United States v. Michael Dale

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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Nos. 09-2510/2890
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Cindy Rote, *
*
Appellee, *
* Appeals from the United States
v. * District Court for the
* Southern District of Iowa.
Titan Tire Corporation, *
* [PUBLISHED]
Appellant. *
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Submitted: February 8, 2010
Filed: July 28, 2010
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Before LOKEN, Chief Judge,1 GRUENDER and BENTON, Circuit Judges.
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PER CURIAM.
Cindy Rote has been seeking long-term disability benefits from Titan Tire
Corporation (“Titan”) for over eight years. Rote began working at Titan’s plant on
November 7, 1984, and joined the union. In 1997, Rote had surgeries to replace the
joints in both of her thumbs. In April 1998, while she was still recovering from
surgery, the union went on strike. The strike ended in October 2001. Rote wanted to
return to work at the end of the strike, and Titan asked Dr. Anthony Sciorrotta to
1The Honorable James B. Loken stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on March 31,
2010. He has been succeeded by the Honorable William Jay Riley.

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evaluate Rote’s ability to return to work. Dr. Sciorrotta restricted Rote to jobs that did
not require frequent pinching with more than five pounds of force and did not involve
kneeling or squatting. Titan informed Rote that there were no jobs compatible with
those restrictions available at the plant.
Although Rote had difficulty obtaining the necessary paperwork from Titan, she
eventually filed an application for long-term disability benefits. Dr. Scott Neff, who
performed Rote’s joint replacement surgeries, evaluated Rote and stated that “her
restrictions have not changed, and consequently, based on the employer[’]s decision,
she is considered disabled.” Rote submitted Dr. Neff’s evaluation with her disability
application. Under Titan’s disability plan, an employee is eligible for benefits if she
is “permanently and totally disabled . . . so as to be prevented thereby from being
physically able to perform the work of any classification in the local plant.” Titan, as
the administrator of its own ERISA plan, denied Rote’s application for disability
benefits, stating only that she did “not qualify as ‘disabled’ under the plan.”
Rote filed suit against Titan, challenging the denial of her application. The
district court vacated Titan’s denial of benefits, holding that the decision was
conclusory and lacked much of the explanation required under 29 C.F.R. § 2560.503-
1. The court remanded the matter to the administrator for reevaluation of Rote’s
claim. See Abram v. Cargill, Inc., 395 F.3d 882, 886 (8th Cir. 2005) (“A reviewing
court must remand a case when the court or agency fails to make adequate findings
or explain the rationale for its decision.”).
On remand, Rote submitted additional evidence to support her claim for
disability benefits. In particular, Rote’s attorney wrote to both Dr. Neff and Dr.
Sciorrotta. Her attorney’s letter noted that “[a] question has now arisen as to whether
the restrictions you imposed . . . were only temporary or were intended to be
permanent,” and then asked whether the doctors recommended that Rote “continue to
follow these [work] restrictions indefinitely.” Both doctors responded affirmatively
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with respect to the restrictions on pinching and gripping. Dr. Sciorrotta explained,
“With respect to whether I would recommend that Ms. Rote continue to follow these
restrictions indefinitely, I would say that regarding her hands, she should continue
with those restrictions since they were outlined by Dr. Neff and were felt to be of a
permanent nature.”2
Titan again denied Rote’s application, claiming that because the restrictions on
her physical activity were only to be followed “indefinitely,” Rote was not
“permanently” disabled and therefore did not qualify for long-term disability benefits
under the plan. Rote requested a formal review of the decision and included in her
request a letter from Dr. Neff clarifying that he intended Rote’s restrictions to be
“permanent.” Titan indicated that it would be “consulting with an independent
medical expert regarding Ms. Rote’s appeal,” but it later denied Rote’s claim. After
Rote made several requests for whatever information the independent medical expert
provided, she eventually learned that he provided no written information.
Rote again filed suit, challenging Titan’s denial of her application for long-term
disability benefits. The district court 3 held that Titan abused its discretion in denying
Rote’s application and reversed the decision, ordering Titan to pay Rote disability
benefits. The district court also awarded Rote attorney’s fees in the amount of
$13,675, which included fees incurred from May 18, 2004, the date Rote filed her
original suit in the district court. Titan appeals both decisions.
Like the district court, we review the plan administrator’s decision for an abuse
of discretion because the plan gives Titan discretionary authority to determine
2Dr. Sciorrotta also opined that Rote’s restrictions related to kneeling and
squatting need not be continued indefinitely.
3The Honorable John A. Jarvey, United States District Judge for the Southern
District of Iowa.
