King v. Caesar's World, Inc.

781 F. Supp. 1497, 1992 U.S. Dist. LEXIS 930, 1992 WL 12684
CourtDistrict Court, D. Nevada
DecidedJanuary 22, 1992
DocketNo. CV-N-90-416-BRT
StatusPublished

This text of 781 F. Supp. 1497 (King v. Caesar's World, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
King v. Caesar's World, Inc., 781 F. Supp. 1497, 1992 U.S. Dist. LEXIS 930, 1992 WL 12684 (D. Nev. 1992).

Opinion

JUDGMENT FOR ATTORNEY’S FEES, PENALTIES, AND COSTS

BRUCE R. THOMPSON, District Judge.

This is an ERISA action in which plaintiff has prevailed, in part, and now has moved for an allowance of attorney’s fees and costs. Plaintiff seeks an allowance of attorney’s fees in the amount of $14,145.00 plus a multiplier and reimbursement for costs advanced in the amount of $2,823.75.

Plaintiff Steven King’s employment with defendant Caesar’s World, Inc. terminated on January 31, 1990 because he had become permanently disabled. Caesar’s ERISA plan provided for compensation for temporary disability and permanent disability. Temporary disability was to be compensated by Aetna for up to one year and if the disability was permanent, Mutual Benefit provided the indemnity after one year of total disability.

On April 4, 1990 King and his attorneys entered into a contingent fee agreement providing for a fee of 3373% before trial and 40% after trial of any sums collected by reason of the attorneys’ services. Pursuant to this agreement King has paid the attorneys between $12,000 and $14,000 according to King’s best recollection. The contingent fee agreement provides in part:

8. In the event a court orders a separate award of attorney’s fees in this mat[1499]*1499ter, such award shall be exclusively the property of the law firm.-
10. The lawyers’ fees will be based on this contingency agreement or the court awarded fee, whichever is greater, but not both.

Initially, Caesar’s World and Aetna rejected King’s claim for temporary total disability upon the specious ground that he was not employed at the time he became disabled. This rejection was by letter from James A. Mitchell, Vice President-Administrator of Caesar’s World dated March 12, 1990 (Ex. 2) after consultation with Aetna. This rejection was caused by erroneous factual information or negligent failure to supply full information furnished by employees of Caesar’s World respecting the onset of King’s disability.

The only information King had at this time respecting his ERISA rights were defendants’ Exhibits A and B, “Group Insurance Benefits” and “Summary of Coverage, revised plan effective January 1, 1990.” These documents referred exclusively to the portion of the ERISA plan serviced by Aetna Life Insurance Company. They designated Beverly M. Kamps, Assistant Vice President-Insurance, an employee of Caesar’s World, as the Plan Administrator and referenced Plan Number 501 for inquiries to the Plan Administrator “who remains responsible for complying with ERISA reporting rules and regulations.” At this time King had not received nor was he aware of Caesar’s Pamphlet (Exhibit C) “Supplemental Group Life and Long Term Disability Insurance” which summarized the benefits for permanent disability under The Mutual Benefit Life Insurance Company policy and referenced Plan No. 502 for long term disability benefits.

In an effort to obtain information regarding King’s rights his attorneys on April 5, 1990 wrote defendant Beverly Kamps asking for a copy of Plan # 501. The reply was not responsive to the request and despite telephone calls and additional letters, copies of the ERISA plan policies were not supplied to plaintiff’s counsel. Finally on August 28, 1990 plaintiff filed this action against Caesar’s World Inc., Aetna Life Insurance Co. and Beverly Kamps, Plan Administrator. It was only during discovery that plaintiff eventually obtained copies of the pertinent portions of the Aetna and Mutual Benefit policies, which constituted the ERISA plan.

In December 1990 defendants Caesar’s World and Aetna decided that plaintiff was totally disabled and offered to pay the amount due for disability. Under the State Industrial Insurance System, Caesar’s World was a self-insurer. Inasmuch as plaintiff had filed for SIIS benefits as well as ERISA plan benefits and the SIIS claim had been denied and was on appeal, Aetna and Caesar’s World jointly filed a motion to deposit in court the sum of $15,176.19 to await resolution of the SIIS claim. The court on March 22,1991 ordered the sum of $15,176.19 to be paid directly to plaintiff with the understanding that, because the SIIS benefits if payable would be deductible from the Aetna liability, Aetna and Caesar’s World could make this adjustment between themselves.

King had applied for and was receiving benefits under the federal social security system. There was also a dispute between plaintiff and defendants regarding whether Aetna was entitled to offset the social security benefits. The plan summaries (Ex. 1 and Ex. 2) did not authorize the offset but the Aetna policy, when finally disclosed, clearly did. The court resolved this dispute in its order of September 16, 1991 holding that the social security benefits should be deducted from the Aetna indemnity payments. Plaintiff’s opposition to this ruling had been based on the ERISA plan summaries and defendants failure timely to supply full information respecting the ERISA plan provisions. While this argument was not sustained by the court, the contention that under the circumstances of this case the defendants should be held to the representations in the ERISA plan summaries was not wholly specious, unreasonable and untenable and is part of the work for which plaintiff’s counsel are entitled to compensation.

[1500]*1500The award of attorney’s fees in ERISA cases is governed by 29 U.S.C. § 1132(g) which provides, in part, as follows: “(1) In any action under this title ... by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” The court must first calculate the lodestar amount which is determined by multiplying the hours spent on a case by a reasonable hourly rate of compensation. Pennsylvania v. Delaware Valley Citizens’ Council, 478 U.S. 546, 563, 106 S.Ct. 3088, 3097, 92 L.Ed.2d 439 (1986). The factors to be considered by the court in exercising its discretion to award attorney’s fees under ERISA include the degree of the opposing parties’ culpability or bad faith; the ability of the opposing parties to pay; whether an award of. fees would deter others from acting similarly under like circumstances; whether the parties requesting fees sought to benefit all ERISA plan participants and beneficiaries or to resolve a significant legal question; and the relative merits of the parties’ positions. Blanton v. Anzalone, 760 F.2d 989, 992 (9th Cir.1985), citing Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir.1980).

Defendants have, to some extent, acted in bad faith in their handling of plaintiff’s disability claim. Defendants attempted to apply pressure tactics by withholding the benefits due to plaintiff. Defendants also delayed providing plaintiff with a copy of the insurance contract; had they produced the contract within 30 days after plaintiff’s initial request in April 1990, this action might never have been filed. Defendant Caesar’s World is more than able to satisfy an award of fees; their net income for 1990 was over $36 million and total assets were valued at almost $900 million.

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Related

Blum v. Stenson
465 U.S. 886 (Supreme Court, 1984)
Kerr v. Screen Extras Guild, Inc.
526 F.2d 67 (Ninth Circuit, 1975)
Hummell v. S. E. Rykoff & Co.
634 F.2d 446 (Ninth Circuit, 1980)
Blanton v. Anzalone
760 F.2d 989 (Ninth Circuit, 1985)

Cite This Page — Counsel Stack

Bluebook (online)
781 F. Supp. 1497, 1992 U.S. Dist. LEXIS 930, 1992 WL 12684, Counsel Stack Legal Research, https://law.counselstack.com/opinion/king-v-caesars-world-inc-nvd-1992.