Gibbs v. Gen Amer Life Ins Co , 173 F.3d 946 ( 2000 )

Revised May 11, 2000
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 98-50061
CAROLYN J. GIBBS,
Plaintiff-Appellant,
VERSUS
ASHLEY C. 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
April 21, 2000
Before POLITZ, DeMOSS, and BENAVIDES, Circuit Judges.
DeMOSS, Circuit Judge:
Carolyn J. Gibbs (hereinafter "Appellant") appeals from the
final judgment in her ERISA action which awarded attorneys’ fees to
both the Defendant-Appellee, General American Insurance Company
(hereinafter "General American"), and to the Intervenor Plaintiff-
Appellees, Ashley C. Gibbs and Andrew F. Gibbs, both minors
(hereinafter "Intervenors"). Appellant contends that the district
court erred in denying her request for attorneys' fees against
General American because she was the prevailing party, and that the
Court also erred in awarding attorneys' fees and costs to both
Intervenors and General American out of the disputed insurance
proceeds which were being held in the court's registry. Appellant
also contends that the district court erred in admitting certain
polygraph results into evidence during the bench trial, and in
relying on such evidence in awarding attorneys' fees.
I. FACTUAL BACKGROUND
Carolyn J. Gibbs was married to Joel W. Gibbs in 1988. During
their marriage they had two children, Ashley and Andrew. Mr. Gibbs
maintained employment as a director of operations for Waco Magnetic
Imaging, which provided him, as part of his benefits package, a
life insurance policy issued through General American Life
Insurance Company (“General American”). That policy designated
Carolyn Gibbs, as the policy's named beneficiary, with life
benefits in the amount of one times Mr. Gibbs’ annual salary
rounded to the next even thousand dollars ($42,000) with double
indemnity accidental death benefits (for a total of $84,000 in the
event of accidental death).
2
At some point in 1994, Appellant contacted a former boyfriend,
Bartley Bell, after seeing his appearance on an episode of the
Oprah Winfrey television show. Bell was then attending college in
Alabama. The two began corresponding and spoke on the phone almost
daily. At one point in 1995, Appellant flew to Alabama to attend
Bell’s high school reunion. During their correspondence with one
another, they discussed their feelings for one another and their
plans for a future together. Due to marital problems, the Gibbses
separated from one another on several occasions during 1995.1 In
December of the same year, Mr. Gibbs filed for a divorce and moved
out of the family residence. The divorce agreement drafted by Mr.
Gibbs’ attorney, and which Appellant had agreed to sign, would have
given Mr. Gibbs the authority to determine where the children would
live. Upset by the divorce proceedings, Appellant told one of her
friends, Stephanie Grimm, that it would have been a lot easier for
her if Mr. Gibbs were killed in a car wreck.
On January 25, 1996, Appellant took her children to a Mother’s
Day Out program at the Crestview Church of Christ. She had planned
her class schedule at Baylor University for the Tuesdays and
Thursdays that this program was offered. Shortly after arriving at
the church, Appellant testified that she discovered her son Andrew
had forgotten his lunch. She told him that his father would bring
1
Both of the Gibbses testified to frequenting night clubs with
their own friends and having engaged in adulterous relationships.
Appellant regularly spent time with a girlfriend, Suzanne Truitt,
with whom she had often entered nightclub bikini contests.
3
it to him. But when Andrew began crying, she promised to bring it
to him herself. At approximately 9:30 a.m., she called Mr. Gibbs’
office, but he was on another phone call. She left a message with
Pat Johnson, the office manager, that she was late for her classes
and that Mr. Gibbs needed to go by her townhouse to get Andrew’s
lunch bag and take it to him at the church. She advised Johnson to
tell Mr. Gibbs that the kitchen door was unlocked.
After receiving the telephone message, Mr. Gibbs left his
office at approximately 9:50 a.m. to retrieve his son’s lunch.
After several hours had passed without his return, and because he
had not responded to numerous pages and telephone calls, his co-
workers contacted the police. After her classes ended at
2:00 p.m., Appellant arrived to pick up her children at the church
around 2:30 p.m. -– Andrew was crying because his daddy had never
shown up with his lunch. When she arrived with the children back
at her townhouse, she found Mr. Gibbs’ car in her carport. Also
present was a police car and a uniformed officer who informed
Appellant that the police had been called by Mr. Gibbs’ co-workers
when he failed to return to work.
Appellant told the officer to drive around the front of the
house because of the dog in the backyard. She proceeded into the
house through the back door, and upon entering the house noticed
that it was messy. Pictures and videos were spread out on the
floor and drawers were opened as if they had been searched. She
received no response upon calling out Mr. Gibbs’ name. When she
4
went upstairs, she found his body lying in the hallway with blood
everywhere. She then ran back downstairs and took the children out
the front door.
The police then entered the house and found Mr. Gibbs’ body.
They initially told Appellant that Mr. Gibbs appeared to have taken
his own life, but it was later determined that he had been stabbed
repeatedly and his throat had been cut open a number of hours
before he was discovered. The Hewitt Police Department released
the townhouse back to Appellant by 5:00 p.m. that same afternoon.
The very next day, Appellant’s father, who had arrived the previous
evening from Colorado, organized the efforts of Appellant’s Sunday
school class in cleaning the murder scene. They ripped out the
blood-stained carpet, repainted the walls, and generally cleaned up
all indications that a murder had occurred. Ms. Truitt also
visited the townhouse and removed incriminating love letters which
she had written to the Appellant.
In an effort to solve the murder, the Hewitt Police Department
enlisted the aid of the Texas Rangers; however, their investigation
did not begin until after Appellant’s friends and family had
completely cleaned the murder scene.2 The murder weapon was
located sometime thereafter. Appellant, who later found additional
bloodstains when she returned for a final clean-up on January 31 ,
2
Upon their arrival at the crime scene, the Texas Rangers
ordered Appellant's friends and family to cease their cleaning
operations and to disperse from the crime scene.
5
notified the police of the same. Ultimately, the following items
were identified as missing from the townhouse: a camcorder, some
home videos, Appellant’s high school class ring, and one of the
children’s silver baby mugs. Ten days after the murder, the Texas
Rangers requested that Appellant submit to a polygraph examination,
but upon the advice of her counsel, she refused.3
Appellant and her children then moved in with Ms. Truitt for
approximately four weeks. They then moved to Colorado Springs to
live with her parents. By January of 1997, Appellant’s former
boyfriend, Bartley Bell, had moved to Colorado, where the two were
married that July.
In April 1996, Appellant first submitted a claim to General
American for the proceeds of Mr. Gibbs’ aforementioned life
insurance policy. Due to an improper address, General American
received the claim three months later. Having been advised by Mr.
Gibbs’ employer that Appellant was a suspect in her husband’s
death, General American contacted the Hewitt Police Department
which advised that, indeed, Appellant had not been ruled out as a
suspect.
