, 785 F. App’x 397 (9th Cir. 2019). The court remanded the matter to the district court with instructions to remand the claim to Sedgwick for it to redo its evaluation and correctly apply the terms of the Plan.
On remand, Sedgwick again denied Plaintiff’s LTD claim. Alves then moved to reopen his case and also sought attorneys’ fees. The district court re-opened the case but decided to postpone the decision on attorneys’ fees until after adjudication of the LTD claim. Alves v. Hewlett Packard Enter. Comprehensive Welfare Benefits Plan, No. 216CV09136RGKJEM, 2021 WL 1257938 (C.D. Cal. Jan. 8, 2021). The district court ultimately found that Sedgwick did not abuse its discretion in denying benefits. Alves v. Hewlett Packard Enter. Comprehensive Welfare Benefits Plan, No. 216CV09136RGKJEM, 2021 WL 1788398 (C.D. Cal. May 4, 2021), aff’d sub nom. Alves v. Hewlett-Packard Comprehensive Welfare Benefits Plan, No. 21-55476, 2022 WL 726928 (9th Cir. Mar. 10, 2022). Plaintiff appealed to the Ninth Circuit again, and the district court determined that it would be appropriate to adjudicate the claim for attorneys’ fees after the Ninth Circuit decided the appeal. Alves v. Hewlett Packard Enter. Comprehensive Welfare Benefits Plan, No. 216CV09136RGKJEM, 2021 WL 4732576 (C.D. Cal. June 28, 2021). Subsequently, the Ninth Circuit affirmed the decision. Alves v. Hewlett-Packard Comprehensive Welfare Benefits Plan, No. 21-55476, 2022 WL 726928 (9th Cir. Mar. 10, 2022). We wrote about this decision here.
Though he ultimately lost on the merits of his claims, Plaintiff asserted that his success in the first Ninth Circuit appeal (obtaining a remand to Sedgwick) made him eligible for an award of attorney’s fees under ERISA § 502(g). He sought $123,300 as a reasonable fee to award. The district court found that even if Plaintiff achieved a sufficient degree of success on the merits, the five factors set forth in Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980) weigh against awarding fees. Alves v. Packard, No. 216CV09136RGKJEM, 2022 WL 2318523, at *2 (C.D. Cal. June 17, 2022).
Plaintiff appealed to the Ninth Circuit again and the court affirmed the decision of the district court. Alves v. Hewlett-Packard Comprehensive Welfare Benefits Plan, No. 22-55621, 2023 WL 5973108 (9th Cir. Sept. 14, 2023). The court found that the district court did not abuse its discretion when it weighed the Hummell factors. First, the court found that Sedgwick did not act in bad faith or intentionally misinterpret the disability plan. And although Hewlett-Packard could pay the attorney’s fees, which weighs in favor of a fee award, the other factors did not weigh in favor. The court found that there would be no deterrent value of a fee award since the error was unintentional, Plaintiff did not bring the lawsuit to benefit others, and ultimately Plaintiff did not prevail. Balancing the factors, the court was left with no “definite conviction” that the district court made a clear error of judgment.
*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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