Mar 112014

Concluding a nine-year court battle, John J. Donachie was awarded summary judgment against Liberty Life Assurance Company of Boston, the administrator of his employer’s LTD plan. As respects his request for attorneys’ fees, however, Mr. Donachie was not as fortunate. The District Court denied his application on the ground that he had failed to show that Liberty Life had demonstrated “bad faith” in its handling of the claim.

In a decision handed down March 11, the Second Circuit reversed the District Court’s denial of fees, and, in the process, made several important holdings. First, the court held that a reviewing court must consider whether a claimant has achieved “some degree of success on the merits.” It further held that while a District Court may award fees upon a showing of some degree of success, it may also drill further down by considering the five (5) so-called Chambless factors. And as respects the Chambless factors, the Second Circuit emphasized that a District Court “cannot selectively consider some factors while ignoring others,” that “bad faith” and “culpability” (both elements of the first Chambless factor) are distinct, and that a finding of culpability alone will satisfy the first factor.

Lastly, and perhaps most significantly, citing to Birmingham v. SoGen-Swiss Int’l Corp. Ret. Plan, 718 F.2d 515, 523 (2d Cir. 1983), the Second Circuit held that where (as here) a claimant not only achieved “some degree of success on the merits,” but also acquired “prevailing party” status, granting a fee request “is appropriate absent some particular justification for not doing so.” And finding no particular justification present, the Second Circuit awarded Mr. Donachie fees (and a remand to the District Court for the purpose of determining the amount).

Donachie v. Liberty Life Assurance Co. of Boston, 745 F.3d 41 (2d Cir. 2014)

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