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Ronald Pemberton v. Reliance Standard Life Insurance Company

March 10, 2011

RONALD PEMBERTON, PLAINTIFF,
v.
RELIANCE STANDARD LIFE INSURANCE COMPANY, DEFENDANT.



MEMORANDUM OPINION AND ORDER

This matter is before the court on plaintiff Ronald Pemberton's renewed motion for an award of attorney's fees and costs (R. 54). The court will grant the motion because Pemberton has achieved at least some success on the merits and his requested fees and costs are reasonable.

I. BACKGROUND

Pemberton filed this action after defendant Reliance Standard Life Insurance Company rejected his claim for long-term disability benefits. On January 5, 2010, the court denied the parties' cross-motions for summary judgment and remanded the case to Reliance Standard for reconsideration of Pemberton's claim. The court identified a number of issues on which Reliance Standard acted arbitrarily and capriciously, including its failing to adequately consider Pemberton's award of Social Security disability benefits and its using an employability analysis based on an incomplete medical review. The court gave weight to Reliance Standard's conflict of interest as the payer and administrator of claims.

On February 4, 2010, Pemberton moved for an award of attorney's fees and costs. The court denied Pemberton's motion without prejudice and allowed him to renew his motion after the U.S. Supreme Court issued its decision in Hardt v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149 (2010).

On February 18, 2010, Reliance Standard notified Pemberton that it had reconsidered his claim and had decided to reinstate his benefits. R. 54 Ex. 1. Reliance Standard, however, applied an offset to account for early retirement benefits that Pemberton received from his employer. Pemberton's gross benefits were $92,191.68, but Reliance Standard paid only $27,721.01 after applying the offset.

The Supreme Court issued its decision in Hardt on May 24, 2010. Pemberton renewed his motion for attorney's fees and costs on July 9, 2010, and sought $24,090 in attorney's fees and $2,345.32 in costs. Pemberton also sought reversal of Reliance Standard's decision to offset his early retirement benefits in a motion for summary judgment filed on September 15, 2010. The court affirmed Reliance Standard's application of the offset.

In sum, Pemberton succeeded in obtaining a remand, which ultimately led to Reliance Standard's changing its position and awarding Pemberton benefits less the offset.

II. DISCUSSION

The court will grant Pemberton's petition because Pemberton is eligible to recover attorney's fees and his request for $24,090 in attorney's fees and $2,345.32 in costs is reasonable.

A. Eligibility to recover attorney's fees

A district court in its discretion may allow a reasonable attorney's fee and costs to either party. 29 U.S.C. § 1132(g)(1). Unlike other fee-shifting statutes, the ERISA provision that governs this case does not require that a party claiming fees be a "prevailing party." Id.; Hardt, 130 S. Ct. at 2156. A court need only determine whether a party claiming an award demonstrates "some degree of success on the merits." Hardt, 130 S. Ct. at 2158 (quoting Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983)).

Pemberton achieved at least some degree of success on the merits. Pemberton faced a complete denial of benefits at the beginning of this case; he persuaded the court to remand the case and to compel Reliance Standard to reconsider the denial of benefits. The court remanded the case because it agreed with Pemberton that Reliance Standard acted arbitrarily and capriciously in its decision-making process. The court shared Pemberton's concern about Reliance Standard's conflict of interest. Reliance Standard considered the court's concerns, reversed its decision, and awarded benefits to Pemberton. The court's remanding of the case resulted in a substantive gain for Pemberton.

Reliance Standard did deduct a substantial amount of money after it applied the early-retirement offset. But Pemberton did not have to prevail on the merits; he needed only to achieve some success on the merits. The court can fairly characterize Reliance Standard's reinstating Pemberton's benefits as some success on the merits. Hardt, 130 S. Ct. at 2158-59.

Reliance Standard argues that the remand order alone does not constitute success on the merits because the order is a procedural ruling and does not alter the parties' positions. The court, however, is awarding fees because Pemberton realized a gain as a result of the remand, not because of the mere fact that Pemberton obtained a remand. The question of whether a remand order, without more, constitutes some success on ...


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