In October 1996, Appellant contacted General American to
inquire as to the status of her pending claim. Again, General
3
Appellant subsequently, and approximately two weeks before the
trial of this matter, did voluntarily submit to a polygraph
examination administered by a licensed polygrapher at the Texas
Department of Public Safety. The overall analysis indicated that
she had been deceptive in her answers.
6
American contacted the Hewitt Police Department, which again
advised that Appellant had not yet been ruled out as a suspect.
General American then wrote to Appellant and advised her that her
claim could not be paid until the investigation into Mr. Gibbs’
death had been completed.4 Appellant declined to exercise her
rights under a provision of the policy which would have permitted
her, as a beneficiary under suspicion of involvement in the
insured’s death, to waive payment of the insurance proceeds to her
directly and to have the proceeds flow directly to her minor
children.
II. PROCEDURAL HISTORY
In February 1997, Carolyn Gibbs filed this action under ERISA,
as the named beneficiary of an ERISA plan, alleging that General
American failed to pay benefits under 29 U.S.C. § 1132(a)(1)(B),
and she requested attorneys’ fees pursuant to ERISA’s fee
provisions, see 29 U.S.C. § 1132(g), because General American’s
failure to pay was allegedly in bad faith. Upon the filing of the
ERISA claim, General American filed an interpleader counterclaim
pursuant to Rule 22 of the Federal Rules of Civil Procedure,
depositing $88,852.00 (the insurance proceeds plus interest) into
4
General American’s beneficiary-involved-in-death policy, found
in their death procedures manual, required that it be established
beyond a reasonable doubt that the beneficiary was not involved in
the death of the insured prior to benefits being paid.
7
the district court’s registry. General American never contested
its obligation to pay, but pleaded that it was facing potential
exposure to conflicting claims from Appellant and the minor
children for the proceeds because Carolyn was a suspect in Mr.
Gibbs' murder. General American sought to compel the intervention
of the Gibbses’ minor children and to be itself released from the
case. General American also requested an award of attorneys’ fees
at the time it moved to be dismissed from the case.
The district court refused to let General American out of the
case upon interpleader and required that it litigate the issue of
Appellant’s entitlement to attorneys’ fees under ERISA. The
district court reasoned that General American’s alleged bad faith
was in issue because it withheld payment and failed to file its
interpleader before Appellant filed her ERISA action, which was
nearly one year after her first request for the proceeds.
In its order permitting the interpleader, the district court
appointed a guardian ad litem, John A. Kuchera, to represent the
children’s interests. The guardian ad litem filed an Intervenor
complaint on their behalf, pleading that the children were entitled
to the insurance proceeds pursuant to § 21.23 of the Texas
Insurance Code. Intervenors’ claim was not based upon ERISA
because the children were never designated in any ERISA plan
document as, and never claimed to be, beneficiaries under an ERISA
plan. Rather, their claim was based solely upon § 21.23, which
would automatically divest Carolyn of her interest in the proceeds
8
if it was established by a preponderance of the evidence that she
was a “principal or an accomplice in willfully bringing about the
death of the insured.” TEX. INS. CODE ANN. § 21.23. Intervenors also
requested their attorneys’ fees and costs.5
The case was tried to the bench.6 The two issues being tried
were: (1) Appellant’s and Intervenors’ competing claims of
entitlement to the insurance proceeds in the court’s registry, and
(2) whether Appellant was entitled to attorneys’ fees and costs
under ERISA based upon General American’s alleged bad faith. Two
ancillary issues were whether General American and Intervenors were
entitled to attorneys’ fees and costs. At the end of the trial,
the district court held as follows:
First, with respect to the competing claims for entitlement to
the insurance proceeds, the district court held that Intervenors
5
As will be discussed below, since Intervenors' complaint was
not based upon ERISA, the attorneys' fees provisions of 29 U.S.C.
§ 1132(g) do not govern the analysis of the guardian ad litem's
request for fees and costs.
6
Appellant had asked for a jury trial but the court sua sponte
struck her jury request because claims under ERISA are equitable in
nature and are not entitled to a jury trial. The district court
was correct insofar as the claim for attorney fees by Carolyn
against General American is concerned. However, we express doubt
as to whether the district court properly denied a jury sua sponte
with regard to the dispute between Appellant and Intervenors as to
who was entitled to the proceeds under Texas law. Irrespective of
our doubt, as the denial of a jury trial was never raised on appeal
by any party and because the record reveals no objection to the
case proceeding without a jury, the issue is beyond the scope of
our review. See e.g., Jones v. Birdsong, 679 F.2d 24, 24 (5th Cir.
1982) (failing to object to case proceeding without a jury
constitutes waiver of the right to a jury trial).
9
had not sustained their burden of establishing that Appellant
caused or was involved in the death of her husband by a
preponderance of the evidence under Section 21.23.7 Thus, the
proceeds went to Appellant.
Second, with respect to Appellant’s claim for attorneys’ fees
and costs, the district court found that General American had not
acted in bad faith and, therefore, it denied Appellant’s request.
With respect to General American’s request for attorneys’ fees and
costs, the district court determined that General American was
entitled to have its attorneys’ fees ($21,100.25) paid out of the
interpleaded insurance proceeds so as to deter other beneficiaries
from filing premature lawsuits to collect insurance benefits when
they are suspected of involvement in the death of the insured.
Finally, with respect to Intervenors’ claim for attorneys’ fees,
the district court determined that the guardian ad litem for the
intervening children was entitled to have his fees and costs
($19,047.98) paid out of the interpleaded insurance proceeds. On
December 16, 1997, judgment was entered in favor of General
American as to Appellant’s claim against it, and in favor of
Appellant as to Intervenors’ claim against her. In its subsequent
order assessing fees and costs against Appellant, the district
7
Specifically, the district court stated “[i]t is likely that
Plaintiff was involved in the death of Gibbs, but, in a close case,
the evidence presented does not prove her involvement by a
preponderance of the evidence.” Curiously, we find no notice of
appeal by the Intervenors as to this determination by the district
court.
10
court ordered that all interpleaded funds remaining after payment
of the ordered fees and costs be paid to Appellant.8
Appellant timely appealed the district court’s awards of
attorneys’ fees, and a prior panel of our Court considered her
appeal and issued an opinion. See Gibbs v. Gibbs, 167 F.3d 949 (5th
Cir. 1999). That opinion was vacated on April 22, 1999, when the
prior panel construed Intervenor Plaintiff-Appellees’ petition for
rehearing en banc as a petition for panel rehearing and granted the
same. See Gibbs v. Gibbs, 173 F.3d 946 (5th Cir. 1999), vacating
167 F.3d 949 (5th Cir. 1999).
In support of their petition for rehearing, Intervenors
advanced two arguments. First, they argued that the prior panel’s
8
Despite finding that Appellant failed to prevail on her claim
of bad-faith failure to pay benefits, the district court’s finding
that Appellant’s involvement in the murder had not been established
by a preponderance of the evidence precluded General American from
continuing to withhold payment of the insurance benefits based upon
a provision which allowed it to do so until a suspected
beneficiary’s non-involvement is established beyond a reasonable
doubt. General American never asserted that it did not owe the
money to someone -- either Appellant or Intervenors, and once the
district court determined that Intervenors did not prevail in their
claim of superior rights to the insurance proceeds, by default,
those proceeds flowed to Appellant, the named beneficiary.
