Pettit v. Life Insurance Company of North America et al

Filing 30

MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 7/11/2016. (dass, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
TYEAST PETTIT,

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Plaintiff,

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v.

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LIFE INSURANCE COMPANY
OF NORTH AMERICA,

Civil Action No. RDB-15-2694

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Defendant.
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MEMORANDUM OPINION
Plaintiff Tyeast Pettit (“Plaintiff” or “Pettit”) has brought this action pursuant to
Sections 502(a), (e)(1) and (f) of the Employee Retirement Income Security Act (“ERISA”),
29 U.S.C. §§ 1132(a), (e)(1) and (f), against Defendant Life Insurance Company of North
America (“Defendant” or “LINA”), challenging LINA’s denial of her claims for life
insurance benefits (Count One) and long-term disability benefits1 (Count Two) under an
employee benefit plan2 governed by ERISA.3 Compl., p. 1, ECF No. 1. Currently pending
before this Court is Defendant’s Motion for Partial Summary Judgment Regarding the

As explained infra, the Plan includes separate long-term disability and life insurance policies, both issued and
administered by LINA. See LTD Policy, Def.’s Ex. 1, ECF No. 18-3; Life Policy, Def.’s Ex. 2, ECF No. 18-4.
2 Plaintiff initially named Fresenius Medical Care Holdings Plan (the “Plan”) as an additional Defendant. See
Compl., p. 1, ECF No. 1. However, by agreement of the parties, this Court has subsequently dismissed the
Plan from this action. See Marginal Order Approving Stipulation of Dismissal, ECF No. 10.
3 Additionally, Plaintiff alleges that Defendant has violated ERISA Sections 502(a)(1)(A) and (c)(1), 29 U.S.C.
§§ 1132(a)(1)(A) and (c)(1) “by failing to supply information and comply with notice requests” (Count Three).
However, as explained infra, the pending motion pertains only to the standard of review this Court will apply
in reviewing LINA’s benefits determinations in Counts One and Two.
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Standard of Review (ECF No. 18). LINA contends that this Court should review its denial
of benefits for “abuse of discretion.” Pettit argues for “de novo” review. The parties’
submissions have been reviewed, and no hearing is necessary. See Local Rule 105.6 (D. Md.
2016). For the reasons that follow, Defendant’s Motion for Partial Summary Judgment
Regarding the Standard of Review (ECF No. 18) is DENIED.

Accordingly, benefits

determinations made by LINA under the ERISA Plan at issue in this case shall be reviewed
under the default de novo standard.
BACKGROUND
In ruling on a motion for summary judgment, this Court reviews all facts and
reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550
U.S. 372, 378 (2007); see also Hardwick ex rel. Hardwick v. Heyward, 711 F.3d 426, 433 (4th Cir.
2013). The facts of this case are as follows:
Plaintiff Tyeast Pettit (“Plaintiff” or “Pettit”) resides in Fruitland, Maryland. Compl.,
¶ 3, ECF No. 1. Pettit worked as a Clinical Manager at Fresenius Medical Care North
America (“Fresenius”) until June 1, 2012, at which time she was unable to continue working
“in her own occupation . . . due to multiple sclerosis that was initially diagnosed in 2008 with
progressive symptoms including the inability to balance, pain, and fatigue.” Id. at ¶¶ 6-7. As
a Fresenius employee, Pettit was covered by the Fresenius Medical Care Holdings Plan (the
“Plan”), a Massachusetts-based employee benefit plan governed by the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., and “providing for
employee benefits including long-term disability and waiver of premium for life insurance
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coverage.” Id. at ¶ 5. Defendant Life Insurance Company of North America (“Defendant”
or “LINA”) is the Plan’s administrator and insurer, and conducts its business. Id. at ¶ 4.
The Plan includes two separate policies, a Long-Term Disability Policy (the “LTD
Policy”) and a Life Insurance Policy (the “Life Policy”), both issued and administered by
LINA. See LTD Policy, Def.’s Ex. 1, ECF No. 18-3; Life Policy, Def.’s Ex. 2, ECF No. 184. Both policies include integration clauses, which provide that “[t]he entire contract will be
made up of the Policy, the application of the Employer, a copy of which is attached to the
Policy, and the applications, if any, of the Employees [Insureds].” LTD Policy at 21; Life
Policy at 25. Additionally, both policies include procedures for amending the policies, which
provide that “[n]o change in the Policy will be valid until approved by an executive officer of
the Insurance Company. This approval must be endorsed on, or attached to, the Policy. No
agent may change the Policy or waive any of its provisions.” Id.
Both policies include an Amendatory Rider, which provides that “[t]he Plan
Administrator has appointed the Insurance Company [LINA] as the named fiduciary for
deciding claims for benefits under the Plan, and for deciding any appeals of denied claims.”
LTD Policy at 26-27; Life Policy at 32-33. Additionally, a separate Appointment of Claim
Fiduciary form (“ACF”) defines LINA’s responsibilities as follows:
Claim Fiduciary [LINA] shall be responsible for adjudicating claims for
benefits under the Plan, and for deciding any appeals of adverse claim
determinations. Claim Fiduciary shall have the authority, in its discretion, to
interpret the terms of the Plan, including the Policies; to decide questions of
eligibility for coverage or benefits under the Plan; and to make any related
findings of fact. All decisions made by such Claim Fiduciary shall be final and
binding on Participants and Beneficiaries of the Plan to the full extent
permitted by law.
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ACF, Def.’s Ex. 4, ECF No. 18-6. The ACF further provides that the “Plan Administrator
shall include the foregoing in Summary Plan Descriptions furnished to Participants. Claim
Fiduciary shall provide Plan Administrator with a form of Summary Plan Description, based
on its standard Certificates of Insurance, which contains in substance the foregoing, in
addition to a summary of the terms of the Policies.” Id. Accordingly, Certificates of
Insurance for both policies were distributed to Plan participants and provided the following:
The Plan Administrator has appointed the Insurance Company [LINA] as the
named fiduciary for adjudicating claims for benefits under the Plan, and for
deciding any appeals of denied claims. The Insurance Company shall have the
authority, in its discretion, to interpret the terms of the Plan, to decide
questions of eligibility for coverage or benefits under the Plan, and to make
any related findings of fact. All decisions made by the Insurance Company
shall be final and binding on Participants and Beneficiaries to the full extent
permitted by law.
Group Disability Insurance Certificate, Def.’s Ex. 5, p. 17, ECF No. 18-7; Group Life
Insurance Certificate, Def.’s Ex. 6, p. 21, ECF No. 18-8.4
LINA paid Pettit long-term disability benefits through November 27, 2014 under the
LTD Policy [Policy #LK0980154]. Compl., ¶ 8, ECF No. 1. Additionally, Pettit “applied
for and continues to receive Social Security Disability benefits based upon the finding that
she is totally and permanently disabled from substantial gainful activity.”

