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Corbell v. Southern Illinois Healthcare Group Health Plan

February 17, 2010

JEANIE CORBELL, PLAINTIFF,
v.
SOUTHERN ILLINOIS HEALTHCARE GROUP HEALTH PLAN, DEFENDANT.



The opinion of the court was delivered by: Reagan, District Judge

MEMORANDUM AND ORDER

The underlying issues in this case brought under § 502(a) of the Employees Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. § 1132(a) (West 2009), have been settled by agreement of the parties. What remains is the determination of attorney fees. Plaintiff Jeanie Corbell has moved for the Court to award her $59,004.15 in attorney fees. (Doc. 46.) The sole defendant, Southern Illinois Healthcare Group Health Plan (Plan), does not dispute that Corbell is entitled to attorney fees*fn1 but opposes the amount of fees, suggesting instead that the Court award her $20,802.90, less than half of the amount requested. Corbell later modified the fee request to account for additional work performed after the initial and now claims $62,542.15. The Court now considers her motion for fees (Doc. 46).

I. Facts

This ERISA litigation arises from the denial of medical benefits for neurorehabilitative treatment to Corbell who was covered under the Plan. According to her complaint, Corbell was in a single-car accident on July 28, 2006, and sustained critical injuries, including trauma to the brain. After her physical condition stabilized, her physicians prescribed neuro-rehabilitative therapy for her brain trauma, but she was initially denied coverage because the facility at which she would be treated provided a higher a level of nursing care then needed. She tried again later at a facility called Center for Comprehensive Services (CCS) and was initially granted coverage. She began treatment on May 7, 2007, but had to request approval from the Plan every 30 days, which she claims she did. On August 30, however, the Plan denied benefits for treatment during the month of May and eventually denied all coverage for treatment incurred at CCS. The treatment at that point exceeded $100,000.

Soon after that, she retained the legal services of Mr. Robert Wilson, who is admitted to the bar of this Court and has 30 years experience, little or none of which is in ERISA matters.*fn2

He in turn enlisted the services of Ms. Tammi Jackson and Mr. Zachary Hosman, associates in his firm of Wilson & Henshaw located in Harrisburg, Illinois. Jackson and Hosman are admitted generally to this Court while Mr. Matthew Effland, who was also employed by plaintiff, is not admitted to the bar of this Court either generally or for this case.*fn3 Effland swears that he specializes in employment law and is a shareholder in the firm of Ogletree, Deakins, Nash, Smoak & Stewart, P.C. based in Indianapolis, Indiana. (Effland Aff. 1; Wilson Aff. 2.) Effland is the cousin of Douglas Corbell, Jeanie's husband, and agreed to work on her legal matters for free. (Douglas Corbell Aff. 1-- 2.) He has engaged in ERISA litigation before. (Effland Aff. 2.) When Effland began assisting, he was an associate at his firm, has since become a shareholder and as of now has 10 years experience. Wilson swears that he supervised all of Effland's work in this case. (Wilson Aff. 2.)

Between retainer of counsel and commencement of suit on February 27, 2008, Corbell's counsel did more work than simply preparing the complaint. They were also involved in pursuing the administrative appeal of the denial of benefits. During September through November 2007, her attorneys contacted Southern Illinois Healthcare (SIH), the administrator of the Plan, along with Waterstone and HealthLink, which were claim administrators for the plan. Her attorneys requested the claim file so that they could perfect an administrative appeal; for whatever reason, they did not get the documents they needed to complete the appeal and turned instead to litigation. The litigation before the Court included a motion to dismiss, discovery regarding the claim file, a status conference on February 19, 2009, and a settlement conference on March 12. At the settlement conference on March 12, the Plan agreed to cover fully Corbell's treatment in 2007 at CCS. Corbell abandoned her equitable claims because she received payment of benefits due for 2008.

