In re Olick, Bky. No. 07-10880(ELF) (Bankr. E.D. Pa. 8/12/2008), Bky. No. 07-10880(ELF)
| Decision Date | 12 August 2008 |
| Docket Number | Adv. No. 07-060,Bky. No. 07-10880(ELF),Adv. No. 07-052 |
| Parties | IN RE: THOMAS W. OLICK, Chapter 13, Debtor. THOMAS W. OLICK, Plaintiff, v. JAMES KEARNEY, et al., Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Before me is a dispute regarding the amount of costs to be taxed in favor of a plaintiff who has accepted an Offer of Judgment under Fed. R. Bankr. P. 7068 from one of the defendants in the above adversary proceedings.
In February 2007, Plaintiff Thomas W. Olick ("Mr. Olick") initiated two (2) separate adversary proceedings in this court against Defendants Knights of Columbus ("the Knights"), James Kearney, Thomas Jenkins (the Knights, Kearney and Jenkins referred to collectively as "the Knights Defendants") and Aetna Life Insurance Co. ("Aetna"). The adversary proceedings were later consolidated for trial.
In March 2008, the court granted in part and denied in part the respective summary judgment motions of the Knights Defendants and Aetna, dismissing Jenkins as a party defendant and dismissing a number of Mr. Olick's claims. Shortly thereafter, Mr. Olick accepted an Offer for Judgment Aetna tendered.
Although Mr. Olick and Aetna resolved the merits of claims raised in these adversary proceedings, they were unable to agree on the costs to be taxed under Fed. R. Bankr. P. 7054. This (hopefully) last dispute between Mr. Olick and Aetna has generated several lengthy written submissions by the parties and an evidentiary hearing. By the time this matter was taken under advisement, Mr. Olick's demand for taxation of costs had risen to $40,151.44.
For the reasons set forth below, I will deny most of Mr. Olick's request for taxation of costs. Costs will be taxed in the amount of $1,349.50.
Prior to the initiation of the adversary proceedings, the parties engaged in litigation involving the same claims in the U.S. District Court for the Eastern District of Pennsylvania. The District Court litigation generated a reported decision, Olick v. Kearney, 451 F.Supp.2d 665 (E.D. Pa. 2006) ("the District Court Case"), in which the Defendants' motions to dismiss the complaint were granted in part and denied in part.
The existence and disposition of the District Court Case is relevant to the dispute between Mr. Olick and Aetna regarding allowable costs and in Part III.A, infra, I will further discuss the District Court Case. In the meantime, I quote a passage from the District Court Case because it provides a concise summary of the underlying factual background of the dispute among the parties:
In June 1995, Plaintiff Thomas Olick entered into an employment contract ("the Contract") with Defendant Knights of Columbus ("Knights") whereby Knights authorized Plaintiff to sell its insurance products to members of five Knights of Columbus Councils. Shortly after signing the Contract, Plaintiff became eligible for and purchased group health insurance for his wife and children from Defendant Aetna Life Insurance Company ("Aetna"). Plaintiff paid all required premiums for this insurance until February 15, 2006.
Beginning in February 2005, Plaintiff's relationship with Knights, and especially with Defendant James Kearney ("Kearney"), Knights' general agent, began to sour. Plaintiff alleges that, over the next year, Defendants Knights and Kearney reduced Plaintiff's sales territory without reducing his sales quota, and acted in numerous other ways to sabotage his sales efforts (e.g., by withholding information regarding Plaintiff's territory, failing to inform Plaintiff of his customers' overdue premiums, punishing Plaintiff for his opposition to illegal sales practices, and refusing to approve policies written by Plaintiff). Plaintiff further alleges that Knights improperly reduced his commissions on two occasions, and that Defendant Thomas Jenkins ("Jenkins"), a fellow Field Agent for Knights, unlawfully took over his former sales territory and interfered with his sales efforts.
Despite these clashes with his colleagues and superiors, Plaintiff claims that he was never formally terminated, and thus never became ineligible for his group health insurance. Yet the COBRA Notice (dated February 28, 2006) that Plaintiff received from Knights on March 1, 2006 indicates that Plaintiff was fired on November 1, 2005. In any case, Plaintiff alleges that after March 1, 2006, Defendant Aetna informed Plaintiff that he and his family were no longer covered and refused to pay more than $3,000 in medical bills that should have been covered by his group health insurance plan. Soon thereafter, Plaintiff appealed Aetna's claims decisions orally and in writing, but received no response.
Id. at 669-70 () (footnote omitted).
