Opinion
Case No. 01-72992
January 9, 2004
ORDER
On September 25, 2003, this Court entered an Order in favor of the Plaintiff, Barbara King, who had sought to obtain an award of health plan benefits, pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. Thereafter, on October 8, 2003, she filed a motion for attorney fees and prejudgment interest, which is presently before this Court for consideration.
The Detroit Medical Center (DMC) did not file any response to King's motion until November 14, 2003.
For the reasons that have been set forth below, the Court will (1) reject the response of the DMC and (2) grant King's request for attorney fees and prejudgment interest.
I
The Local Rules for the United States District Court for the Eastern District of Michigan specify that "[a] response to a nondispositive motion must be filed within 14 days after service of the motion." E.D. Mich. LR 7.1(d)(2)(B). In this case, the DMC did not file any response to King's motion for attorney fees and prejudgment interest for more than 30 days. In the opinion of this Court, this late filing constitutes a gross violation of the Local Rules. Moreover, the DMC has not submitted any request for authority to file a tardy response or made any other effort to explain its failure to respond to King's motion in a timely manner.
Accordingly, the Court finds that the filing by the DMC of its response brief was not in compliance with the language or the spirit of the Local Rules of the Eastern District of Michigan. Hence, the response by the DMC response must be, and is, rejected.
II
The Court will now address King's motion for attorney fees and prejudgment interest. In Wells v. U.S. Steel, 76 F.3d 731 (1996), the United States Court of Appeals for the Sixth Circuit set forth the following standard for evaluating requests for attorney fees in ERISA actions:
District courts have discretion to shift attorney's fees in ERISA actions, although there are five factors that courts should consider:
(1) the degree of the opposing party's culpability or bad faith; (2) the opposing party's ability to satisfy an award of attorney's fees; (3) the deterrent effect of an award on other persons under similar circumstances; (4) whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA; and (5) the relative merits of the parties' positions.
No single factor is determinative. Rather the court should consider each before exercising its discretion.Id. at 736. (citing Armistead v. Vernitron Corp., 944 F.2d 1287, 1301 (6th Cir. 1991)).
Applying these factors to the case at bar, the Court must first consider the degree of the DMC's culpability or bad faith. On this issue, King argues, in reliance upon Hoover v. Provident Life and Accident Co., 290 F.3d 801 (6th Cir. 2002), that "[b]ad faith is not a prerequisite to an award of attorney fees." Pl.'s Br. Supp. Mot. for Att'y Fees at 3. The Hoover court upheld an award of attorney fees, even though the district court had not made a finding of bad faith. In Hoover, the district judge had determined that the defendant insurance carrier had a high degree of culpability, finding that the company's decision to reject the insured's request for coverage was arbitrary and capricious and based largely on the opinions of the doctors in its claim department. Id. at 809. King also relies upon Wells, supra at 736, in which the Sixth Circuit upheld an award of attorney fees because, in part, the defendant had taken many meritless positions, which, among other things, prolonged the litigation and resulted in increased attorney fees.
In this case, King maintains that the DMC's treatment of her claim and its behavior throughout this litigation provides clear evidence of culpable conduct. The Court agrees. In its September 25th Order, this Court determined that the DMC had acted arbitrarily and capriciously in denying King's claim. In so doing, the Court noted that the DMC never made the admission criteria for residential treatment, upon which it relied in its denial of her claim, available to King. Thus, the Court concluded that this failure to inform King of such an essential element of the benefit plan directly contradicted and constituted a gross violation of the statutory requirements of ERISA. It was also the determination of this Court that one of the asserted defenses in this case (namely, that King did not pursue local alternatives before seeking state treatment) was "particularly disingenuous," because the very terms of the Plan place that burden upon the DMC.
King further alleges that she has incurred considerable costs in (1) filing a motion to compel discovery, (2) identifying, clarifying and deciphering a coded and cryptic administrative record, and (3) replying and responding to the DMC's meritless defenses and positions. Following its review of the record in this case, the Court finds that the DMC's positions and defenses have unnecessarily prolonged this litigation. Thus, for all the reasons that have been provided above, the Court believes that a high degree of culpability is attributable to the DMC.
As an example, the Court notes that on September 22, 2003, the DMC filed three motions for "partial summary judgment" all of which were based on the same set of facts. Taken together, these motions were redundant and repetitive, and if granted, would have been dispositive of this entire case. Thus, the Court determines these three motions should have been filed in a single pleading. As such, these "litigation tactics" caused King to expend unnecessary time and costs.
The second factor that the Court must consider in awarding attorney's fees is the DMC's ability to satisfy the fee awarded. On this issue, the Court believes that the DMC, a regional hospital and trauma center in the City of Detroit, Michigan, has the ability to satisfy the fees requested.
With regard to the third factor, the Court concludes that the granting of an award of attorney fees in this case will have a deterrent effect on other entities under similar circumstances.
The fourth factor directs this Court to consider "whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA." In this case, King's claim for benefits was personal and did not confer a common benefit upon the other participants of the DMC health benefit plan. Moreover, this case has not involved any significant legal questions. Indeed, the clear violations of ERISA by the DMC in this case constitute the very basis upon which this Court found its conduct to have been highly objectionable.
Finally, the fifth factor (i.e., the relative merits of the parties' positions, which have been discussed throughout this Order), weighs heavily in favor of King.
III
King also seeks an award of prejudgment interest. District courts have broad discretion to award prejudgment interest to ERISA plaintiffs. See Tiemeyer v. Community Mut. Ins. Co., 8 F.3d 1094, 1102 (6th. Cir.), cert. denied, 511 U.S. 1005 (1994). In Wells, supra at 737, the Sixth Circuit said, with regard to an award of prejudgment interest, that "the decision to grant or deny prejudgment interest should hinge on whether to do so would further the congressional purposes underlying the obligations imposed by the statute in question. . . . Generally, the beneficiaries of pension plans have a right to prejudgment interest on benefits wrongly withheld."In this case, the Court determined that the DMC's decision was arbitrary and capricious. Therefore, inasmuch as the DMC wrongfully withheld benefits from King, she is entitled to receive interest on the amount of the benefits that were withheld from her.
IV
On the basis of this record and for the reasons that have been set forth above, King's request for attorney fees in the sum of $73,296.54 plus prejudgment interest is granted.
IT IS SO ORDERED.