Corbell's attorneys submitted affidavits and documentation with her motion for fees in which they indicate the number of hours they or their associates worked along with the rate that they attest is the usual rate offered to the public. Wilson swears that he billed Corbell for 29 hours at the rate of $228.88 per hour, and 36.1 hours at the rate of $250 per hour, resulting in $15,662.50. (Wilson Aff. 2.) The reason for the difference in rate was due to a clerical error; his usual rate is $250 per hour. He also swears he billed Corbell for 7.08 hours of Ms. Jackson at the usual rate of $125 per hour, totaling $885, and 2.1 hours of Mr. Hosman's work at a usual rate of $80 per hour, totaling $168. (Id.) The motion also claims "Mr. Wilson's expenses" in the amount of $538.65, which appears to be the sworn-to amount of out-of-pocket expenses incurred by the firm.*fn4 (Id.)

The bulk of the fees claimed are for Effland, who swears that while an associate with a rate of $235 per hour he worked 27.8 hours. When made shareholder in 2008, his rate was increased to $280 per hour and he worked 25 hours. His rate went up again in 2009 to $290 per hour, when he worked 97.3 hours. This totals $41,750. Corbell also claims 12.2 hours additional for Effland to prepare the reply to the motion (Doc. 58) and to prepare a motion to seal their memorandum in support of fees (Doc. 49), for an additional $3538. This additional amount is supported by documentation and supplemental affidavit, in which Effland also swears that the motion to seal was prepared under threat of sanctions from the Plan. Due to Effland's prior arrangement and relationship with Douglas Corbell, Effland never billed any of his fees. With the amounts claimed from Wilson and associates, the grand total claimed is $62,542.15.*fn5

The Plan, as an alternate reference, proffered the rates of its attorneys through affidavits and documentation. Mr. Thomas Berry charged the highest rate of the Plan attorneys: $185 per hour.

II. Analysis

Courts have discretion to award reasonable attorney fees and costs to either party in ERISA litigation. ERISA § 502(g), 29 U.S.C.A. § 1132(g); Laborers' Pension Fund v. Lay-- Com, Inc., 580 F.3d 602, 615 (7th Cir. 2009). The award of fees inures to the benefit of the litigant, not counsel for the litigant. ERISA § 502(g)(1) ("[T]he court in its discretion may allow a reasonable attorney's fee and costs of action to either party." (emphasis added)); Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Cartage Co., 76 F.3d 114, 116 (7th Cir. 1996) ("Most fee-shifting statutes, including ERISA, direct the award to the litigant rather than the lawyer."). The litigant is able to obtain an award of attorney fees "even to those plaintiffs who did not need them to maintain their litigation" due to free-of-charge representation. Cent. States, 76 F.3d at 116 (quoting Venegas v. Mitchell, 495 U.S. 82, 87--88 (1990)).

The starting part for determining a reasonable fee is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Anderson v. AB Painting & Sandblasting Inc., 578 F.3d 542, 544 (7th Cir. 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433--34 (1983)). Hours are not reasonably expended "if they are excessive, redundant, or otherwise unnecessary." Stark v. PPM Am., Inc., 354 F.3d 666, 674 (7th Cir. 2004) (citing Spegon v. Catholic Bishop of Chi., 175 F.3d 544 (7th Cir. 1999)). Hours also not reasonably expended are those "spent litigating claims on which the party did not succeed to the extent they were distinct from claims on which the party did succeed." Id. (citing Spegon, 175 F.3d 544).

The reasonable hourly rate is the market rate, "the rate that lawyers of similar ability and experience in the community normally charge their paying clients for the kind of work in question." Id. (citing People Who Care v. Rockford Bd. of Educ., Sch. Dist. No. 205, 90 F.3d 1307 (7th Cir. 1996)). The burden of proving the market rate is on the applicant, but "once the attorney provides evidence of the market rate, the burden shifts to the opposing party to show why a lower rate should be awarded." Id. at 674--75 (citing McNabola v. Chi. Transit Auth., 10 F.3d 501 (7th Cir. 1993)). "The best evidence of the market value ...


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