Peer v. Liberty Life Assurance Co. of Bos.

• Decision Date: 06 April 2021
• Docket Number: No. 19-13974,19-13974
• Parties: Theresa E. PEER, Plaintiff-Appellee, Paul Martin Sullivan, Jr., Interested Party-Appellant-Cross Appellee, v. LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, Defendant-Appellee-Cross Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

992 F.3d 1258

Theresa E. PEER, Plaintiff-Appellee,Paul Martin Sullivan, Jr., Interested Party-Appellant-Cross Appellee,

v.LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, Defendant-Appellee-Cross Appellant.

No. 19-13974

United States Court of Appeals, Eleventh Circuit.

April 6, 2021

Paul Martin Sullivan, Jr., Paul M. Sullivan Jr, LLC, Palm Beach Gardens, FL, for Plaintiff-Appellee.

Paul Martin Sullivan, Jr., Palm Beach Gardens, FL, Pro Se.

Lee W. Marcus, Marcus & Myers, PA, Orlando, FL, for Defendant-Appellee.

Before WILSON, LAGOA, and BRASHER, Circuit Judges.

BRASHER, Circuit Judge:

To resolve this appeal, we must decide whether the Employment Retirement Income Security Act's fee-shifting provision, 29 U.S.C. § 1132(g)(1), permits a court to award fees against a party's counsel. This issue is a question of first impression that has split the district courts within and without this circuit. Here, the district court held that ERISA's fee-shifting provision permits a fee award against counsel and awarded attorney's fees against Theresa E. Peer's counsel, Paul Sullivan, but not against Peer herself. Sullivan appealed the award, arguing that ERISA does not allow a fee award against counsel. Liberty Life Assurance Company of Boston cross-appealed, arguing that the district court erred by awarding fees only against Sullivan and not Peer too.

We agree with Sullivan that ERISA's fee-shifting provision in Section 1132(g)(1) cannot support a fee award against counsel. The function of this statute is not to sanction attorney misconduct. That role belongs to other provisions, such as 28 U.S.C. § 1927 and Federal Rule of Civil Procedure 11(c). But the court here relied exclusively on Section 1132(g)(1) when awarding fees. Because we reverse and vacate the court's fee award, we do not address Liberty Life's argument that the district court should have imposed fees against Peer. On remand, the court may consider whether a fee award is appropriate against Peer under ERISA or against Peer or Sullivan under another statute, rule, or the court's inherent authority.

I.

This appeal arises from litigation over Peer's ERISA-governed insurance policy. Liberty Life insures the policy's life insurance benefits. Under the policy's provisions, policyholders who are totally disabled are entitled to a waiver of policy premiums for the duration of their disability. Liberty Life denied Peer this benefit after determining that she was not disabled from "any occupation." Peer hired Sullivan as counsel to appeal that adverse benefits determination, but the decision was upheld on administrative appeal. Peer then filed a lawsuit against Liberty Life, seeking (1) a waiver of premium, (2) clarification of her right to future benefits, and (3) a reasonable claims procedure going forward. Five months after Peer filed her lawsuit, Liberty Life gave up: it reinstated her coverage and the waiver of premium benefit retroactive to the original termination date.

At that point, Liberty Life advised the court that it had mooted the only issue in Peer's pending motion for summary judgment. After considering the parties’ briefing, the court denied the motion as moot and also dismissed as moot Peer's claim for waiver of premium. The court then directed Peer to identify any remaining issues. After reviewing Peer's response, the court held that each issue identified was either rendered moot by the reinstatement of coverage under a waiver of premium or was "confusingly intertwined" with the mooted issues. The court closed the case but granted Peer leave to amend her complaint.

Peer filed an amended complaint that incorporated by reference all forty-six paragraphs of her original complaint. The amended complaint also added a second count that recited the procedural history of the case and rephrased the claims for relief that had previously been declared moot. The court struck the amended complaint for failing to comply with the court's local rules that prohibit incorporating previous pleadings without restating the averments. Peer then filed a second amended complaint that block-quoted the original complaint for Count I and repeated Count II verbatim.

The court remained confused as to why Peer was attempting to maintain the mooted action and consequently "utilized an unusual case management procedure and issued interrogatories directly to" Sullivan. The court asked Sullivan whether the case presented questions of law, capable of resolution on summary judgment, or whether only factual issues remained. Sullivan responded that legal issues remained for the court to address, so the court "set a status conference for [Sullivan] to explain to the [c]ourt, in person, what relief needed adjudication."

