Metaxas v. Gateway Bank F.S.B.

District Court, N.D. California·Decided November 15, 2022·No. 3:20-cv-01184·Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 POPPI METAXAS, Case No. 20-cv-01184-EMC

8 Plaintiff, ORDER GRANTING PLAINTIFF’S 9 v. MOTION FOR ATTORNEY’S FEES

10 GATEWAY BANK F.S.B., et al., Docket No. 96 11 Defendants.

12 13 14 Plaintiff Poppi Metaxas filed this case against her former employer Defendant Gateway 15 Bank, F.S.B. (“Gateway”). Docket No. 1 (“Compl.”). The parties filed cross motions for 16 summary judgment. Docket No. 74, 77. The Court found in favor of Plaintiff on the claim for 17 termination benefits and in favor of Defendants on the claim for disability benefits. Docket No. 18 90 (“SJ Order”). Ms. Metaxas now moves for attorney’s fees totaling $316,880 pursuant to 29 19 U.S.C. § 1132 (g). Docket No. 96 (“MAF”); Docket No. 100 (“Repl.”). 20 For the following reasons, the Court GRANTS Ms. Metaxas’ Motion for Attorney’s Fees 21 in the amount of $189,240 in attorney’s fees (236.55 hours at $800 per hour) and $400 in costs for 22 a total of $189,640. 23 I. FACTUAL AND PROCEDURAL BACKGROUND 24 A. Factual Background 25 Since 1998, Ms. Metaxas was employed as President and CEO of Gateway as an at-will 26 employee serving at the pleasure of the Board. SJ Order, at 4. She was the only participant in 27 Gateway’s Supplemental Executive Retirement Plan (“the Plan”), which provides retirement, 1 Plan is governed by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001. 2 Id. at 1. 3 In 2008, Ms. Metaxas was diagnosed with ovarian cancer and underwent chemotherapy 4 treatment. Id. at 5–6. She continued to report symptoms through 2011. Id. at 6–9. 5 In 2010, the Office of Thrift Supervision (“OTS”) determined that Ms. Metaxas had 6 engaged in fraudulent transactions on behalf of Gateway in 2009. Id. at 4. The Board suspended 7 Ms. Metaxas without pay pending further investigation of the matter. Id. at 4–5. Ms. Metaxas 8 was charged with conspiracy to commit bank fraud in the Eastern District of New York. Id. at 10. 9 She pled guilty in 2015. Id. 10 While the charges were pending, Ms. Metaxas submitted a claim for benefits under the 11 Plan. Id. at 11. Gateway’s Initial Claim Committee considered and denied Ms. Metaxas’ claim. 12 Id. Upon reconsideration, the Appeal Committee found that Ms. Metaxas was ineligible for any 13 termination benefits because she was terminated for cause before she tendered her resignation. Id. 14 at 12. The committee also found that Ms. Metaxas was not entitled to disability benefits because 15 she did not become disabled while employed by Gateway. Id. at 13. 16 B. Procedural History 17 Ms. Metaxas filed her complaint on February 17, 2020. Docket No. 1 (“Compl.”). The 18 parties filed cross-motions for summary judgment. Docket No. 74, 77. The Court found in favor 19 of Ms. Metaxas on the claim for termination benefits and in favor of Gateway on the claim for 20 disability benefits. Docket No. 90 (“SJ Order”). 21 Ms. Metaxas now moves for $310,505 in attorney’s fees pursuant to 29 U.S.C. § 1132(g). 22 Docket No. 96 (“MAF”). Gateway opposes. Docket No. 99 (“Opp.”). Ms. Metaxas replied, 23 increasing the request to $316,880 for time spent on the reply brief itself. Docket No. 100 24 (“Repl.”). The Court now addresses this motion. 25 II. LEGAL STANDARD 26 A. Motion for Attorney’s Fees (29 U.S.C. § 1132 (g)) 27 For ERISA actions, “the court in its discretion may allow a reasonable attorney’s fee and 1 446, 452 (9th Cir. 1980). The Supreme Court has determined that there is no requirement that fees 2 may only be awarded to a “prevailing party” so long as the claimant has achieved “some degree of 3 success on the merits.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 244–45 (2010). 4 The Ninth Circuit has directed courts to consider the following factors when considering whether 5 to grant ERISA fee awards: (1) the degree of the opposing parties’ culpability or bad faith; (2) the 6 ability of the opposing parties to satisfy an award of fees; (3) whether an award of fees against the 7 opposing parties would deter others from acting under similar circumstances; (4) whether the 8 parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to 9 resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties’ 10 positions. Simonia v. Glendale Nissan/Infiniti Disability Plan, 608 F.3d 1118, 1121–22 (9th Cir. 11 2010) (citing Hummell, 634 F.2d at 446). 12 III. DISCUSSION 13 A. Eligibility for Attorney’s Fees 14 As a preliminary matter, Ms. Metaxas is eligible for attorney’s fees under § 1132(g). 15 Attorney’s fees may be awarded to any party that has achieved “some degree of success on the 16 merits.” Hardt, 560 U.S. at 244–45. “Although the Supreme Court did not address the issue in 17 Hardt, most courts have, in the wake of Hardt determined that a remand to a plan administrator— 18 by itself—does in fact constitute some success on the merits.” Bain v. Oxford Health Ins. Inc., 19 No. 15-CV-03305-EMC, 2020 WL 1332080, at *2 (N.D. Cal. Mar. 23, 2020). Here, the Court 20 granted-in-part summary judgment in favor of Ms. Metaxas. SJ Order, at 40. On the issue of 21 termination benefits, the Court “remand[ed] to the [Plan] administrator for reconsideration” 22 because the Court found that the administrator abused its discretion in interpreting a provision of 23 the Plan and erred procedurally. Id. at 28. Thus, Ms. Metaxas has achieved some success on the 24 merits and is entitled to make a claim under § 1132(g). 25 B. Appropriateness of Attorney’s Fees 26 Having concluded that Ms. Metaxas is eligible under § 1132(g), the Court next considers 27 whether an award of fees is appropriate here under the Hummel factors before determining the 1 1. Degree of the opposing parties’ culpability or bad faith. As to the first factor, this Court 2 finds that the factor weighs in favor of Ms. Metaxas. Ms. Metaxas argues that Gateway’s denial 3 of her termination benefits under the terms of the Plan was improper and an abuse of discretion, 4 permitting Gateway to keep the value of Ms. Metaxas’ benefits (allegedly $1.2 million) for over 5 12 years. MAF, at 5–6. Ms. Metaxas argues that this constitutes culpability and bad faith. MAF, 6 at 6. 7 An employer is “culpable” when it has “violated ERISA, thereby depriving plaintiffs of 8 rights under a pension plan and violating a Congressional mandate” including but not limited to 9 whether the employer “failed to engage in a fair and open-minded consideration” of a plaintiff’s 10 claim. Paese v. Hartford Life & Acc. Ins. Co., 449 F.3d 435, 450–51 (2d Cir. 2006). Although 11 Ms. Metaxas’ conduct in committing fraud in her capacity as President and CEO of Gateway and 12 their effectuating a resignation before she was terminated hardly puts her on good equitable stead, 13 the fact remains that this Court found that Gateway violated ERISA and abused its discretion in 14 determining whether Ms. Metaxas was entitled to benefits under the Plan. See SJ Order. 15 Gateway’s Initial Claim Committee violated its discretionary authority in interpreting provisions 16 of the Plan and in concluding that Ms. Metaxas was ineligible for termination benefits. Id. at 23.

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