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Aviation West Charters, Inc. v. United Healthcare Insurance Co.

United States District Court, D. Arizona

January 12, 2015

Aviation West Charters, Inc., Plaintiff,
v.
United Healthcare Insurance Company, et al., Defendants.

ORDER

NEIL V. WAKE, District Judge.

Before the Court is Defendant United Healthcare Insurance Company's Motion for Attorneys' Fees (Doc. 49) and the Motion for Attorneys' Fees of Defendants Renaud Cook Drury Mesaros, P.A. Welfare Benefit Plan and Renaud Cook Drury Mesaros, P.A. (Doc. 47).

I. BACKGROUND

Defendant United Healthcare Insurance Company ("United") is the insurer and administrator of the Renaud, Cook, Drury, Mesaros, P.A. Welfare Benefit Plan ("Plan"), which is an employee-sponsored benefit and welfare plan. In January 2013, Plaintiff Aviation West Charters, Inc., provided medical air and ground transport services for a beneficiary of the Plan. Plaintiff submitted post-service claims to United seeking payment of $682, 510.00 for the transportation services it provided. Although United denied the claims, in July 2013, it made payments to Plaintiff in the amounts of $374, 328.81 and $187, 413.11 related to the transportation services. In December 2013, United informed Plaintiff that it was recouping the amounts paid for the transportation services by reducing the amount of funds that were otherwise payable to Plaintiff for other claims it had submitted to United.

On February 20, 2014, Plaintiff initiated this lawsuit, alleging subject matter jurisdiction under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(e) and (f). The Complaint asked the Court to declare that Defendants violated certain ERISA requirements, enjoin Defendants from continuing to pursue recoupment efforts against Plaintiff related to the Beneficiary claims, order Defendants to return to Plaintiff all monies recouped, and other relief. On November 10, 2014, the Court granted summary judgment against Plaintiff on any federal law claims, finding that Plaintiff did not have a cause of action under ERISA because it is not a plan participant, beneficiary, or fiduciary and did not have a valid assignment of benefits from the Beneficiary under the Plan. (Doc. 45.) The Court further explained, "This conclusion does not foreclose any state law claim, such as one for unjust enrichment, for which the Court declines to exercise supplemental jurisdiction." ( Id. )

United requests an attorneys' fee award under 29 U.S.C. § 1132(g)(1) in the amount of $65, 301.50. (Doc. 49.) Defendants Renaud, Cook, Drury, Mesaros, P.A. Welfare Benefit Plan ("Plan") and Renaud, Cook, Drury, Mesaros, P.A. ("Plan Administrator") seek an award of attorneys' fees under 29 U.S.C. § 1132(g)(1) in the amount of $3, 080.00. (Doc. 47.)

II. LEGAL STANDARD

Under 29 U.S.C. § 1132(g)(1), a court in its discretion may award a reasonable attorneys' fee and costs of an action under ERISA to any party. Although the statute vests judges with broad discretion, the discretion is not unlimited. Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255 (2010). Before fees may be awarded under § 1132(g)(1), a fees claimant must show "some degree of success on the merits, " which requires more than "trivial success on the merits" or a "purely procedural victory." Id. The court may award fees without lengthy inquiry into whether a party's success was substantial or on a central issue if the court can fairly call it "some success on the merits." Id.

If a district court concludes that the fees claimant has achieved "some degree of success on the merits, " the court must consider the Hummell factors before exercising discretion to award fees. Simonia v. Glendale Nissan/Infinity Disability Plan, 608 F.3d 1118, 1121 (9th Cir. 2010). The Hummell factors are:

(1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against the opposing parties would deter others from acting under similar circumstances; (4) whether the parties 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.

Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980). "However, no single Hummell factor is necessarily decisive." Simonia, 608 F.3d at 1122.

III. ANALYSIS

A. Defendants May Seek Fees Under 29 U.S.C. § 1132(g)(1).

Plaintiff contends that none of the Defendants may seek fees under 29 U.S.C. § 1132(g)(1) because the statute applies only to an action "brought by a participant, beneficiary, or fiduciary" and the Court ruled that Plaintiff is not a plan participant, beneficiary, or fiduciary because it did not have a valid assignment of benefits under the Plan. Plaintiff initiated this action under ERISA, claiming to be a beneficiary based on an assignment of benefits. The ...


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