Regional Employers' Assurance Leagues Voluntary Employees' Beneficiary Ass'n Trust v. Castellano

164 F. Supp. 3d 705, 2016 U.S. Dist. LEXIS 17264, 2016 WL 540794
CourtDistrict Court, E.D. Pennsylvania
DecidedFebruary 10, 2016
DocketCIVIL ACTION NO. 03-6903
StatusPublished
Cited by5 cases

This text of 164 F. Supp. 3d 705 (Regional Employers' Assurance Leagues Voluntary Employees' Beneficiary Ass'n Trust v. Castellano) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Regional Employers' Assurance Leagues Voluntary Employees' Beneficiary Ass'n Trust v. Castellano, 164 F. Supp. 3d 705, 2016 U.S. Dist. LEXIS 17264, 2016 WL 540794 (E.D. Pa. 2016).

Opinion

MEMORANDUM AND ORDER

ELIZABETH T. HEY, United States Magistrate Judge

I. FACTS AND PROCEDURAL HISTORY

Defendant/Counter Claimant (“Mrs. Castellano”) has filed a motion for attorneys’ fees in this ERISA action. The facts and procedural background are long and sordid and discussed at length in the August 24, 2015 decision issued by the Honorable Mary McLaughlin granting summary judgment to Mrs. Castellano against the counterclaim defendants1 on her Section 502(a)(1)(B) claim for benefits under her husband’s welfare benefit plan, the Regional Employers’ Assurance League Voluntary Employees’ Beneficiary Association (“REAL VEBA”). See Doc. 351. As explained in Judge McLaughlin’s opinion, Domenic M. Castellano, D.D.S., Mrs. Cas-tellano’s husband, owned a dental practice which joined the REAL, an unincorporated association of employers who adopted a benefit structure for their employees’ under the REAL’S welfare benefit plan. Id. at 6-7. The assets of the REAL are held in trust by the REAL VEBA. Id. The Trust and all of the adoption documents were authored, by John Koresko, V, an attorney and public accountant. Id. at 4.

Dr. Castellano purchased a $750,000 flexible premium adjustable life insurance policy for his dental practice through the REAL, which named the Trustee of the REAL VEBA Trust as beneficiary. See [709]*709Doc. 351 at 8-9. Penn-Mont, a corporate affiliate of the law firm of Koresko & Associates, P.C., was the plan administrator. Id. at 4, 5. Upon Dr. Castellano’s death in 2003, the REAL VEBA Trust received a check for $751,266.18 in life insurance proceeds. Id. at 9. Mrs. Castella-no submitted a REAL VEBA Death Benefit Form naming her as Dr. Castellano’s beneficiary. Id. at 10. In response, Penn-Mont gave Mrs. Castellano a choice — ten annual payments of $75,000 or a lump-sum payment of $597,560.14. Id. at 11. Mrs. Castellano demanded a lump-sum payment of $750,000, and, in response, Penn-Mont filed a declaratory judgment action against Mrs. Castellano. Id. at 12-13. On June 29, 2005, Penn-Mont denied Mrs. Castellano’s claim for benefits. Id. at 13.

On August 24, 2015, more than twelve years after Dr. Castellano’s death and the submission of the Death Benefit Form, and nearly twelve years after the inception of this lawsuit, Judge McLaughlin granted summary judgment to Mrs. Castellano on her counterclaim for violation of ERISA section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), and ordered the Trust to pay Mrs. Castellano $750,000. See Doc. 351 at 30.2

Mrs. Castellano, by her attorney Ira B. Silverstein, has filed a motion for attorneys’ fees and costs totaling $1,009,905.85, which includes a request for a 25% upward adjustment. See Doc. 353. The Honorable Wendy Beetlestone, to whom the case is now assigned, has referred the motion to the undersigned. Doc. 358. The motion is supported by Mr. Silverstein’s affidavit and voluminous detailed time records. Docs. 353-2 through 353-7.3 The Koresko Entities have not responded to the motion. I directed the DOL to respond and it has opposed the motion in part, arguing that the attorneys’ fees and costs should not be borne by the REAL VEBA or, if they are, should receive no priority above the equitable distribution upon which the court will decide after the accounting process is completed. See Docs. 359, 363 at 1-2. Additionally, although it does not address any of the billing entries, the DOL argues that the court should reduce the fees and costs to those related to work performed on the single claim under which Mrs. Castellano obtained relief. Id. at 2. Mrs. Castellano has submitted a reply in support. Doc. 364.