Appellant argues that she was indeed the prevailing party because
the end result of her ERISA claim was that General American was
ordered to pay her the disputed proceeds. We note, however, that
the central issue involving Appellant’s ERISA claim below was only
whether General American acted in good faith in refusing to pay
Appellant directly, before the level of her involvement in the
murder was established and the potentially conflicting and
duplicative claims of the minor children could be addressed -- and
this issue related solely to whether Appellant should be awarded
her attorneys' fees and costs based on General American's alleged
bad faith.
11
decision that the district court abused its discretion in awarding
fees and costs to their guardian ad litem because they did not
“prevail” on their claim, overlooked and ignored the distinction
between the role of a party and the role of a guardian ad litem,
and the panel’s decision in this regard conflicted with both
Supreme Court and Fifth Circuit precedent, which distinguishes
between the compensation to be awarded attorneys and compensation
to be awarded other court personnel, and which establishes that a
guardian ad litem need not prevail in order to be entitled to his
fees.9 Second, they argued that the prior panel failed to address
their cross-point -– that Intervenors had in fact established
Appellant’s involvement by more than a preponderance of the
evidence, and thus, they were entitled to an award of the insurance
proceeds. This later cross-point is not before our Court because
no cross-appeal was filed. See United States v. Coscarelli, 149
F.3d 342 (5th Cir. 1998) (en banc).
Thus, the subject of this appeal is not the district court’s
9
These contentions were never made in Intervenors’ original
responsive brief, but rather were presented for the first time
following the prior panel’s entry of an opinion denying the
guardian ad litem’s fees altogether. In Intervenors’ original
responsive brief, they argued only their cross-point – that they
had in fact established Appellant’s involvement by more than a
preponderance of the evidence, and thus, they were entitled to an
award of the insurance proceeds. Presumably, Intervenors assumed
from Appellant’s brief and General American’s reply, that either of
those two parties would ultimately be responsible for the ad litem
fees, and that no defense of the district court’s award thereof was
necessary.
12
conclusion that Appellant failed to prevail on her claim against
General American of bad faith failure to pay benefits under ERISA,10
but rather, it is based entirely on the propriety of the district
court’s awards of attorneys’ fees and costs and the alleged
impropriety of admitting polygraph evidence.
III. ANALYSIS
Before we can fully address Appellant's contention that the
district court erred in denying her request, and in granting both
General American's and Intervenors' request for, fees and costs, we
must first resolve her related secondary issue, that is, whether
the district court erred in admitting and allegedly relying upon
certain polygraph evidence in determining whether to award fees.
A. Admissibility of Polygraph Evidence
Several weeks prior to the commencement of the trial of this
matter, Appellant took and passed a private polygraph examination,
and based upon those favorable results, she agreed to submit to a
second polygraph examination to be administered by the Texas
Department of Public Safety, whose earlier request for a polygraph
examination she had denied. As noted above, the overall analysis
of this second examination indicated that she had been deceptive in
10
As noted above, the parties do, however, disagree as to which
of them was the “prevailing party” to the extent that such
designation is determinative of the award of attorneys fees.
13
her answers, and specifically the test results revealed the
following:
A. There existed an 88% probability that
Appellant was deceptive when she answered “no”
to the question: “Did you plan with any man to
cause the death of Joel [Mr. Gibbs]?”;
B. There existed a 98% probability that Appellant
was deceptive when she answered “no” to the
question: “Did you intentionally set up Joel,
causing his death?”;
C. There existed a 99% probability that Appellant
was deceptive when she answered “no” to the
question: “Prior to arriving at your house on
the afternoon of January 25, did you already
know someone was going to cause the death of
Joel?”; and
D. There existed a 56% probability that Appellant
was deceptive when she answered “no” to the
question: “Did anyone ever tell you that they
caused the death of Joel?”.
Appellant asserts that the district court erred in relying
upon the polygraph evidence as a basis for assessing attorneys’
fees against her. General American responds that since the
district court determined that the evidence did not establish
Appellant’s involvement by a preponderance of the evidence, the
issue of whether the polygraph evidence was properly admitted is
irrelevant to the district court’s discretion in awarding
attorneys’ fees. However, it is Appellant’s position that there
was no physical or circumstantial evidence linking her to the death
of Mr. Gibbs, and as a result, the district court must have based
its fees decision on the polygraph results. This assertion
overlooks the fact that the lack of any physical evidence is
14
directly attributable to the actions of Appellant and her friends
and family in so quickly erasing the crime scene. This assertion
also ignores evidence concerning Appellant’s phone call, which
placed Mr. Gibbs at the crime scene, and the following
circumstantial facts which our review of the record has revealed:
(1) Appellant gave conflicting testimony as to whether, when, and
from where she made the call which placed Mr. Gibbs at the murder
scene; (2) there is competent and uncontroverted evidence that
Appellant told Stephanie Grimm, a friend, in the midst of the
Gibbses’ divorce negotiations, that it would be so much easier for
her if Joel were simply killed in a car wreck; (3) the murder
weapon was recovered in Appellant’s kitchen (one of her own kitchen
knives which had been wiped clean and placed back in the knife
block); (4) Appellant was desperate for money to pay for college
tuition (she had asked her parents to co-sign a loan, which they
refused to do, and as a result she ended up having to take out a
more expensive student loan); and (5) in an apparent slip of the
tongue, when confronted by Stephanie Grimm concerning Ms. Grimm’s
fear that Appellant was involved in Joel’s murder, it was Appellant
herself who first interjected the idea of murder-for-hire, by
responding defensively, and in a tone which Grimm perceived as
argumentative, “how do I know you didn’t hire someone to kill
Joel?” This circumstantial evidence, coupled with a lack of
physical evidence which is directly attributable to Appellant's own
15
actions in erasing the crime scene, leads us to conclude that the
polygraph evidence was not the only evidence upon which the
district court could have based its fees decision.
Also, there is little indication in the record that, in fact,
the district court based the award of fees on the polygraph
results; to the contrary, the district court explicitly determined
that the fees should be awarded based upon the premature filing of
this lawsuit at a time when Appellant knew she was under suspicion,
and when there was “absolutely no basis for believing that [General
American] had acted in bad faith.”
Furthermore, as this Court has denounced the per se rule that
polygraph examinations are inadmissible, see United States v.
