This matter comes before the Court on plaintiff Carl Woodard Sr.'s motion for attorney's fees (Doc. 33) pursuant to § 502(g)(1) of the Employee Retirement Income Security Act, 29 U.S.C. § 1132(g)(1). Defendant Metropolitan Life Insurance Company ("MetLife") has responded to the motion (Doc. 37).
This dispute began when Woodard filed a claim for disability insurance benefits under a long term disability ("LTD") insurance plan offered by his employer and operated by MetLife. The LTD plan's summary plan description defines disability as follows:
Disabled or disability means that due to sickness, pregnancy or accidental injury, you are receiving appropriate care and treatment from a doctor on a continuing basis; and
* During your elimination period and the next 24-month period, you are unable to perform the material duties of your regular job with the employer and unable to earn more than 80 percent of your pre-disability earnings or indexed pre-disability earnings; or
* After the 24-month period, you are unable to earn more than 60 percent of you [sic] indexed pre-disability earnings from any employer in your local economy at any gainful occupation for which you are reasonably qualified taking into account your training, education, experience and pre-disability earnings.
Summary Plan Description at 23, Compl. Ex 1. The claimant has the burden of providing information to demonstrate he is disabled under this definition. Summary Plan Description at 10, Def. Resp. M. Fees Ex. A.
Woodard stopped working on October 20, 2006, and filed a claim for LTD benefits in June 2007 based on a back injury from December 2005 (spinal stenosis following a lumbosacral fusion). On October 7, 2007, the Social Security Administration awarded Woodard monthly disability benefits as of April 2007.
MetLife, on the other hand, denied Woodard's claim for LTD benefits on November 5, 2007, finding that the medical information Woodard had submitted did not support the finding that he had a functional impairment that prevented him from performing his job during the entire period for which he sought benefits. The denial letter specifically referenced statements, notes and reports from Dr. Hoffman from the period of August 6 to December 4, 2006 and the fact that MetLife had confirmed with Dr. Hoffman's office that Woodard had not been seen since December 4, 2006. The record indicates MetLife called Woodard in October 2007 to request he submit additional medical information beyond December 2006, but Woodard had not provided any additional medical records other than an August 2007 report from Dr. Hoffman based on his 2006 treatment. MetLife construed this to mean Woodard was no longer under Dr. Hoffman's or any other medical provider's treatment and therefore did not qualify for LTD benefits that were only awardable to participants who "are receiving appropriate care and treatment from a doctor on a continuing basis." The denial letter further informed Woodard that medical information was needed from his last date worked (October 20, 2006) to the present to support a claim for disability benefits, and that he had only submitted medical information to December 4, 2006. Finally, the letter set forth Woodard's right to reconsideration of the decision should he be able to provide documentation of disability from October 2006 to the present and his right to file an administrative appeal challenging the denial of benefits with additional supporting documentation of disability. The denial, of course, only addressed the first category of disability -- whether Woodard could perform his own job during the elimination period and the next 24 months ("own occupation" disability). The second category ("any occupation" disability) was not addressed because Woodard was not eligible for such benefits until after the 24-month period. Woodard appealed MetLife's denial.
On January 9, 2008, MetLife denied Woodard's administrative appeal. In Woodard's appeal, he told MetLife that his employer agreed in October 2006 that he did not need to send in any more medical information because his condition would not improve. Woodard also informed MetLife he had been under the treatment of Dr. Burch, Dr. Klein and Dr. Dirkers but only submitted medical records from Dr. Burch. MetLife stated that it had obtained an independent medical neurosurgeon consultant to review Woodard's file, including the new information from Dr. Burch. The reviewer noted that Woodard had not followed up on Dr. Hoffman's suggestion of surgery and weight loss and instead pursued pain management and physical therapy from Dr. Burch. Dr. Burch noted Woodard showed a 50% to 99% improvement in April 2007. The reviewer concluded that Woodard's files did not support a finding that he had a functional limitation that prevented him from performing his regular job after October 23, 2007. Although given the opportunity, Drs. Hoffman and Klein (Dr. Burch had since retired) did not comment on the reviewer's report.
Woodard filed this lawsuit in October 2008 claiming benefits under § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B). He alleged MetLife's decision to deny him benefits was arbitrary and capricious. On April 17, 2009, the parties reached a settlement in which Woodard obtained some benefits but less than he had demanded prior to the settlement. He also retains an opportunity to apply for "any occupation" disability in the future. The parties did not agree, however, whether an attorney's fee award was warranted. That dispute is brought before the Court in the pending motion.
ERISA provides, "In any action under this subchapter . . . by a participant [or] beneficiary . . ., 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). As the statute indicates, a fee award to a prevailing party is discretionary, not mandatory, and is only warranted if the non-prevailing party's litigation position was not "substantially justified." Lowe v. McGraw-Hill Cos., 361 F.3d 335, 339 (7th Cir. 2004) (citing Bittner v. Sadoff & Rudoy Indus., 728 F.2d 820, 830 (7th Cir. 1984)).*fn1 There is a modest but rebuttable presumption that a prevailing party is entitled to attorney's fees. Stark v. PPM Am., Inc., 354 F.3d 666, 673 (7th Cir. 2004).
It is often difficult to determine whether a settling party is a "prevailing party" for purposes of a suit for benefits under § 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B). This is because parties may choose to settle for a variety of reasons, none of which have to do with the merits of the case or justify an award of attorney's fees. For example, parties may settle to avoid a nuisance or for wholly gratuitous reasons. Hooper v. Demco, Inc., 37 F.3d 287, 292 (7th Cir. 1994). The Seventh Circuit Court of Appeals has held that a settling plaintiff is considered a "prevailing party" under ERISA if two conditions are met. The first is that "the outcome of the plaintiff's lawsuit [is] causally linked to the achievement of the relief obtained," that is, the suit played a "provocative role" or was a catalyst in obtaining relief. Id. A settlement reached soon after a lawsuit is filed is evidence that the suit may be causally connected to the relief obtained. See, e.g., id. at 293 ("In light of the close proximity of time between the filing of the suit and settlement (two weeks), the suit seems to have acted as a 'catalyst' for the ...