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eligibility for benefits. See LaSalle v. Mercantile Bancorporation, Inc. Long Term
Disability Plan, 498 F.3d 805, 808-09 (8th Cir. 2007). 4 “Under this standard, we
consider whether the administrator’s decision is supported by such relevant evidence
that a reasonable mind might accept as adequate to support such a conclusion.” Id. at
809. “[W]e ask whether the decision to deny . . . benefits was supported by
substantial evidence, meaning more than a scintilla but less than a preponderance.”
Schatz v. Mut. of Omaha Ins. Co., 220 F.3d 944, 949 (8th Cir. 2000).
We agree with the district court that Titan abused its discretion in denying
Rote’s application for long-term disability benefits. The parties do not dispute that
Rote qualifies as “disabled” under the plan and that her disability is “total.” Titan’s
sole reason for denying Rote’s application was that she had not shown her disability
to be “permanent.” To reach that conclusion, Titan interpreted the doctors’ letters as
suggesting that Rote’s restrictions are not permanent, focusing on the use of the term
“indefinitely” and relying on one dictionary definition of “indefinite.” See Black’s
Law Dictionary 769 (6th ed. 1990) (noting that the “[t]erm is more synonymous with
temporary than with permanent”). However, the intended meaning of “indefinitely”
—that the restrictions are permanent—was clear from the context of the letters that
Rote’s attorney and the doctors exchanged. Rote’s attorney first informed the doctors
that there was a question about “whether the restrictions . . . were only temporary or
were intended to be permanent,” before asking whether the restrictions should be
continued “indefinitely.” The doctors’ affirmative responses, when read in context,
show that the restrictions are permanent, not temporary. Moreover, the doctors
resolved any doubt about their intent in their subsequent letters. Dr. Neff responded
4“[T]he financial conflict of interest present whenever an insurer both evaluates
claims for benefits and pays granted claims . . . does not change the standard of review
but may be relevant in determining whether the insurer abused its discretion.” Jones
v. Unum Provident Corp., 596 F.3d 433, 438 (8th Cir. 2010). Because we would find
an abuse of discretion in Titan’s denial of benefits even without considering this
conflict of interest, we need not elaborate on the standard of review applicable here.
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affirmatively to a later question from Rote’s attorney asking whether the work
restrictions were “intended to be permanent restrictions.” And Dr. Sciorrotta wrote
that Rote’s restrictions “were felt to be of a permanent nature.” Notwithstanding
Titan’s strained reading of the responses the doctors gave to the question whether the
restrictions should be continued “indefinitely,” it is plain that the doctors have
consistently maintained that Rote’s work restrictions are permanent. Under these
circumstances, we conclude that Titan’s decision denying Rote’s application for
disability benefits was not based on “substantial evidence.” See Schatz, 220 F.3d at
949. We therefore affirm the district court’s decision holding that Titan abused its
discretion.5
Turning to the attorney’s fee award, Titan first argues that an award of any
attorney’s fees is inappropriate here. “This Court will not overturn a District Court’s
decision regarding attorneys’ fees absent an abuse of discretion.” Sheehan v.
Guardian Life Ins. Co., 372 F.3d 962, 968 (8th Cir. 2004). When examining whether
to award attorney’s fees in an ERISA case, courts are to consider:
(1) the degree of the opposing parties’ culpability or bad faith; (2) the
ability of the opposing parties to satisfy an award of attorneys’ fees; (3)
whether an award of attorneys’ fees against the opposing parties could
deter other persons acting under similar circumstances; (4) whether the
parties requesting attorneys’ fees sought to benefit all participants and
beneficiaries of an ERISA plan or to resolve a significant legal [question]
regarding ERISA itself; and (5) the relative merits of the parties’
positions.
5Titan also argues that we should evaluate its denial of benefits using the factors
enumerated in Finley v. Special Agents Mutual Benefit Ass’n, 957 F.2d 617, 621 (8th
Cir. 1992). However, this case does not involve interpretation of the plan’s terms as
in Finley; the definition of “permanently disabled” is not in dispute. Therefore, Finley
is not applicable.
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Lawrence v. Westerhaus, 749 F.2d 494, 496 (8th Cir. 1984) (per curiam). However,
“the ‘five factors’ set forth by Westerhaus are by no means exclusive or to be
mechanically applied.” Martin v. Ark. Blue Cross & Blue Shield, 299 F.3d 966, 972
(8th Cir. 2002) (en banc).
We find no abuse of discretion in the district court’s decision to award
attorney’s fees. As the district court noted, “[t]his was not a close case.” Titan relied
on a hypertechnical reading of the medical evidence and ignored the doctors’ attempts
to clarify their opinions. Additionally, there was evidence that Titan attempted to
frustrate Rote’s ability to move the claims process forward by repeatedly ignoring her
requests for documents. While no evidence has been presented regarding the second
or third factors, and while the fourth factor favors Titan in that Rote’s suit will only
benefit her own application for benefits, we nonetheless conclude that in light of all
the “relevant considerations,” id., the weight of the first and fifth factors is sufficient
here to show that the district court did not abuse its discretion in awarding attorney’s
fees.