The procedural history of the litigation between Mr. Olick and Aetna that culminated in the Rule 7068 Judgment in the above adversary proceeding is germane to the issues before me. Therefore, I will describe that history in some detail.
On February 15, 2006 Mr. Olick filed a complaint in the Court of Common Pleas, Northampton County against the Knights and an individual defendant, James Kearney. In that Complaint, Mr. Olick asserted claims for breach of contract, age discrimination, breach of fiduciary duty, job discrimination and negligence. On March 13, 2006, before Defendants Knights and Kearney responded to the Complaint, Mr. Olick amended the Complaint to add Aetna as a Defendant. In the state court litigation, and in all of the litigation in federal district court and in this court, Mr. Olick has acted pro se.
On April 11, 2006, Aetna, with the consent of the Knights and Kearney, removed the state court action to federal court, thereby commencing the District Court Case, referenced in Part II, supra.1 Subsequently, Mr. Olick again amended the Complaint to add another individual defendant (Thomas Jenkins). On September 11, 2006, the District Court granted in part, and denied in part, the respective Motions to Dismiss of Defendants Kearney, Jenkins and Knights and Defendant Aetna. See Olick v. Kearney, 451 F.Supp.2d at 680-81.
On November 29, 2006, Aetna served an Offer of Judgment on Mr. Olick pursuant to Fed. R. Civ. P. 68 ("the Rule 68 Offer"). The Rule 68 Offer provides, in its entirety:
Pursuant to Federal Rule of Civil Procedure 68, Defendant Aetna Life Insurance Company submits this Offer of Judgment in full and complete satisfaction of your claims against Aetna, including reasonable costs accrued to date in connection with your claim as against Aetna, such amount to be agreed upon by the parties or determined by the Court's normal procedure for costs should the parties fail to reach such agreement.
Pursuant to the Judgment, Aetna will retroactively deem that the member eligibility status for health benefits coverage under the Knights of Columbus health benefits plan ("the Plan") is in place for the period from November 1, 2005 through March 1, 2006, for you, as well as for Kathryn Olick, David Olick and Matthew Olick even though they are not parties to this action. Accordingly, benefits claims for that period will be considered to be in the eligible status for coverage pursuant to the terms of the Plan as if there had been no termination as of November 1, 2005. Also, Aetna will not seek reimbursement from you, your dependants [sic] and your/their providers for benefits Aetna has previously paid for that period. To the extent Aetna may have already recovered from providers any such amounts if paid as benefits, Aetna will reimburse those providers such amounts as if coverage under the Plan was effective for that time period. Aetna will also reimburse you and your dependants [sic] for out-of-pocket expenses incurred during that time period for prescriptions and/or services which would have been covered as benefits under the Plan had coverage been in effect from November 1, 2005 through March 1, 2006, upon specific showing of such expenses.
Mr. Olick did not accept the Rule 68 Offer.
On February 13, 2007, Mr. Olick filed a motion under Fed. R. Civ. P. 41 to voluntarily dismiss the District Court Case. At that time, the deadline for completion of discovery was February 26, 2007 and trial was scheduled for April 2, 2007.2 Over the Defendants' objections,3 the District Court granted Mr. Olick's Rule 41 motion and dismissed the District Court Case on February 20, 2007.
1. proceedings prior to the court's ruling on summary judgment
Meanwhile, on February 9, 2007, four (4) days before filing the Rule 41 motion in the District Court Case, Mr. Olick commenced a chapter 13 bankruptcy case in this court, docketed at Bky. No. 07-10880. On February 21, 2007, the day after the dismissal of the District Court Case, Mr. Olick filed an adversary complaint in this court against the Defendants, docketed as Adv. No. 07-052.4 On February 28, 2007, Mr. Olick filed a second adversary complaint in this court against the Defendants, docketed as Adv. No. 07-060.5 The two (2) adversary complaints asserted the same claims as those set forth in the District Court Case.
In this court, with the consent of the parties, the two (2) adversary proceedings were consolidated for trial under Adv. 07-60 by orders dated May 31, 2007. I will refer to the consolidated proceedings as "the AP."
Both the Knights Defendants and Aetna filed motions to dismiss the AP. On June 26, 2007, I issued an order granting in part, and denying in part, the Defendants' motions. See AP Docket Entry No. 73. In effect, the June 26th Order narrowed the claims in the AP to those that had survived the motions to dismiss in the District Court Case (in the reported decision cited above) and renumbered them for clarity's sake in the consolidated proceeding. The...
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