Id. at ¶ 9.

However, via letter dated June 24, 2015, “LINA issued a denial of long-term disability
In her Opposition to the pending Motion, Plaintiff requested “discovery . . . in the form of requests for
production of documents to pin down the defendant as [to] what it now claims are summary plan documents,
insurance certificates and actual plan documents and their respective dates of creation.” Pl.’s Opp’n, p. 2,
ECF No. 21. At the request of this Court, Defendant has subsequently filed correspondence documenting
that the exhibits cited supra (LTD Policy, Life Policy, ACF, Insurance Certificates) were in fact provided to
Plaintiffs’ counsel before briefing began on the pending Motion. See Correspondence, ECF No. 27.
Accordingly, via Letter Order dated June 3, 2016 (ECF No. 29), this Court ruled that “the discovery issue, as
reflected by ECF Nos. 23, 24, and 25, is now MOOT.”

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benefits under [the LTD Policy].” Id. at ¶ 14. Pettit also filed a claim for “Waiver of
Premium/Life Insurance benefits” under the Life Policy [Policy #FLX0980203]. However,
“[f]ollowing an initial denial, which plaintiff timely appealed, [LINA] issued a final denial
dated June 24, 2015 on the basis that ‘we have not been provided with medical
documentation to support an impairment of functional capacity severe enough to affect your
client’s ability to work in any sedentary occupation at this time.’ ” Id. at ¶ 10. Pettit claims
that “[LINA’s] denial was based upon a medical review and a functional capacity evaluation
that failed to consider chronic pain, unexpected absences from work and failed to perform a
vocational analysis.”

Id. at ¶ 12.

“As a result of [LINA’s] denial of the Waiver of

Premium/Life Insurance benefits,” Pettit now claims that she “has not received the proper
coverage since September 26, 2014 to which she is entitled, and was denied the waiver of
premium under the policy including for life insurance benefits.” Id. at ¶ 13.
Pettit has brought the present action, pursuant to 29 U.S.C. § 1132(a)(1)(B), to
recover benefits under both the Life and LTD Policies (Counts One and Two). Id. at ¶¶ 1728. Additionally, Pettit claims that LINA has violated 29 U.S.C. §§ 1332(a)(1)(A) and (c)(1)
by failing to provide her with “requested copies of plan documents, summary plan
description, complete claims file and medical evidence used to deny the claim, and
communications whether by memo, letter or email” (Count Three).

Id. at ¶¶ 29-33.

