Peer v. Liberty Life Assurance Co. of Bos.

THERESA PEER, Plaintiff, v. LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, Defendant.

Case No. 9:17-CV-80281-ROSENBERG/REINHART

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

August 8, 2019

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR ATTORNEY'S FEES AND GRANTING DEFENDANT'S MOTIONS FOR ATTORNEY'S FEES

This cause is before the Court upon Defendant's Motion for Attorney's Fees [DE 71], Plaintiff's Motion for Attorney's Fees [DE 48], and Defendant's Motion for Appellate Attorney's Fees [DE 86].¹ Plaintiff's Motion is granted in part and denied in part. Defendant's Motions are granted. Because the Court's award of fees to Defendant warrants a detailed explanation, the Court sets forth the unusual history of this case below. Next, the Court addresses the merits of the parties' competing motions for attorney's fees.

The History of Litigation in this Case

Plaintiff initiated this action in March of 2017. Plaintiff alleged that she was totally disabled, that she had an insurance policy with Defendant, that the policy contained a waiver-of-premium-benefit for insureds who were totally disabled, and that Defendant had wrongfully denied Plaintiff that benefit. DE 1.

In July of 2017, Plaintiff filed a motion for summary judgment seeking a determination that she was entitled to her waiver-of-premium-benefit. On August 2, 2017, Defendant responded to Plaintiff's motion by informing the Court that it had voluntarily reinstated Plaintiff's requested benefit and that it had done so retroactively so that Plaintiff would have no gap in coverage. When Defendant reinstated Plaintiff's benefit, Defendant also offered to pay Plaintiff's counsel a reasonable attorney fee so that the case could be closed and Defendant could avoid additional litigation costs. See DE 86 at 3. Defendant contended that because of its reinstatement of Plaintiff's benefit, the case had become moot. DE 21 at 3.

When the Court received notification from Defendant that Plaintiff had received the relief sought in her Complaint retroactively, the Court could see no reason to disagree with Defendant that the case had become moot. Accordingly, the Court issued an order to show cause, to Plaintiff, seeking an explanation why the case should not be closed:

On or before Friday August 4, 2017 at 5:00 pm Plaintiff must show cause, in writing, why Plaintiff's Motion for Summary Judgment should not be denied as moot in light of Defendant's Response in Opposition. The Court notes that if the Motion for Summary Judgment is denied as moot and the case is administratively closed, the parties would remain free to litigate attorney's fees.

DE 22. Plaintiff responded to the Court's order to show cause, but Plaintiff's response was difficult to understand. By way of example, the response included the following block paragraph:

A defendant's statement that it has changed its position cannot suffice to satisfy the heavy burden [of mootness]. (United States v. Concentrated Phosphate Export Assn., 393 U.S. 199, 203 (1968). In the context of the present action, that last statement bears repeating. A defendant's statement that it has changed its position cannot satisfy its heavy burden. (Id.) In the present context, it is not even clear that Liberty Life has made any statement at all. There is one sentence in argumentauthored by Liberty's attorney. That is all. It is supported neither by the record nor by affidavit. As an officer of the Court, Peer's attorney can attest to the fact that this sentence was the first notice of any kind given to Peer's attorney in any form that Liberty had changed its position and allegedly voluntarily reinstated Peer's waiver of premium benefit. It may also be said that this change had not been communicated previously to anyone other than possibly Liberty's lawyer. It is further not even clear whether it was intended to communicate an internal communication, whether it reflected a future event intended to take place thereafter or what "voluntarily" might mean. "Reservation of rights" language in insurance industry communications for example indicates that no predicate right has necessarily been found to have been fulfilled, merely that temporarily benefits under an insurance policy are being paid. The absolutely extraordinary and far-reaching effect Liberty's lawyer's argument was apparently intended to have on Peer's claims in the pending action is frankly beyond belief.

DE 23 at 3-4.² What the Court could discern from Plaintiff's response was that Plaintiff's counsel represented that her motion for summary judgment was not moot, that the Court should not accept Defendant's counsel's representation that the benefit had been reinstated and that litigation should continue. Thus, even though the Court could not discern what remained to be adjudicated in the case, the Court accepted Plaintiff's demand for a formal ruling on her motion for summary judgment and the Court ordered that briefing on the motion for summary judgment would resume. DE 24.

