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United Refining Company Incentive Savings Plan for Hourly Employees v. Morrison

United States District Court, Third Circuit

December 23, 2013

UNITED REFINING COMPANY INCENTIVE SAVINGS PLAN FOR HOURLY EMPLOYEES and ROBERT KAEMMERER, in his capacity as Plan ADMINISTRATOR, Plaintiff,
v.
DALLAS Q. MORRISON, an individual, and MARK WILLIAM PRATT, an individual, Defendants.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

SUSAN PARADISE BAXTER, Magistrate Judge.

I. RECOMMENDATION

It is respectfully recommended that Plaintiffs' motion for costs and attorney's fees [ECF No. 10], as supplemented by declaration [ECF No. 29] be granted in part and denied in part as follows: Plaintiff's attorney's fees for Attorney Rillo should be awarded in the amount of $2, 725.00; Plaintiff's attorney's fees for their local counsel, MIJB, should be awarded in the amount of $2, 952.00; and costs should be reimbursed in the amount of $399.75. Plaintiffs' request for fees and costs in excess of these amounts should be denied.

II. REPORT

A. Relevant Procedural and Factual History

On October 2, 2012, Plaintiffs United Refining Company Incentive Savings Plan for Hourl Employees ("the Plan") and Robert Kaemmerer, in his capacity as Plan Administrator ("Kaemmerer"), initiated this interpleader action to resolve a dispute as to the beneficial rights to the account of James Jacobs ("Jacobs"), a Plan participant who died on October 2, 2009. The vested balance of the account is approximately $102, 959.00. The competing claimants are Dallas Q. Morrison ("Morrison"), a former neighbor and friend of Jacobs, and Mark William Pratt ("Pratt"), Jacobs' nephew, both of whom are named as Defendants in this action.

Plaintiffs were dismissed from this case following a case management conference held by the Court on March 18, 2013. On April 8, 2013, Plaintiffs filed a motion for attorney's fees and costs in the total amount of $24, 796.07 to be assessed against the account at stake in this action [ECF No. 10]. This motion was subsequently amended by declaration of Plaintiffs' attorney, Christopher J. Rillo ("Rillo"), to correct a mathematical error, which reduced the total amount of fees and costs to $24, 396.07 [ECF No. 29]. Each Defendant filed a response to Plaintiffs' motion [ECF Nos. 32 and 36, respectively] opposing any award of fees and costs to Plaintiffs' counsel. Plaintiffs subsequently filed a reply to Defendants' responses [ECF No. 37], and thereafter filed a second declaration of Attorney Rillo requesting that Plaintiffs' attorney's fee request be increased by $2, 000.00 to reflect the time invested in preparing the reply [ECF No. 38].

In the meantime, Defendants filed cross motions for summary judgment to resolve the ultimate issue before the Court [ECF Nos. 15, 33]. An oral argument on Defendants' motions was held before the Honorable Nora Barry Fischer on November 18, 2013, after which Judge Fischer issued an Order entering judgment in favor of Defendant Pratt and against Defendant Morrison with respect to all right, title and interest as beneficiary of Jacobs' Plan account [ECF No. 40]. Plaintiffs' outstanding motion for attorney's fees and costs [ECF No. 10], as amended, has now been referred to the undersigned for Report and Recommendation.

B. Discussion

1. Entitlement to Attorney's Fees and Costs in Interpleader

Neither the interpleader statute nor Rule 22 of the Federal Rules of Civil Procedure provides for the award of attorney's fees or costs to the stakeholder in an interpleader proceeding. See 4 James Wm. Moore, et al., Moore's Federal Practice § 22.06, at 22-96 (Matthew Bender 3d ed. 2002); 7 Charles Allen Wright, et al., Federal Practice and Procedure : Civil §1719 (3d ed. 2001). Nonetheless, "[d]espite the lack of explicit statutory authorization, modern federal practice follows the traditional equity rule that gives the trial court discretion to allow a disinterested stakeholder to recover attorney's fees and costs from the stake itself.'" First Trust Corp. v. Bryant , 410 F.3d 842, 856 (6th Cir. 2005), quoting 4 Moore's Federal Practice, § 22.06, at 22-98 to 22-99 & n. 4 (3d ed. 2002)).

Equitable principles favor an award of attorney's fees where the interpleading party is "(1) a disinterested stakeholder, (2) who had conceded liability, (3) has deposited the disputed funds with the court, and (4) has sought a discharge from liability." Metropolitan Life Ins. Co. v. Kubichek , 83 Fed.Appx. 425, 431 (3d Cir. 2003) (citations omitted). In this case, all four of these equitable considerations are satisfied. Thus, the Court concludes that Plaintiffs are entitled to an equitable award of attorney's fees and costs in this matter.

2. Reasonableness of Requested Fees

One of the reasons justifying an award of a stakeholder's attorney's fees in an interpleader action are that such fees are generally recognized as being relatively modest, since all that is necessary to bring an interpleader action is the preparation of a petition, the deposit of the contested funds into the court, service on the claimants, and the preparation of an order discharging the stakeholder from the suit. 7 Charles A. Wright, Arthur Miller & Mary K. Kane, Federal Practice and Procedure §1719 (3d ed. 2001). See also In re Mandalay Shores Co-op. Housing Ass'n, Inc., 21 F.3d 380, 383 (11th Cir. 1994) (finding that a stakeholder's attorney's fees are generally justified in interpleader because "fees for the stakeholder typically are quite minor and therefore do not ...


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