Gibbs v. Gen Amer Life Ins Co

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 98-50061
Summary Calendar

CAROLYN J. GIBBS,

Plaintiff-Appellant,

VERSUS

ASHLEY E. GIBBS, a Minor Child and ANDREW F. GIBBS, a Minor Child,

Intervenor Plaintiffs-Appellees,

VERSUS

GENERAL AMERICAN LIFE INSURANCE COMPANY,

Defendant-Appellee.

Appeal from the United States District Court
for the Western District of Texas

March 3, 1999
Before DAVIS, DUHÉ, and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

Appellant Carolyn J. Gibbs appeals the denial of her motion

for attorney’s fees in an ERISA case against Appellee General

American Life Insurance Company. Instead, the district court
awarded General American its attorney’s fees. We affirm in part

and vacate in part.

Background

Carolyn J. Gibbs married Joel Gibbs in 1988. They had two

children, Ashley and Andrew, who are Intervenors in this action.

Joel Gibbs was employed by Waco Magnetic Imaging and as part of his

employee benefits package, he was issued an insurance policy

through General American Life Insurance Company (“General

American”). Carolyn Gibbs was the named beneficiary of the policy.

In 1995, Carolyn and Joel Gibbs separated, and in December of that

year, Joel filed for divorce. The divorce proceedings upset

Carolyn Gibbs to such a degree that she told a friend that it would

be easier to deal with if Joel Gibbs were killed in a car wreck.

On January 25, 1996, Carolyn Gibbs took her children to the

Mothers’ Day Out program at Crestview Church of Christ. Carolyn

Gibbs discovered that her son Andrew had forgotten his lunch, so

she told him that his father would bring his lunch. When Andrew

cried, she promised that she would bring it herself. At

approximately 9:30 a.m., she called Joel Gibbs’ office and was told

by the office manager that he was on the phone. Carolyn Gibbs told

the office manager that she was late for school and asked her to

tell Joel to go by her townhouse to get Andrew’s lunch and to take

it to him at school. Carolyn told the office manager to tell Joel

that she would leave the kitchen door unlocked.

Joel Gibbs left work at 9:50 a.m. to retrieve Andrew’s lunch.

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When he did not return after a few hours, the police were

contacted. Joel Gibbs did not respond to telephone calls or to his

pager. Carolyn Gibbs had three classes at Baylor University from

9:30 a.m. to 2:00 p.m. At approximately 2:30 p.m. she picked up

the children at Crestview. Andrew was crying when she picked him

up and said that his daddy hadn’t brought his lunch. Carolyn Gibbs

then drove home and noticed Joel’s car in the carport. She then

noticed a police car and an officer in uniform who said that the

police had been called by Joel Gibbs’ office.

Carolyn Gibbs told the officer to drive around to the front

door because of the chow dog in the backyard. She took the

children in the backdoor and immediately noticed how messy the

house was. Pictures and videos were spread on the floor, and

drawers were opened and appeared as if they had been searched. She

called Joel’s name but received no response. She went upstairs and

saw Joel lying in the hallway with blood everywhere. She then ran

downstairs and took the kids out the front door.

The police entered the house and found Joel Gibbs’ body.

Although the police told Carolyn Gibbs that it appeared her husband

killed himself, it was later determined that he had been stabbed

numerous times and that his throat had been cut and that he had

been killed hours earlier. The Hewitt Police Department released

the townhouse back to Carolyn Gibbs at approximately 5:00 p.m. The

next day, Carolyn Gibbs’ father, who had arrived the previous

evening from Colorado, was instrumental in arranging for his

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daughter’s Sunday School class to clean up the townhouse. This

included ripping out the bloodstained carpet, repainting the walls,

and generally cleaning up all signs of the murder.

The Hewitt Police Department contacted the Texas Rangers for

assistance, but their investigation did not begin until after the

townhouse had been cleaned. The murder weapon was found at a

subsequent time. Carolyn Gibbs discovered additional bloodstains

when she returned to the townhouse on January 31 for a final

cleaning before she left town. She pointed those out to the

police. Items discovered missing from the townhouse included a

camcorder, some home videos, Carolyn Gibbs’ high school class ring,

and one of the children’s silver baby mug. Ten days after the

murder, Carolyn Gibbs was approached by the Texas Rangers to

undergo a polygraph examination. Upon advice of counsel, she

declined.

Carolyn Gibbs and her children moved in with a friend for

approximately four weeks. They then moved to Colorado Springs to

live with her parents. In January 1997, Carolyn Gibbs’ former

boyfriend, Bartley Bell, moved to Colorado; they married in July.

In April 1996, Gibbs submitted a claim for the proceeds from

Joel Gibbs’ life insurance policy to his employer. General

American received the claim in July 1996. General American was

advised by Joel Gibbs’ employer that Carolyn Gibbs was a suspect in

her husband’s death. The Hewitt Police Department advised General

American that Carolyn Gibbs had not been ruled out as a suspect.

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 In October 1996, Carolyn Gibbs contacted General American to

determine the status of her claim. General American contacted the

Hewitt Police Department again and was informed that Carolyn Gibbs

still had not been eliminated as a suspect. General American then

wrote her and informed her that the claim would not be paid until

the investigation into Joel Gibbs’ death had been completed. The

insurance policy at issue contained a provision which allowed a

beneficiary suspected to be involved in an insured’s death to waive

payment of the proceeds and designate another beneficiary. Under

this provision, Carolyn Gibbs could have waived her entitlement to

the insurance proceeds and have had them assigned to her minor

children. She elected not to make this waiver.

