2011 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-10-2011

Hetty Viera v. Life Ins Co N America

Precedential or Non-Precedential: Precedential

Docket No. 10-2281

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

______

No. 10-2281

______

HETTY A. VIERA,

as Executrix of the Estate of Frederick A. Viera;

HETTY A. VIERA, Individually,

Appellants

v.

LIFE INSURANCE COMPANY

OF NORTH AMERICA

______

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-09-cv-03574)

District Judge: Honorable Eduardo C. Robreno

______

Argued April 13, 2011

Before: FISHER, JORDAN and COWEN, Circuit Judges.

(Filed: June 10, 2011)
2

James W. Sutton, III (Argued)

Vlasac & Shmaruk 

1014 Millcreek Drive 

Feasterville, PA 19053

Counsel for Appellant

Mark C. Cawley

James A. Keller (Argued)

Allison B. Newhart

Saul Ewing 

1500 Market Street 

Centre Square West, 38th Floor 

Philadelphia, PA 19102 

Counsel for Appellee

______

OPINION OF THE COURT

______

FISHER, Circuit Judge.

This appeal arises out of the 2008 death of Frederick 

Viera (“Viera”) in a head-on motorcycle accident. At the 

time of his death, Viera was covered under an employerprovided accidental death and dismemberment policy 

(“Policy”), issued by Life Insurance Company of America 

(“LINA”), and subject to the Employee Retirement Income 

Security Act (“ERISA”), 29 U.S.C. §§ 1101 et seq. Viera‟s 

wife and the executrix of his estate, Hetty Viera (“Plaintiff”), 

submitted a claim under the Policy following his death. 

LINA denied Plaintiff‟s claim, both initially and on appeal. 
3

Subsequently, Plaintiff filed suit, but the United States 

District Court for the Eastern District of Pennsylvania found 

for LINA on cross-motions for summary judgment. It 

concluded that the Policy gave LINA discretionary authority 

to determine eligibility. It therefore reviewed LINA‟s 

decision under a deferential abuse-of-discretion standard and

held that LINA was entitled to summary judgment. We 

conclude that deferential review was not appropriate, given 

the language of the Policy, and thus remand for further 

proceedings.

I.

A. Factual History

On October 14, 2008, Viera was seriously injured in a 

motorcycle accident in Grand Junction, Colorado. He was 

treated at St. Mary‟s Hospital and Medical Center (“St. 

Mary‟s”) for approximately three hours and subsequently 

died.

On the date of his death, Viera maintained the Policy, 

an employer-provided accidental death and dismemberment 

policy regulated under ERISA.1 The Policy was issued and 

administered by LINA.

 

1 Viera also had an employer-provided life insurance 

policy at the time of his death. Plaintiff received $350,000 

from LINA on account of this claim.
4

Viera had a pre-existing chronic condition known as 

atrial fibrillation, which was diagnosed prior to LINA‟s 

issuing the Policy. As part of the medical treatment for this 

condition, Viera received medication called Coumadin (also 

known as Warfarin). Coumadin is a prescription oral anticoagulant drug prescribed for the prevention and treatment of 

blood clots.

Following Viera‟s motorcycle accident, doctors at St. 

Mary‟s made several findings regarding his treatment and 

death. For example, the Final Assessment made in the 

Emergency Report confirmed that Viera was “on Coumadin 

with therapeutic INR2significantly complicating trauma 

management.” (App. at 160.) The Discharge Summary 

prepared by Dr. Michael Bradshaw of St. Mary‟s described 

Viera‟s death as caused by “multiple injuries in a head-on 

motorcycle versus car accident with severe pelvic fractures, 

lower extremity fractures, and a fully coumadinized patient 

due to atrial fibrillation.” (Id. at 138.)

The Certificate of Death confirmed that the immediate 

cause of Viera‟s death was “multiple injuries,” and it 

ambiguously noted that “arteriosclerotic cardiovascular 

disease” was a “condition [] contributing to death but not 

related to [immediate cause].” (Id. at 227.) The autopsy 

report, prepared by Robert A. Kurtzman, listed the immediate 

cause of death as “multiple injuries” and listed “other 

 

2

The International Normalized Ratio (“INR”)

measures the Coumadin levels in a person‟s blood.
5

significant conditions” including “atrial fibrillation.” (Id. at 

237.)

