Kinsinger v. Smartcore, LLC

CourtDistrict Court, W.D. North Carolina
DecidedJune 3, 2020
Docket3:17-cv-00643
StatusUnknown

This text of Kinsinger v. Smartcore, LLC (Kinsinger v. Smartcore, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kinsinger v. Smartcore, LLC, (W.D.N.C. 2020).

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION DOCKET NO. 3:17-cv-00643-FDW-DCK ERIC KINSINGER and ) DENISE KINSINGER, ) ) Plaintiffs, ) ) vs. ) ) SMARTCORE, LLC; ) ORDER SMARTCORE ELECTRIC, LLC; ) SMARTCORE ELECTRICAL SERVICES, ) LLC; SMARTCORE, LLC GROUP ) HEALTH BENEFIT PLAN; STEVEN ) MATTHEW GOOD and WILLIAM H. ) WINN, JR., ) ) Defendants. ) )

THIS MATTER is before the Court upon Plaintiffs’ two post-judgment motions, the Motion for Attorney Fees and Costs (Doc. No. 129) and Motion to Alter Judgment to Include Prejudgment Interest (Doc. No. 130). Defendant William H. Winn, Jr. filed responses opposing Plaintiff’s motions (Docs. No. 132, 133), and Plaintiffs replied (Docs. No. 134, 135). The motions are ripe, and the Court addresses each in turn. I. Background This is an Employee Retirement Income Security Act (“ERISA”) case involving claims by Eric and Denise Kinsinger (“Plaintiffs”) for seven claims for relief against the above-captioned corporate entities and Defendants Matthew Good and William H. Winn, Jr. individually (“Defendants”). The Court issued a written order on August 21, 2019, awarding Plaintiffs attorneys’ fees and costs for the expenses incurred in pursuing this action as well as prejudgment 1 and post-judgment interest. (Doc. No. 126). This ruling followed extensive litigation between the parties concerning Plaintiffs’ claims for unpaid wages and benefits under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). Plaintiffs were participants in the SmartCore LLC, Group Health Plan (the “Plan”) set up to provide employees and their dependents payment for major medical benefits. (Doc. No. 126, p.7). In February of 2016 Plaintiffs were informed the Plan’s insurance policy had been canceled for nonpayment effective January 1, 2016. (Doc. No. 126, p.5). Plaintiffs filed suit against Defendants in November 2017 after they had exhausted all administrative remedies related to the

Plan. (Id. at 8). Plaintiffs filed a second amended complaint in March of 2018 raising seven causes of action: (1) unpaid wages; (2) breach of contract; (3) benefits due, based on the failure to pay fees; (4) breach of fiduciary duty; (5) injunctive and other appropriate equitable relief under 29 U.S.C. §1132(a)(3) for (a) failure to pay withheld participant contribution and (b) misrepresentations made by Defendants regarding coverage by the Plan; (6) failure to provide Plan documents and record; (7) attorneys’ fees, interest and costs pursuant to 29 U.S.C. §1132(g), ERISA §502(g) and N.C. Gen. Stat. §95-25.22(d). In February 2019, Defendants conceded at a hearing before this Court that they had violated the North Carolina Wage and Hour Act and owed Plaintiff unpaid wages in the amount of $6,250, statutory interest, and double damages pursuant to N.C. Gen. Stat. §95-25.22 (Doc. No. 86, p.1).

In June 2019 the Court entered a Consent Judgment regarding Plaintiffs’ claim for ERISA benefits under ERISA §502(a)(1)(B), 29 U.S.C. §1132(a)(1)(B). (Doc. No. 116). Finally, in August of 2019 this Court ruled in favor of Plaintiffs on the remaining ERISA claims. (Doc. No. 126). The Court

2 also ruled Plaintiffs are entitled to recover attorney fees associated with their NC wage and hour claim, ERISA claims, and post judgment interest. (Id. at 13-16). II. Reasonable Attorneys’ Fees “In calculating an award of attorney's fees, a court must first determine a lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate.” Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). Courts are guided by twelve factors known as the Johnson/Barber factors to determine a reasonable rate and reasonable number of hours:

(1) the time and labor expended; (2) the novelty and difficulty of the questions raised; (3) the skill required to properly perform the legal services rendered; (4) the attorney's opportunity costs in pressing the instant litigation; (5) the customary fee for like work; (6) the attorney's expectations at the outset of the litigation; (7) the time limitations imposed by the client or circumstances; (8) the amount in controversy and the results obtained; (9) the experience, reputation and ability of the attorney; (10) the undesirability of the case within the legal community in which the suit arose; (11) the nature and length of the professional relationship between attorney and client; and (12) attorneys' fees awards in similar cases.

Id. at 243–44 (quoting Barber v. Kimbrell's Inc., 577 F.2d 216, 226 n. 28 (4th Cir. 1978)). The Court accordingly considers each factor below to arrive at a reasonable award in this matter. 1. Time and Labor Expended Plaintiffs’ Motion seeks attorneys’ fees amounting to $321,535.00 based on the efforts of two attorneys and a paralegal expended on Plaintiffs’ behalf by Marcellino & Tyson, PLLC (“the Firm”). Plaintiffs submitted a brief and declarations supporting their claim along with itemized time sheets for the time and labor expended over the course of this action. Defendant Winn concedes that a fee award is appropriate in this matter—indeed the Court already ruled to that effect in its Order—but Winn contests the reasonableness of Plaintiffs’ requested fees. In reply, 3 Plaintiffs amend their request and ultimately seek attorneys’ fees in the amount of $336,780.00 to include an additional 46.3 hours spent preparing their replies regarding fees and costs along with their reply regarding their Motion to Amend Judgment to include prejudgment interest. (Doc. No. 134, at 8). Defendant Winn raises multiple objections to the amount of Plaintiffs’ request for attorney fees and costs: 1) Plaintiffs made unreasonable settlement efforts and incurred unrecoverable fees thereafter, 2) Plaintiffs’ paralegal performed non-compensable clerical work, 3) attorney time entries reflect failures of billing judgment including background research and clerical tasks, 4)

excessive entries for drafting and revising Plaintiffs’ amended complaint, and 5) block billing. The Court addresses each argument in turn. a) Plaintiffs’ Settlement Efforts Even in cases where plaintiffs bring meritorious claims, “it is a salutary principle that a prevailing party should not be permitted to inflate a fee award by using unreasonable settlement demands to extend a case.” E.E.O.C. v. Nutri/System, Inc., 685 F. Supp. 568, 578 (E.D. Va. 1988). Defendant Winn alleges that Plaintiffs unreasonably rejected Defendant’s settlement offer on January 11, 2019 and therefore cannot recover $228,189.00 in attorney fees incurred after that date. (Doc. No. 133, p. 5). However, the Court finds Plaintiffs’ rejection of the January 11, 2019 settlement offer was not unreasonable. Plaintiffs had reasonable concern that the time requested

by Defendants would further delay litigation because it would require extending the summary judgment briefing deadline. (Doc. No. 133-1). Additionally, Plaintiffs demanded Defendants file the confessions of judgment without any act of default in order to ensure collection. Disagreements over the method of collection and potential prolonging of litigation are important considerations 4 in settlement negotiation. Further, Plaintiffs did not cease settlement negotiations after rejecting Defendants’ counteroffer but continued efforts to settle the case. (Doc. No.

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Bluebook (online)
Kinsinger v. Smartcore, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kinsinger-v-smartcore-llc-ncwd-2020.