Accordingly, Pettit prays that this Court award the following relief:
(1) declare that the Defendants are obligated to pay Plaintiff her past due longterm disability benefits with reinstatement of long-term disability benefits and
the waiver of premium/life insurance coverage; (2) declare that the
Defendants be assessed and ordered to pay $110 per day for the failure and/or
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refusal to provide requested Plan documents, schedules and policies pursuant
to 29 U.S.C. §1132(c)(1); (3) issue an injunction and declaratory relief that
LINA produce all relevant documents under section 503-1(m)(8) to include
not only those documents considered but also those documents “submitted,
considered or generated” in compliance with (b)(5) that the plan has been
applied consistently to similarly situated claimants, identify all of the medical
and vocational experts whether relied upon or not, identify the actual reviewer
and his or her credentials, provide internal rules, guidelines and protocols
relied upon or applied in terminating plaintiff’s claim for benefits; and (4)
award retroactive long-term disability benefits and reinstate future benefits; (5)
award Plaintiff the costs of this action, interest, and reasonable attorneys’ fees;
and (6) award such other further and different relief as may be just and proper.
Id. at p. 6-7.
STANDARD OF REVIEW
Rule 56 of the Federal Rules of Civil Procedure provides that a court “shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). A
material fact is one that “might affect the outcome of the suit under the governing law.”
Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986)). A genuine issue over a material fact exists “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson, 477 U.S. at 248. When considering a motion for summary judgment, a judge’s
function is limited to determining whether sufficient evidence exists on a claimed factual
dispute to warrant submission of the matter to a jury for resolution at trial. Id. at 249.
In undertaking this inquiry, this Court must consider the facts and all reasonable
inferences in the light most favorable to the nonmoving party. Libertarian Party of Va., 718
F.3d at 312; see also Scott v. Harris, 550 U.S. 372, 378 (2007). However, this Court “must not
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weigh evidence or make credibility determinations.” Foster v. University of Md.-Eastern Shore,
787 F.3d 243, 248 (4th Cir. 2015) (citing Mercantile Peninsula Bank v. French, 499 F.3d 345, 352
(4th Cir. 2007)); see also Jacobs v. N.C. Administrative Office of the Courts, 780 F.3d 562, 569 (4th
Cir. 2015) (explaining that the trial court may not make credibility determinations at the
summary judgment stage). Indeed, it is the function of the fact-finder to resolve factual
disputes, including issues of witness credibility. See Tolan v. Cotton, ___ U.S. ___, 134 S. Ct.
1861, 1866-68 (2014) (per curiam).
ANALYSIS
Plaintiff Tyeast Pettit (“Plaintiff” or “Pettit”) has brought this action, pursuant to 29
U.S.C. § 1132(a)(1)(B), to recover long-term disability benefits and a waiver of life insurance
premiums (Counts One and Two) under the Fresenius Medical Care Holdings Plan (the
“Plan”), an employee welfare benefit plan maintained by her employer, Fresenius Medical
Care North America (“Fresenius”), and administered by Defendant Life Insurance Company
of North America (“Defendant” or “LINA”). See generally Compl., ECF No. 1.5 The Plan
includes a Long-Term Disability Policy (the “LTD Policy”) and a Life Insurance Policy (the
“Life Policy”), both issued and administered by Defendant. Id. at ¶¶ 10, 14.
Plaintiff has previously applied for benefits under the Plan, but Defendant has denied
her benefit requests. Id. The parties agree that the Plan is governed by the Employee

As indicated supra, Plaintiff also seeks a declaration that Defendant “be assessed and ordered to pay $110
per day for the failure and/or refusal to provide requested Plan documents, schedules and policies pursuant
to 29 U.S.C. § 1132(c)(1)” and “an injunction and declaratory relief that [Defendant] produce [inter alia] all
relevant documents under [S]ection 503-1(m)(8)” (Count Three). See Compl., p. 6, ECF No. 1. However, as
explained herein, the pending motion pertains only to the standard of review applicable to Plaintiff’s 29
U.S.C. § 1132(a)(1)(B) claims in Counts One and Two.
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Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq. Accordingly, a civil
action by a plan “participant or beneficiary . . . to recover benefits due” under ERISA
Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), is Plaintiff’s exclusive remedy. See Metro. Life
Ins. Co. v. Taylor, 481 U.S. 58, 63 (1987) (Ҥ 502(a)(1)(B) of ERISA . . . provides an exclusive
federal cause of action for resolution of such disputes.”). However, the parties disagree as to
the standard of review this Court should apply in reviewing Defendant’s benefit
determinations.

