Metropolitan Life Ins. Co. v. Bambi Gicana ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 13 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
METROPOLITAN LIFE INSURANCE No. 18-55785
COMPANY,
D.C. No.
Plaintiff, 2:16-cv-08317-RSWL-RAO
BAMBI GICANA
MEMORANDUM*
Defendant-cross-claimant-
Appellee.
v.
ARACELI MALONEY
Defendant-cross-defendant-
Appellant,
METROPOLITAN LIFE INSURANCE No. 18-55989
COMPANY, 18-56174
Plaintiff, D.C. No.
2:16-cv-08317-RSWL-RAO
and
ARACELI MALONEY,
Defendant-cross-defendant-
Appellant,
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
v.
BAMBI GICANA,
Defendant-cross-claimant-
Appellee.
Appeal from the United States District Court
for the Central District of California
Ronald S.W. Lew, District Judge, Presiding
Argued and Submitted November 4, 2019
Pasadena, California
Before: FARRIS, McKEOWN, and PARKER,** Circuit Judges.
Appellant Araceli Maloney appeals three orders of the United States District
Court for the Central District of California. The first order imposed an equitable
lien on behalf of the Efren Molina Martinez Living Trust (“Trust”). The second
order awarded attorneys’ fees to Appellee Bambi Gicana, and the third order
awarded her costs.
This case was initiated as an interpleader action by Metropolitan Life to
determine the beneficiary of life insurance proceeds of Efren Molina Martinez,
who died on March 16, 2016. Maloney, his sister, and Gicana, his widow, were
both named as Defendants-in-Interpleader, and the parties stipulated to the
**
The Honorable Barrington D. Parker, Jr., United States Circuit Judge
for the U.S. Court of Appeals for the Second Circuit, sitting by designation.
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dismissal of Metropolitan Life. In the course of reviewing Gicana’s claims that
Maloney had breached her fiduciary duty to the Trust, additional funds that were in
the Decedent’s 401(k) entered the dispute before the District Court. The parties
agreed that these funds were assets of the Trust. However, they dispute the
identities of the beneficiaries of the Trust. That dispute is the subject of a separate
state court probate proceeding.
The District Court concluded that Maloney had violated her fiduciary duties
by diverting Trust assets—the 401(k) funds—into her own retirement account. The
evidence also established that Maloney had used those funds for unauthorized
personal expenditures. Accordingly, the District Court imposed an equitable lien in
favor of the Trust on Maloney’s personal IRA and required her to provide the Trust
with an accounting and to restore improperly disbursed funds.
On appeal, Maloney argues that she is the sole beneficiary of the Trust, and
that, in any event, her IRA is an exempt asset that cannot be the subject of an
equitable lien. We see no merit to these contentions. It is not disputed that both the
insurance proceeds and the 401(k) funds are governed by ERISA. A court may
hold a fiduciary personally responsible for a breach of fiduciary duty under ERISA
and impose appropriate equitable remedies. Mertens v. Hewitt Assocs., 508 U.S.
248, 252 (1993) (citing 29 U.S.C. § 1109(a)). Because Gicana traced the 401(k)
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funds to Maloney’s personal IRA, the District Court correctly imposed the lien
against that account.
Maloney argues that her personal IRA is an exempt asset. She contends this
result is compelled by Rousey v. Jacoway, 544 U.S. 320, 326 (2005), and Cal.
Code Civ. Proc. Section 704.115. We disagree. Rousey involved exemptions from
bankruptcy estates, and the statute Maloney cites concerns exemptions from money
judgments, not immunity from equitable liens. Maloney also misreads the District
Court’s summary judgment order, incorrectly arguing that the order named her as
the sole beneficiary of the Trust. The District Court made no such finding. It
explicitly noted it made no determinations as to the validity of the Trust’s
amendments.
Maloney also appeals the District Court’s grant of attorneys’ fees and costs
to Gicana. She contends that because the equitable lien was granted on behalf of
the Trust, Gicana did not prevail before the District Court and therefore is not
entitled to fees and costs. Again, we disagree. In an ERISA action, the District
Court has the discretion to award attorneys’ fees and costs to either party. Elliot v.
Benefits Ins. Co., 337 F.3d 1138, 1148 (9th Cir. 2003); 29 U.S.C. § 1132(g)(1).
This Court reviews the District Court’s award of attorneys’ fees and costs for abuse
of discretion. Micha v. Sun Life Assurance of Can., Inc., 874 F.3d 1052, 1057 (9th
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Cir. 2017); Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir.
2000).
To be awarded attorneys’ fees, the movant need only show “some degree of
success on the merits.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 255
(2010). In the District Court, Gicana obtained an equitable lien that halted
Maloney’s violation of the terms of the trust—in particular her misuse of Trust
assets for personal benefit. In addition, Maloney was required to furnish an
accounting and to return funds improperly taken from the Trust. We agree with the
District Court that this relief satisfies the “some degree of success” standard. This
Court has required, as a condition of awarding attorneys’ fees, that district courts
consider the factors outlined in Hummel v. S.E. Rykoff & Co., 634 F.2d 446, 453
(9th Cir. 1980). The court below considered each of those factors and determined
that, on balance, they supported Gicana’s request for attorneys’ fees. That analysis
was appropriate, and we see no abuse of discretion in either the award of attorneys’
fees and costs, or in the amounts granted.
We have considered the remainder of Maloney’s arguments and find them to
be without merit. Thus, the judgment and orders of the District Court are
AFFIRMED.
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