Plaintiff submitted a claim for benefits under the 

Policy to LINA on November 3, 2008. LINA denied her 

claim. Key to this appeal is the language of several Policy 

provisions:

“Covered Loss”:

A loss that is all of the following:

1. the result, directly and independently of 

all other causes, of a Covered Accident;

2. one of the Covered Losses specified in 

the Schedule of Covered Losses;

3. suffered by the Covered Person within 

the applicable time period specified in 

the Schedule of Benefits.

(Id. at 78) (emphasis added).

“Covered Accident”:

A sudden, unforeseeable, external event that 

results, directly and independently of all other 

causes, in a Covered Injury or Covered Loss 

and meets all of the following conditions:

1. occurs while the Covered Person is 

insured under this Policy;
6

2. is not contributed to by disease, 

Sickness, mental or bodily infirmity;

3. is not otherwise excluded under the 

terms of this Policy.

(Id.)

“Proof of Loss”:

Written or authorized electronic proof of loss 

satisfactory to Us must be given to Us at Our 

office, within 90 days of the loss for which 

claim is made.

(Id. at 85) (emphasis added).

LINA denied Plaintiff‟s claim by finding that the 

specific circumstances of Viera‟s death did not constitute a 

covered event under the terms of the Policy. Specifically, 

LINA maintained that Viera‟s accident was excluded by the 

“Medical Condition Exclusion” of the Policy, which states 

that:

[B]enefits will not be paid for any Covered 

Injury or Covered Loss which, directly or 

indirectly, in whole or in part, is caused by or 

results from . . . [s]ickness, disease, bodily or 

mental infirmity, bacterial or viral infection or 

medical or surgical treatment thereof, except for 

any bacterial infection resulting from an 

accidental external cut or wound or accidental 

ingestion of contaminated food.
7

(Id. at 83.) LINA concluded that Viera‟s Coumadin treatment 

complicated his medical treatment and constituted a 

contributing factor to his death. LINA relied on a report by 

Dr. Mark H. Eaton, a medical doctor it had retained to review 

the accident reports and hospital records. Dr. Eaton reviewed 

the hospital records, the autopsy report, and the official Death 

Certificate in reaching his conclusion. Dr. Eaton reported 

that:

The cause of Mr. Viera‟s death was attributed to 

the traumatic pelvic fracture which resulted in 

clinically significant pelvic and retroperitoneal 

hemorrhage complicated by the fact that the 

claimant was systematically anti-coagulated. . . . 

In my opinion [Viera‟s] Coumadin therapy

significantly contributed to his death as it is 

more than likely he would have survived the 

traumatic pelvic fracture if he had not been fully 

anti-coagulated at the time of his injury.

(Id. at 124.) Plaintiff administratively appealed the denial of 

benefits in a written letter to LINA. She chose not to 

supplement the record with information supporting her claim 

at that time. LINA affirmed its decision to deny benefits.
8

B. Procedural History

Plaintiff filed an ERISA action against LINA in the 

Court of Common Pleas of Philadelphia County, 

Pennsylvania. LINA removed the action to the United States 

District Court for the Eastern District of Pennsylvania 

pursuant to 28 U.S.C. §§ 1331 and 1441.3

In preparation for the litigation, Plaintiff hired an 

independent expert, Dr. Aaron J. Gindea, to conduct a review 

of the medical records. Dr. Gindea reported that:

The hospital staff did everything possible to 

reverse the [Coumadin] effect and limit the 

bleeding. Although the presence of [Coumadin] 

did make the bleeding worse, it is unreasonable 

to propose that, if not for the [Coumadin], the 

patient likely would have survived. Therefore, 

the patient‟s death WAS NOT directly or 

indirectly, in whole or in part, caused by or 

resulted from the [Coumadin] therapy. Rather, 

it was the result of severe trauma from a motor 

vehicle accident which would likely have been 

fatal in the presence of or the absence of 

[Coumadin].

(Id. at 320-21.)

 

3 We have jurisdiction pursuant to 28 U.S.C. § 1291.
9

The parties filed cross-motions for summary judgment. 

The District Court granted LINA‟s motion for summary 

judgment, denied Plaintiff‟s motion for summary judgment, 

and directed entry of judgment in favor of LINA. It found 

that LINA‟s denial of benefits was not an abuse of discretion. 

Plaintiff timely appealed and argues that the District Court 

should have reviewed LINA‟s decision de novo. In the 

alternative, she asserts that even under a deferential standard 

of review, a genuine issue of material fact exists such that 

summary judgment was inappropriate. Finally, she argues 

that the District Court misinterpreted the Medical Exclusion 

Provision of the Policy, which she maintains cannot be read 

to include atrial fibrillation or Coumadin treatment.

