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Huss v. IBM Medical and Dental Plan

July 15, 2010


The opinion of the court was delivered by: James B. Zagel United States District Judge

Judge James B. Zagel


This was an ERISA suit to overturn the denial of enrollment eligibility for Joseph R. Huss, Jr., Eileen Huss's 25-year-old mentally disabled son, in the employee welfare plan sponsored and administered by Eileen's former employer, International Business Machines Corporation ("IBM"). I granted summary judgment for Plaintiff and found that Joseph R. Huss Jr. was entitled to be immediately enrolled in the IBM Medical and Dental Plan. Additionally, I granted Plaintiff's motion for summary judgment on her claim for statutory penalties pursuant to 29 U.S.C § 1132(c)(1). Plaintiff now moves for an award of attorneys' fees and costs under ERISA. For the following reasons, Plaintiff's motion for attorneys' fees and related non-taxable expenses is granted.


Plaintiff Eileen M. Huss ("Huss") is a retired IBM employee and legal guardian for her disabled son, Joseph R. Huss, Jr. ("Joseph"). Defendant IBM Medical and Dental Plan (the "Plan") is the legal entity through which IBM provides employee benefits to its active and retired employees. Defendant R.A. Barnes, in her capacity as Plan Administrator, has the sole discretion to make the final decision with respect to eligibility under the Plan. The benefits program offered through the Plan is governed by the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").

Joseph, born on August 8, 1981, has suffered from a severe mental disability since birth, and is completely dependent upon his parents for his support and well-being. Huss planned on enrolling Joseph in the Plan after her retirement on December 31, 2006. Joseph was then enrolled in the employee benefit plan offered through his father's employer. On January 3, 2007, Huss was informed that Joseph was not eligible to enroll in the Plan because she was supposed to have submitted a written application at least sixty days prior to Joseph's twenty-third birthday, and that her failure to do so barred Joseph's enrollment in the Plan.

Huss subsequently retained an attorney and twice appealed the Plan's denial of Joseph's eligibility. On August 8, 2007, the Plan Administrator, who the Plan authorized to determine eligibility for benefits and to construe provisions of the Plan, sent a signed letter to Huss' counsel stating that, having conducted a final review of Huss' appeal, Joseph was not eligible to enroll in the Plan.

Huss filed a four-count amended complaint under ERISA against the Plan and the Plan Administrator, seeking relief in the form of health benefits due to her son pursuant to 29 U.S.C. § 1132(a)(1)(B) (Count I) and statutory damages from the Plan and the Plan Administrator for their failure to provide requested documents pursuant to 29 U.S.C. §§ 1024(b)(4) and 1132(c) (Count II). I dismissed Count III, Huss' claim for breach of fiduciary duty, and granted Huss' motion for summary judgment for Counts I and II. Defendant filed a Notice of Appeal to the Seventh Circuit Court of Appeals on January 6, 2010.

Plaintiff then sought to recover attorneys' fees and costs from Defendant under 29 U.S.C. § 1132(g)(1). Pursuant to Local Rule 54.3(d), the parties attempted, though without success, to agree on the amount of fees and expenses to be awarded. By a letter sent to Plaintiff on February 3, 2010, Defendant objected to the award of any fees and also raised objections to specific portions of the fee request. On February 23, 2010, Plaintiff filed a Motion for Award of Attorneys' Fees and Related Non-Taxable Expenses. Pursuant to Local Rule 54.3(e), the parties submitted a Joint Statement in connection with Plaintiff's motion, in which Plaintiff set forth the specific attorneys' fees and costs that it claimed, and Defendant detailed its objections to certain fees and costs claimed by Plaintiff.


ERISA grants the court discretion to "allow a reasonable attorneys' fee and costs of action to either party." 29 U.S.C. § 1132(g)(1). Under this statute, "there is a 'modest presumption' in favor of awarding fees to the prevailing party, but that presumption may be rebutted." Stark v. PPM America, Inc., 354 F.3d 666, 673 (7th Cir. 2004) (quoting Senese v. Chicago Area I.B. of T. Pension Fund, 237 F.3d 819, 826 (7th Cir. 2001)). The Seventh Circuit recognizes two tests for awarding attorneys' fees under § 1132(g)(1). Id. Both tests essentially ask the question, "was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent?" Id. (quoting Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 593 (7th Cir. 2000)).

The first test looks to whether the losing party's position was "substantially justified" and "taken in good faith." Herman v. Cent. States, Se. and Sw. Areas Pension Fund, 423 F.3d 684, 696 (7th Cir. 2005). Substantially justified means "something more than non-frivolous, but something less than meritorious." Id. (quoting Senese, 237 F.3d at 826). The absence of good faith does not require a subjective finding of bad faith, but rather describes "a party who pursues a position . . . without a solid basis." Prod. & Maint. Employees' Local 504 v. Roadmaster Corp., 954 F.2d 1397, 1405 (7th Cir. 1992).

The second test examines the following five factors: (1) the degree of the offending parties' culpability or bad faith; (2) the degree of the ability of the offending parties to satisfy personally an award of attorneys' fees; (3) whether or not an award of attorneys' fees against the offending parties would deter other persons acting under similar circumstances; (4) the amount of benefit conferred on members of the pension plan as a whole; and (5) the relative merits of the parties' positions. Quinn v. Blue Cross & Blue Shield Ass'n, 161 F.3d 472, 478 (7th Cir. 1998). This test has been disfavored in the Seventh Circuit, however, but is included for completeness. See Sullivan v. William A. Randolph, Inc., 504 F.3d 665, 671-72 (7th Cir. 2007) (The five-factor test "perhaps has outlived its usefulness.").


A. Plaintiff Is Entitled to an Award of Attorneys' ...

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