In the pending Motion for Partial Summary Judgment Regarding the

Standard of Review (ECF No. 18), Defendant contends that this Court should review its
denial of Plaintiff’s requested benefits for “abuse of discretion,” see Mot., p. 1, ECF No. 18,
whereas Plaintiff argues for “de novo” review, see, e.g., Pl.’s Opp’n, p. 5, ECF No. 21.
“[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de
novo standard unless the benefit plan gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) (emphasis added). “Firestone established
that the default standard of review is de novo, and that an abuse-of-discretion review is
appropriate only when discretion is vested in the plan administrator.” Woods v. Prudential Ins.
Co. of Am., 528 F.3d 320, 322 (4th Cir. 2008) (emphasis added). Applying Firestone, the
United States Court of Appeals for the Fourth Circuit has concluded the following:
[A]n ERISA plan can confer discretion on its administrator in two ways: (1) by
language which “expressly creates discretionary authority,” and (2) by terms
which “create discretion by implication.” Feder v. Paul Revere Life Ins. Co., 228
F.3d 518, 522-23 (4th Cir. 2000). However, regardless of whether discretion is
created expressly or implicitly, we have consistently required that the plan
manifest a clear intent to confer such discretion. See, e.g., id. at 523; Gallagher v.
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Reliance Std. Life Ins. Co., 305 F.3d 264, 268 (4th Cir. 2002). Moreover, we have
made it plain that “[i]f a plan does not clearly grant discretion, the standard of
review is de novo.” Id. at 270, n. 6. Finally, in the context of determining
whether a plan sufficiently confers discretion, we have held that “[a]ny
ambiguity in an ERISA plan is construed against the drafter of the plan . . .
and in accordance with the reasonable expectations of the insured.” Id.
(internal quotations omitted).
Woods, 528 F.3d at 322. If a plan clearly grants discretion to an administrator or fiduciary of
the plan, “the exercise of assigned discretion is reviewed for abuse of discretion.” Evans v.
Eaton Corp. Long Term Disability Plan, 514 F.3d 315, 321 (4th Cir. 2008).
As this Court has recently noted, “[a]lthough Firestone established a de novo default, the
exception quickly swallowed the rule . . . [and] invited bad-faith benefit denials, allowing plan
administrators to ‘impose self-serving terms that severely restrict the ability of a reviewing
court to correct a wrongful benefit denial.’ ” Weisner v. Liberty Life Ins. Co. of Boston, No. 24
Civ. JKB-15-2545 (D. Md. June 28, 2016) (under seal) (citations omitted). Accordingly,
“state legislators and insurance regulators have in the recent past enacted statutes,
regulations, and administrative rules that either prohibit outright the use of discretionary
clauses in insurance contracts or impose limitations on the content and format of these
clauses.” Id. (citation omitted).6
Here, neither the LTD Policy (Def.’s Ex. 1) nor the Life Policy (Def.’s Ex. 2)
manifests a clear intent to grant LINA discretionary authority, but the Appointment of
Claim Fiduciary form (“ACF”) (Def.’s Ex. 4) does grant LINA “authority, in its discretion,
Plaintiff contends that any discretionary authority granted to LINA under the Plan is void because MD.
CODE ANN., INS. § 12-211 prohibits discretionary clauses in disability insurance policies. See Compl., ¶ 16,
ECF No. 1; Pl.’s Brief, p. 5, ECF No. 19. However, for the reasons explained infra, the Plan does not clearly
grant LINA discretionary authority. Accordingly, this Court need not reach Plaintiff’s argument under MD.
CODE ANN., INS. § 12-211.
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to interpret the terms of the Plan, including the Policies; to decide questions of eligibility for
coverage or benefits under the Plan; and to make any related findings of fact.” Accordingly,
the issue before this Court is whether the ACF’s grant of discretionary authority, also recited
in plan summaries within the Policies’ Insurance Certificates, is considered part of “the
benefit plan” under Firestone. See Firestone, 489 U.S. at 115.
I.

The Appointment of Claim Fiduciary Form (“ACF”) Is Not, as a Matter of Law, a
Valid Amendment to the Policies
This Court has held that a “grant of discretion may be derived from any number of

plan documents, including the plan itself, summary descriptions, contracts, and the like.”
Klebe v. Mitre Grp. Health Care Plan, 894 F. Supp. 898, 902 (D. Md. 1995), aff’d, 91 F.3d 131
(4th Cir. 1996); see also Pettaway v. Teachers Ins. & Annuity Ass’n of Am., 644 F.3d 427, 434
(D.C. Cir. 2011) (holding that courts may consider multiple plan documents in determining
the appropriate standard of review); Wilkinson v. Sun Life & Health Ins. Co., 127 F. Supp. 3d
545, 558 (W.D.N.C. 2015) (same). However, neither the United States Court of Appeals for
the Fourth Circuit nor this Court has yet to consider whether an Appointment of Claim
Fiduciary (“ACF”), like the one in this case, constitutes an ERISA plan document.
However, other United States District Courts within the Fourth Circuit have held that nearly
identical ACFs are plan documents, but only where they have effectively “amended” the
Policies in compliance with the Policies’ amendment procedures7. See DuPerry v. Life Ins. Co.
of N. Am., No. 5:08-CV-344-FL, 2009 U.S. Dist. LEXIS 83532, at *28 (E.D.N.C. Aug. 10,
ERISA requires that employee benefit plans “provide a procedure for amending such plan, and for
identifying the persons who have authority to amend the plan,” 29 U.S.C. § 1102(b)(3), “but does not set
forth any other parameters for such procedures.” See DuPerry, 2009 U.S. Dist. LEXIS at 27 (citing CurtissWright Corp. v. Schoonejejongen, 514 U.S. 73, 80 (1995)).

