Mardirossian v. Guardian Life Insurance Co. of America

457 F. Supp. 2d 1038, 2006 U.S. Dist. LEXIS 94659, 2006 WL 3059930
CourtDistrict Court, C.D. California
DecidedOctober 18, 2006
DocketCV 05-02871 MMMJCX
StatusPublished
Cited by8 cases

This text of 457 F. Supp. 2d 1038 (Mardirossian v. Guardian Life Insurance Co. of America) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Mardirossian v. Guardian Life Insurance Co. of America, 457 F. Supp. 2d 1038, 2006 U.S. Dist. LEXIS 94659, 2006 WL 3059930 (C.D. Cal. 2006).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES

MORROW, District Judge.

I. FACTUAL AND PROCEDURAL BACKGROUND

On April 19, 2005, plaintiff Robert Mar-dirossian filed this action against The Guardian Life Insurance Company of America, Hirsch Pipe and Supply Co., Inc. Long Term Disability Plan, Hirsch Pipe and Supply Co., Inc. Medical Plan, Hirsch Pipe and Supply Co., Inc. Life Insurance Plan, and Hirsch Pipe and Supply Co., Inc. Pension/Retirement Plan. 1 Mardirossian *1041 challenged the denial of his claim for long-term disability (“LTD”) benefits under an employee benefit plan established by Hirsch Pipe and Supply Company, Inc. He invoked federal jurisdiction under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”).

Guardian based its denial of Mardirossian’s claim on his failure to notify it of his disability within twenty days, as required by the plan. 2 Mardirossian acknowledged that he had not provided notice until December 23, 2003, more than a year after he first experienced back pain. 3 He argued, however, that Guardian should have considered his claim on the merits because his late notice did not prejudice its ability to investigate the claim. 4 Under California’s notice-prejudice rule, an insurance company may not avoid liability on the basis of untimely notice unless it proves that it has been actually and substantially prejudiced by the delay. See Cisneros v. UNUM Life Ins. Co. of America, 134 F.3d 939, 944 (9th Cir.1998); Shell Oil Co. v. Winterthur Swiss Ins. Co., 12 Cal.App.4th 715, 760-61, 15 Cal.Rptr.2d 815 (1993).

On June 6, 2006, the court denied Guardian’s motion for summary judgment and sua sponte entered summary judgment in Mardirossian’s favor. The court found that Guardian had abused its discretion in denying Mardirossian’s LTD claim on the basis of late notice and proof of loss, because it did not document that it suffered actual prejudice as a result of the late notice. 5 Accordingly, the court remanded the claim to Guardian for reconsideration.

Mardirossian has now moved for an interim award of attorneys’ fees. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the court finds this matter suitable for decision without oral argument.

II. DISCUSSION

A. Legal Standard Governing Attorneys’ Fees Awards Under 29 U.S.C. § 1132(g)

In any action brought by a plan participant, beneficiary, or fiduciary under the Employee Retirement Income Security Act (“ERISA”), “the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” 29 U.S.C. § 1132(g).' Interpreting this statute, the Ninth Circuit has held that a successful ERISA participant who “prevails in his suit ... to enforce his rights under his plan should ordinarily recover an attorney’s fee unless special circumstances would render such an award unjust.” Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589 (9th Cir.1984); see also McElwaine v. U.S. West, Inc., 176 F.3d 1167, 1172 (9th Cir.1999) (detailing the “special circumstances rule”). 6

1. Whether Mardirossian Is A Prevailing Party

“As a general rule,” ERISA plaintiffs are entitled to an award of attorneys’ fees “if they succeed on any signifi *1042 cant issue in litigation which achieves some of the benefit the parties sought in bringing the suit.” Smith, 746 F.2d at 589 (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)). ERISA plaintiffs may also obtain interim fees by prevailing on the merits of at least some of their claims. Frei v. Hartford Life Ins. Co., No. C-05-01191 EDL, 2006 WL 1409360, *1 (N.D.Cal. May 23, 2006) (citing Kayes v. Pacific Lumber Co., 51 F.3d 1449, 1468-69 n. 15 (9th Cir.1995) (“We hold that interim attorney’s fees are available under ERISA to the extent that they are available under civil rights statutes”)); see also Hanrahan v. Hampton, 446 U.S. 754, 758, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980) (per curiam) (holding that in enacting 42 U.S.C. § 1988, “Congress intended to permit the interim award of counsel fees only when a party has prevailed on the merits of at least some of his claims”). A “prevailing party” is one that achieves “a material alteration of the legal relationship of the parties.” Frei, 2006 WL 1409360 at *1 (quoting Buckhannon Bd. & Care Home, Inc. v. West Virginia Dep’t of Health & Human Resources, 532 U.S. 598, 604, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001)). 7

Relying on Flanagan v. Inland Empire Electrical Workers Pension Plan & Trust, 3 F.3d 1246 (9th Cir.1993), Guardian argues that Mardirossian is not entitled to interim fees because he has not established a right to benefits or shown that Guardian violated ERISA. In Flanagan, the Ninth Circuit held that plaintiffs had standing to sue as “affected participants” under a plan and remanded the case to district court for further consideration. Id. at 1253-54. The court declined to award attorneys’ fees upon remand, concluding that an award would be premature because plaintiffs had “not established a right to bene *1043 fits, nor shown that the Plan or its fiduciaries ... violated ERISA.” Id. at 1253. See also Saffle v. Sierra Pacific Power Co. Long Term Disability Income Plan, 85 F.3d 455

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457 F. Supp. 2d 1038, 2006 U.S. Dist. LEXIS 94659, 2006 WL 3059930, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mardirossian-v-guardian-life-insurance-co-of-america-cacd-2006.