The opinion of the court was delivered by: ROBERT P. PATTERSON, JR.
ROBERT P. PATTERSON, JR., U.S.D.J.
Plaintiff Carmen Guaus Mendez moves for summary judgment on her claim against the proceeds of certain retirement annuity contracts entered into by her husband Leocadio v. Diaz and Defendants Teachers Insurance and Annuity Association and College Retirement Equities Fund ("TIAA-CREF"). Plaintiff also moves for an award of attorney's fees pursuant to 29 U.S.C. § 1132(g)(1). TIAA-CREF moves for reargument of this Court's denial of its motion to be discharged from further liability and also moves for an award of attorney's fees.
For the reasons set forth below, Plaintiff's motions for summary judgment and for attorney's fees are granted and TIAA-CREF's motions for reargument of its motion for discharge and for attorney's fees are denied.
In 1962, TIAA-CREF issued certain retirement annuity contracts (the "annuities") to Leocadio v. Diaz. Mr. Diaz designated his former wife, Virginia Diaz, as the primary beneficiary of $ 25,000 of the annuities and named his estate the beneficiary of the remainder. Upon Mr. Diaz's death on December 25, 1989, TIAA-CREF paid $ 25,000 to Virginia Diaz as primary beneficiary. That amount was deducted off the top of the proceeds of the annuities pursuant to 26 C.F.R. § 1.401(a)-13(g)(4)(C)(2), leaving a balance of $ 410,544 as of June 21, 1990. Plaintiff made a demand for one half of the balance of the proceeds claiming that because she was married to Mr. Diaz at the time of his death, she is entitled to one half of the remaining balance pursuant to 29 U.S.C. § 1055(a)(1).
Defendant Rose Diaz Cordes, the executrix of Mr. Diaz's estate (the "Estate"), acknowledged that the decedent had married Ms. Mendez. However, the Estate argued that Ms. Mendez abandoned Mr. Diaz and that Mr. Diaz did not intend for Plaintiff to receive any of the benefits of his estate. By a letter to TIAA-CREF dated August 17, 1990, the Estate contested Plaintiff's claim to half of the annuities proceeds. A subsequent letter, dated January 29, 1991, was accompanied by a memorandum of law in support of its position. Aff. of John P. Curran, Exhibit F at 8. The memorandum consisted of several pages relying on decisions of state courts applying state law, which were wholly inapplicable to this claim, which is governed by the Employee Retirement Income Security Act ("ERISA").
On June 18, 1991, Plaintiff brought this action in the Supreme Court of New York County to recover the proceeds to which she alleges entitlement, and on July 17, 1991 TIAA-CREF removed the action to this Court pursuant to 28 U.S.C. § 1441. Thereafter, TIAA-CREF counterclaimed in interpleader against Plaintiff and the Estate and deposited the disputed sum into the registry of this Court. TIAA-CREF moved to be discharged from further liability in the action pursuant to 28 U.S.C. § 2361, and has recently moved for an award of its attorney's fees. The motion for discharge was denied at oral argument by this Court's order of December 18, 1992 because counsel for TIAA-CREF "were unable to confirm that the proceeds of the annuities had not been depleted by more than one half of the corpus."
Because the Estate is not opposing Plaintiff's motion for summary judgment, that motion is granted. Plaintiff is hereby awarded the remaining proceeds of the annuities, which amount to $ 205,949.89 plus interest thereon. Because there is no remaining risk of double liability to TIAA-CREF, its motion for reargument of this Court's denial of its motion for discharge is now moot. The parties' claims for attorney's fees remain to be resolved.
ERISA provides that it is within the discretion of the district court to award attorney's fees in actions brought by beneficiaries to recover benefits due. 29 U.S.C. § 1132(g)(1). Plaintiff contends that her entitlement to the disputed proceeds of the annuities has been at all times clear, and that TIAA-CREF's claim that it was investigating the merits of the Estate's claim was a "sham." Therefore, Plaintiff argues, she is entitled to reimbursement of attorney's fees incurred in her effort to secure the proceeds to which she claimed entitlement.
In support of her motion, Plaintiff relies on Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871 (2d Cir. 1987), where the court held that in an ERISA case, the decision of whether to award attorney's fees is based on five factors:
An application of these factors to the case before this Court indicates that Plaintiff should be ...