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2009), aff’d, 2011 U.S. App. LEXIS 1399 (4th Cir. N.C., Jan. 24, 2011) (ACF granting
discretionary authority to LINA constituted a Plan document because it satisfied both
elements of a valid amendment to the Policy)8; Ward v. Life Ins. Co. of N. Am., No.
1:08CV675, 2009 WL 2740202, at *5 (M.D.N.C. Aug. 26, 2009) (same); see also Siegel v.
Connecticut Gen. Life Ins. Co., 702 F.3d 1044, 1048 (8th Cir. 2013) (Noting United States
Magistrate Judge’s conclusion that “LINA’s decision would be reviewed for abuse of
discretion” where “claim fiduciary appointment had been a valid amendment” to the policy).
The LTD and Life Policies in this case both include integration clauses, which
provide that “[t]he entire contract will be made up of the Policy, the application of the
Employer, a copy of which is attached to the Policy, and the applications, if any, of the
Employees [Insureds].” See LTD Policy, Def.’s Ex. 1, p. 21, ECF No. 18-3; Life Policy,
Def.’s Ex. 2, p. 25, ECF No. 18-4. Additionally, both Policies include procedures for
amending the Policies, which provide that “[n]o change in the Policy will be valid until
approved by an executive officer of the Insurance Company.

This approval must be

endorsed on, or attached to, the Policy. No agent may change the Policy or waive any of its
provisions.” Id. However, Defendant does not argue that the ACF constitutes a valid
amendment to the Policy in accordance with these provisions. In fact, Defendant has not
cited DuPerry, Ward, or Siegel. While the ACF in this case was signed by “Matthew G.
Manders,” who Defendant claims is “an executive officer of LINA . . . authorized to

8 The United States District Court for the Eastern District of North Carolina declined to consider in DuPerry
whether the ACF, “if it was not a valid amendment,” would still constitute “a plan document that did not
need to be executed as an amendment to the Policy.” DuPerry, 2009 U.S. Dist. LEXIS at 26-29.

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execute” the ACF, see Mem. Supp. Mot., p. 3, ECF No. 18-2, there is no indication that the
ACF was “endorsed on, or attached to” either of the Policies. In contrast, the ACF in
DuPerry “was endorsed on the Policy in LINA’s files.” DuPerry, 2009 U.S. Dist. LEXIS at 28
(citing Aff. of Heather Zapf, DE # 31-3). See also Wilkinson, 127 F. Supp. 3d at 557
(Statement of Rights “attached to and delivered with the Policy” was an ERISA plan
document).
In support of the pending motion, Defendant has submitted the Declaration of Eric
Bishop, Vice President of Finance, Administration for National Medical Care, Inc., a
subsidiary of Fresenius, and the Declaration of Alexander J. Gelb, Senior Operations
Representative for LINA. Bishop Decl., Def.’s Ex. 3, ECF No. 18-5; Gelb Decl., Def.’s Ex.
7, ECF No. 18-9. According to Bishop, “Fresenius Medical intended that the ACF would
govern the Plan, would constitute a Plan document, and would be read in conjunction with
the LTD Policy and Life Policy.” Bishop Decl. at ¶ 5. According to Gelb, LINA also
understood that “the ACF would govern the Plan, would constitute a Plan document, and
would be read in conjunction with other Plan documents, including the [Policies].” Gelb
Decl. at ¶ 4. However, neither Bishop nor Gelb suggests that the ACF was “endorsed on, or
attached to” either of the Policies, a requirement for a valid Policy amendment.
II.

The Seventh Circuit’s Decision in Raybourne v. Cigna Life Ins. Co. of New York, 576 F.3d
444, 448 (7th Cir. 2009), Holding that an ACF was a Plan Document, Involved a Set
of Documents Readily Distinguishable from Those in This Case
In CIGNA Corp. v. Amara, 563 U.S. 421, 436 (2011), the United States Supreme

