The opinion of the court was delivered by: Laura Taylor Swain, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Caroline Clark ("Clark" or "Plaintiff") initiated this action against defendant First UNUM Life Insurance Company ("First UNUM" or "Defendant") seeking to recover benefits allegedly due under an employee benefit plan, pursuant to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1001 et seq. The Court has subject matter jurisdiction of the action pursuant to 29 U.S.C. § 1132(e)(1) and 28 U.S.C. § 1331. The parties have resolved Plaintiff's benefits claim without the Court's intervention. Plaintiff's motion for attorney's fees is the only controversy that remains before the Court.
In February 2002, Plaintiff applied for long term disability benefits as a result of being disabled by chronic fatigue syndrome ("CFS"). First UNUM, her employer's insurance carrier, denied her claims and her subsequent appeals. On November 17, 2004, Plaintiff commenced this litigation. (Docket entry no. 1.) During this time period, First UNUM was the subject of a multi-state investigation concerning its claim-handling procedures. This investigation concluded with a Market Conduct Examination report that faulted First UNUM's benefits determination procedures, including its excessive reliance on in-house medical professionals, unfair construction of medical reports, and inappropriate placement of burdens on claimants to justify eligibility. (Riemer Aff., Ex. G at 6-10.) Subsequently, First UNUM entered into a "Regulatory Settlement Agreement" ("RSA") with the United States Department of Labor and the New York Superintendent of Insurance. The RSA required First UNUM to pay a $15 million fine and created a "Claim Reassessment Process" to allow certain previously denied claimants, including Plaintiff, to submit their previously denied claims for reconsideration. (Riemer Aff., Ex. F.)
In light of the Claim Reassessment Process, the Court granted a stay of this litigation on February 14, 2005, pending reassessment of Plaintiff's claim (the "Reassessment"). On July 25, 2007, First UNUM, after numerous delays, completed the Reassessment and, in contrast to its previous denial of the claim, granted Plaintiff full back benefits under the terms of the plan (more than $500,000), with 6% interest, and placed Plaintiff in benefit payment status in accordance with the terms of the plan. Pursuant to a previously-executed Stipulation and Order, First UNUM's reversal of its previous denial and payment in full of Plaintiff's claim automatically dismissed Plaintiff's action with prejudice. (Docket entry no. 12.) Plaintiff subsequently filed the instant motion for attorney's fees. (Docket entry no. 13.)
Section 502(g)(1) of ERISA provides that, in an action brought pursuant to the statute, "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C.A. § 1132(g)(1) (West 2003). In adjudicating applications for awards under this provision, courts in this Circuit consider the following five factors:
(1) the degree of the offending party's culpability or bad faith, (2) the ability of the offending party to satisfy an award of attorney's fees, (3) whether an award of fees would deter other persons from acting similarly under like circumstances, (4) the relative merits of the parties' positions, and (5) whether the action conferred a common benefit on a group of . . . plan participants.
Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869, 871 (2d Cir. 1987). "These factors are guiding criteria, but the party seeking the award need not establish all five and no one factor is dispositive." Zervos v. Verizon New York, Inc., No. 01 Civ. 685, 2002 WL 31553484, at *2 (S.D.N.Y. Nov. 13, 2002). ERISA's attorney's fee provisions "should be construed liberally" and attorney's fees "may be awarded to the prevailing party under ERISA in the absence of some particular justification for not doing so." Veltri v. Building Service 32B-J Pension Fund, No. 02 Civ. 4200, 2004 WL 856329, *2 (S.D.N.Y. Apr. 20, 2004) (quoting Birmingham v. SoGen-Swiss Int'l Corp. Ret. Plan, 718 F.2d 515, 523 (2d Cir. 1983)).
In opposition to Plaintiff's motion, Defendant argues that: (i) an award of attorney's fees is not warranted in this case under Section 502(g)(1) of ERISA and Chambless; (ii) any fee award should exclude attorney's fees incurred during the Reassessment; and (iii) the hours and hourly rates upon which Plaintiff's request is premised are not reasonable. The Court considers the three issues in turn.
I. Whether The Chambless Factors Favor Granting Plaintiff Attorney's Fees
Among the five Chambless factors, central to the Court's analysis is the question of Defendant's culpability. Culpable conduct has been defined as "conduct that is blameable . . . involving the breach of a legal duty or the commission of a fault." Paese v. Hartford Life, 449 F.3d 435, 450-51 (2d Cir. 2006) (quoting Black's Law Dictionary (6th ed. 1990)). "A finding of culpability involves more than mere negligence, but does not require malice or any ulterior motive." Zervos, 2002 WL 31553484, at *2. Rather, a "failure to conduct a full and fair review in connection with a plaintiff's claims for benefits satisfies the culpability factor." Winkler v. Metropolitan Life Ins. Co., No. 03 Civ. 9656, 2006 WL 2850247, *2 (S.D.N.Y. Sept. 28, 2006) (internal citations and quotation marks omitted).
Defendant's behavior during the evaluation of Plaintiff's claim demonstrates its culpability. Defendant, inter alia, failed to seek an independent medical evaluation, ignored the recommendations of Plaintiff's physicians, and rejected medical conclusions without contacting Plaintiff's doctors for clarification. (See Riemer Aff., Ex. E). Defendant's failure to seek the opinion of outside medical professionals resulted in an interpretation of the medical reports by their in-house staff only, which produced both conclusory and conflicting statements. Defendant's medical staff failed to question Plaintiff's physicians or attempt to clear up any perceived inconsistencies in their evaluations and, instead, engaged in a selective analysis of the medical reports. "An administrator may, in exercising its discretion, weigh competing evidence, but it may not . . . cherry-pick the evidence it prefers while ignoring significant evidence to the contrary." Winkler v. Metropolitan Life Ins. Co., 170 Fed. Appx. 167, 168 (2d Cir. 2006). Defendant's actions were also consistent with those it was faulted for in the Market Conduct Examination, and deprived Plaintiff of a fair medical evaluation.
Neither the role of evolving diagnostic protocols in the reversal of the initial denial nor the fact that Plaintiff's position was ultimately vindicated with an award of full benefits weighs in favor of Defendant, particularly in light of the unfairness of its initial claims evaluation process. See Lampert v. Metropolitan Life Ins. Co., No. 03 Civ. 5655, 2004 WL 1395040, at *2 (S.D.N.Y. June 21, 2004) (granting the plaintiff attorney's fees and finding the defendant culpable in part because, although defendant had settled plaintiff's claims ...