Motion practice continued. Plaintiff eventually conceded that her waiver of premium benefit had been reinstated by Defendant and, as a result, the Court denied Plaintiff's motion for summary judgment as moot. DE 40. Plaintiff contended that the mootness of her motion for summary judgment did not mean that her entire case was moot, but the Court could not discern how this was so. Plaintiff's Complaint did contain certain references to events in the future and a desire for the Court to adjudicate something about those events, but the Court could see no legalbasis (and Plaintiff provided none) for the Court to adjudicate hypothetical future events. The Court's confusion was sufficiently great that the Court employed a case management procedure that it had never employed before—the Court ordered Plaintiff to file a statement of the remaining issues in the case that needed adjudication. DE 41. Plaintiff's response to the Court's order again was difficult for the Court to comprehend. Plaintiff's response included the following:

The relief available under ERISA's reticulated remedial provision embraces a declaration by the Court determining Peer to be entitled to the benefits being sought, but this declaratory relief still is outstanding and as yet not found by the Court. (It might strike the Court as odd that Liberty has not admitted expressly that Peer met the definition of "Disability" under the policy nor agreed by stipulation filed with the Court that Peer is "Disabled" or even deemed "Disabled" by Liberty.) Peer has been called upon previously by the Court to explain what relief is required by ERISA, 29 U.S.C. §1132(a)(1)(B) in the face of Liberty's argument that the case was mooted by Liberty's administrative reinstatement of Peer's benefits. (Liberty even made the extraordinary claim that its unilateral decision to reinstate Peer to benefit status deprived this Court of subject matter jurisdiction and consequently that the Court should dismiss the present action as moot.) On short notice Peer was fortunate to be able to locate a case disposing of just an argument in Lamuth v. Hartford Life and Accident Ins. Co., 30 F. Supp. 3D 1036 (E.D. Wash., 2014) ("For the reasons that follow, the Court finds that Dr. Lamuth's claim for payment of benefits is moot, but her claim for a clarification of rights regarding the Pre-existing Condition Limitation and her date of Disability is not.") (Id., 1043.) Peer was also able to locate Dr. Lamuth's memorandum of law arguing that her case was not moot and filed that memorandum in the present action. (Doc. No. 24.) It is less clear here that in Lamuth, that Liberty has actually determined Peer eligible for benefits, Peer is therefore in even more need of and indeed entitled by 29 U.S.C. §1132(a)(1)(B) to a finding by this Court that Peer has met the definition of "Disabled" under the Liberty policy. (Cf. Lamuth, supra, 1042.) ("Hartford granted Dr. Lamuth's claim . . . Hartford explained that Dr. Lamuth 'is eligible for benefits under the terms of the Policy. . .'") Without such a finding that Peer is "Disabled" and entitled to benefits under the Liberty policy, Peer is similarly unable to determine the date of her "Disability" with any certainty. That date, whether as reinstated by Liberty or determined by the Court fixes the date for commencement of the annual review by Liberty of Peer's entitlement to benefits under the Liberty policy. The Liberty policy, namely, proceeds from year to year with benefits certified at one year intervals each year and with a three-month window preceding each subsequent anniversary date for Liberty to review Peer's continued "Disability." In short Peer is entitled to a determination by a finding by the Court that she is "Disabled" under the Liberty policy. Not only that, but Peer is entitled to an order clarifying her rightto future benefits under the Liberty policy, pursuant to 29 U.S.C. §1132(a)(1)(B). These are statutory rights, granted by ERISA itself in its reticulated remedial provision, to wit, 29 U.S.C. §1132(a)(1)(B).

DE 45 at 3. In a detailed order, the Court attempted to analyze Plaintiff's remaining issues for trial. DE 46. The Court divided Plaintiff's remaining issues into three broad categories. First, Plaintiff sought relief on issues that were moot. For example, Plaintiff stated that she wanted a determination that she was disabled in the present, but the Court had already denied Plaintiff's motion for summary judgment on that very issue as moot. DE 46 at 2. Second, Plaintiff stated that she wanted the Court to adjudicate her disability status in the future. The Court ruled as follows: "The Court also fails to see, and Plaintiff fails to provide any cogent legal argument, how the Court may adjudicate Plaintiff's disability status in the future." Third and finally, Plaintiff sought relief as follows: "In clarification of Peer's future benefits, what time frames apply to the dates beginning the anniversaries...