Carolyn Gibbs initiated a suit for benefits under ERISA

against General American in February 1997, claiming that General

American had refused to pay the benefits due her. At that time,

General American filed an interpleader counterclaim under Federal

Rule of Civil Procedure 22, depositing the insurance proceeds into

the registry of the court in the amount of $88,852.00. Carolyn and

Joel Gibbs’ two minor children intervened, and a guardian ad litem

was appointed to represent their interests.

After a bench trial, the district court concluded that Carolyn

Gibbs had not prevailed on her claims against General American but

that she had prevailed in her claims against the Intervenors

because they failed to prove by a preponderance of the evidence

that Carolyn Gibbs caused or was involved in the death of Joel

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Gibbs. This conclusion is not the subject of this appeal. This

appeal is solely about attorney’s fees under ERISA. Carolyn Gibbs

requested payment of her attorney’s fees by General American. The

district court found that General American had not acted in bad

faith and denied Gibbs’ request for attorney’s fees. However, the

district court determined that General American was entitled to an

award of fees in the amount of $21,100.85 to be paid by Gibbs in

order to deter others from filing premature lawsuits to collect

insurance benefits. The district court further determined that the

guardian ad litem’s fees and costs in the amount of $19,047.98 were

to be paid by Gibbs from the proceeds of the insurance policy.

Gibbs timely appeals.

Analysis

Under ERISA, “the court in its discretion may allow a

reasonable attorneys’ fee and costs of action to either party.” 29

U.S.C. § 1132(g)(1). This court reviews the district court’s

decision with respect to the award of costs and fees under ERISA

for an abuse of discretion. Todd v. AIG Life Insurance Co., 47

F.3d 1448, 1458 (5th Cir. 1995). This court considers five factors

in determining whether an attorney’s fee award is appropriate:

(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;

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 (3) whether an award of attorneys’ fees against the opposing
party would deter other persons acting under similar
circumstances;

(4) whether the parties requesting attorney’s 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’ position.

Id. (citing Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255

(5th Cir. 1980)).

We note at the outset that the district court did not abuse

its discretion in denying Gibbs’ request for attorney’s fees. It

was entirely appropriate for General American to interplead the

proceeds of the insurance policy as General American was merely

attempting to avoid multiple claims and double payments.

We also conclude that the district court abused its discretion

in awarding attorneys’ fees to the guardian ad litem. In Martin v.

Blue Cross and Blue Shield of Virginia, Inc., 115 F.3d 1201 (4th

Cir. 1997), the Fourth Circuit held that only a prevailing party is

entitled to a consideration for attorneys’ fees in an ERISA action.

This holding is consistent with this circuit’s statement in Boggs

v. Boggs, 82 F.3d 90 (5th Cir. 1996), rev’d on other grounds, 520

U.S. 833, 117 S.Ct. 1754, 138 L.Ed.2d 45 (1997), explaining that

ERISA “allows the court to award ERISA beneficiaries, participants,

and fiduciaries reasonable attorney’s fees and costs when they are

the prevailing party.” Id. at 94 n. 1. As the court in Boggs

affirmed the district court’s denial of the plaintiff’s request for

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declaratory judgment, it concluded that the plaintiff was not

entitled to attorneys’ fees. In the present case, the Intervenors

were not the prevailing party. For this reason, the guardian ad

litem is not entitled to attorneys’ fees.

The last issue that we address is the award of attorney’s fees

and costs to General American, the defendant in this lawsuit.

Although ERISA provides that the court may in its discretion award

costs and attorney’s fees “to either party,” we note the

conspicuous absence of any case citation by General American

wherein a defendant was awarded costs and attorney’s fees under

ERISA. The reason is obvious--such awards to the defendant are

rare. Although we recognize that General American is the

prevailing party in this case, this status merely provides for

“consideration” for attorneys’ fees. There is no presumption in

this circuit in favor of awarding costs and attorneys’ fees under

ERISA. Todd, 47 F.3d at 1459. This is especially true in the case

of a prevailing defendant. As stated in Marquardt v. North AM. Car

Corp., 652 F.2d 715 (7th Cir. 1981), even if the defendant prevails

in an ERISA action, consideration of the appropriate factors for

awarding attorneys’ fees “will seldom dictate an assessment of

attorneys’ fees against ERISA plaintiffs.” Id. at 720.

In awarding costs and fees to General American, the district

court relied heavily upon Factor #3: whether an award of

attorneys’ fees against the opposing party would deter other

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persons acting under similar circumstances. According to the

district court, “the award of attorneys’ fees to Defendant would,

hopefully, deter others from filing premature lawsuits to collect

insurance proceeds when the beneficiary remains under suspicion of

having murdered the insured.” Findings of Fact and Conclusions of

Law (Dec. 15, 1997), p. 8-9, ¶ 6. We acknowledge that the record

is clear that the district court found Gibbs to be an unsympathetic

plaintiff. The fact that Gibbs remained under suspicion for her

husband’s murder when she initiated suit was pivotal in the

district court’s decision. But that fact cannot be viewed in a

vacuum. Had it not been for the Hewitt Police Department’s

allowing most of the physical evidence to be cleaned up or

destroyed shortly after the murder, someone might have been charged

with the murder in the foreseeable future. But as it now stands,

Gibbs may be a suspect forever. We find that the deterrence factor

will be sufficiently satisfied with Gibbs’ being required to pay

for her own attorney’s fees and the Intervenor’s fees. Under these

circumstances it was an abuse of discretion to require Gibbs to

also pay General American’s fees and costs. Therefore, although §

1132(g)(1) does not explicitly differentiate between plaintiffs and

defendants in an ERISA case, we do not think that this is the

exceptional case in which a defendant should be awarded attorneys’

fees.

Accordingly, the judgment of the district court awarding costs

and attorney’s fees to General American Life Insurance Company and

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to the guardian ad litem is vacated. The judgment in all other

respects is affirmed.

AFFIRMED IN PART; VACATED IN PART.

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