II.

A district court‟s determination of the proper standard 

to apply in its review of an ERISA plan administrator‟s 

decision is a legal conclusion which we review de novo. 

Grupo Protexa, S.A. v. All Am. Marine Slip, 20 F.3d 1224, 

1231 (3d Cir. 1994).

We review a district court‟s grant of summary 

judgment de novo, applying the same standard the district 

court applied. Alcoa, Inc. v. United States, 509 F.3d 173, 175 

(3d Cir. 2007). We also review the legal interpretation of 

contractual language de novo. Heasley v. Belden & Blake 

Corp., 2 F.3d 1249, 1254 (3d Cir. 1993).
10

III.

A. Standard of Review of LINA’s Benefits 

Denial

The Supreme Court has held that “a denial of benefits 

challenged under [ERISA] 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). If the plan 

gives the administrator or fiduciary discretionary authority to 

make eligibility determinations, we review its decisions under 

an abuse-of-discretion (or arbitrary and capricious) standard.4 

Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008); 

Doroshow v. Hartford Life & Accident Ins. Co., 574 F.3d 

230, 233 (3d Cir. 2009). “Whether a plan administrator‟s 

exercise of power is mandatory or discretionary depends upon 

the terms of the plan.” Luby v. Teamsters Health, Welfare, & 

Pension Trust Funds, 944 F.2d 1176, 1180 (3d Cir. 1991). 

There are no “magic words” determining the scope of judicial 

review of decisions to deny benefits, and discretionary 

powers may be granted expressly or implicitly. Id. However, 

when a plan is ambiguous, it is construed in favor of the 

insured. Heasley, 2 F.3d at 1258. “The plan administrator 

bears the burden of proving that the arbitrary and capricious 

 

4

In the ERISA context, an “abuse-of-discretion” 

standard of review is used interchangeably with an “arbitrary 

and capricious” standard of review. Howley v. Mellon Fin. 

Corp., 625 F.3d 788, 793 n.6 (3d Cir. 2010).
11

standard of review applies.” Kinstler v. First Reliance Std. 

Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999).

Under the abuse-of-discretion standard, we may 

overturn an administrator‟s decision only if it is “without 

reason, unsupported by substantial evidence or erroneous as a 

matter of law.” Miller v. Am. Airlines, Inc., 632 F.3d 837, 

845 (3d Cir. 2011) (quoting Abnathya v. Hoffmann-La Roche, 

Inc., 2 F.3d 40, 45 (3d Cir. 1993)). In determining whether 

an administrator abused its discretion, we must consider any 

structural conflict of interest as one of several factors. Estate 

of Schwing v. The Lilly Health Plan, 562 F.3d 522, 526 (3d 

Cir. 2009).

In contrast, if we exercise de novo review, the role of 

the court “is to determine whether the administrator . . . made 

a correct decision.” Hoover v. Provident Life & Accident Ins. 

Co., 290 F.3d 801, 808-09 (6th Cir. 2002) (alteration in 

original) (quoting Perry v. Simplicity Eng’g, 900 F.2d 963, 

965 (6th Cir. 1990)). “The administrator‟s decision is 

accorded no deference or presumption of correctness.” Id. at 

809. The court must review the record and “determine 

whether the administrator properly interpreted the plan and 

whether the insured was entitled to benefits under the plan.” 

Id.

The relevant language at issue in the Policy is the 

“Proof of Loss” provision, which provides: “Written or 

authorized electronic proof of loss satisfactory to Us must be 

given to Us at Our office, within 90 days of the loss for which 

claim is made.” (App. at 85) (emphasis added). LINA argues 

that this language confers discretion upon them because they 
12

have expressly reserved the right to decide whether the proof 

of loss is satisfactory to them. Plaintiff argues that the 

language does not expressly and unambiguously confer 

discretion. Specifically, Plaintiff argues that the language can 

be interpreted in several different ways.5 Plaintiff argues that 

the alleged ambiguity should be resolved in her favor and de 

novo review should apply. The District Court rejected 

Plaintiff‟s argument and held that the “relevant policy 

language presents a clear grant of discretionary authority to 

LINA in deciding whether sufficient proof to support a claim 

has been submitted to shift the Court‟s review from de novo

to the deferential abuse of discretion standard.” Viera v. Life 

Ins. Co. of N. Am., 2010 WL 1407312, at *5 (E.D. Pa. Apr. 6, 

2010). We disagree.

