Shultz v. Aetna Life Insurance Company (JOINT ASSIGN)(MAG2)

CourtDistrict Court, M.D. Alabama
DecidedAugust 13, 2019
Docket1:16-cv-00094
StatusUnknown

This text of Shultz v. Aetna Life Insurance Company (JOINT ASSIGN)(MAG2) (Shultz v. Aetna Life Insurance Company (JOINT ASSIGN)(MAG2)) is published on Counsel Stack Legal Research, covering District Court, M.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shultz v. Aetna Life Insurance Company (JOINT ASSIGN)(MAG2), (M.D. Ala. 2019).

Opinion

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

MIDDLE DISTRICT OF ALABAMA, SOUTHERN DIVISION

RICHARD P. SHULTZ, ) ) Plaintiff, ) ) CIVIL ACTION NO. v. ) 1:16cv94-MHT ) (WO) AETNA LIFE INSURANCE ) COMPANY and L-3 ) COMMUNICATIONS WELFARE ) PLAN, ) ) Defendants. )

OPINION AND ORDER This case has been brought pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. § 1001, et seq. After being awarded long-term-disability benefits because he can no longer work, plaintiff Richard P. Shultz now seeks, under ERISA’s fee-shifting provision, 28 U.S.C. § 1132(g)(1), attorney’s fees and costs from defendants Aetna Life Insurance Company and L-3 Communications Welfare Plan. For the reasons below, the court holds that Shultz’s petition for attorney’s fees and costs is due to be granted, though not for the full amount requested.

I. BACKGROUND As described in the magistrate judge’s first recommendation, Shultz began working as an engineer for

a company in 2003. Rep. & Rec. (doc. no. 158) at 2. After being diagnosed with bladder cancer in July 2013, he could no longer work; his last day on the job was July 23, 2013. One of his treating physicians stated

that Shultz had, “No ability to work ... due to inoperable hernia & pulmonary emboli.” Id. at 3. The physician later indicated that Shultz’s “Estimated

return to work date” was “Never.” Id. Based at least in part on that physician’s findings, Aetna Life approved Shultz’s short-term disability benefits beginning in September 2013 and later approved his

claim for 24 months of long-term-disability benefits beginning on October 22, 2013. Aetna Life informed Shultz that, should he still be disabled after 24 months, he would need to meet a more stringent definition of “disabled” to continue receiving

benefits; specifically, he would need to show that he was “unable to work at any reasonable occupation solely because of an illness, injury, or disabling pregnancy- related condition.” Id. at 4.

At Aetna Life’s prompting, Shultz applied for, and received, Social Security Disability Income. Aetna Life sought reimbursement for those payments to recoup part of the payments it had made to Shultz. Id. at 5.

However, the magistrate judge noted that the standard for Social Security disability benefits--which Shultz satisfied--is much higher than Aetna Life’s “reasonable

occupation” standard. Id. at 11. As Shultz continued the treatment for his cancer and as the end of the 24-month period approached, Aetna Life investigated whether Shultz was able to work in

“any reasonable occupation.” A n Aetna Life nurse reviewed Shultz’s file and noted that he was “inclined to conclude, based on the current medical records in the file, that Richard Shultz would have ful[l] time functional capacity.” Claim File Pt. 2 (doc. no.

115-33); see Rep. & Rec. (doc. no. 158) at 5. Aetna Life provided the nurse’s assessment to Shultz’s treating physicians for their approval, and both signed it. However, each physician later wrote with concerns

about Shultz’s ability to work; in fact, one physician wrote that “th[e] letter noting [his] signature ... was in error on the pre-printed form submitted by Aetna.” Rep. & Rec. (doc. no. 158) at 6.

Aetna Life eventually terminated Shultz’s long-term-disability benefits based on a “Transferable Skill Analysis” that found that he could work as a

“boat dispatcher,” “purser,” or “test desk supervisor,” a job very similar to the one that he was previously deemed incapable of working. Id. at 6-7 (referring to Shultz’s prior job as a “Help Desk Supervisor”). When

Shultz appealed Aetna Life’s determination to a higher level, Aetna Life requested that an independent physician, Dr. Elena Antonelli, complete an assessment. See id. at 7.

Dr. Antonelli said she attempted to reach Shultz’s treating physicians, but that they failed to return her calls; at least one of the physicians disputed that account. Dr. Antonelli never physically examined

Shultz but, based on a telephone conversation and a review of his medical records, she determined that he could return to work. She later read letters, submitted by Shultz’s treating physicians, which stated

that they did not agree that Shultz was able to return to work, but the letters did not affect her decision. See id. at 8. Dr. Antonelli noted that neurocognitive

testing might be helpful to better understand Shultz’s condition, but the record contains no indication that such testing occurred. Based on Dr. Antonelli’s review, Aetna Life denied Shultz’s appeal. See id.

Shultz then filed suit in this federal court, claiming that Aetna Life and the Welfare Plan improperly withheld long-term-disability and other related benefits from him. The magistrate judge, to whom the case had been referred, recommended that the

matter be remanded to Aetna Life’s administrator so the parties could “complete the record and obtain a new decision.” Id. at 13. In a later recommendation noting again that the court was without the benefit of

a complete record, the magistrate judge declined the Welfare Plan’s request to rule as to the claim against it for non-long-term-disability benefits. See Supp. Rep. & Rec. (doc. no. 164). Over objections, the court

adopted both of the magistrate judge’s recommendations and remanded the case to the Welfare Plan for a new determination on a complete record. See Judgment (doc.

no. 172). Following the remand order, Shultz timely filed the pending petition for attorney’s fees and costs. After he filed the petition, Aetna Life notified him that it

was reinstating his long-term-disability benefits. See Pl.’s Supp. to Mot. for Attorneys’ Fees (doc. no. 184- 1) at 1. He supplemented his petition to reflect that he had prevailed in getting his long-term-disability benefits. See id. But he also asked the court to keep

the case pending because the parties still had to address “ancillary benefits and a few secondary issues.” Id. Shultz has now represented to the court that the parties “recently resolved all remaining

administrative issues not presently before the [c]ourt.” Pl.’s Statement Regarding Conclusion of Admin. Process (doc. no. 187) at 1. Aetna Life and the Welfare Plan oppose Shultz’s

petition for fees and costs. They argue that (1) he did not achieve the required “success on the merits” to warrant attorney’s fees; (2) the court should exercise

its discretion to deny attorney’s fees; and (3), in the alternative, the court should dramatically reduce his requested fees and eliminate his requested expenses.1 The court will address each of these arguments in turn.

1. In telephonic conference calls on April 5 and December 19, 2018, the parties declined the opportunity to present supplemental briefing on: (1) Aetna Life’s decision to reinstate Shultz’s long-term-disability II. DISCUSSION

The court’s analysis proceeds in two parts. First, the court considers whether Schultz is entitled to an award of attorney’s fees and expenses from Aetna Life and the Welfare Plan under 29 U.S.C. § 1132(g)(1).

Second, the court considers the amount of attorney’s fees Schultz may recover.

A. Schultz has demonstrated that he is entitled to attorney’s fees under ERISA.

Under § 1132(g)(1), “the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party” provided that “the fee claimant has achieved ‘some degree of success on the merits.’” Hardt v.

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