Dimopoulou v. First Unum Life Insurance Company

Background

Dimitra Dimopoulou sued First Unum Life Insurance Company under the Employee Retirement Income Security Act (ERISA), alleging that Unum wrongfully denied her long-term disability benefits. The court had previously denied the parties’ competing motions for summary judgment and sent the matter back to Unum for further administrative review while retaining jurisdiction. The court had also issued an interim award of $223,361.00 in attorneys’ fees and $5,868.08 in costs.

During the remand, Unum agreed to pay Dimopoulou’s benefits retroactively to November 30, 2010. Dimopoulou then moved for a final award of attorneys’ fees, costs, and prejudgment interest. She requested $337,875.50 in attorneys’ fees, $2,694.95 in costs, and prejudgment interest at New York’s 9% statutory rate, totaling $396,462.66.

Success on the Merits

ERISA allows a court to award reasonable attorneys’ fees and costs when a claimant has achieved “some degree of success on the merits.” The court had previously found that the remand met that requirement. It reaffirmed that conclusion, explaining that proceedings ordered by the district court and conducted while the court retains jurisdiction remain part of the ERISA action.

The court rejected Unum’s arguments that the remand was a separate administrative proceeding and that fees should be denied because no judgment had been entered. The court also declined to apply the additional factors commonly considered in ERISA fee decisions.

Attorneys’ Fees

The court used the lodestar method, which calculates a presumptively reasonable fee by multiplying reasonable hours by reasonable hourly rates. It approved the requested rates for the attorneys and support staff other than lead attorney Michael Hiller’s requested $750 hourly rate. The court found that Dimopoulou had not shown that $750 matched the relevant market rate and reduced Hiller’s rate to $675, consistent with the rate previously approved in the interim fee award.

That rate reduction lowered the possible fee award to $323,845.50. The court then found that the hours claimed were excessive, including 127.95 hours spent preparing the current fee application, overlap with the earlier fee application, work that could have been delegated to junior attorneys, and vague time entries. The court rejected Unum’s proposed 50% to 75% reduction as too large but applied a 20% across-the-board reduction. The resulting attorneys’ fee award was $259,076.40.

Costs and Prejudgment Interest

Because Unum did not object to the requested costs, the court awarded $2,694.95.

The court also found that prejudgment interest was available even though Dimopoulou had not obtained a judgment and Unum had paid benefits after administrative review. Because Unum had agreed to pay benefits retroactively to November 30, 2010, the court used that date as the beginning of the relevant period and found no basis to delay the starting date based on the evidence Unum claimed it had received later.

The court rejected Dimopoulou’s requested 9% rate as inequitable and potentially excessive. Instead, it applied a 3.25% prime rate to the midpoint of the period from November 30, 2010, through March 26, 2020, when Dimopoulou received Unum’s retroactive benefits check. The court awarded $143,166.98 in prejudgment interest.

Disposition

Judge Andrew L. Carter, Jr. granted Dimopoulou’s motion for attorneys’ fees, costs, and prejudgment interest with modifications. The court awarded $259,076.40 in attorneys’ fees, $2,694.95 in costs, and $143,166.98 in prejudgment interest, and directed the Clerk of Court to enter judgment consistent with the opinion. The court denied Unum’s motion to strike the reply affidavit because the court did not rely on that affidavit in deciding the fee application.