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Van Dusseldorp v. Lean Ho

United States District Court, S.D. Iowa, Central Division

March 4, 2014

STEVE VAN DUSSELDORP et al., Plaintiffs,
v.
KIM LEAN HO et al., Defendants

For Steve Van Dusseldorp, Jason Andringa, Lin Chape, Vermeer Corporation 401k Retirement Plan, Plaintiffs: Rachel T. Rowley, BROWN WINICK GRAVES GROSS BASKERVILLE & SCHOENEBAUM PLC, DES MOINES, IA.

For John Koolstra, Robert Smith, Plaintiffs: Rachel T. Rowley, LEAD ATTORNEY, BROWN WINICK GRAVES GROSS BASKERVILLE & SCHOENEBAUM PLC, DES MOINES, IA.

For Sarah Shaw, Ashley Robeson, Cross Claimants: Mark A Otto, OTTO LAW OFFICE PLLC, Newton, IA.

OPINION

ROBERT W. PRATT, U.S. DISTRICT JUDGE.

ORDER

Before the Court is Plaintiffs' Motion for Attorney Fees and Costs (" Motion" ), filed

Page 1070

January 7, 2014.[1] Clerk's No. 26. The affidavit submitted by Plaintiffs' counsel in support of this Motion states that " Plaintiffs are seeking an award of fees and costs in the amount of $15,507.82." Ex. B (Aff. in Supp. of Award of Attorney Fees and Costs) (Clerk's No. 26-3) ¶ 7. Of that amount, $13,643.50 is attributable to attorney fees and the remaining $1,864.32 is attributable to various costs incurred in the course of this litigation. Ex. A (Itemization of Attorney Fees and Costs) (Clerk's No. 26-2) at 1-6. On January 20, 2014, Defendants Ashley Robeson and Sarah Shaw (collectively " Defendants" ) filed a response (Clerk's No. 27), the substance of which is that Defendants " do not resist the sum of $15,507.82 being paid from the 401(k) proceeds that have been paid into the Court in this action." Id. ¶ 2. Plaintiffs have not filed a reply. The Motion is fully submitted.[2]

I. LAW AND ANALYSIS

A. Legal Standard

" [Plaintiffs] bear[] the burden of establishing [their] entitlement to an [attorney fee] award." See Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). " The amount of fees to be awarded in an interpleader action[, however,] is committed to the sound discretion of the district court," Trs. of the Dirs. Guild of Am.-Producer Pension Benefits Plan v. Tise, 234 F.3d 415, 426 (9th Cir. 2000) (internal citation omitted); accord In re Technical Equities Corp., 163 B.R. 350, 360 (Bankr. N.D. Cal. 1993) (" It is fundamental that an award of attorney fees in an interpleader action is within the trial court's discretion . . . ." ) and will not be disturbed " absent a clear abuse of that discretion," Wescott Agri-Prods., Inc. v. Sterling State Bank, Inc., 682 F.3d 1091, 1094 (8th Cir. 2012) (internal citation and quotation marks omitted). Thus, an award of " attorney fees to an interpleader [plaintiff] is not mandatory, but . . . permissive." In re Technical Equities Corp., 163 B.R. at 360. The only limitation imposed on trial courts in this context is the prohibition on awarding attorney fees " if incurred in asserting [the interpleader plaintiff's] interest . . . in the funds." Id. (internal citation omitted); cf. Ferber Co. v. Ondrick, 310 F.2d 462, 467 (1st Cir. 1962) (" [I]nterpleader fee is usually awarded out of the fund to compensate a totally disinterested stakeholder who had been, by reason of the possession of the fund, subjected to conflicting claims through no fault of its own." (emphasis added)). " [T]he broad rule governing an award of attorney[] fees is reasonableness." Protective Life Ins. Co. v. Kridner, No. 12-0582, at *17 (D. Minn. Mar. 27, 2013).

Page 1071

" Interpleader is a valuable procedural device for ERISA plans . . . [that] are confronted with conflicting . . . claims upon the proceeds of . . . [the deceased's] benefit plan." Tise, 234 F.3d at 426. The filing of an interpleader action benefits all claimants " by promoting early litigation on the ownership of the fund, thus preventing dissipation." Id. (internal citation and quotation marks omitted). Because this benefit inures to all claimants, the law allows interpleader plaintiffs to claim reimbursement of their attorney fees and costs. Id.; Protective Life Ins. Co., at *7 (" [A] disinterested stakeholder who is threatened with multiple liability and who interpleads the claimants should ordinarily not bear the expenses it incurs in bringing the action, and is entitled to attorneys['] fees." (internal citations and quotation marks omitted)).

Recoverable expenses are properly limited to the attorney fees billed to prepare the complaint, obtain service of process on the claimants to the fund, and secure the plaintiff's discharge from liability and dismissal from the lawsuit. Tise, 234 F.3d at 426-27 (internal citation omitted). An interpleader plaintiff is, thus, not entitled to an attorney fee reimbursement for any " additional professional services" rendered by the plaintiff's attorney. See Hartford Fire Ins. Co. v. Prof'l Men's Inv., Inc., 337 F.2d 1011, 1012 (3d Cir. 1964). Because of this limited scope of " compensable expenses," the typical attorney fee award is " modest." Tise, 234 F.3d at 427 (internal citations omitted); see also Ferber Co., 310 F.2d at 467 (" By its very nature, . . . [the attorney fee award] is of a relatively small amount, simply to compensate for initiating the proceedings." ). Additionally, since the attorney fees are reimbursed out of the interpleaded ...


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