Cross v. The Qwest Disability Plan

• Court: U.S. District Court — District of Colorado
• Writing for the Court: Kathleen M Tafoya
• Decision Date: 30 December 2010
• Docket Number: Civil Action No. 08-cv-00516-PAB-KMT
• Citation: Cross v. Qwest Disability Plan, Civil Action No. 08-cv-00516-PAB-KMT (D. Colo. Dec 30, 2010)
• Parties: ROBIN F. CROSS, Plaintiff, v. THE QWEST DISABILITY PLAN, also known as and operating under the designation of Qwest Disability Services, and formerly known as the US West Disability Plan, and QWEST COMMUNICATIONS INTERNATIONAL INC., also known as Qwest Inc., Defendants.

ROBIN F. CROSS, Plaintiff,

v. THE QWEST DISABILITY PLAN, also known as and operating under the designation of Qwest Disability Services, and formerly known as the US West Disability Plan, and QWEST COMMUNICATIONS INTERNATIONAL INC., also known as Qwest Inc., Defendants.

Civil Action No. 08-cv-00516-PAB-KMT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Dated: December 30, 2010

Magistrate Judge Kathleen M. Tafoya

ORDER

This matter is before the court on "Plaintiff's Verified Motion for Attorney's Fees and Costs" [Doc. No. 116 (sealed)¹] (hereinafter "Motion") filed on May 19, 2010. The Defendants filed their "Response to Plaintiff's Verified Motion for Attorney's Fees and Costs" [Doc. No. 122] (hereinafter "Response" or "Resp.") on June 14, 2010. Thereafter, Plaintiff filed a Reply [Doc. No. 126] on June 18, 2010. The matter was referred to this court by District Judge Philip A. Brimmer on October 26, 2010 and a hearing was held on the motion on November 9, 2010. At that time the court took the matter under advisement.

Thereafter, Plaintiff filed "Plaintiff's Attorney's Second Supplemental Legal Services Affidavit" [Doc. No. 138-2] (hereinafter "Second Affidavit") as well as "Plaintiff's Attorney's Third Supplemental Legal Services Affidavit" [Doc. No. 146] (hereinafter "Third Affidavit"). The Second Affidavit concerned billing for legal services between June 18, 2010 and November

19, 2010, the date of the filing of the Second Affidavit. The filing of the Second Affidavit triggered a response from the defendants [Doc. No. 141] and a reply from Plaintiff [Doc. No. 144]. The Third Affidavit was filed on December 21, 2010 and to date no response has been filed by the Defendants. The Third Affidavit addresses billings from expert witness Sawn E. McDermott for services rendered on October 29, November 8 and November 9, 2010.

BACKGROUND

Plaintiff filed her original ERISA Complaint in Denver District Court on December 20, 2007, asserting wrongful denial of disability benefits under Qwest's ERISA Plan (hereinafter "Plan"). [Doc. No. 2.] Defendants removed the case to this Court on March 13, 2008 and filed their Answer on April 2, 2008. [Doc. No. 9.]. The Administrative Record was filed on August

20, 2008 [Doc. No. 23] and motions and other discovery issues were addressed thereafter. Prior to initial briefing on the merits which was due to begin on January 15, 2009, the parties began negotiating in earnest and notified the court on January 15, 2009 they had reached a settlement. On January 16, 2009, the parties entered into a Confidential Settlement Agreement Regarding Disability Benefits [Doc. No. 116-1] (hereinafter "Settlement Agreement" or "Setl. Agr.").

The settlement entered into by the parties contemplated the retention of two independent medical examinations ("IMEs") of Plaintiff, with separate medical professionals charged withevaluating Plaintiff's then current medical and mental health condition. (Setl. Agr.}} 2.) Defendants were to pay for both of the IMEs, although the parties would jointly select the providers. (Id.) The parties agreed that if one or both of the medical providers conducting the IMEs opined that Plaintiff was disabled, Defendants would grant disability benefits retroactive to the date of the original denial and would place Plaintiff on the Plan as disabled going forward. (Id. at ¶ 3.) The IMEs were completed in May 2009 and both medical professionals concluded that Plaintiff is disabled under the Plan. (Mot., Ex. 2.)

Upon the findings in the IMEs, and pursuant to the Settlement Agreement, Defendants outlined in a September 24, 2009 letter to Plaintiff's counsel the disability benefits payable to Plaintiff. (Resp., Ex. A) Several months later on December 10, 2009, the Plan provided a more detailed explanation of the benefits structure directly to Plaintiff. (Id., Ex. C). Plaintiff received a lump sum payment of her back benefit payment in late December 2009 and began receiving a monthly disability payments in early 2010. (Id.)

The Settlement Agreement provided that in the event Plaintiff was found to be disabled and qualified for disability payments under the Plan, Defendants would pay Plaintiff's reasonable attorney's fees incurred in the pursuit of her disability benefits under ERISA, Title 29 U.S.C.