Posada, 57 F.3d 428, 434 (5th Cir. 1995), the standards announced
in Daubert control the admissibility of such results. In Daubert
v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786
(1993), the Supreme Court stated that a district court should
analyze: (1) the scientific validity of the method; (2) the extent
to which the trier of fact will be assisted in understanding the
evidence and determining the fact at issue; and (3) whether the
evidence will have a prejudicial effect which is not outweighed by
its probative value. See id. at 2796-2798. Most of the safeguards
provided for in Daubert are not as essential in a case such as this
where a district judge sits as the trier of fact in place of a
jury. In this case, the district court was satisfied with the
16
testimony of Peter Heller, the polygraph examiner for the Texas
Department of Public Safety, who testified in detail regarding the
factors and analysis involved in the examination process at issue,
and the district court concluded that the examination results of
Appellant’s test were scientifically valid. We conclude that the
polygraph evidence in this bench trial was properly admitted
without error by the district court, and furthermore, irrespective
of the propriety of admitting the polygraph results, the district
court did not rely solely on the polygraph results in awarding
attorneys’ fees and costs.
B. Awards of Attorneys' Fees and Costs
Having rejected Appellant's argument that the district court
improperly relied upon inadmissible polygraph results, we now turn
to a determination of whether the district court erred in awarding
fees to the respective parties. It is well settled that the
district court has broad discretion in determining the
appropriateness of an award of attorneys’ fees, and we review its
award or denial thereof for an abuse of that discretion. See Todd
v. AIG Life Ins. Co., 47 F.3d 1448, 1458 (5th Cir. 1995).
1. Fees and costs governed by ERISA
The relevant ERISA fee provision provides in pertinent part:
[i]n any action . . . by a participant,
beneficiary, or fiduciary, the court in its
17
discretion may allow a reasonable attorney’s fee
and costs of action to either party.
29 U.S.C. § 1132(g)(1).
Since, as noted above, this case really involved two separate
actions: (1) Appellant's claim against General American for failure
to pay ERISA benefits to which she was entitled, which claim arose
under ERISA, and (2) Intervenor's claim of entitlement to the
proceeds, which claim arose under § 21.23 of the Texas Insurance
Code, only the fee requests by the parties to the former action are
governed by the provisions of 29 U.S.C. § 1132(g)(1). That is to
say, we review only the district court's award of fees and costs to
General American and its denial of fees and costs to Appellant
under ERISA's fee provisions.
a. Must a party first prevail in order to be eligible for
consideration for attorneys’ fees and costs under ERISA’s
fee provision, 29 U.S.C. § 1132(g)(1)?
Appellant urges that as the only prevailing party,11 she is the
only party eligible for consideration of fees under ERISA. Her
claim is based upon the premise that a party must first prevail in
an ERISA action in order to be eligible for consideration for
11
The district court entered judgment in favor of General
American on her claims against it, but then paradoxically ordered
that once all fees had been deducted from the interpleaded funds,
because Intervenors had failed to establish superior entitlement to
the proceeds, the remaining funds were to be paid to Appellant.
Arguably, she did prevail on her claim for failure to pay benefits,
but not on her request for attorneys' fees based on bad faith
failure to pay.
18
attorneys' fees. Thus, a threshold inquiry in this appeal is
whether or not a party must be deemed to have prevailed in order to
recover attorneys’ fees under ERISA’s fees provisions, and it is an
inquiry which, until the prior panel entered its now-vacated
opinion, this Court had yet to squarely address. That issue has
also created a split of authority among a number of our sister
circuit courts of appeal.
The proper starting point for this analysis is with the
language of ERISA’s attorneys’ fee provision itself, which as noted
above, permits the district court, in its discretion, to award
“reasonable attorney’s fees and costs . . . to either party.” 29
U.S.C. § 1132(g)(1) (emphasis supplied). Conspicuously absent from
this language is the term “prevailing” which term has generally
been included in the other fee-shifting statutes enacted by
Congress. See, e.g., 42 U.S.C. § 2000e-5(k). The debate on this
particular issue centers around whether courts should read a
prevailing party requirement into the “either party” language of
§ 1132(g)(1).
In determining whether a party must prevail in order to be
eligible for an award of attorneys’ fees, the Fourth Circuit in
Martin v. Blue Cross & Blue Shield of Va., Inc., 115 F.3d 1201 (4th
Cir. 1997), explicitly held that “only a prevailing party is
entitled to consideration for attorneys’ fees in an ERISA action.”
Martin, 115 F.3d at 1210. The analysis which precedes the Fourth
19
Circuit’s conclusion refers to the “prevailing party” limitation
which “many of our sister circuits have imposed . . . on the
availability of attorneys’ fees under ERISA.” Id.
Specifically, the Martin court cites to cases from the First,
Third, Fifth, Seventh, Ninth, and D.C. Circuits as having “imposed
a prevailing party requirement” on an award of fees under ERISA.
Our review of the decisions cited by the Martin court reveals that
many of the circuits, while stating that awards of attorneys’ fees
are appropriate for prevailing parties in ERISA actions, do not in
so stating, foreclose the ability of non-prevailing parties to
obtain an award of fees. And of those cases cited, only one
decision from the Seventh Circuit can be read as going so far as to
actually require a party to prevail before a district court could
consider an award of attorneys’ fees.
In Little v. Cox’s Supermarkets, 71 F.3d 637, 644 (7th Cir.
1995), the Seventh Circuit focused on the bottom-line question of
the losing party’s exercise of good faith in determining whether an
award of fees under ERISA was due the prevailing party. More
recently, the Seventh Circuit has twice moved closer to actually
requiring a party to prevail before it can be eligible for an award
of fees. See Quinn v. Blue Cross & Blue Shield Ass’n, 161 F.3d
472, 478 (7th Cir. 1998) (describing the two processes by which an
ERISA party may be awarded attorneys’ fees “after it has attained
‘prevailing party’ status”); Poteete v. Capital Eng’g, Inc., Nos.
20
98-1531 & 98-1772, 1999 WL 517174, at *3 (7th Cir. July 21, 1999)
(noting that the “principles that sometimes entitle a party to
recover his attorneys’ fees limit that entitlement to prevailing
parties”) (citing 29 U.S.C. § 1132(g)(1)).
The remaining circuit decisions cited by the Martin court
simply do not require that a party prevail as a pre-requisite to
consideration for an award of attorneys’ fees, and more recent
decisions from those circuits hold to the contrary -- that a party
need not prevail in order to be entitled to consideration for fees
under ERISA. While the First Circuit in the case cited by the
Martin court literally read the word “prevailing” into the relevant
ERISA fee provision, see Cottrill v. Sparrow, Johnson & Ursillo,
Inc., 100 F.3d 220, 225 (1st Cir. 1996) (stating “Congress declared
that, in any ERISA claim advanced by a ‘participant, beneficiary,
or fiduciary, the court in its discretion may allow a reasonable
attorney’s fee’ to the prevailing party”) (quoting 29 U.S.C.
