United States District Court, D. Utah, Central Division
ORDER AND MEMORANDUM OF DECISION
CAMPBELL, U.S. DISTRICT COURT JUDGE
Don Foust filed this action against Defendant Lincoln
National Life Insurance Company (“Lincoln”),
claiming Lincoln's denial of certain insurance benefits
violated the Employee Retirement Income Security Act
(“ERISA”). On September 24, 2019, the court
agreed and granted Mr. Foust's motion for summary
judgment. See Foust v. Lincoln Nat'l Ins. Co.,
No. 2:17-cv-01208-TC, 2019 WL 4645416 (D. Utah Sept. 24,
Foust now requests 10% prejudgment interest on the benefits
awarded, $400.00 in costs, and $117, 647.00 in attorney's
fees. (ECF No. 52.) Lincoln does not challenge the rate of
prejudgment interest or the award of costs. The sole disputed
matter is the request for attorney's fees.
Entitlement to Fees
ERISA action, “the court in its discretion may allow a
reasonable attorney's fee and costs of action to either
party.” 29 U.S.C. § 1132. The Tenth Circuit has
established five factors for the court to weigh in
determining whether to award attorney's fees:
(1) the degree of the opposing party's culpability or bad
faith; (2) the opposing party's ability to satisfy an
award of fees; (3) whether an award of fees would deter
others from acting under similar circumstances; (4) whether
the party requesting fees sought to benefit all participants
and beneficiaries of an ERISA plan or to resolve a
significant legal question regarding ERISA; and (5) the
relative merits of the parties' positions. Gordon v.
U.S. Steel Corp., 724 F.2d 106, 109 (10th Cir. 1983).
No. single factor is dispositive and a court need not
consider every factor in every case.
Cardoza v. United of Omaha Life Ins. Co., 708 F.3d
1196, 1207 (10th Cir. 2013).
the factors, the court elects to award fees to Mr. Foust.
although both parties agree that Lincoln did not act in bad
faith, Lincoln still has some level of culpability for
wrongfully denying Mr. Foust's claim. In particular, the
court notes that it found Lincoln's denial to be not only
incorrect, but arbitrary and capricious, suggesting a level
of blameworthiness that goes beyond a mistaken or negligent
denial of a claim. See, e.g., McPherson v.
Emps.' Pension Plan of Am. Re-Ins. Co., Inc., 33
F.3d 253, 256-57 (3d Cir. 1994) (“[B]ad faith normally
connotes an ulterior motive or sinister purpose. . . . A
losing party may be culpable, however, without having acted
with an ulterior motive. In a civil context, culpable conduct
is commonly understood to mean conduct that is blameable [or]
censurable.”) (internal quotations omitted).
while Lincoln faults Mr. Foust for not providing evidence of
Lincoln's ability to pay fees, Lincoln also provides no
evidence showing that it could not pay fees. So at best, this
factor is neutral. Third, an award of attorney's fees is
likely to provide at least some deterrent effect. See,
e.g., Carpenters S. Cal. Admin. Corp. v.
Russell, 726 F.2d 1410, 1416 (9th Cir. 1984) (“If
defendant employers face the prospect of paying
attorney's fees for successful plaintiffs, they will have
added incentive to comply with ERISA.”). The fourth
factor favors Lincoln, as the suit was not brought to favor
all participants or beneficiaries and did not resolve any
unique legal questions. But the fifth favors Mr. Foust.
Although Mr. Foust did not prevail on every aspect of his
claim, on the whole his position was far more meritorious.
the first, third, and fifth factors favor providing Mr. Foust
with an award of attorney's fees.
Amount of Award
determining the amount of attorney's fees to award, the
court uses the lodestar method, which requires determining
“the number of hours reasonably expended on the
litigation multiplied by a reasonable ...