To begin with, we distinguish the language at issue 

here – in particular, the words “proof of loss satisfactory to 

Us” – from language in other plans that requires submission 

of “satisfactory proof,” without reference to who must be 

satisfied. Most courts of appeals to consider the issue have 

concluded that the mere requirement to submit “satisfactory 

 

5

LINA makes much of Plaintiff‟s admission before 

the District Court that “[t]his language clearly states that 

LINA shall be the entity determining whether the loss is 

satisfactory to it.” (App. at 14.) LINA argues that this 

constitutes a waiver of Plaintiff‟s argument that the language 

is ambiguous and, as such, must be construed against the 

drafter. This single statement by Plaintiff only establishes, or 

“admits,” that LINA is the decision-maker. It does not stand 

for a complete concession of the de novo standard.
13

proof” does not confer discretion upon an administrator, and 

thus, does not insulate the administrator from de novo review. 

See, e.g., Perugini-Christen v. Homestead Mortg. Co., 287 

F.3d 624, 626-27 (7th Cir. 2002) (a policy requiring 

“satisfactory proof of Total Disability to [the insurer]” results 

in de novo review); Kearney v. Std. Ins. Co., 175 F.3d 1084, 

1089-90 (9th Cir. 1999) (en banc) (same where policy 

requires “receipt of satisfactory written proof”); Kinstler, 181 

F.3d at 251-52 (same where policy requires insured to 

“submit[] satisfactory proof of Total Disability to [the 

insurer]”).

On the other hand, courts of appeals interpreting policy 

language requiring submission of “proof of loss satisfactory 

to Us” have reached divergent conclusions, revealing the 

ambiguity inherent in the language. The United States Court 

of Appeals for the Second Circuit was the first appellate court 

to suggest that “satisfactory to us” language may not be 

sufficient to trigger abuse-of-discretion review. In Kinstler, 

181 F.3d at 252, the court explained:

[T]he word “satisfactory,” whether in the phrase 

“satisfactory proof” or the phrase “proof 

satisfactory to [the decision-maker]” is an 

inadequate way to convey the idea that a plan 

administrator has discretion. Every plan that is 

administered requires submission of proof that 

will “satisfy” the administrator. No plan 

provides benefits when the administrator thinks 

that benefits should not be paid! Thus, saying 

that proof must be satisfactory “to the 

administrator” merely states the obvious point 
14

that the administrator is the decision-maker, at 

least in the first instance. [Therefore] we 

reiterate that . . . insulation from de novo review 

requires either language stating that the award 

of benefits is within the discretion of the plan 

administrator or language that is plainly the 

functional equivalent of such wording.

Id. at 252.

Shortly thereafter, the United States Court of Appeals 

for the Seventh Circuit squarely held that “satisfactory to us” 

language is insufficient to confer discretion. In Diaz v. 

Prudential Insurance Co. of America, 424 F.3d 635, 639-40 

(7th Cir. 2005), the court broke from other courts of appeals, 

and its own prior precedent,6by holding that the “satisfactory 

to us” language was no longer sufficient to compel abuse-of-

 

6

The Seventh Circuit had twice before held that this 

language conferred discretion adequate to yield abuse-ofdiscretion review. See Donato v. Metro. Life Ins. Co., 19 

F.3d 375, 379-80 (7th Cir. 1994) (“satisfactory to us” 

sufficiently conferred discretion); Bali v. Blue Cross & Blue 

Shield Ass’n, 873 F.2d 1043, 1047 (7th Cir. 1989) 

(“satisfactory to Committee” sufficiently conferred 

discretion). Therefore, prior to being published, Diaz v. 

Prudential Insurance Co. of America, 424 F.3d 635 (7th Cir. 

2005), was circulated to all active judges under Seventh 

Circuit Rule 40(e) because it changed the way the court 

ascertained the proper standard of review. No judge voted to 

hear the case en banc.
15

discretion review. Diaz held that the “critical question is 

whether the plan gives the employee adequate notice that the 

plan administrator is to make a judgment within the confines 

of pre-set standards, or if it has the latitude to shape the

application, interpretation, and content of the rules in each 

case.” Id. Diaz relied on language from Herzberger v. 

