Flores v. Life Ins. Co. of North America, 770 F. Supp. 2d 768

Flores, an ERISA claimant, sought short-term disability benefits and later LTD from Bechtel plan; LINA was the insurer.
Bechtel was the designated plan administrator and sponsor; LINA acted only as insurer and did not hold administrator status.
Flores filed suit in January 2010 after administrative denials; Bechtel/LINA eventually agreed to pay full STD and partial LTD in August 2010.
During administrative proceedings, Flores sought copies of internal claims manuals; LINA refused to produce the Transition Manual as proprietary material.
Flores argued penalties under ERISA § 1132(c) and attorney’s fees under § 1132(g); court later denied penalties and awarded partial fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Can penalties be assessed against the insurer (LINA) under ERISA?	Flores argued LINA acted as de facto administrator and should be penalized.	Bechtel is the designated administrator; LINA is not liable for penalties.	Penalties cannot be assessed against LINA; Bechtel is the plan administrator; court assumes arguendo possible but denies penalties.
Was a penalties award warranted for failure to disclose the Transition Manual?	Manual was relevant as policy/guidance and should have been disclosed.	Manual was not required or relevant to Flores's claim.	No penalty; failure to disclose was not shown to be prejudicial or required by regulation.
Did Flores achieve some degree of success on the merits justifying attorney's fees?	The suit prompted LINA to reconsider and award benefits; this constitutes success.	No success within the litigation context since relief occurred administratively.	Flores achieved some degree of success; fees may be awarded as the suit catalyzed relief.
What is the reasonable hourly rate and total attorney's fees award?	Apply market-rate for experienced ERISA counsel.	Limit fees or rates appropriate given the modest amount in controversy.	Hourly rate set at $300; total award of $17,925 in attorney's fees and costs.

Williams v. Metro. Life Ins. Co., 609 F.3d 622 (4th Cir. 2010) (no need to fully litigate to obtain attorney's fees; some success suffices)
Davis v. Featherstone, 97 F.3d 734 (4th Cir. 1996) (penalty factors and prejudice considerations in ERISA cases)
Rego v. Westvaco Corp., 319 F.3d 140 (4th Cir. 2003) (ERISA attorney's fees are not recoverable for administrative exhaustion alone)
Custer v. Pan American Life Ins. Co., 12 F.3d 410 (4th Cir. 1993) (factors in evaluating ERISA fee awards)
Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d 1017 (4th Cir. 1993) (en banc; ERISA fee-shifting considerations)
Coleman v. Nationwide Life Ins. Co., 969 F.2d 54 (4th Cir. 1992) (insurer as administrator definition and penalties limitation)