Almont Ambulatory Surgery Ctr. v. Ilwu-Pma Welfare Plan ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS OCT 28 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALMONT AMBULATORY SURGERY No. 20-55464
CENTER, LLC, a California limited liability
company; et al., D.C. No.
2:14-cv-02177-MWF-VBK
Plaintiffs-Appellants,
v. MEMORANDUM*
INTERNATIONAL LONGSHOREMEN'S
AND WAREHOUSEMEN'S UNION-
PACIFIC MARITIME ASSOCIATION
WELFARE PLAN,
Defendant-Appellee,
and
INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION; et al.,
Defendants.
Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding
Submitted October 21, 2021**
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Pasadena, California
Before: CALLAHAN, OWENS, and FORREST, Circuit Judges.
Appellants1 appeal from the district court’s order awarding attorney fees to
Appellee International Longshore and Warehouse Union-Pacific Maritime
Association Welfare Plan (“the Plan”). Having jurisdiction under 28 U.S.C. § 1291,
Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006), we affirm.
1. FRCP 26 disclosure. Appellants argue the district court erred in
awarding fees to the Plan because the Plan violated Federal Rule of Civil Procedure
26 by failing to disclose its insurance policy that provided coverage for the Plan’s
cost of defense. However, Rule 26 only requires disclosure of “any insurance
agreement under which an insurance business may be liable to satisfy all or part of
a possible judgment in the action or to indemnify or reimburse for payments made
to satisfy the judgment.” Fed. R. Civ. P. 26(a)(1)(A)(iv) (emphasis added). As the
insurance policy here provides coverage only for defense costs, and not coverage for
any judgment entered in the underlying action, the Plan did not violate Rule 26.
2. ERISA’s attorney fee provision. Next, Appellants argue that an
1
Appellants are Almont Ambulatory Surgery Center, LLC; CIRO Surgery
Center, LLC; East Bay Ambulatory Surgery Center, LLC; Modern Institute of
Plastic Surgery & Antiaging, Inc.; New Life Surgery Center, LLC d/b/a Beverly
Hills Surgery Center, LLC; West Hills Surgery Center, LLC; Independent Medical
Services, Inc.; San Diego Ambulatory Surgery Center, LLC; and Orange Grove
Surgery Center, LLC.
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insurance company is not permitted to seek attorney fees under ERISA, and here,
the real party in interest is the Plan’s insurer because it will receive any funds
recovered by the Plan. However, ERISA does not require a party to have paid for its
defense out of pocket to receive a fee award; attorney fees can be awarded so long
as the underlying action was brought “by a participant, beneficiary, or fiduciary.” 29
U.S.C. § 1132(g)(1). Here, Appellants, who are “beneficiaries” of the Plan, brought
the underlying action themselves, thus fulfilling this requirement. Corder v. Howard
Johnson & Co., 53 F.3d 225, 229, 231 (9th Cir. 1994). As the Plan was a party to
the underlying action, the district court did not err in awarding attorney fees to the
Plan. Id.
3. Apportionment of fees. Appellants argue the fee award was
unreasonable because the district court failed to exclude fees incurred during the
district court proceedings and fees incurred litigating Appellants’ non-ERISA
claims. A “district court’s decision to award or deny attorney’s fees in an ERISA
action” is reviewed for abuse of discretion, as is the “district court’s determination
of the amount of reasonable attorney’s fees.” Van Gerwen v. Guarantee Mut. Life
Co., 214 F.3d 1041, 1045 (9th Cir. 2000).
Despite Appellants’ contentions, the district court explicitly recognized that
the Plan sought attorney fees for both the district court and appellate phases of
litigation and separated the two categories in the billings submitted to the district
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court. Consistent with its ruling that the Plan was not entitled to district court fees,
the court shaved off the over $650,000.00 in fees arising from the district court
phase. Furthermore, the district court also explicitly recognized that some of the
claims on appeal were non-ERISA claims and reduced the already reduced fee
amount by a further ten percent. See Downey Cmty. Hosp. v. Wilson, 977 F.2d 470,
474 (9th Cir. 1992). While the district court arguably could have analyzed the award
amount with a greater degree of precision, we do not have a “definite conviction that
the [district] court made a clear error of judgment” such that it abused its discretion
in awarding $208,395.45 to the Plan, especially considering the overlapping issues
in the ERISA and non-ERISA claims. Welch v. Metropolitan Life Ins. Co., 480 F.3d
942, 945 (9th Cir. 2007) (citation omitted); see, e.g., Webb v. Sloan, 330 F.3d 1158,
1169 (9th Cir. 2003).
4. Notice of Motion for Fees. Finally, San Diego Ambulatory Surgery
Center, LLC, and Orange Grove Surgery Center, LLC (San Diego and Orange
Grove) argue they did not receive adequate notice or opportunity to be heard
regarding the Plan’s motion for attorney fees because the Plan neglected to name
them specifically in the moving papers. However, whether San Diego and Orange
Grove received sufficient notice and opportunity to be heard requires consideration
of “all the circumstances.” United States v. Castro, 78 F.3d 453, 456 (9th Cir. 1996)
(citation omitted). While the motion and moving papers do not specifically name
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San Diego or Orange Grove, the Plan conferred with all Appellants’ counsel to
discuss the motion prior to it being filed, as required by the relevant local rules. The
Plan’s counsel “indicated clearly that [the] motion [was] going to be seeking
sanctions and fees against all plaintiffs and all of their attorneys of record.”
Furthermore, the Plan named San Diego and Orange Grove in its reply brief, to
which San Diego and Orange Grove were allowed to file an objection. And San
Diego and Orange Grove appeared at the motion’s hearing, received time to argue
the attorney fees issue, and expressly joined the arguments submitted already by
their co-Appellants. In sum, although not initially named in the moving papers, the
totality of the circumstances establishes that San Diego and Orange Grove received
adequate notice and opportunity to respond before fees were awarded against them.
See FTC v. Alaska Land Leasing, Inc., 799 F.2d 507, 510 (9th Cir. 1986).
AFFIRMED.
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