Almont Ambulatory Surgery Ctr. v. Ilwu-Pma Welfare Plan

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 28, 2021
• Docket: 20-55464
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 28 2021 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

ALMONT AMBULATORY SURGERY No. 20-55464 CENTER, LLC, a California limited liability company; et al., D.C. No. 2:14-cv-02177-MWF-VBK Plaintiffs-Appellants,

v. MEMORANDUM*

INTERNATIONAL LONGSHOREMEN'S AND WAREHOUSEMEN'S UNION- PACIFIC MARITIME ASSOCIATION WELFARE PLAN,

Defendant-Appellee,

and

INTERNATIONAL LONGSHORE AND WAREHOUSE UNION; et al.,

Defendants.

Appeal from the United States District Court for the Central District of California Michael W. Fitzgerald, District Judge, Presiding

Submitted October 21, 2021**

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Pasadena, California

Before: CALLAHAN, OWENS, and FORREST, Circuit Judges.

Appellants1 appeal from the district court’s order awarding attorney fees to

Appellee International Longshore and Warehouse Union-Pacific Maritime

Association Welfare Plan (“the Plan”). Having jurisdiction under 28 U.S.C. § 1291,

Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006), we affirm.

1. FRCP 26 disclosure. Appellants argue the district court erred in

awarding fees to the Plan because the Plan violated Federal Rule of Civil Procedure

26 by failing to disclose its insurance policy that provided coverage for the Plan’s

cost of defense. However, Rule 26 only requires disclosure of “any insurance

agreement under which an insurance business may be liable to satisfy all or part of

a possible judgment in the action or to indemnify or reimburse for payments made

to satisfy the judgment.” Fed. R. Civ. P. 26(a)(1)(A)(iv) (emphasis added). As the

insurance policy here provides coverage only for defense costs, and not coverage for

any judgment entered in the underlying action, the Plan did not violate Rule 26.

2. ERISA’s attorney fee provision. Next, Appellants argue that an

1 Appellants are Almont Ambulatory Surgery Center, LLC; CIRO Surgery Center, LLC; East Bay Ambulatory Surgery Center, LLC; Modern Institute of Plastic Surgery & Antiaging, Inc.; New Life Surgery Center, LLC d/b/a Beverly Hills Surgery Center, LLC; West Hills Surgery Center, LLC; Independent Medical Services, Inc.; San Diego Ambulatory Surgery Center, LLC; and Orange Grove Surgery Center, LLC.

2 insurance company is not permitted to seek attorney fees under ERISA, and here,

the real party in interest is the Plan’s insurer because it will receive any funds

recovered by the Plan. However, ERISA does not require a party to have paid for its

defense out of pocket to receive a fee award; attorney fees can be awarded so long

as the underlying action was brought “by a participant, beneficiary, or fiduciary.” 29

U.S.C. § 1132(g)(1). Here, Appellants, who are “beneficiaries” of the Plan, brought

the underlying action themselves, thus fulfilling this requirement. Corder v. Howard

Johnson & Co., 53 F.3d 225, 229, 231 (9th Cir. 1994). As the Plan was a party to

the underlying action, the district court did not err in awarding attorney fees to the

Plan. Id.

3. Apportionment of fees. Appellants argue the fee award was

unreasonable because the district court failed to exclude fees incurred during the

district court proceedings and fees incurred litigating Appellants’ non-ERISA

claims. A “district court’s decision to award or deny attorney’s fees in an ERISA

action” is reviewed for abuse of discretion, as is the “district court’s determination

of the amount of reasonable attorney’s fees.” Van Gerwen v. Guarantee Mut. Life

Co., 214 F.3d 1041, 1045 (9th Cir. 2000).

Despite Appellants’ contentions, the district court explicitly recognized that

the Plan sought attorney fees for both the district court and appellate phases of

litigation and separated the two categories in the billings submitted to the district

3 court. Consistent with its ruling that the Plan was not entitled to district court fees,

the court shaved off the over $650,000.00 in fees arising from the district court

phase. Furthermore, the district court also explicitly recognized that some of the

claims on appeal were non-ERISA claims and reduced the already reduced fee

amount by a further ten percent. See Downey Cmty. Hosp. v. Wilson, 977 F.2d 470,

474 (9th Cir. 1992). While the district court arguably could have analyzed the award

amount with a greater degree of precision, we do not have a “definite conviction that

the [district] court made a clear error of judgment” such that it abused its discretion

in awarding $208,395.45 to the Plan, especially considering the overlapping issues

in the ERISA and non-ERISA claims. Welch v. Metropolitan Life Ins. Co., 480 F.3d

942, 945 (9th Cir. 2007) (citation omitted); see, e.g., Webb v. Sloan, 330 F.3d 1158,

1169 (9th Cir. 2003).

4. Notice of Motion for Fees. Finally, San Diego Ambulatory Surgery

Center, LLC, and Orange Grove Surgery Center, LLC (San Diego and Orange

Grove) argue they did not receive adequate notice or opportunity to be heard

regarding the Plan’s motion for attorney fees because the Plan neglected to name

them specifically in the moving papers. However, whether San Diego and Orange

Grove received sufficient notice and opportunity to be heard requires consideration

of “all the circumstances.” United States v. Castro, 78 F.3d 453, 456 (9th Cir. 1996)

(citation omitted). While the motion and moving papers do not specifically name

4 San Diego or Orange Grove, the Plan conferred with all Appellants’ counsel to

discuss the motion prior to it being filed, as required by the relevant local rules. The

Plan’s counsel “indicated clearly that [the] motion [was] going to be seeking

sanctions and fees against all plaintiffs and all of their attorneys of record.”

Furthermore, the Plan named San Diego and Orange Grove in its reply brief, to

which San Diego and Orange Grove were allowed to file an objection. And San

Diego and Orange Grove appeared at the motion’s hearing, received time to argue

the attorney fees issue, and expressly joined the arguments submitted already by

their co-Appellants. In sum, although not initially named in the moving papers, the

totality of the circumstances establishes that San Diego and Orange Grove received

adequate notice and opportunity to respond before fees were awarded against them.

See FTC v. Alaska Land Leasing, Inc., 799 F.2d 507, 510 (9th Cir. 1986).

AFFIRMED.