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Hayes v. Berryhill

United States District Court, E.D. Kentucky, Central Division

July 31, 2017

ROBERT EVERT HAYES, Plaintiff,
v.
NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.

          MEMORANDUM OPINION AND ORDER

          Danny C. Reeves United States District Judge

         This matter is pending for consideration of the second motion for attorney’s fees filed by attorney Wolodymyr Cybriwsky. [Record No. 27] Cybriwsky served as counsel before this Court for Plaintiff Robert Hayes. [Id.] Cybriwsky now seeks payment under 42 U.S.C. § 406(b)(1) of $11,607.25, based on a contingency fee agreement with Plaintiff Hayes. [Id. at 2] The Commissioner filed a response to the fee request, noting that the Court is without jurisdiction given the nearly five-year delay in bringing the motion. [Record No. 33 at 3] Oral argument was held on July 28, 2017. [Record No. 36][1]

         Having considered the filings and arguments of counsel, the Court finds the motion untimely and application of equitable tolling to be wholly inappropriate under the facts presented. Therefore, Cybriwsky’s motion will be denied.

         I.

         Hayes, by counsel, sought review of the Social Security Administration’s denial of his application for a period of disability benefits on November 22, 2010. [Record No. 1] However, on February 8, 2011, the Commissioner moved to remand the case for further administrative proceedings because significant portions of the recording of the administrative hearing were inaudible. [Record No. 7] The remand motion was granted on February 9, 2012. [Record No. 8] Following remand, a new administrative hearing occurred, which included testimony from a medical expert who had not previously testified on Hayes’s behalf.[2] [Record No. 19 at 8] On August 2, 2011, based, in part, on the new medical testimony, an Administrative Law Judge issued Hayes a fully-favorable decision. [Id.; Record No. 10-1]

         On March 28, 2012, the Commissioner filed a motion to re-docket and affirm the fully-favorable decision. [Record No. 9] That motion was granted and judgment was entered in favor of Hayes on April 19, 2012. [Record Nos. 12 and 13] On May 18, 2012, Cybriwsky filed a motion for attorney’s fees under the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412(b). [Record No. 14; Record No. 20 (corrected motion)] Finding no bad faith on the part of the Commissioner to justify a higher rate, the Court granted Cybriwsky a $2,225.00 fee, reflecting the lodestar amount (at the standard rate of $125 per hour) for Cybriwsky’s work in obtaining the remand for reconsideration. [Record No. 22] Thereafter, the docket was dormant for more than four-and-a-half years.

         On April 25, 2017, Cybriwsky filed a motion for fees in the amount of $11,607.25 under 42 U.S.C. § 406(b)(1) based upon Hayes’s fully favorable decision obtained on remand and a written fee agreement. [Record No. 23] The motion was initially denied because counsel provided no supporting documentation concerning the amount of past-due benefits payable to Hayes. [Record No. 26] A second motion was filed on May 5, 2017. That motion included as an exhibit the Social Security Administration’s notice to Hayes of his past-due benefit amount. [Record No. 27] Again, Cybriwsky seeks a fee of $11,607.25, based upon 29.6 hours of work, which he argues is reasonable because it is less than two-times his stated hourly rate. [Record No. 27-1 at 6, 8] The fee agreement suggests an hourly rate for federal appeals of $325. [Record No. 27-2] Based upon his proposed 29.6 hours of labor, Cybriwsky’s fee request amounts to an hourly rate of $392.14. Documentation dated March 20, 2012, establishes that Hayes was entitled to past-due benefits of $46,429. [Record No. 27-3] The Commissioner withheld 25% of the benefits (i.e., $11,607) for payment to Hayes’s representative. [Id.] Further, because there was a fee agreement on file for administrate-level counsel, attorney Calvert was paid $5,300. [Id.]

         The Court set the matter for oral argument and the Commissioner filed a brief in response. [Record Nos. 30 and 33] The Commissioner noted that, under 42 U.S.C. § 406(b)(1)(A) and Rule 54(d)(2)(B)(i) of the Federal Rules of Civil Procedure, the current motion was due fourteen days following entry of judgment in Hayes favor, which results in a deadline of May 3, 2012. [Record No. 33 at 3-4] The Commissioner also points out that, under Local Rule 83.11(d), the § 406(b) fee petition was due within 30 days of the fully-favorable decision, meaning, alternatively, a deadline of September 1, 2011. [Id. at n.2]

         Whichever deadline is operative (the Commissioner suggests May 3, 2012), the Commissioner asserts that equitable tolling is not appropriate. [Id. at 4] Under the four-factor test for tolling, the Commissioner argues that factors one and four are met because the movant had at least constructive knowledge of the filing requirement and had no reason to be ignorant of it in light of his being a seasoned practitioner. [Id.] Regarding the second factor, the movant’s diligence, the Commissioner argues that counsel had no rational reason for the delay, and that his argument that he just recently obtained the Notice of Award is unconvincing. [Id. at 5] Specifically, the Commissioner points to record evidence suggesting that counsel had actual notice of the past-due benefits on April 5, 2012, and was in regular contact thereafter with Hayes and attorney Calvert, both of whom would have received the March 20, 2012, Notice of Award. [Id.] Therefore, Cybriwsky either had the actual Notice of Award or had the means to obtain it in 2012.

         The third factor to be considered regarding the tolling issue is prejudice to the non-moving party. The Commissioner asserts that, in light of the time lapse, it has already released the excess funds (previously held for the attorney fee) to Hayes. [Record No. 33 at 6] Therefore, counsel would be required to attempt to recover the funds from Hayes himself, and it is unlikely Hayes has the expectation or means to pay counsel. [Id. at 6-7] If counsel were unsuccessful in obtaining payment from Hayes, he could request that the SSA assess an overpayment to Hayes to recoop the fee award. [Id. at 7] However, Hayes may apply for and may receive a waiver of overpayment. [Id. at 7] If Hayes were to receive a waiver, according to counsel for the Commissioner’s statement at oral argument, taxpayers would foot the bill. Accordingly, Cybriwsky’s delay in bringing the fee petition would result in a substantial-and- unexpected obligation for payment from Hayes or, alternatively, a significant (and avoidable) toll on the public fisc. As a result, the Commissioner argues that equitable tolling is inappropriate.

         In the alternative, should the court find equitable tolling appropriate, the Commissioner argues that the requested fee of $11,607.25 would represent a windfall to Cybriwsky. [Record No. 33 at 7] Instead, she suggests that an hourly rate of $360 per hour is reasonable, and that Cybriwsky is only entitled to compensation for 18.1 hours of work, resulting in an award of $6,516. [Id. at 11-12]

         II.

         Oral argument was held on July 28, 2017. [See Record No. 36.] Things did not go well for Cybriwsky.

         During argument, Cybriwsky offered an elusive and ever-evolving explanation for his delay in filing the § 406(b) fee petition. He contended initially that his failure to act timely was due to the fact that he never received written documentation from SSA establishing the amount of Hayes’s past-due benefit award. Cybriwsky argued that, while he asked for this documentation continuously beginning in 2012, the agency simply never responded. He also claimed to have communicated with his client (Hayes), but contended that he did not obtain the amount of the award from Hayes or ...


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