Finally, we turn to Titan’s argument that, even if an award of some attorney’s
fees were appropriate, the fees incurred during Rote’s first suit and during the
administrative proceedings occasioned by the district court’s remand order should not
have been awarded. The statute governing attorney’s fee awards under ERISA
provides: “In any action under this subchapter . . . by a participant, beneficiary, or
fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs
of action to either party.” 29 U.S.C. § 1132(g)(1). According to Titan, the first suit
and the subsequent administrative proceedings were “pre-litigation” and not part of
the current “action” within the meaning of the statute. Therefore, Titan argues, the
district court may not award fees incurred before the second lawsuit. Whether
attorney’s fees incurred during the earlier proceedings are recoverable is a question
“of statutory interpretation, which we review de novo.” Parke v. First Reliance
Standard Life Ins. Co., 368 F.3d 999, 1010 (8th Cir. 2004).
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As an initial matter, Titan incorrectly portrays the relationship between Rote’s
first and second suits, asserting that they were separate cases and therefore separate
actions such that Rote cannot now recover fees incurred during the first suit. In
Gerhardt v. Liberty Life Assurance Co. of Boston, 574 F.3d 505 (8th Cir. 2009), we
dismissed an appeal from a district court’s order remanding a benefits claim to the
administrator for further proceedings, id. at 506-07. We held that this was not a final
order under 28 U.S.C. § 1291, even though the docket listed the case as terminated
and the district court did not explicitly note it was retaining jurisdiction. Gerhardt,
574 F.3d at 511. The district court’s initial remand order here is nearly identical to the
one in Gerhardt, and for the reasons outlined in Gerhardt, see id. at 511-12, we reject
Titan’s claim that the district court did not retain jurisdiction over Rote’s claim.
Because the two suits were the continuation of one “action,” Rote can recover fees
incurred during the first suit.
Since Rote’s two suits are part of the same “action,” this case is distinguishable
from those on which Titan relies, Parke and Spearman v. Motorola Disability Income
Plan, 279 F. Supp. 2d 1047 (S.D. Iowa 2003). In Parke, we held that attorney’s fees
incurred during pre-litigation proceedings before the plan administrator could not be
recovered, even though those proceedings were necessary to exhaust a benefits claim,
because that pre-litigation work was not part of the “action” within the meaning of the
statute. 368 F.3d at 1011. The pre-litigation administrative proceedings at issue in
Parke were “neither necessary for enforcement of a judicial decree nor so closely
connected to the resolution of the judicial action as to fall within the scope of
[Sullivan v. Hudson, 490 U.S. 877 (1989)] and [Pennsylvania v. Delaware Valley
Citizens’ Council for Clean Air, 478 U.S. 546 (1986)],” cases where the Supreme
Court awarded attorney’s fees under other statutes for work performed during
administrative proceedings. Parke, 368 F.3d at 1011. Unlike the fees at issue in
Parke, the disputed fees here were not incurred pre-litigation, but rather after a court-
ordered remand. We are also not persuaded that this case should be resolved
identically to Spearman, where the district court refused to award attorney’s fees
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incurred during a court-ordered remand to allow the plaintiff to administratively
exhaust her ERISA claim. 279 F. Supp. 2d at 1052. Unlike the situation in Spearman,
the district court’s remand order here was not occasioned by Rote’s failure to satisfy
the prerequisites for bringing her claim in district court.
Instead, Rote’s case is more closely analogous to those where courts have found
that fees incurred during an administrative remand were appropriate. See, e.g.,
Hudson, 490 U.S. 877; Delaware Valley, 478 U.S. 546. “Where the administrative
proceedings are ordered by the district court and where that court retains jurisdiction
over the action during the pendency of the administrative proceedings, we hold that
ERISA authorizes the award of associated costs.” Peterson v. Cont’l Cas. Co., 282
F.3d 112, 122 (2d Cir. 2002) (upholding an award of similar fees incurred during a
remand to the plan administrator); cf. Graham v. Hartford Life & Accident Ins. Co.,
501 F.3d 1153, 1163 (10th Cir. 2007) (“[W]e do not intend to create a per se rule that
attorney’s fees are inappropriate whenever a district court decides to remand a claim
to the plan administrator rather than ordering benefits directly.”). We therefore affirm
the district court’s attorney’s fee award. 6
The judgment of the district court is affirmed.
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6Titan does not argue that, once the district court determined that an attorney’s
fees award was permissible under the statute, the court abused its discretion in
determining whether to award fees incurred during Rote’s first suit or the
administrative remand. Nor does Titan argue the court abused its discretion in
determining the amount of fees to award generally.
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