II. LEGAL STANDARDS

The first step in considering an award of attorneys’ fees in an ERISA case [710]*710is to determine whether the claimant achieved “some degree of success on the merits.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010).

The second step in an ERISA attorneys’ fees analysis is to determine whether attorneys’ fees should be awarded. Although “there is no presumption that a successful plaintiff in an ERISA suit should receive an award [of attorneys’ fees] in the absence of exceptional circumstances,” McPherson v. Employees’ Pension Plan of Am. Re-Ins. Co., Inc., 33 F.3d 253, 254 (3d Cir.1994), the Third Circuit has acknowledged that ERISA defendants often bear the burden of attorneys’ fees for a prevailing plaintiff. Brytus v. Spang & Co., 203 F.3d 238, 242 (3d Cir.2002).

The Third Circuit has developed a list of factors to be considered in making the determination of whether an award of attorneys’ fees is appropriate: (1) the offending parties’ culpability or bad faith; (2) the ability of the offending parties to satisfy an award of attorneys’ fees; (3) the deterrent effect of an award of attorneys’ fees against the offending parties; (4) the benefit conferred on members of the pension plan as a whole; and (5) the relative merits of the parties’ positions. Ursic v. Bethlehem Mines, 719 F.2d 670, 673 (3d Cir.1983). Although the court may consider other factors, at a minimum “it must articulate its considerations, its analysis, its reasons and its conclusions touching on each of [the Ursic] factors.” McGuffey v. Brink’s, Inc., 594 F.Supp.2d 553, 555 (E.D.Pa.2009) (Brody, J.) (quoting Anthuis v. Colt Indus. Operating Corp., 971 F.2d 999, 1012 (3d Cir.1992)). Moreover, the Ursic factors are not a rigid test. They provide a useful framework to analyze a motion for attorneys’ fees. Fields v. Thompson Printing Co., 363 F.3d 259, 275 (3d Cir.2004). “[N]o one of [the] factors is decisive, and some may not be apropos in a given case, but together they are the nuclei of concerns that a court should address” in considering an award of attorneys’ fees in an ERISA case. Viera v. Life Ins. Co. of No. Am., Civ. No. 09-3574, 2013 WL 3199091, at *2 (E.D.Pa. June 25, 2013) (Robeno, J.).

If the court determines attorneys’ fees should be awarded, the final step in the analysis requires the court to “review the attorneys’ fees and costs requested and limit them to a reasonable amount.” Hardt, 560 U.S. at 249, 130 S.Ct. 2149; see also Viera, 2013 WL 3199091, at *2.

III. ANALYSIS

I note that the DOL “does not take issue with Castellano’s contention that she is entitled to some award of attorney’s fees and costs based on the former fiduciaries’ arbitrary and capricious denial of her benefits claim.” Doc. 363 at 1. However, the Third Circuit has determined that full analysis of the Ursic factors is necessary in determining the propriety of a fee award. McGuffey, 594 F.Supp.2d at 555 (quoting Anthuis, 971 F.2d at 1012).

1. Degree of Success

There can be no doubt that Mrs. Castel-lo achieved “some degree of success” in this action. From the outset, she sought the full amount of the plan benefit to which she was entitled after her husband’s death. She achieved it.

2. Ursicors

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164 F. Supp. 3d 705, 2016 U.S. Dist. LEXIS 17264, 2016 WL 540794, Counsel Stack Legal Research, https://law.counselstack.com/opinion/regional-employers-assurance-leagues-voluntary-employees-beneficiary-paed-2016.