§ 1132(g)(1)), it has more recently recognized by implication that
such awards are not limited to prevailing parties. See Doe v.
Travelers Ins. Co., 167 F.3d 53, 61 (1st Cir. 1999) (stating that
“such awards are normally for the prevailing party” and thus
implying that such awards for non-prevailing parties are
contemplated by § 1132(g)(1) (emphasis supplied)).
In a decision overlooked by the Martin court, the Third
Circuit held that while § 1132(g)(1) allows for an award of fees
21
and costs to either party, it does not “automatically mandate an
award to a prevailing party.” Anthuis v. Colt Indus. Operating
Corp., 971 F.2d 999, 1010 (3d Cir. 1992). Like the decision from
the Third Circuit which was cited by the Martin court, see
McPherson v. Employees’ Pension Plan, 33 F.3d 253, 254 (3d Cir.
1994), this decision fails to squarely address whether the Third
Circuit requires prevailing status before a party may be entitled
to consideration for an award of attorneys’ fees.
In the Ninth Circuit decision cited by the Martin court, see
Flanagan v. Inland Empire Elec. Workers Pension Plan & Trust, 3
F.3d 1246, 1253 (9th Cir. 1993), the Ninth Circuit held that though
it had previously stated in dictum that the ERISA fee provision
allows the court to award non-prevailing parties their attorneys’
fees, “plaintiffs cannot recover fees under section 1132(g)(1)
until they succeed on [some] significant issue in litigation which
achieves some of the benefit . . . sought in bringing the suit.”
Arguably, this statement applies only to fee requests by plaintiffs
in ERISA actions and not to defendants or intervening parties.
Indeed, prior to its holding in Flanagan, the Ninth Circuit stated
that the criteria used to determine whether an ERISA party is
entitled to an award of attorneys’ fees “do not rely on the
prevailing-party doctrine.” Sokol v. Bernstein, 812 F.2d 559, 561
(9th Cir. 1987). And more recently, the Ninth Circuit, in an
unpublished decision, acknowledged that fee awards under
22
§ 1132(g)(1) are not limited to prevailing parties. See Green v.
Hotel Employees & Restaurant Employees Int’l Welfare-Pension Funds,
No. 95-16314, 1997 WL 8466, *4 (9th Cir. Jan. 1, 1997) (unpublished
table decision) (stating that “[a]lthough Section 1132(g)(1) does
not limit such an award to a prevailing party, awarding attorney
fees to an unsuccessful litigant would not serve any of the
purposes underlying Section 1132(g)(1)") (emphasis supplied).
Though not mentioned by the Martin court, both the Tenth and
Eleventh Circuits have also recognized that a party need not
prevail in order to be entitled to attorneys’ fees. See Chambers
v. Family Health Plan Corp., 100 F.3d 818, 827 (10th Cir. 1996)
(stating that “‘[a]lthough the statute [§ 1132(g)(1)] does not
require that a party prevail as a condition to receiving an award
of attorneys’ fees . . ., we have remanded cases for denial of fees
without explanation only when the party seeking fees had prevailed
at least partially . . . .’”) (quoting Morgan v. Independent
Drivers Ass’n Pension Plan, 975 F.2d 1467, 1471-72 (10th Cir.
1992)); see also Freeman v. Continental Ins. Co., 996 F.2d 1116,
1119 (11th Cir. 1993) (stating that “[u]nlike other fee-shifting
provisions, which give the court discretion to award fees to a
prevailing party, § 1132(g)(1) allows a court to award fees to
either party.”). Like the Eleventh Circuit, the Second Circuit has
also explicitly stated that a party need not prevail under ERISA in
order to be entitled to consideration for attorneys’ fees. See
23
Miller v. United Welfare Fund, 72 F.3d 1066, 1074 (2d Cir. 1995)
(stating that “Section 502(g)(1) [codified at 29 U.S.C. §
1132(g)(1)] contains no requirement that the party awarded
attorneys’ fees be the prevailing party.”)
With regard to this Circuit’s take on this issue, at first
blush, the Fourth Circuit’s holding in Martin appears to be
consistent with our statements in Boggs v. Boggs, 82 F.3d 90 (5th
Cir. 1996), rev’d on other grounds, 520 U.S. 833, 117 S. Ct. 1754
(1997). In Boggs, we stated that ERISA “allows the court to award
ERISA beneficiaries, participants, and fiduciaries reasonable
attorney’s fees when they are the prevailing party.” Id. at 94
n.1. But while this statement in Boggs seems to require a party to
prevail, arguably, it requires only that principal plaintiffs who
bring suits under ERISA prevail in order to be entitled to their
fees. Boggs simply does not speak to the propriety of awarding
fees to prevailing defendants, or to other third parties who may
have been forced to join in an ERISA action.
More instructive on the issue of whether a party must prevail
in order to be eligible for consideration for an award of fees is
our holding in Todd v. AIG Life Ins. Co., 47 F.3d 1448 (5th Cir.
1995). In Todd, Justice White, sitting by designation and writing
for the Court, in determining whether the “lodestar” method for
calculating attorneys’ fees is appropriate in ERISA cases, noted
that while the Supreme Court has endorsed the lodestar method in
24
cases involving fee-shifting statutes where Congress has authorized
the award of fees to a prevailing party, “ERISA does not use the
‘prevailing party’ language in its attorneys’ fee provision.” Id.
at 1459. Justice White went on to describe the analysis which
courts should use in determining attorneys’ fees under ERISA. The
first step, he noted, is to “determine whether “the party is
entitled to attorneys’ fees by applying the five factors enumerated
in Bowen[12].” Id. Conspicuously absent from this first step is
a requirement that the “party” under consideration for attorneys’
fees be the prevailing one. Combined with Justice White’s prior
notation regarding the failure of Congress to include the
prevailing party limitation in ERISA’s fee provision, Todd can be
read as supporting the proposition that there is no absolute
requirement that a party prevail in order to recover attorneys’
fees.
We decline to join the Fourth Circuit in its reliance on “the
weight of authority” from other circuits imposing a prevailing
party limitation on the availability of attorneys’ fees under
ERISA, as that reliance, for the reasons discussed above, is
subject to considerable doubt. Indeed, the greater weight of
authority, from outside and within our own circuit, supports the
notion that a party need not prevail in order to be eligible for an
12
Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255 (5th Cir.
1980).
25
award of attorneys’ fees under § 1132(g)(1) of ERISA.
b. Fees and Costs for General American
Having determined that there is no requirement that a party
prevail in order to be eligible for consideration for attorneys'
fees under ERISA, we now turn to consider whether the district
court abused its discretion in awarding and denying attorneys' fees
and costs below. In this case, the district court properly
identified the appropriate five factors to be used in determining
the underlying awards of attorneys’ fees under ERISA. Those
factors are as follows:
(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;
(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.