§ 1132(g). (Setl. Agr. at § 3(c).) That section of the Settlement Agreement reads

c. Legal expenses: Defendants will also pay the reasonable attorney's fees and expenses of Cross for her pursuit of disability benefits promptly after a determination by one or both of the medical evaluators that she is currently disabled. Cross will cause her legal counsel to be cooperative in disclosing and documenting the legal services for consideration by defendants. Defendants willpromptly and reasonably consider the services and the asserted amounts for reasonable attorney's fees in conjunction with standards for allowance of attorney's fees for claims for benefits under ERISA, 29 USC § 1132(g).² The parties will promptly examine the question of reasonable attorney's fees for the services of Cross' counsel to reach an agreement about reasonable attorney's fees to be paid by defendants within 30 days after the determination of disability. In the absence of agreement by the parties, the parties will have the matter of reasonable attorney's fees under ERISA submitted to the District Court for ruling on the amount of fees and expenses by the U. S. Magistrate Judge assigned to the litigation. In that event attorney's fees and legal expenses will be determined through a motion, affidavit, documentation, and, if necessary hearing before the U.S. Magistrate Judge under this Settlement Agreement. The parties agree that the decision by the U. S. Magistrate Judge will be final and binding and defendants will promptly pay the amount to plaintiff's counsel.

(Setl. Agr. at ¶ 3(c).)

Title 29 U.S.C. § 1132(g)(1) gives courts discretionary authority to award reasonable attorney's fees and costs in an ERISA action. Although fees are not awarded as a matter of course, Gordon v. U.S. Steel Corp., 724 F.2d 106, 108 (10th Cir. 1983), in this case the parties are in agreement that reasonable attorney's fees and costs will be awarded as a result of the parties' Settlement Agreement. The question before the court concerns the reasonableness of the plaintiff's demand.

DEMAND

Plaintiff's Motion originally demanded attorney's fees in the amount of $115,000 plus costs and expert witness fees based on the Contingent Fee Agreement in place between Plaintiff and her counsel. (See Mot., Ex. 9, Contingent Fee Agreement.) However, as part of his Reply and more emphatically at the November 2010 hearing, Plaintiff's counsel conceded that an award of a contingent fee for a proceeding under ERISA was improper.³ Instead, Plaintiff's counsel now seeks reimbursement for approximately 239.5 hours of his professional time to be charged at the rate of $500.00 per hour rather than at his normal billing rate of $290.00 per hour, for a total of $119,750.00.⁴ Plaintiff relies upon a case from this district, DeGrado v. Jefferson Pilot Financial Ins. Co., No. 02-cv-01533-WYD-BNB, 2009 WL 1973501, at *10 (D. Colo. July 6, 2009), in support of her claim. Additionally, Plaintiff seeks reimbursement of costs in the amount of $413.76, reimbursement for expert witness fees in the amount of $3,210.00 for Shawn McDermott, whom Plaintiff presented on the issue of reasonable attorney's fees in ERISA cases, and reimbursement for $1,224.00 for the services of a law clerk helping with work on the case.

Defendants do not object to the hourly billing rate of Plaintiff's counsel of $290.00 per hour; however, they do object to the court allowing the rate to be inflated to $500.00 per hour based on DeGrado. Further, Defendants object to certain categories of billed hours as being non-compensable, including time spent in the administrative phase of the case prior to the commencement of litigation, clerical and other administrative tasks billed at senior attorney rate, attorney time spent after the determination that Plaintiff would receive disability benefits under the Plan, any costs associated with Plaintiff's expert, Shawn McDermott, and the excessive fees attributable to pursuit of an attorney fee award by this court.

LEGAL STANDARD

"The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). "This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." Id. In other words, "[t]o determine the reasonableness of a fee request, a court must begin by calculating the so-called 'lodestar amount' of a fee, and a claimant is entitled to the presumption that this lodestar amount reflects a 'reasonable' fee." Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998) "The lodestar calculation is the product of the number of attorney hours 'reasonably expended' and a 'reasonable hourly rate.'" Id.

The party seeking an award of fees should submit specific evidence supporting the hours worked and rates claimed. Hensley, 461 U.S. at 433. The Tenth Circuit has noted that "[c]ounsel for the party claiming the fees has the burden of proving hours to the district court bysubmitting meticulous, contemporaneous time records that reveal, for each lawyer for whom fees are sought, all hours for which compensation is requested and how those hours were allotted to specific tasks." Case v. Unified School Dist. No. 233, 157 F.3d 1243, 1250 (10th Cir. 1998). "A district court is justified in reducing the reasonable number of hours if the attorney's time records are 'sloppy and imprecise' and fail to document adequately how he or she utilized large blocks of time." Id.; see also Robinson, 160 F.3d at 1281 ("a district court may discount requested attorney...