Clark v. Feder, Semo & Bard, P.C.
| Decision Date | 23 July 2014 |
| Docket Number | Civil Action No. 07–470 JDB |
| Citation | 59 F.Supp.3d 114 |
| Parties | Denise M. Clark, Plaintiff, v. Feder, Semo & Bard, P.C., et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Allison C. Pienta, Stephen Robert Bruce, Stephen R. Bruce Law Offices, Washington, DC, John R. Ates, Ates Law Firm, P.C., Alexandria, VA, for Plaintiff.
James Charles Bailey, Jason H. Ehrenberg, Michael A. Tilghman, Bailey & Ehrenberg PLLC, Washington, DC, for Defendant.
Before the Court is [138] defendants Joseph Semo and Howard Bard's (collectively, “S & B”) motion seeking an award of attorney's fees for multiple years of litigation with plaintiff Denise Clark, pursuant to 29 U.S.C. § 1132(g) and 28 U.S.C. § 1927. S & B seek attorney's fees from both Clark and her counsel, Stephen R. Bruce. For the reasons discussed below, the Court will deny S & B's motion.
Clark was an attorney with the law firm of Feder, Semo & Bard, P.C. (“FS & B”) for almost ten years until she left the firm in 2002. In 2005, FS & B unexpectedly went out of business, and Clark received accelerated retirement benefits according to FS & B's retirement plan. She alleged that FS & B's plan had insufficient funds to pay out benefits according to the terms of the plan, and in 2007 she brought claims against FS & B, FS & B's retirement plan, and S & B individually, seeking recovery of unpaid retirement benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001. The Court dismissed some of Clark's claims but denied defendants' motion to dismiss the remaining claims. Clark v. Feder Semo & Bard, P.C., 527 F.Supp.2d 112 (D.D.C.2007). In March 2010, the Court granted summary judgment for defendants on all but one of Clark's claims, Clark v. Feder, Semo & Bard, P.C., 697 F.Supp.2d 24 (D.D.C.2010), but shortly afterwards, the Court reconsidered that decision and vacated the partial grant of summary judgment, Clark v. Feder, Semo & Bard, P.C., 736 F.Supp.2d 222 (D.D.C.2010). The Court then ordered Clark to file a statement clarifying the nature of her remaining claims, which had evolved over the course of the proceedings. See Order of Sept. 30, 2010 [ECF No. 85]. The case continued, and in September 2011 the Court granted summary judgment for defendants on two of these claims, see Clark v. Feder , Semo & Bard, P.C., 808 F.Supp.2d 219 (D.D.C.2011), but proceeded to trial on three remaining claims. The Court conducted a six-day bench trial and ultimately entered judgment for the defendants on all remaining claims. Clark v. Feder Semo & Bard, P.C., 895 F.Supp.2d 7 (D.D.C.2012). S & B then filed this motion to recover attorney's fees, but before it was fully briefed Clark appealed the judgment on the merits to the D.C. Circuit, which affirmed this Court's judgment. Clark v. Feder Semo & Bard, P.C., 739 F.3d 28 (D.C.Cir.2014). The motion for fees, which had been stayed pending the outcome of Clark's appeal, is now ripe.
S & B move to collect attorney's fees from Clark, under 29 U.S.C. § 1132(g), and from Clark's counsel, Stephen R. Bruce, under both 29 U.S.C. § 1132(g) and 28 U.S.C. § 1927. The Court will first examine whether S & B are entitled to attorney's fees from Clark, and then turn to the request for attorney's fees from Bruce.
ERISA provides that “in any action under this subchapter, ... 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 Eddy v. Colonial Life Insurance Co. of America, the D.C. Circuit set out five factors “as guidelines for the district court in deciding whether to award attorney's fees under ERISA.” 59 F.3d 201, 206 (D.C.Cir.1995).
Those factors are: “(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.” Id. This Court will examine each of the Eddy factors in turn.1
S & B begin by arguing that the first Eddy factor, bad faith or culpability, favors an award of attorney's fees because “Clark acted in bad faith ... in pursuing several of her claims and unreasonably prolonging the proceedings.” Defs.' Mem. Supp. Mot. for Att'y Fees ( ) [ECF No. 138–1] at 10. “The first factor ... is distinct from the fifth factor and focuses not on the relative merits of the parties' legal arguments and factual contentions, but on the nature of the offending party's conduct.” Eddy, 59 F.3d at 210. “[A] party moving for attorney's fees ... must demonstrate ‘evidence of intentional or reckless conduct’ to support a finding of bad faith.” Boland, 966 F.Supp.2d at 12 (quoting Eddy, 59 F.3d at 210 ). That is not to say, however, that the merits of the parties' legal arguments are irrelevant to whether a party acted in bad faith: arguments may be “so devoid of merit as to rise to the level of bad faith.” See Holland v. Williams Mountain Coal Co., 496 F.3d 670, 673 (D.C.Cir.2007).