Court faced an issue similar to the question presently before this Court. In Amara, the
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Solicitor General took the position that “the terms of [ERISA plan] summaries are terms of
the plan.” Amara, 563 U.S. at 436. The Supreme Court rejected that argument, concluding
that ERISA plan “summary documents . . . provide communication with beneficiaries about
the plan, but . . . do not themselves constitute the terms of the plan for purposes of §
502(a)(1)(B).” Id. at 438.
Rather than arguing that the ACF was a valid amendment to the Policies, Plaintiff
relies almost exclusively on the Seventh Circuit’s holding in Raybourne v. Cigna Life Ins. Co. of
New York, 576 F.3d 444, 448 (7th Cir. 2009), a pre-Amara case, that a “Claim Fiduciary
Appointment” document, similar to the ACF in this case, constituted a plan document on its
own. Similar to the ACF in this case, the “Claim Fiduciary Appointment” document in
Raybourne granted Cigna “ ‘the authority, in its discretion, to interpret the terms of the Plan
[and] to decide questions of eligibility for coverage or benefits under the Plan.’ ” Raybourne,
576 F.3d at 448. Further, a “Summary Plan Description” (“SPD”) confirmed that “[t]he
Plan Administrator has delegated to the insurance company the full and complete
discretionary authority and responsibility to decide all questions of eligibility for benefits
under the Plan.” Id.
The Plaintiff in Raybourne objected that the Claim Fiduciary Appointment was not a
Plan document because it was “extrinsic,” “he did not receive it until [the] litigation was
underway,” and “it [was] neither incorporated nor referenced anywhere in the plan.” Id.
However, the Seventh Circuit found that the Claim Fiduciary Agreement itself “explain[ed]
why Raybourne did not receive it—it state[d] that the plan administrator must describe its
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discretion “in Summary Plan Descriptions furnished to Participants.’ ” Id. The SPD
“explain[ed] that the ‘actual provisions of the Plan are set forth in the insurance policy and the
claims fiduciary agreement.’ ”

Id. (emphasis added).

The Seventh Circuit dismissed the

Plaintiff’s objection, citing its earlier decision in Semien v. Life Ins. Co. of N. Am., 436 F.3d 805,
811 (7th Cir. 2006), for the proposition that “often the terms of an ERISA plan must be
inferred from a series of documents none clearly labeled as ‘the plan.’ ” Id. “[G]iven that
the Claim Fiduciary Appointment provides the name of the plan and plan administrator, is
signed by representatives of the plan and Cigna, and states that it ‘shall be effective’ from the
date of the underlying insurance policy,” the Seventh Circuit concluded that “it is difficult to
see how it could be anything other than a plan document.” Id. at 449.
Like the Claim Fiduciary Appointment document in Raybourne, the ACF in this case
“provides the name of the plan and plan administrator, is signed by representatives of the
plan and [LINA], and states that it ‘shall be effective’ from the date of the underlying
insurance policy.” See Raybourne, 576 F.3d at 449. The ACF indicates that “Fresenius
Medical Holdings, Inc.” is both the “Name of Plan” and “Plan Administrator,” it is signed
by both the President of the Insurance Company and the Senior Benefits Manager of the
Plan, and provides that the “Claim Fiduciary shall serve as such effective from and after the
effective date of each of the Policies.” See ACF, Def.’s Ex. 4, ECF No. 18-6. Furthermore,
like in Raybourne, the SPDs contained in the Insurance Certificates distributed to Plaintiff and
other Plan participants indicate the following:
The Plan Administrator has appointed the Insurance Company [LINA] as the
named fiduciary for adjudicating claims for benefits under the Plan, and for
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deciding any appeals of denied claims. The Insurance Company shall have the
authority, in its discretion, to interpret the terms of the Plan, to decide
questions of eligibility for coverage or benefits under the Plan, and to make
any related findings of fact. All decisions made by the Insurance Company
shall be final and binding on Participants and Beneficiaries to the full extent
permitted by law.
Group Disability Insurance Certificate, Def.’s Ex. 5, p. 17, ECF No. 18-7; Group Life
Insurance Certificate, Def.’s Ex. 6, p. 21, ECF No. 18-8.
Despite these similarities, several courts have held since the Raybourne decision that
ACFs nearly identical to the one in this case are not Plan documents. See, e.g., Moran v. Life
Ins. Co. of N. Am. Misericordia Univ., No. 3:CV-13-765, 2014 WL 4251604, at *9 (M.D. Pa.
Aug. 27, 2014); Barbu v. Life Ins. Co. of N. Am., 987 F. Supp. 2d 281, 289 (E.D.N.Y. 2013);
Francis v. Anacomp, Inc. Accidental Death & Dismemberment Plan, No. 10CV467 BEN BGS, 2011
WL 4102143, at *4 (S.D. Cal. Sept. 14, 2011); Heim v. Life Insurance Company of North America,
slip op., Case No. Civ.A. 10–1567, 2010 WL 5300537 (E.D. Pa. 2010).
The United States District Court for the Eastern District of New York held in Barbu
v. Life Ins. Co. of N. Am., 987 F. Supp. 2d 281, 289 (E.D.N.Y. 2013), another case involving
LINA Policies, that an ACF nearly identical to the ACF in this case was not a Plan
document. As in this case, LINA declined to argue in Barbu that the ACF was a valid
amendment to the Policy. See Barbu, 987 F. Supp. 2d at 288, n. 4. Rather, LINA argued that
the ACF itself constituted a valid Plan document, relying on the Seventh Circuit’s decision in
Raybourne. Id. at 286. However, the Barbu court declined to follow Raybourne because the
documents in the record were distinguishable from those before the Raybourne court. First, a
clause in the SPD before the Raybourne court explicitly indicated that “provisions of the Plan
15

