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January 16, 1998


The opinion of the court was delivered by: BUCKLO

 In a previous opinion I found First UNUM Life Insurance Company's ("UNUM") decision to deny Judith Perlman disability benefits arbitrary and capricious. Perlman v. Swiss Bank Corp. Comprehensive Disability Protection Plan, 979 F. Supp. 726, 1997 WL 619871 (N.D. Ill. 1997). I remanded Ms. Perlman's case to UNUM, the plan administrator, for a redetermination of whether she is owed disability benefits. Ms. Perlman moves for an award of attorney's fees, costs, and expenses. For the following reasons, the motion is granted.

 Prevailing Party

 The Employee Retirement Income Security Act ("ERISA") gives me discretion to award reasonable attorney's fees and costs. 29 U.S.C. § 1132(g)(1). To recover fees and costs, Ms. Perlman must first establish she is the "prevailing party" in this litigation. Janowski v. International Bhd. of Teamsters Local Number 710 Pension Fund, 812 F.2d 295, 297 (7th Cir. 1987). In ERISA cases, a "prevailing party" is determined using the same standard set forth under 42 U.S.C. § 1988. Id. A plaintiff is considered a "prevailing party" if she "'succeed[s] on any significant issue in litigation which achieves some of the benefit the party sought in bringing suit.'" Hensley v. Eckerhart, 461 U.S. 424, 433, 76 L. Ed. 2d 40, 103 S. Ct. 1933 (1983)(quoting Nadeau v. Helgemoe, 581 F.2d 275, 278-79 (1st Cir. 1978)). "The plaintiff must be able to point to a resolution of the dispute which changes the legal relationship between itself and defendant." Texas State Teachers Ass'n v. Garland Indep. Sch. Dist., 489 U.S. 782, 792, 103 L. Ed. 2d 866, 109 S. Ct. 1486 (1989). More specifically, "whatever relief the plaintiff secures must directly benefit him at the time of the judgment or settlement." Farrar v. Hobby, 506 U.S. 103, 111, 121 L. Ed. 2d 494, 113 S. Ct. 566 (1992).

 I find Ms. Perlman is a prevailing party. Ms. Perlman filed suit seeking to overturn the denial of her disability benefits. I found that UNUM's denial of benefits was arbitrary and capricious and remanded the case for a "new determination" of disability benefits. Perlman, 1997 WL 619871 at *5. In doing so, I found "serious flaws in UNUM's decision-making process" and ordered UNUM to seek "outside expert assistance in reviewing Ms. Perlman's claim." Id. While I did not grant Ms. Perlman the greatest relief possible, an award of disability benefits, I did grant her a judgment that was a direct benefit: a new and procedurally proper assessment of her claim for disability benefits. Based on UNUM's new responsibilities, the legal relationship between the parties has changed and Ms. Perlman is a "prevailing party."

 Although UNUM argues otherwise, the fact I did not award Ms. Perlman disability benefits does not prohibit Ms. Perlman's status as a "prevailing party." Ms. Perlman need only succeed "'on any significant issue in litigation which achieves some of the benefit [she] sought in bringing suit.'" Hensley, 461 U.S. at 433. One of Ms. Perlman's goals in bringing suit was to have UNUM's denial of disability benefits voided. She has accomplished this goal and is, accordingly, a "prevailing party." *fn1"

 Fee Awards

 The Seventh Circuit has noted that, in the ERISA context, two tests exist to determine whether fees should be granted to a prevailing party. Meredith v. Navistar Int'l Transp. Corp., 935 F.2d 124, 128 (7th Cir. 1991). The first test looks at five factors:

(1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against the opposing parties would deter others from acting under similar circumstances; (4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties' positions.

 Id. (citation omitted). The second test suggests the prevailing party is entitled to fees unless the court finds that "the losing party's position was 'substantially justified.'" Production & Maintenance Employees' Local 504 v. Roadmaster Corp., 954 F.2d 1397, 1404 (7th Cir. 1992). "Whichever approach is used, the bottom-line question is essentially the same: was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent?" Meredith, 935 F.2d at 128. Ms. Perlman does not have to show that UNUM subjectively acted in bad faith. Roadmaster Corp., 954 F.2d at 1405. Instead, the Seventh Circuit has interpreted the language in Meredith referring "to 'good faith' and 'harassment' simply to mean that a party who pursues a position that is not substantially justified--that is, a position without a 'solid basis'--has, in an objective sense, really done nothing more than harass his opponent by putting him through the expense and bother of litigation for no good reason." Id. A district court should entertain a "modest presumption" that a prevailing party is entitled to reasonable attorney's fees. Little v. Cox's Supermarkets, 71 F.3d 637, 644 (7th Cir. 1995)(citation omitted).

 UNUM, in its motion for summary judgment, took the position that it had properly denied Ms. Perlman's claim for disability benefits. UNUM argued that Ms. Perlman had not proven any procedural defects in its decision-making process. (Def. Summ. Jud. Motion at 20). I do not believe such an argument was substantially justified or had a solid basis. As I noted in my previous opinion, UNUM's decision to deny short-term benefits was clouded by a potential conflict of interest. Perlman, 1997 WL 619871, at *3. UNUM was aware that granting Ms. Perlman short-term disability benefits, which would have been paid by Swiss Bank Corp., could lead to paying long-term disability benefits, which would have to be paid by UNUM. Further, Ms. Perlman's claim was assigned to Robert D'Antonio for review. Mr. D'Antonio admitted Ms. Perlman's claim was one of the more complex claims he had ever handled. Still, Mr. D'Antonio did not seek an independent medical evaluation of Ms. Perlman and did not order tests which had been suggested by a UNUM nurse who had reviewed Ms. Perlman's records.

 Additionally, when Ms. Perlman appealed her denial through the UNUM appeal process, UNUM did not seek outside experts to review Ms. Perlman's claim. Although the appeal processor consulted two UNUM nurses regarding Ms. Perlman's case, neither of the nurses actually reviewed Ms. Perlman's file. Indeed, neither nurse was asked to give a general opinion on Ms. Perlman's claim. Further, none of UNUM's claim handlers knew anything about Ms. Perlman's job other than that she was a lawyer. Thus, they were hardly in a position to determine whether Ms. Perlman's ailments disabled her from performing her job duties. In sum, UNUM's argument that its decision-making process was procedurally sound was not "substantially justified."

 Reasonableness of Fees

 Although Ms. Perlman is entitled to fees, I may only award fees that are reasonable in relation to the results Ms. Perlman obtained. Texas State Teachers Ass'n, 489 U.S. at 789-90; Janowski, 812 F.2d at 298-99. Determining which fees Ms. Perlman should be awarded based on her argument that UNUM's decision-making was procedurally defective is not simple. Unlike many cases where a litigant may prevail on one count of a numerous count charge and fees may be determined based solely on efforts to win that particular count, Ms. Perlman's case consisted of various arguments arising out of a common core of facts. The Supreme Court has counseled that "district courts should exercise their equitable discretion in such cases to arrive at a reasonable fee award, either by attempting to identify specific hours that should be eliminated or by simply reducing the award to account for the limited success of the plaintiff." Texas State Teachers Ass'n, 489 U.S. at 789-90. "The district court ...

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