Standard Insurance Co., 205 F.3d 327 (7th Cir. 2000), for the 

proposition that Herzberger changed the course of Seventh 

Circuit jurisprudence on this issue. In so holding, it

reaffirmed the safe harbor language it pioneered in 

Herzberger:

[i]f a plan wishes to insulate its decision to deny 

benefits from plenary review, the surest way to 

do so (at least in this Circuit) is by including 

language that either mimics or is functionally 

equivalent to the “safe harbor” language we 

have suggested: “Benefits under this plan will 

be paid only if the plan administrator decides in 

his discretion that the applicant is entitled to 

them.”

Diaz, 424 F.3d at 637 (quoting Herzberger, 205 F.3d at 331). 

However, the Diaz court went further than Herzberger by 

holding that “[n]o single phrase such as „satisfactory to us‟ is 

likely to convey enough information to permit the employee 

to distinguish between plans that do and plans that do not 

confer discretion on the administrator.” Id. at 639.

The United States Court of Appeals for the Ninth 

Circuit followed the footsteps of the Seventh Circuit and held 

that “satisfactory to us” language does not “unambiguously 
16

provide discretion to the plan administrator.” Feibusch v. 

Integrated Device Tech., Inc., 463 F.3d 880, 883 (9th Cir. 

2006) (applying de novo review). The Ninth Circuit adopted 

safe harbor language7and explained that the “policy does not 

unambiguously indicate that the plan administrator „has 

authority, power, or discretion to determine eligibility or to 

construe the terms of the Plan, [and therefore] the standard of 

review will be de novo.‟” Id. at 884 (quoting Sandy v. 

Reliance Std. Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir. 

2000)). It reasoned that the term “satisfactory to us,” “only 

arguably confer[red] discretion,” and that therefore the 

ambiguity must be resolved in favor of the insured. Id. It 

also noted that although it endorsed the safe harbor language, 

it was not requiring “magic words.” Id.

There is, however, a split among our sister courts of 

appeals regarding the impact of the “satisfactory to us” 

language. In contrast to the courts of appeals for the Second, 

Seventh, and Ninth Circuits, the First, Eighth, and Tenth 

Circuits have held that the “satisfactory to us” language 

confers discretion sufficient to insulate an administrator from 

de novo review. The First Circuit dealt with similar language 

in Brigham v. Sun Life of Canada, 317 F.3d 72 (1st Cir. 

2003). The policy at issue provided that the administrator 

“must be provided with such evidence satisfactory to us as we 

may reasonably require under the circumstances.” Id. at 81 

 

7

The safe harbor language adopted was: “The plan

administrator has discretionary authority to grant or deny 

benefits under this plan.” Feibusch v. Integrated Device 

Tech., Inc., 463 F.3d 880, 883 (9th Cir. 2006).
17

(emphasis in original). The court noted that “[c]ircuits that 

have considered similar language view the „to us‟ after 

„satisfactory‟ as an indicator of subjective, discretionary 

authority on the part of the administrator, distinguishing such 

phrasing from policies that simply require „satisfactory proof‟ 

of disability, without specifying who must be satisfied.” Id. 

It concluded that the language “trigger[ed] discretionary 

review.” 8 Id. at 82.

Similarly, in Nance v. Sun Life Assurance Co. of 

Canada, 294 F.3d 1263, 1267-68 (10th Cir. 2002), the Tenth 

Circuit held that the policy language adequately conferred 

discretion. The language at issue in the insurance policy 

required that “[p]roof must be satisfactory to Sun Life” before 

benefits would be paid. Id. at 1267. The court was careful to 

“caution [] that plan drafters who wish to convey discretion to 

plan administrators are ill-advised to rely on language that is 

borderline in accomplishing that task.” Id. at 1268 n.3. 

However, it ultimately held that the “satisfactory to Sun Life” 

language “suffice[d] to convey discretion to Sun Life in 

finding the facts relating to disability.” Id. at 1268; see also 

Ferrari v. Teachers Ins. & Annuity Ass’n, 278 F.3d 801, 806 

(8th Cir. 2002) (a plan sufficiently conferred discretion 

because it “specifie[d] that the employee must provide written 

 

8 However, the First Circuit also noted that there may 

be “an increasing recognition of the need for the clearest 

signals of administrative discretion.” Brigham v. Sun Life of 

Can., 317 F.3d 72, 82 (1st Cir. 2003).
18

proof of continued total disability” and “that such proof must 

be satisfactory to [the plan administrator]”).9

 