are set forth in the insurance policy and the claims fiduciary agreement.” Id. at 287 (citing
Raybourne, 576 F.3d at 448) (emphasis added). In contrast, the LINA Policy SPD in Barbu,
contained in a Certificate of Insurance, included no such provision. Id. The Barbu court
found it “critical” that the defendant in Raybourne “could at least point to a clause in the SPD
stating that the ACF contained plan terms.” Id. (emphasis added). It is important to note that,
like the LINA SPD in Barbu, the Plan summaries in this case do not include any language
indicating that the ACF contains Plan terms.
The Barbu Court further distinguished the LINA documents in that case from the
Cigna documents in Raybourne on the grounds that the Policy in Barbu included an
integration clause that did not “include the ACF among the three items (‘the Policy, the
application of the Employer ... and the applications ... of the Insureds,’) making up the
‘entire contract.’ ” Id. In contrast, “[t]here was no integration clause discussed in Raybourne.”
Id. Here, just like the LINA policy in Barbu, the Life and LTD Policies both include
integration clauses explicitly providing that “[t]he entire contract will be made up of the
Policy, the application of the Employer, a copy of which is attached to the Policy, and the
applications, if any, of the Employees [Insureds].” LTD Policy at 21; Life Policy at 25. As
the Barbu court concluded, the presence of this clause directly contradicts Defendant’s
contention that the ACF should be read with the Policies as a Plan document. Barbu, 987 F.
Supp. 2d at 287.9
While the integration clause refers to the “entire contract” as opposed to the “Plan” or “entire set of Plan
documents,” the Barbu court cited a series of recent decisions relying on similar integration clauses in
declining to enforce documents extrinsic to insurance policies. See, e.g., Jobe v. Med. Life. Ins. Co., 598 F.3d 478,
486 (8th Cir. 2010) (reviewing multiple “plan documents” and concluding that fully-integrated policy
9

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Furthermore, the Barbu court found it significant that Raybourne was issued prior to
the United States Supreme Court’s decision in CIGNA Corp. v. Amara, holding that ERISA
plan summaries do not contain plan terms. Amara, 536 U.S. at 438. The Barbu court
concluded that “the guidance of the Supreme Court in Amara on SPDs applies with equal
force to ACFs” and that neither document becomes part of a Plan without explicit language
so stating. Barbu, 987 F. Supp. 2d at 287. There was no language explicitly making the ACF
in Barbu part of the plan, nor is that language present in this case.
The United States District Court for the Middle District of Pennsylvania likewise held
in Moran v. Life Ins. Co. of N. Am. Misericordia Univ., No. 3:CV-13-765, 2014 WL 4251604, at
*9 (M.D. Pa. Aug. 27, 2014) that a nearly identical LINA ACF did not constitute a Plan
document. The Moran court adopted the reasoning in Barbu, concluding that “the Supreme
Court’s guidance on SPDs in Amara also applies to Claim Fiduciary forms” and that “LINA
failed to identify any provision in any document indicating that the Claim Fiduciary form is
incorporated or integrated into the Plan.” Id. Like in Barbu, and the present case, the
documents in the record in Moran included no clause stating that the ACF included Plan
terms. See id. Additionally, as in Barbu and the present case, the Policy “contain[ed] an
integration clause supporting the contrary conclusion.” Id.

“controls over the inconsistent grant of discretion to the administrator in the summary plan description”);
Grosz–Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1161 (9th Cir. 2001) (holding SPD unenforceable
where policy’s integration clause limited entire contract to policy and applications); Hamill v. Prudential Ins. Co.
of Am., No. 11–CV–1464, 2013 WL 27548, at *2 (E.D.N.Y. Jan. 2, 2013) (noting importance of SPD’s
omission from policy’s integration clause referring to “[t]he entire Group Contract”).

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For these reasons, the Seventh Circuit’s decision in Raybourne is not directly applicable
to the ACF in this case.10

Accordingly, by relying almost exclusively on Raybourne,

Defendant has failed to demonstrate that the grant of discretion contained in the ACF in this
case is sufficient to invoke abuse of discretion review. See also Francis v. Anacomp, Inc.
Accidental Death & Dismemberment Plan, No. 10CV467 BEN BGS, 2011 WL 4102143, at *4
(S.D. Cal. Sept. 14, 2011) (applying de novo standard of review where policy purported to be
fully integrated, ACF did not amend the policy, and ACF was not described in SPD); Heim v.
Life Insurance Company of North America, slip op., Case No. Civ.A. 10–1567, 2010 WL 5300537
(E.D. Pa. 2010) (applying de novo standard where LINA’s Claim Fiduciary Form was not
attached to the insurance policy or described in the summary plan document).
III.