Todd, 47 F.3d at 1458 (citing Iron Workers Local No. 272 v. Bowen,
624 F.2d 1255 (5th Cir. 1980)).
Appellant urges that the district court abused its discretion
in awarding General American its fees and costs because, as she
26
contends, it was not the prevailing party, and it acted in bad
faith. As discussed above, the prevailing status of the parties is
not determinative of the fee awards, though generally, a proper
analysis of the five factors will in most instances favor an award
of fees to the party which has most substantially prevailed.
With respect to the first factor, the district court relied on
its conclusion that General American did not withhold payment in
bad faith, but rather that it did so in an effort to resolve the
potentially conflicting claims of Appellant and her minor children
in light of the investigation into her involvement in Mr. Gibbs’
death. The district court specifically found that General American
“did not act in bad faith . . . [n]or did it fail to conduct an
adequate investigation.” However, the court did intimate that
Appellant proceeded in bad faith as she:
“brought this suit when it was obvious she was
still a suspect in the murder of her husband and
when there was absolutely no basis for believing
that Defendant had acted in bad faith.”
With respect to the second factor, the district court found
that the insurance proceeds were adequate enough to satisfy an
award of attorneys’ fees for General American. With respect to the
third factor, upon which it relied most heavily in determining that
General American was entitled to have its fees paid out of the
interpleaded funds, the district court said “the award of
attorneys' fees to [General American] would, hopefully, deter
others from filing premature lawsuits to collect insurance proceeds
27
when the beneficiary remains under suspicion of having murdered the
insured.” And with respect to the fourth factor, the district
court found that Appellant had filed suit solely to benefit herself
and not any other ERISA plan participant. The district court did
not specifically address the fifth factor.
Regarding the first factor, while Appellant may have been a
suspect when she brought this action, due to the Hewitt Police
Department’s allowing her family and friends to completely clean
the crime scene, it is likely that Appellant would have remained a
suspect indefinitely, and consequently, General American, absent
just this type of litigation, could have withheld payment of the
benefits to Appellant indefinitely. Notwithstanding her refusal to
waive her claim to the proceeds in favor of her minor children
while she remained a suspect, it would be difficult to characterize
her actions in filing this suit as being taken in bad faith. This
factor counsels against awarding General American its attorneys'
fees.
Regarding the second factor, Appellant contends that the
insurance proceeds are insufficient to sustain an award of fees to
General American for $21,100.85 which amounts to nearly one-fourth
of the total proceeds of $88,852.00. This argument is strengthened
by the fact that, as will be discussed below, Appellant will be
required to pay her own attorneys' fees. This factor, therefore,
also counsels against awarding General American its attorneys'
fees.
28
With respect to the deterrent effect discussed by the district
court (the third factor), given the totality of the circumstances,
and General American’s reluctance, however justified, to release
the insurance proceeds, it would not serve the goals of ERISA to
deter others from instituting litigation which would force the
interpleading of disputed insurance proceeds for resolution of the
proper disbursement thereof, especially in situations such as this,
where doing otherwise could permit the insurance company to
indefinitely postpone resolution of the proper disbursement. The
district court used the third deterrent factor as a sword to
discourage beneficiaries from pursuing a claim when they are
suspected of being involved in the insured's death, rather than as
this factor was intended to be used, as a shield, to protect
beneficiaries from the fear of having to pay to pursue an important
ERISA claim in the event of failing to prevail. Clearly, Congress
intended the fee provisions of ERISA to encourage beneficiaries to
assert their rights without fear of being responsible for the fees
and costs of their opponent’s attorneys if they failed to prevail.
The district court’s use of this factor, though somewhat logically
justified based upon Appellant’s awareness that she was clearly a
suspect, was an abuse of its discretion in light of the other
factors and the totality of the circumstances of this case, which
included the fact that General American didn’t exercise its “good
faith” in interpleading until after it had been sued, and the fact
29
that without physical evidence, Appellant might remain a suspect ad
infinitum.
With respect to the final factor, the relative merits of the
parties’ positions, the district court itself acknowledged that,
even considering the polygraph evidence, this was a “close case.”
And while the district court obviously believed that Appellant was
likely involved somehow in the murder of her husband, her position
can hardly be deemed to be so disproportionately meritless as to
justify the imposition of an award of attorneys’ fees to General
American based on this factor.
In sum, the first, second, third, and fifth Todd factors all
counseled in favor of disallowing General American’s request for
attorneys’ fees and costs from Appellant. We therefore find that
the district court improperly relied upon the third deterrence
factor and that it abused its discretion in awarding General
American its attorneys’ fees and costs.
c. Fees and costs for Appellant Carolyn Gibbs
Appellant also argues that the district court abused its
discretion in denying her request for attorneys’ fees and costs
from General American as she was the prevailing party. She
recites, as argument, all of the same reasons advanced for why the
award of fees to General American was an abuse of discretion. The
district court stated:
30
Defendant [General American] in this case did not
act in bad faith in failing to approve Plaintiff’s
claim. Nor did it fail to conduct an adequate
investigation. Accordingly, Plaintiff is not
entitled to an award of attorney’s fees.
The district court’s conclusion relies heavily upon the first and
fifth Todd factors, and upon its conclusion that General American
acted completely in good faith. The district court also noted with
respect to the fourth factor that Appellant filed suit only to
benefit herself and no other ERISA plan participant, and that she
was not seeking to resolve any significant legal issue regarding
ERISA itself which would justify an award of her attorneys’ fees.
An additional argument under the third, deterrence factor
exists for denying Appellant an award of attorneys’ fees, and this
argument is implicit in the district court’s conclusions.
Permitting the award of such fees would actually serve to encourage
beneficiaries suspected of involvement in the death of an insured
to file premature lawsuits, before their alleged involvement can
either be established or ruled out, and this deterrence argument
weighs more heavily against an award to Appellant for her fees than
the reverse argument did regarding an award of fees against
Appellant and in favor of General American when the insurance
company has delayed action on a claim.
For the reasons discussed above, the district court’s decision
to deny her request for attorneys’ fees and costs was not an abuse
of discretion.
31
2. Guardian ad litem fees
Appellant also argues that the district court abused its
discretion in awarding Intervenors their guardian ad litem’s fees
out of her proceeds, instead of assessing the same against General
American, whom she contends was the non-prevailing party. With
respect to the guardian ad litem's fees, the district court
undertook no analysis of the Todd factors.13 In fact, the district
court merely stated “[t]he guardian ad litem’s fees will also be
deducted from the insurance proceeds currently in the registry of
the court.”
