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Finks v. Life Insurance Company of North America

July 24, 2009


The opinion of the court was delivered by: Alan Kay United States Magistrate Judge


Upon consideration of the Plaintiff's Mini-Brief on Attorney Fees ("Mini-Brief") [20] and the Defendant's response thereto ("Response") [25], and for the reasons stated below, this Court finds that Plaintiff is entitled to recover her attorney's fees associated with litigation, but not fees associated with administrative proceedings. An appropriate Order accompanies this Memorandum Opinion.


Plaintiff Cynthia Finks ("Plaintiff") sued Defendant Life Insurance Company of North America ("LINA" or "Defendant") to compel LINA to pay her Long Term Disability benefits under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiff asserts that she first became ill with chronic Lyme disease on or about September 7, 2006, a condition that she alleges made her disabled. (Response at 1.) As a result of her disability, Plaintiff claimed that she was entitled to monthly disability benefits beginning on September 7, 2006, and ending on July 21, 2008, when she returned to work. (Id. at 1, 6.) According to Defendant, "the subject policy requires a 90-day elimination period[;] [thus], the benefits at issue are those from December 2006 through July 2008." (Response at 6.) LINA received Plaintiff's initial claim for disability benefits on February 7, 2007, and subsequently "sent [Plaintiff] a letter on April 17, 2007, informing her that her claim for long term disability ("LTD") benefits had been denied." (Id. at 1, 5.) In its denial letter, dated April 13, 2007, LINA stated that "[b]ased on medical information received, we find the available medical information does not provide consistent evidence to support significant functional impairment from performing your occupation." (Pl.'s Exh. 3 at 3.) Plaintiff subsequently submitted her appeal on October 9, 2007 (Response at 5), which was denied by LINA in January of 2008 (Id. at 5-6.) In its January 8, 2008 denial letter, LINA stated that "the office notes on file do not support a severity in symptoms to support [Plaintiff's] inability to work as a concert violinist." (Pl.'s Exh. 7 at 2.)

Plaintiff filed this civil action against Defendant on July 24, 2008. During the course of this litigation, on April 15, 2009, LINA approved Plaintiff's disability benefits and paid Plaintiff $121,217.52, representing LINA's calculations of disability benefits ($115,762.83) and interest ($5,454.69). (May 27, 2009 Mem. Op. [24] at 2.) Defendant claims that it eventually paid Plaintiff her benefits "based on input from counsel and the Court during the course of litigation." (Response at 6.) Plaintiff subsequently sought an additional $4,815.40 in interest. Plaintiff was awarded $4,082.37 in interest by the trial court after an adjustment was made using a variable interest rate rather than a fixed rate. (Mem. Op. [24] at 3-4.) Plaintiff now attempts to recover attorney fees, which include fees incurred during administrative (pre-litigation) and judicial proceedings.


The Employment Retirement Income Security Act of 1974 ("ERISA") provides that "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132(g)(1). In order to guide courts in exercising their discretion under this ERISA fee provision, the D.C. Circuit has articulated five factors for courts to consider. Eddy v. Colonial Life Ins. Co., 59 F.3d 201, 206 (D.C. Cir. 1995). The factors include: (1) the losing party's culpability or bad faith; (2) the losing party's ability to satisfy a fee award; (3) the deterrent effect of such an award; (4) the value of the victory to plan participants and beneficiaries, and the significance of the legal issue involved; and (5) the relative merits of the parties' positions. See i.e, Becker v. Weinberg Group, Inc., 554 F. Supp. 2d 9, 15 (D.D.C. 2008), citing Grand Union Co. v. Food Employers Labor Relations Ass'n, 257 U.S. App. D.C. 171 (D.C. 1987). In its adoption of these factors, the Sixth Circuit has weighed them so that "none of the five [... ] factors standing alone is determinative, a district court must consider each of the five factors before deciding whether or not to exercise its discretion." Schwartz v. Gregori, 160 F.3d 1116, 1119 (6th Cir. 1998). Moreover, a court can use these factors to weigh each side's argument in order to decide if fee-shifting is appropriate.



This Court begins its analysis of judicial proceeding fees by examining each of the five factors set forth in the Eddy case and determining whether these factors weigh in favor of Plaintiff's recovery of fees.

1. The losing party's culpability or bad faith

a. Defendant's Review of Medical Records

Plaintiff alleges that LINA created a false impression that it was seeking expert review of her appeal. (Mini-Brief at 7.) More specifically, Plaintiff asserts that LINA sent her two letters (dated December 7, 2007 and January 4, 2008) stating that its decision concerning Plaintiff's appeal was delayed because her file was "being referred for a medical review with a Medical Consultant." (LINA's letters attached as Pl.'s Exhs. 5, 6.) These letters did not mention that LINA needed additional information to make a decision on Plaintiff's appeal.*fn2 LINA's computer log shows that Plaintiff's case file was referred to the medical consultant on January 8, 2008, then referred back so quickly that it would have been impossible for a consultant to thoroughly review the content.*fn3 (Mini-Brief at 7.) In addition, the Medical Consultant's "conclusion" was noted by Diane Accetta ("Accetta"), the LINA Appeal Claim Manager who signed the denial letter, and not Dr. McCool, the medical consultant. (Id.) Plaintiff points out that Dr. McCool did not document any aspect of his review of the 200 page medical record and LINA proffers no evidence that Dr. McCool reviewed Plaintiff's file other than a notation by Accetta summarizing McCool's conclusion. (Id.)

Plaintiff also alleges that Dr. McCool was "neither an expert nor an outsider," which makes the term "consultant" misleading. (Id.) Dr. McCool's full-time job was in claim management at LINA. (Id. at 7-8.) Because of this, Plaintiff argues that there was no reason for LINA's repeated delays in responding to her appeal. (Id. at 8.) Plaintiff contends that these delays, coupled with "rubberstamping" or having another employee sign off with the medical consultant's name, show bad faith. (Id.)

In response, LINA states that "Plaintiff confuses the date and time of entry as meaning the date and time that the events took place." (Response at 10.) Defendant asserts that Dr. McCool not only thoroughly reviewed Plaintiff's claim file, but even questioned one aspect of her diagnosis.*fn4 (Id.) In addition, he reviewed the file thoroughly enough to determine that the appeal only referenced subjective or non-existent symptoms. (Id.) However, LINA's allegations that Dr. McCool reviewed Plaintiff's file are unsupported by record evidence and the fact that Dr. McCool's "review" ...

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