Wise v. Monterey County Hospitality Association Health and Welfare Plan

Background

Benjamin Wise sued the Monterey County Hospitality Association Health and Welfare Plan, the Monterey County Hospitality Association, MVI Administrators Insurance Solutions, Inc., UnitedHealthcare Insurance Company and United Healthcare Services, Inc. (collectively, “UHC”), and MAXIMUS Federal Services, Inc. Wise claimed that the defendants denied benefits under an employee-benefit plan governed by the Employee Retirement Income Security Act (ERISA).

Wise sought coverage for a MyoPro Motion G powered arm brace after a physician submitted a coverage request. UHC denied the request and later denied an appeal. MAXIMUS then conducted an independent medical review and upheld UHC’s decision.

In an earlier ruling, the court denied Wise’s motion for partial summary judgment; denied UHC’s and MAXIMUS’s motions for summary judgment on Wise’s claim that UHC improperly denied benefits under ERISA § 502(a)(1)(B); granted those motions as to restitution sought under Wise’s fiduciary-duty claim; denied them as to injunctive relief under that claim; and granted them as to Wise’s claim for denial of a full and fair review. After a trial, the court found that UHC improperly denied coverage of the MyoPro, but found that UHC did not breach its fiduciary duty. The court also found in favor of MAXIMUS on the remaining claims against it. Judgment was entered on August 12, 2020.

Fee standard and entitlement to an award

Wise sought $156,645 in attorney’s fees and $846.39 in costs from UHC. Under ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1), a court may exercise its discretion to award reasonable fees and costs to either party if the fee claimant achieved some degree of success on the merits. The court also considered five factors commonly called the Hummell factors: the opposing party’s culpability or bad faith; its ability to pay; whether an award would deter similar conduct; whether the request sought to benefit plan participants or resolve an important ERISA question; and the relative merits of the parties’ positions.

The court found that Wise achieved meaningful success because he prevailed on his claim that UHC improperly denied coverage for the MyoPro. It found that all five Hummell factors favored an award. The court therefore concluded that Wise was eligible to recover fees and costs from UHC, while noting that the appropriate amount remained disputed.

Attorney’s fees

The court used the lodestar method, which generally calculates a fee by multiplying reasonable hours by a reasonable hourly rate. It approved hourly rates of $450 for attorney D. Jason Davis and $525 for attorney Zoila E. (Villacorta) Davis because UHC did not challenge those rates and Wise provided evidence supporting them.

Wise initially requested compensation for 242.4 hours by Jason Davis and 90.6 hours by Zoila Davis, or 333 hours total. The court excluded 71.1 hours for Jason Davis and 21.9 hours for Zoila Davis because those hours concerned only defendants other than UHC. It did not make a separate reduction for time devoted solely to MVI’s motions to dismiss because Wise had already excluded 18.9 such hours from the request. The court also excluded 8.4 hours claimed by Jason Davis because Wise first submitted documentation for those hours with his reply brief rather than with the motion.

After those exclusions, the court calculated $77,085 for 171.3 hours by Jason Davis and $36,067.50 for 68.7 hours by Zoila Davis, for a lodestar total of $113,152.50. Because Wise did not prevail on the fiduciary-duty claim, the court reduced that amount by 15 percent. It awarded $96,179.62 in attorney’s fees.

Costs

Wise requested $846.39 in costs. UHC argued that $337.56 for serving other defendants should be excluded. The court agreed, explaining that UHC was not responsible for service costs involving those defendants, that MAXIMUS and MVI were prevailing parties, and that Wise had agreed that he and the Monterey County Hospitality Association entities would each bear their own fees and costs. The court awarded $508.83 in costs.

Disposition

Judge Lucy Koh granted in part Wise’s motion for attorney’s fees and reimbursement of costs. The court awarded $96,179.62 in attorney’s fees and $508.83 in costs, for a total award of $96,688.45.