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Attorney's Fees and Costs: D. Conn.

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  • Attorney's Fees and Costs: D. Conn.

    In a recent case from Connecticut, the court awards attorney's fees and costs on the Plaintiff's motion. By way of background, after being denied further benefits and exhausting internal appeals, this ERISA action was brought. The court found that the Defendant had not conducted a full and fair review of the Plaintiff's claim, and that the Defendant operated under under a conflict of interest in denying the Plaintiff's disability status. With respect to attorney's fees, the court utilized the Chambless factors and found:

    Guardian next argues that the Chambless factors weigh against awarding Johnson’s fees
    and costs even if she is eligible for them. I disagree. First, Guardian’s degree of culpability weighs in favor of granting attorney’s fees. To find that Guardian acted culpably, I need not find that it acted in bad faith. Slupinski v. First Unum Life Ins. Co., 554 F.3d 38, 48 (2d Cir. 2009). Rather, it is enough to conclude that its actions involved “the breach of a legal duty or the commission of a fault . . . .” Id. (quotation marks omitted). For example, the Second Circuit found that attorney’s fees were appropriate where a plan administrator “failed to engage in a fair and open-minded consideration of [the] claim.” Paese v. Hartford Life & Acc. Ins. Co., 449 F.3d 435, 451 (2d Cir. 2006). In this case, I concluded that Guardian “did not conduct a full and fair review of [Johnson’s] claim” (ECF No. 37 at 28) and that “conflict of interest may have impacted [Guardian’s] decision to terminate [Johnson’s] benefits.” (Id. at 32.) Guardian’s failings were more than sufficient to establish culpability. Second, both parties agree that Guardian is able to satisfy an award of attorney’s fees.
    (ECF No. 44 at 9). Third, I find that awarding fees may help deter “other persons acting under similar circumstances.” Donachie, 745 F.3d at 46. Specifically, evidence in the record suggested that Guardian evaluated Johnson’s disability in August 2014 and decided to continue paying benefits through 2016. (ECF No. 37 at 32.) Six months later, however, it found out that its payments would increase because they would no longer be offset by social security payments to her son. (Id.) Within days, Guardian decided to re-evaluate Johnson’s claim and ultimately concluded that she was no longer disabled. (Id.) Awarding attorney’s fees in this case may prevent plan administrators in the future from allowing conflicts of interest to taint their assessment of claims in this manner. I find that the fourth Chambless factor, whether the party seeking fees conferred a benefi all beneficiaries of an ERISA plan, is neutral.4 Johnson sought to have her own disability determination overturned by challenging Guardian’s decision-making process. To the extent that her case will benefit others by preventing Guardian from making similar procedural errors in the future, that benefit is already contemplated by the third Chambless factor focusing on deterrence. In any event, “failure to satisfy the [fourth] Chambless factor does not preclude an award of attorneys’ fees.” Locher v. Unum Life Ins. Co. of Am., 389 F.3d 288, 299 (2d Cir. 2004). The fifth factor, the relative merits of the parties’ claims, weighs in Johnson’s favor. Guardian suggests that this factor is neutral or favors them because I found that the case was a “close call.” (ECF No. 44 at 11.) I disagree. If I had reviewed Johnson’s claim de novo, then concluding that it was a “close call” might indicate that the relative merits of the parties’ claims were nearly balanced. Here, however, I concluded that the appropriate standard was arbitrary and capricious review. Guardian can hardly contend that its defense had merit simply because it almost proved its decision-making process was not procedurally inadequate and tainted by conflicts of interest. Johnson bore a heavy burden as a result of the deferential standard of review in this case, but she carried her burden nonetheless. If anything, this factor weighs more heavily in Johnson’s favor as a result of the mismatch in the burdens that Guardian and Johnson faced. Ultimately, four of the five Chambless factors weigh in Johnson’s favor while one is neutral. Given that Johnson achieved “some success on the merits,” I find that awarding attorney’s fees and costs is appropriate in this case.
    Ultimately, after finding that the costs and fees were reasonable, the court granted the Plaintiff's motion. The full opinion is attached below.
    Attached Files
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