Caccavo v. Reliance Standard Life Insurance Company
- Kimba Wood
- 1:19-cv-06025-KMW-KNF
- U.S. District Court · Southern District of New York
- 13
In Caccavo v. Reliance, Judge Wood denied Reliance’s request for attorneys’ fees and costs despite finding it eligible, because the relevant factors weighed against an award.
Reliance Standard Life Insurance Company was denied its request for attorneys’ fees and costs. Frank Caccavo was not ordered to pay those fees or costs.
What happened
In Caccavo v. Reliance Standard Life Insurance Company, Frank Caccavo challenged Reliance’s reduction of his long-term disability benefits under an employee-benefits law. The court previously ruled for Reliance, and the appeals court affirmed that judgment. Reliance then renewed its request for attorneys’ fees and costs.
The court ruled that the appeals court’s earlier denial of fees for Reliance’s appellate work did not prevent Reliance from seeking fees for its work in the district court. Although Reliance had achieved enough success to qualify for a possible fee award, the court found that the relevant factors did not support making Caccavo pay Reliance’s fees.
Judge Kimba M. Wood denied Reliance’s motion for attorneys’ fees and costs. The court did not decide whether the requested amount was reasonable because it found that an award was not justified under the applicable factors.
The detailed version
- Caccavo v. Reliance Standard Life Insurance Company · No. 1:19-cv-06025-KMW-KNF
- Kimba Wood
- Nov. 2, 2022
Background
Frank Caccavo brought an action under the Employee Retirement Income Security Act of 1974, a federal law governing employee benefit plans, against Reliance Standard Life Insurance Company. He challenged Reliance’s reduction of his long-term disability benefits after an automobile accident. Reliance argued that the reduction complied with the insurance policy.
After the parties filed cross-motions for summary judgment, the court granted summary judgment to Reliance. Caccavo appealed, and the Second Circuit affirmed the judgment on June 28, 2022. Reliance separately sought attorneys’ fees and costs for its work in the district court and for its appeal. The Second Circuit denied Reliance’s request for appellate fees on July 14, 2022. Reliance then renewed its district-court motion for fees and costs.
Claim-preclusion issue
Caccavo argued that the Second Circuit’s denial of appellate fees barred Reliance’s district-court motion under claim preclusion, a doctrine that prevents a party from relitigating a claim that was already finally decided. The court rejected that argument. It treated the Second Circuit’s order as a final merits decision, and it concluded that the Second Circuit had authority to decide Reliance’s request for fees connected to the appeal.
The court nevertheless found that the two fee motions did not involve the same cause of action. The district-court motion concerned work performed in 2019 and 2020, while the appellate motion concerned later work on the appeal. The work and factual circumstances were distinct, even though Reliance relied on substantially similar legal arguments. The Second Circuit’s denial of appellate fees therefore did not bar Reliance’s district-court motion.
Eligibility for fees
Under 29 U.S.C. § 1132(g)(1), a court may award reasonable attorneys’ fees and costs to either party in an ERISA action. A party must first show “some degree of success on the merits.” The court held that Reliance met this threshold because it obtained summary judgment and prevailed on appeal. Reliance was therefore eligible for a possible fee award.
Chambless factors
The court then considered the five factors from Chambless v. Masters, Mates & Pilots Pension Plan, which guide the discretionary decision whether to award fees:
- Culpability or bad faith: This factor did not support an award. Reliance argued that Caccavo acted improperly by refusing to provide a renewal contract and certain pay statements. The court found no evidence of malice, bad faith, breach of a legal duty, or other culpable conduct. It also noted that the courts had not found Caccavo’s claims to lack a reasonable basis.
- Ability to pay: The court gave this factor no weight. Although Reliance argued that Caccavo could pay the requested $47,078.54, a party’s ability to pay is generally neutral.
- Deterrence: This factor weighed against an award. The court reasoned that charging fees to a beneficiary who pursued a colorable but unsuccessful ERISA claim could discourage other plan participants from bringing valid claims, while doing little to deter frivolous claims.
- Relative merits: This factor favored Reliance because it won at summary judgment, but the court declined to give it substantial weight because Caccavo’s claims were not entirely without merit and there was no finding of bad faith or culpability.
- Common benefit: This factor did not favor Reliance. Courts generally treat it as inapplicable or neutral when an ERISA defendant seeks fees.
Because the Chambless factors weighed against an award, especially the culpability and deterrence considerations, the court denied Reliance’s motion for attorneys’ fees and costs. The court did not reach the separate question whether Reliance’s requested fees were reasonable, including whether the hours and activities were adequately supported.
Disposition
Reliance’s renewed motion for attorneys’ fees and costs was DENIED. The clerk was directed to close the motion at ECF No. 58.
Read the full 13-page opinion on CourtListener, the free public archive maintained by the Free Law Project.