Free v. BriodyFree v. Briody
Employee Benefits Ca 1660
Richard L. FREE, Plaintiff-Appellant, Cross-Appellee,
v.
Louis J. BRIODY, individually and as trustee and member of
the committee under the Gilbert-Hodgman, Inc.,
Salaried Employees' Profit Sharing Plan
and Trust, Defendant-Appellee,
Cross-Appellant.
Nos. 85-2398, 85-2399.
United States Court of Appeals,
Seventh Circuit.
Argued Jan. 16, 1986.
Decided June 11, 1986.
Lee T. Polk, Vedder, Price, Kaufman & Kammholz, Chicago, Ill., for plaintiff-appellant, cross-appellee.
Hedberg, Tobin, Flaherty & Whalen, Edward J. Whalen, Mark T. Piazza, Chicago, Ill., for defendant-appellee, cross-appellant.
Before WOOD, POSNER and FLAUM, Circuit Judges.
POSNER, Circuit Judge.
Louis Briody, the defendant in this case, was one of two trustees of a corporate pension plan. Richard Free, a former employee of the corporation, brought suit against Briody (and the other trustee) in a federal district court under the Employee Retirement Income Security Act of 1974, 29 U.S.C. Secs. 1001 et seq., charging breach of trust. The court held the two trustees jointly and severally liable for almost $80,000 in losses incurred by the pension fund as a result of the breach. We upheld this judgment.
In September 1984 Free applied to the district court for an award of attorney's fees for the efforts at collection that he had undertaken between October 1, 1982, and August 31, 1984. The court awarded him $18,671.89. Briody has appealed from this award and Free has cross-appealed from the court's denial of an additional $4,530.75 that he had sought.
The first question, one of first impression, is whether ERISA authorizes an award of attorney's fees for work in collecting a judgment rendered under ERISA. "In any action under this subchapter by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fees and costs of action to either party." 29 U.S.C. Sec. 1132(g)(1). The district court back in 1982 awarded Free more than $40,000 for attorney's fees that he had incurred in prosecuting the action to a successful judgment; and that award has never been contested (or, for that matter, paid). The issue here is fees for postjudgment proceedings to collect the ERISA judgment. We see no technical objection to fitting such an award under the statute. The judge retained jurisdiction of the case, as he was empowered to do, to supervise compliance with the judgment. Hence the fees he has awarded for the collection efforts have been awarded in the ERISA action itself. Nothing on the face of the statute, or in its history or purpose, suggests that the only legal efforts that can be compensated by an award of fees are those that precede the judgment, and not those incurred afterward to make the judgment a reality. The judge as we said retained jurisdiction. Thus the entry of the judgment was just one way station on the long road from the filing of the complaint to the collection of the judgment. Fees for efforts to realize on judgments are often awarded in civil rights cases, see Balark v. Curtin,
Next Briody argues that it was an abuse of discretion in the circumstances for the judge to award attorney's fees for Free's efforts to collect the judgment. In an effort to give some particularity to the undefined statutory standard for awarding attorney's fees in ERISA cases, we held in Bittner that fees should be awarded to the prevailing party whenever the loser's position in the litigation was not substantially justified, unless special circumstances would make an award unjust.
Briody's further complaint that the fees are excessive in relation to the work done by Free's lawyers has no merit. In one respect, however, we think the district judge erred in Free's favor. The judge awarded $2,793 for fees incurred in a matter to which Briody was not a party--Free's effort to make the pension fund whole through insurance when the judgment against Briody and the other trustee could not be collected. Such expenses were a consequence of Briody's breach of trust and of his resistance to paying the judgment, it is true, but they were not attorney's fees as the term is used in statutes that provide for awarding attorney's fees to parties to litigation. Such statutes are designed to compensate a party for the costs of litigation, not costs somehow consequent upon litigation. If Free had developed a psychiatric illness as a result of Briody's obdurate refusal to pay any part of the judgment, and had retained a lawyer to press a claim for benefits for the disability resulting from the illness, the lawyer's fee would not be recoverable under an attorney fee shifting statute. Cf. Brandt v. Superior Court,
Finally, on Free's cross-appeal, we agree that the judge abused his discretion in denying the $4,530.75 in additional fees that Free sought. These fees were incurred during a period of about one month following the district court's decision on October 1, 1982, finding that Briody had breached his trust. In that decision the district court set a date of October 12 for the submission by Free of his request for attorney's fees. In submitting the request Free pointed out that the request could not include expenses incurred after September 30, because such expenses either had not yet been incurred or had not yet been processed in the law firm's computerized billing system. Later, of course, the judge awarded attorney's fees for the postjudgment collection efforts, but he unaccountably refused to do so for the first month's efforts, on the ground that the request was untimely. But it could not have been made any earlier. The matter must therefore be remanded to correct the amount of fees awarded to Free, in accordance with this opinion. By our calculations Free is entitled to $20,409.64, rather than the $18,671.89 awarded by the district judge.
AFFIRMED IN PART, VACATED IN PART, AND REMANDED WITH DIRECTIONS.