Actions that courts consider to be taken in bad faith typically reflect a party's intent to confuse or mislead the court. Compare Finks v. Life Ins. Co. of N. Am., No. 08–1272, 2009 WL 2230899, at *4 (D.D.C.2009) (), and Becker v. Weinberg Grp., 554 F.Supp.2d 9, 16 (D.D.C.2008) (), with Holland, 496 F.3d at 676 (), and Boland, 966 F.Supp.2d at 12 ().
Here, S & B argue that Clark acted in bad faith by pursuing her claims because she allegedly “prolong[ed] the proceedings” and “attempt[ed] to drive up ... the cost of litigation” by “continually shifting the theories of her claims in an attempt to evade an adverse judgment,” and “attempting to add in non-parties to the litigation in an attempt to avoid summary judgment.” Defs.' Mot. at 10. To be sure, Clark's claims have been ambiguous, and this Court has, in the past, required her to clarify them. See Clark v. Feder, Semo & Bard, P.C., 736 F.Supp.2d 222, 234 (D.D.C.2010) ; see also Order of Sept. 30, 2010 [ECF No. 85]. Pursuing confusing or unclear claims, however, does not by itself constitute bad faith, and this Court was ultimately satisfied with Clark's efforts to clarify her claims. See Eddy, 59 F.3d at 210. The Court also does not view Clark's “shifting” theories as evidence of her intent to “prolong the proceedings.” Defs.' Mot. at 10. Instead, it reflects a certain level of ineptness. S & B must provide “evidence of intentional or reckless conduct,” and the Court is unconvinced that Clark's inexpert litigating rises to the level of “reckless” or bad faith conduct. Eddy, 59 F.3d at 210 ; see also Finks, 2009 WL 2230899, at *4 ; Becker, 554 F.Supp.2d at 16. Although Clark and her counsel may at times have been confused with respect to the legal theories pursued, they did not act with an intent to confuse or mislead the Court.
Similarly, this Court does not view Clark's attempt to join two third parties as evidence of bad faith. It is not clear that Clark attempted to join the non-parties “to avoid summary judgment,” as S & B argue. Defs.' Mot. at 11. Rather, it appears that Clark moved to join the third parties in response to a counterclaim by defendants. See Clark v. Feder Semo & Bard, P.C., 634 F.Supp.2d 99, 102 (D.D.C.2009). That counterclaim alleged that Clark was a fiduciary of the retirement plan and was responsible for any violation related to benefit distributions. Id. at 103. Clark responded by filing a third-party complaint against Much Shelist Denenberg Ament & Rubenstein, P.C. and the Pension Advisory Fund, two entities that provided legal and actuarial services to the retirement plan. Id. at 102. The third party complaint asserted claims against both entities for violations of ERISA and professional malpractice and sought indemnification from them. Id. at 103. Even though this strategy was not effective, it seems to be a reasonable response to the counterclaim in these circumstances. Thus, S & B have not shown that Clark's aim in attempting to join those parties was “to avoid summary judgment.” Defs.' Mot. at 11. Accordingly, the Court concludes that bad faith is not evident from the record, so this factor weighs against an award of attorney's fees.
The Court must also consider whether Clark is able to satisfy an award of attorney's fees. See Eddy, 59 F.3d at 206. In cases where a court does not have enough information to decide whether the losing party can satisfy the fee, this factor is neutral. See Risteen v. Youth for Understanding, Inc., No. 02–0709, 2003 WL 22011766, at *3 (D.D.C.2003) (). S & B argue that Clark is able to pay, yet there is very little evidence in the record to aid the Court in determining whether this is true. S & B provide Clark's prior work history, but this sheds little light on her current financial situation. See Defs.' Mot. at 11. Clark admits that she runs a law practice employing two associates, but she also claims that her income, based mostly on contingent fees, is too inconsistent to allow her to...
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...various absent third-parties, and pursuit of unclear or confusing claims, do not constitute bad faith. Clark v. Feder, Semo & Bard, P.C., 59 F. Supp. 3d 114, 118 (D.D.C. 2014) (Bates, J.). The Court agrees that actions taken with an intent to confuse or mislead a court during litigation con......