The Language Contained in the Amendatory Riders to the Policies Does Not, On its
Own, Clearly Grant Discretionary Authority to LINA
The Life and LTD Policies do include Amendatory Riders, which provide that “[t]he

Plan Administrator has appointed the Insurance Company [LINA] as the named fiduciary
for deciding claims for benefits under the Plan, and for deciding any appeals of denied
claims.” LTD Policy at 26-27; Life Policy at 32-33. Defendant contends that this language
alone is sufficient to confer discretionary authority on LINA. See Mem. Supp. Mot., p. 6,
ECF No. 18-2. However, the United States Court of Appeals for the Fourth Circuit has
concluded that even where a party “qualifies as a fiduciary under ERISA” its decisions will

10 This Court is aware of only one case relying on Raybourne to conclude that an ACF is a plan document. See
Ehas v. Life Ins. Co. of N. Am., No. 12 C 3537, 2012 WL 5989215, at *2 (N.D. Ill. Nov. 29, 2012). However,
there was no integration clause discussed in Ehas. Additionally, the Ehas court ultimately held that the de novo
standard of review applied because an Illinois statute “strip[ped] the plan of its discretion-conferring
language.” Ehas, 2012 WL 5989215 at 10.

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only be entitled to deferential review where it “has also been given discretionary authority
with regard to decisions about eligibility for benefits and construction of the plan.” See Doe v.
Grp. Hospitalization & Med. Servs., 3 F.3d 80, 85 (4th Cir. 1993) (emphasis added) (citing
Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 60-61 (4th Cir. 1992) (status as a fiduciary is
not an indivisible concept and only specifically assigned discretionary duties are entitled to
discretionary review)). Additionally, “discretionary authority is not conferred ‘by the mere
fact that a plan requires a determination of eligibility or entitlement . . . .’ ” Woods v.
Prudential Ins. Co. of Am., 528 F.3d 320, 322 (4th Cir. 2008) (quoting Gallagher v. Reliance
Standard Life Ins. Co., 305 F.3d 264, 269 (4th Cir. 2002), as amended (Oct. 24, 2002)).
Defendant cites one case, Van Anderson v. Life Ins. Co. of N. Am., No. 4:11CV00050,
2012 WL 1077794, at *4 (W.D. Va. Mar. 30, 2012), in support of its position. In Van
Anderson, the United States District Court for the Western District of Virginia found that
ERISA plan language identical to the Amendatory Rider language in this case qualified as a
grant of discretionary authority sufficient to trigger review for abuse of discretion. However,
the Court provided no explanation for that finding or analysis of its reasons, and did not
acknowledge the Fourth Circuit’s guidance in the Doe, Coleman, Woods, or Gallagher cases,
discussed supra. See Van Anderson, 2012 WL 1077794 at *4. Indeed, the parties in Van
Anderson had already agreed that LINA’s benefits determinations would be reviewed for
abuse of discretion. Id. On the contrary, several courts have explicitly held that the abovequoted Amendatory Rider language is insufficient to confer discretionary authority. See, e.g.,
Moran, 2014 WL 4251604, at 5 (“language in the Group Policy identified by LINA is silent
19

regarding the discretion afforded and exercised by the plan fiduciary in making claims
decisions . . . [and] does not clearly indicate that LINA has discretion to interpret the rules,
to implement the rules, and even to change them entirely.”)(internal quotations omitted);
Mercer v. Life Ins. Co. of N. Am., No. CIV.A. 11-0372, 2011 WL 4404053, at *5 (W.D. La.
Aug. 30, 2011), report and recommendation adopted, No. CIV.A. 11-0372, 2011 WL
4433107 (W.D. La. Sept. 21, 2011) (“[T]he plan language identified by LINA remains silent
regarding the discretion exercised by the plan fiduciary to make claim decisions. Moreover,
LINA has not identified any plan provisions that expressly or unequivocally grant it
authority to construe plan terms and render final decisions regarding eligibility for
benefits.”); Cathey v. Dow Chem. Co. Med. Care Program, 907 F.2d 554, 559 (5th Cir. 1990) (plan
language designating insurance company as the “Named Fiduciary,” and according it with
authority to render a “final decision on a claim for benefits,” was not sufficient to confer
discretionary authority).
For these reasons, the documents in the record before this Court do not evidence a
clear intent to grant LINA discretionary authority as a matter of law.

Therefore,

Defendant’s Motion for Partial Summary Judgment Regarding the Standard of Review (ECF
No. 18) is DENIED. Accordingly, this Court will apply the default de novo standard of
review in adjudicating Plaintiff’s claims for Life and LTD benefits under the ERISA Plan,
pursuant to 29 U.S.C. § 1132(a)(1)(B) (Counts One and Two).

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CONCLUSION
For the reasons stated above, Defendant’s Motion for Partial Summary Judgment
Regarding the Standard of Review (ECF No. 18) is DENIED.

Accordingly, benefits

determinations made by LINA under the ERISA Plan at issue in this case shall be reviewed
under the default de novo standard.
A separate Order follows.

Dated: July 11, 2016

_____/s/___________________
Richard D. Bennett
United States District Judge

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