Intervenors argue that in determining attorneys’ fees, the
court should take into account the fact that a guardian ad litem’s
role is different than that of the attorney for a party. They
point to authority which stands for the proposition that the
guardian ad litem, when appointed by the court, occupies a dual
role as an advisor for his assigned client and an officer to the
court. See duPont v. Southern Nat. Bank, 771 F.2d 874, 882 (5th
Cir. 1985); Friends for All Children v. Lockheed Aircraft Corp.,
13
We pause here to note that the issue of attorneys' fees under
ERISA applied only to the dispute between Appellant and General
American. The standard governing the guardian ad litem's
entitlement to fees is governed not by ERISA, but rather by Texas
state law as it relates to their action under § 21.23 of the Texas
Insurance Code. And to the extent that any of the ad litem's fees
are taxable as costs against Intervenors' opposing party
(Appellant), that issue is governed by Rule 54(d) of the Federal
Rules of Civil Procedure.
32
725 F.2d 1392, 1401 (D.C. Cir. 1984) (Mikva J., dissenting).
According to Intervenors, the ad litem’s unique role justifies
payment for his services regardless of the outcome of the case for
his clients. See Stephen Allen Lynn Profit Sharing v. S.A. Lynn
P.C., 25 F.3d 280, 280-81 nn.1,2 (5th Cir. 1994); duPont, 771 F.2d
at 882 (citing with approval, Judge Mikva’s dissent in Friends for
All Children, 725 F.2d at 1400-01). We agree, but only insofar as
the ad litem acts in the capacity as a guardian ad litem and not as
an attorney ad litem.
In duPont, we held that where the same person acts in the
capacities as both a minor's guardian ad litem and as his attorney
ad litem, only the person's expenses in the former role are taxable
as costs under Fed. R. Civ. P. 54(d). See id. at 882. His fees
and expenses in the role of attorney ad litem would be treated as
any other attorneys’ fees. In the case where the attorney ad litem
recovers assets or proceeds for the minor or protects the same,
then his fees may be assessed against the assets or the proceeds so
recovered or protected. See, e.g., duPont, 771 F.2d at 882-83;
Kollsman v. Cohen, 996 F.2d 702, 706 n.3 (4th Cir. 1993) (citing
Folsom v. McDonald, 237 F.2d 380, 381-82 (4th Cir. 1956)). However,
in the event he tries to recover and fails, the guardian ad litem
acting in the capacity as an attorney for the minor is in no better
position than an attorney retained by any litigant under normal
circumstances. See Kollsman, 996 F.2d at 706. The Kollsman court
33
adequately explained why an appointed attorney ad litem is in no
better posture than retained counsel with respect to entitlement to
fees:
The guardian ad litem's presence is necessitated by
the litigation and it is his duty to determine
policy regarding litigation. The guardian ad litem
is frequently not an attorney and if legal services
are required, he must seek and employ counsel.
Counsel obtained thereby on behalf of a ward or
incompetent is in no different circumstance from
counsel for any other litigant. See Hull by Hull,
971 F.2d at 1511; duPont, 771 F.2d at 882;
Schneider, 658 F.2d at 854-55; Franz, 38 F.2d at
606. An attorney who serves as both legal counsel
and guardian ad litem does not thereby acquire any
greater right to recover his fees than have his
brethren who are hired directly by a litigant. Id.
Kollsman, 996 F.2d at 706.
In its answer and interpleader, General American requested
that the court appoint a guardian ad litem to represent the
interests of the minor children and require that they be joined as
parties so that Carolyn and the minor children could “settle
amongst themselves their rights to the money due under the policy.”
At the point of interpleader, the district court appointed Mr.
Kuchera “as guardian ad litem for [the children]” and directed that
Kuchera “file all appropriate pleadings on behalf of the minor
children and represent their interests for all purposes” (emphasis
added). In no manner, did the district court require that Kuchera
file an intervenor complaint under § 21.23 for the purpose of
litigating the children's entitlement to the proceeds. Rather, as
34
in the general case where a guardian ad litem is appointed to
represent the interests of minor children with respect to disputed
proceeds, the guardian ad litem's initial task was to assess his
wards’ potential claim of entitlement and decide what course of
action should be taken on behalf of his wards, i.e., litigate,
settle or waive their claim.
Here, Kuchera examined the circumstances of this case and
decided to file a motion to intervene and to file a complaint on
behalf of the children asserting their entitlement to the proceeds.
He was unsuccessful, and by failing to preserve or recover assets
or proceeds for his clients in his capacity as their attorney, and
not as their guardian, he is in no better position than a separate
counsel he might have retained. At the time Kuchera decided to try
to establish Appellant's involvement, there was no lie detector
evidence, and only limited circumstantial evidence of her
involvement in Mr. Gibbs' death. Additionally, Appellant had not
been charged or indicted, and based on the botched investigation,
it was likely that she never would be. Kuchera's decision to
pursue the § 21.23 claim of entitlement to the proceeds was a
gamble; he rolled the dice hoping he could get the necessary
evidence to recover proceeds for the children, and he was
unsuccessful. Whether or not Texas state law would permit recovery
of attorney’s fees by the attorney ad litem for an unsuccessful
claimant under § 21.23 out of the insurance proceeds in question is
an issue which the district court did not address, either factually
35
or legally.
Furthermore, the only part of Kuchera's expenses which are
taxable as costs against any party under Rule 54(d) of the Federal
Rules of Civil Procedure are those expenses related to his role as
the guardian ad litem. And those costs are taxable only against
the prevailing party, Appellant in this case, upon a showing of
good cause. Under Rogers v. Wal-Mart Stores, Inc., 686 S.W.2d 599,
600 (Tex. 1985), we think the trial court correctly found good
cause within the record of this case to support awarding those
limited costs against Appellant since the district court did say
that she was “likely” involved, that General American acted in
“good faith,” and that Kuchera made a good faith effort on behalf
of the children. Consequently, we have determined that remand is
necessary in order to give the district court the opportunity to
determine which of Kuchera's claimed expenses fall under each
category, that is -- which are recoverable guardian ad litem
expenses taxable as costs, and which are non-taxable attorney ad
litem expenses. The district court should also determine whether,
under Texas state law, the latter category of expenses may be
recovered by the guardian ad litem from Appellant and/or General
American.
CONCLUSION
For all of the foregoing reasons, we AFFIRM the judgment of
36
the district court in so far as it denies attorneys' fees and costs
to Appellant Carolyn Gibbs; REVERSE the judgment of the district
court in so far as it awards attorneys' fees and costs to Appellee
General American Life Insurance; VACATE the judgment of the
district court insofar as it awards attorneys’ fees and costs to
Intervenor-Appellees' guardian ad litem, John Kuchera; and REMAND
with instructions that the district court determine, pursuant to
duPont v. Southern Nat. Bank, 771 F.2d 874 (5th Cir. 1985), which
of Mr. Kuchera's fees and expenses were generated in his role as
guardian ad litem, and tax such fees and expenses as costs against
Appellant Carolyn Gibbs and/or General American. The district
court should also determine whether the portion of Mr. Kuchera's
fees and expenses generated in his role as attorney ad litem are
recoverable from Appellant and/or General American under Texas
state law in the circumstances of this case.