After the status conference, the court dismissed the claims in Count I and granted judgment on the pleadings as to Count II. The court held Count I was moot and Count II was not ripe because Peer was seeking an advisory opinion about her rights if Liberty Life were to render an adverse benefits determination in the future. Peer appealed, and this Court affirmed. Peer v. Liberty Life Assur. Co. of Boston , 758 F.App'x 882, 884–85 (11th Cir. 2019). This Court held that "Peer has already received the relief that she seeks, and ‘there is no further relief that the Court can award [Peer].’ " Id. at 884. And we agreed that any claim for adjudication of the right to future benefits was unripe. Id.

On remand, Liberty Life and Peer moved for attorney's fees under 29 U.S.C. § 1132(g)(1). The district court granted both motions in part. It awarded Peer attorney's fees for work performed from the commencement of her suit until her policy was reinstated. It awarded Liberty Life attorney's fees incurred for any work performed after the reinstatement of Peer's policy, including fees for litigating the appeal. The court directed Liberty Life to pay Peer's fees, and Sullivan, not Peer, to pay Liberty Life's fees. The court entered the fee award against Sullivan for two reasons: (1) if Sullivan "had brought [Peer's] claims with cogent clarity, this case would have ended soon after August 2, 2017," but Sullivan kept the court in a "systemic state of confusion" and caused Liberty Life to expend "considerable resources"; and (2) Sullivan had thirty years of ERISA experience and "should have known that [Peer's] case was moot and that there was no further justiciable controversy between the parties."

Peer filed a motion to alter judgment, but the court denied it within the hour and without a response from Liberty Life. Sullivan timely appealed. Liberty Life cross-appealed the fee order, arguing that the court erred in assessing attorney's fees solely against Sullivan but not Peer.

II.

We review a court's decision to award fees or to issue sanctions for an abuse of discretion. Sierra Club v. Hankinson , 351 F.3d 1358, 1361 (11th Cir. 2003) (attorney's fees); Amlong & Amlong, P.A. v. Denny's, Inc. , 500 F.3d 1230, 1237–38 (11th Cir. 2007) (sanctions). A court abuses its discretion if it acts contrary to the law. See Amlong , 500 F.3d at 1238 (citing Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990) ).

III.

ERISA's fee-shifting statute 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). The question for us is whether a court has discretion under this statute to require an attorney to pay another party's fees. We hold that it does not. We believe that this statute is best understood to authorize fee awards against parties, not their counsel. This is so for several reasons.

First, this reading accords with common law principles that inform our interpretation of the statute. Our legal system is based on the "bedrock principle" of the American rule, which presumes that each party will pay its own attorney's fees. Hardt v. Reliance Std. Life Ins. Co. , 560 U.S. 242, 252–53, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010). Under our common law, the judiciary does not have "roving authority ... to allow counsel fees ... whenever the courts might deem them warranted." Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res. , 532 U.S. 598, 610, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001). Congress may override common-law rules, even bedrock ones, but it must do so explicitly. See id. at 602, 121 S.Ct. 1835 ; see also Antonin Scalia & Bryan Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 318 (2012). Because the American Rule has deep roots in our common law, see Arcambel v. Wiseman , 3 U.S. (3 Dall.) 306, 1 L.Ed. 613 (1796), we must read fee-shifting statutes strictly "with a presumption favoring the retention of long-established and familiar [legal] principles." Fogerty v. Fantasy, Inc. , 510 U.S. 517, 534, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). See also Shaw v. Merchants’ Nat'l Bank , 101 U.S. 557, 565, 25 L.Ed. 892 (1879).

Applying these principles to Title VII of the Civil Rights Act, we held that Title VII's fee-shifting provision does not support an attorney's fee award against counsel. Durrett v. Jenkins Brickyard, Inc. , 678 F.2d 911, 915 (11th Cir. 1982). That statute, like the ERISA provision at issue here, provides for an award of fees without specifying who is supposed to pay. See 42 U.S.C. § 2000e-5(k) ("[T]he court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee ... as part of the costs."); 42 U.S.C. § 1988(b) ("[T]he court, in its discretion, may allow the prevailing party ... a reasonable attorney's fee as part of the costs."). Because "[n]either § 1988 nor § 2000e-5(k) makes any mention of attorney liability for costs and fees," Roadway Express, Inc. v. Piper , 447 U.S. 752, 761, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980), we held that the statute "authorizes attorney's fees only against litigants, not against counsel." Amlong , 500 F.3d at 1238. Other courts have relied on similar reasoning to disallow fee awards against attorneys in a ...