AFFIRMED in part; REVERSED in part; VACATED in part; and
REMANDED.
37
BENAVIDES, J., specially concurring:
I join the judgment of the majority and its holding that under
our decision in duPont v. Southern Nat’l Bank of Houston, Texas,
771 F.2d 874 (5th Cir. 1985), Mr. Kuchera cannot recover his
attorney ad litem fees as costs under Federal Rule of Civil
Procedure 54(d). duPont binds this panel to its holding. I
nevertheless write separately to emphasize my conviction that we
painted with too broad a brush in deciding duPont.
While duPont forecloses payment of Mr. Kuchera’s fees in his
capacity as attorney, as opposed to guardian, ad litem pursuant to
Rule 54(d), the court simultaneously revealed another possible
avenue for compensating attorneys ad litem: “when an attorney ad
litem acts to preserve a trust for the benefit of a minor, then his
expenses, although not taxable as costs, can be recovered from the
trust.” 771 F.2d at 883 (citing United States v. Equitable Trust
Co., 283 U.S. 738 (1931)). This rule is a well-established
exception to “American Rule” that “absent statute or enforceable
contract, litigants pay their own attorneys’ fees.” Alyeska
Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 257 (1975).
See id. (“[T]he 1853 [fee statute] was read as not interfering with
the historic power of equity to permit the trustee of a fund . . .
, or a party preserving or recovering a fund for the benefit of
others . . . , to recover his costs, including his attorneys’ fees,
from the fund . . . itself[.]”). I believe that American General’s
deposit of the funds into the district court’s registry, under the
38
circumstances (where American General made no claims to the funds
as such and whereby it relieved itself of potential liability for
payment of the funds to the improper party) is sufficiently
analogous to a settler’s contribution of funds to a trust to
warrant application of this rule. Mr. Kuchera acted to preserve
the interpleader funds for the benefit of the Gibbs children, and
he may therefore be able to recover his fees from the insurance
proceeds.
Unfortunately, here, the district court did not award fees
against the fund on the basis of this theory, but instead pursuant
to Rule 54(d). I would remand for consideration of attorneys fees
also under this alternative theory described in duPont.
Texas law, which provides for payment of ad litem fees by the
prevailing party, see Tex. R. Civ. Proc. 141 (permitting an
assessment of costs against a prevailing party for good cause shown
on the record), articulates the compelling rationale for duPont’s
alternative theory: “those who accept ad litem appointments should
be reasonably sure of receiving a fee for their services.” Dover
Elevator Co. v. Servellon, 876 S.W.2d 166, 171 (Tex. Civ. App.
1993, no writ); see also Cahill v. Lyda, 826 S.W.2d 932, 933 (Tex.
1992). Quite logically, without such assurances, courts might find
themselves unable to obtain necessary representation for minors in
39
court.14 Indeed, securing needed representation of minors is so
important in Texas that the designation of the representative as
“guardian ad litem” or “attorney ad litem” has little bearing on
the recovery of attorneys’ fees: “the paramount concern is not the
technical designation of the representative but the protection of
the minor’s interest.” Phillips Petroleum Co. v. Welch, 702 S.W.2d
672, 674 (Tex. Civ. App. 1995, no writ).15 In my view, to the
extent that duPont precludes payment of Mr. Kuchera’s fees pursuant
to Rule 54(d), the reasoning of the Texas courts persuasively
explains why such an outcome is undesirable.
I take some heart from our decision today to sanction the
district court’s consideration of the availability of attorneys’
fees under Texas law, to be paid either out of the insurance
proceeds or by Carolyn Gibbs or American General. I remain
convinced that an attorney, who in good faith and with good cause,
undertakes an obligation imposed upon him by the district court
both to protect the interests of minors and to file pleadings on
their behalf, and who undisputably discharges this obligation in a
14
In fact, the Supreme Court cites a similar explanation for the historic
rule of equity permitting a trustee litigating on behalf of a fund to recover his
attorneys’ fees from the trust: “‘Such a rule of practice,’ it has been said, ‘is
absolutely essential to the safety and security of a large number or persons who
are entitled to the protection of the law–indeed, stand most in need of it–but
who are incompetent. . . to ask for protection or redress.’” Equitable Trust,
283 U.S. at 744 (quoting Voorhees v. Polhemus, 36 N.J.Eq. 456, 458 (1883)).
15
Significantly, Texas state courts routinely use “guardian ad litem” and
“attorney ad litem” interchangeably. See Estate of Catlin, 936 S.W.2d 447, 452
(Tex. App.–Houston (14th Dist.) 1996, no writ) (“The attorney ad litem in this
case was appointed pursuant to rule 173 which provides [for the appointment of
a guardian ad litem.]”); Strawder v. Thomas, 846 S.W.2d 51, 64 (Tex. App.–Corpus
Christi 1992, no writ) (“[C]ompensation to be paid to the guardian ad litem
(attorney ad litem) shall be fixed by the court[.]”).
40
faithful and responsible manner should not be abandoned by the
system that has required and made use of his services. This is not
to say that all attorneys’ fees incurred in connection with ad
litem representation would be compensated merely because the
attorney initiated some legal action. Certainly, unreasonable or
bad faith efforts on behalf of the client should not result in
compensation.
Here, however, the facts of the case indicated the complicity
of a party, Carolyn Gibbs, in a criminal offense, and the district
court found that Carolyn Gibbs more likely than not participated,
in some manner, in Joel Gibbs’ death. In these circumstances, a
reasonable attorney, consistent with his duties imposed on him by
virtue of his appointment by the court, should have sought to
recover the insurance funds for the Gibbs children, as Mr. Kuchera
did. Far from “rolling the dice” and “gambling” on recovery, Mr.
Kuchera’s decision to intervene was virtually dictated by the facts
themselves; he acted in a measured and reasonable manner, which was
calculated to protect the best interests of the Gibbs children.16
His reasonable and good faith efforts in this regard should not go
uncompensated.
With these comments, I join the judgment of this court
16
In fact, had he not intervened on behalf of the Gibbs children, he would
have exposed himself to a potential malpractice suit that either of the Gibbs
children could have brought upon attaining the age of majority. See, e.g., Byrd
v. Woodruff, 891 S.W.2d 689, 708 (Tex. App.–Dallas 1994, no writ) (“We hold that
the guardian ad litem . . . can be liable in a civil action for damages resulting
from a breach of his duties as a personal representative for the minor.”).
41
remanding Mr. Kuchera’s claim for attorneys’ fees for further
consideration by the district court and join the court’s opinion
with respect to its resolution of American General’s claim for
attorneys’ fees.
42