9 Additionally, it appears that the Fourth, Sixth, and 

Eleventh Circuits would hold that “satisfactory to us” 

language confers discretion. In Gallagher v. Reliance 

Standard Life Insurance Co., the Fourth Circuit held that a 

plan calling for “satisfactory proof ” did not grant discretion 

but explained, in dicta, that had the plan called for “proof of 

... disability that is satisfactory to [the plan administrator]” it 

would require “proof of a total disability that [the plan 

administrator] finds subjectively satisfactory ... and [the 

court] would review [the plan administrator‟s] denial of [the 

insured‟s] claim for abuse of discretion.” 305 F.3d 264, 269 

(4th Cir. 2002) The Sixth Circuit goes further, holding that 

any plan requiring “satisfactory proof” or “satisfactory 

evidence” grants discretion, regardless of whether it specifies 

who must be satisfied or to whom the evidence must be 

submitted. See Perez v. Aetna Life Ins. Co., 150 F.3d 550, 

557 (6th Cir. 1998) (“[T]his „right to require ... satisfactory 

evidence‟ means, semantically, that the evidence must be 

satisfactory to [the plan administrator]. ... We therefore 

conclude that the plan clearly grants discretion.”). The 

Eleventh Circuit seems to follow a similar rule, holding, 

without discussion, that a plan requiring submission of 

“satisfactory proof of Total Disability to [the plan 

administrator] ... . gives the administrator discretion to 

determine eligibility for benefits.” Levinson v. Reliance 

Standard Life Ins., 245 F.3d 1321, 1324-25 (11th Cir. 2001); 

see also Tippitt v. Reliance Standard Life Ins., 457 F.3d 1227, 
19

We find the reasoning of the Second, Seventh and 

Ninth Circuits persuasive. To be insulated from de novo

review, a plan must “communicate the idea that the 

administrator not only has broad-ranging authority to assess 

compliance with pre-existing criteria, but also has the power 

to interpret the rules, to implement the rules, and even to 

change them entirely.” Diaz, 424 F.3d at 639. We agree that 

“[n]o single phrase such as „satisfactory to us‟ is likely to 

convey enough information to permit [an insured] to 

distinguish between plans that do and plans that do not confer 

discretion on the administrator.” Id.

Specifically, the language at issue here “does not alert 

the plan participant to the possibility that [LINA] has the 

power to re-define the entire concept of [a covered loss] on a 

case-by-case basis.” Id. Indeed, the only discretion reserved 

by this single phrase, nested within a section wholly 

regarding the procedural requirements for submission of a 

claim, is “the inevitable prerogative to determine what forms

of proof must be submitted with a claim – something that an 

administrator in even the most tightly restricted plan would 

 

1233-34 (11th Cir. 2006) (explaining that Levinson is the law 

of the Circuit and, therefore, that a plan requiring the insured 

to “submit[] satisfactory proof of Total Disability to [the plan 

administrator]” granted discretion to that administrator).
20

have to do.”10 Id. (emphasis in original). In other words, it is 

not clear whether “satisfactory to Us” means “electronic 

proof of loss [in a form] satisfactory to Us” or “electronic 

proof of loss [substantively and subjectively] satisfactory to 

Us.” We resolve this ambiguity in favor of the insured:

[T]he administrator‟s burden to demonstrate 

insulation from de novo review requires either 

language stating that the award of benefits is 

within the discretion of the plan administrator 

or language that is plainly the functional 

equivalent of such wording. Since clear 

language can be readily drafted and included in 

policies, even in the context of collectively 

bargained benefit plans when the parties really 

intend to subject claim denials to judicial 

review under a deferential standard, courts 

should require clear language and decline to 

search in semantic swamps for arguable grants 

of discretion.

 

10 In this way, the “satisfactory to Us” language in the 

Policy at issue here, which is completely nested within a 

section regarding procedural requirements, is also 

distinguishable from the full sentences at issue in Nance v. 

Sun Life Assurance Co. of Canada, 294 F.3d 1263, 1267 

(10th Cir. 2002) (“Proof must be satisfactory to Sun Life.”), 

and Brigham, 317 F.3d at 81 (“If proof is required, we must 

be provided with such evidence satisfactory to us as we may 

reasonably require under the circumstances.”).
21

Kinstler, 181 F.3d at 252 (emphasis added).

If an administrator wishes to insulate its decision to 

deny benefits from de novo review, we suggest that it adopt 

the following “safe harbor” language: “Benefits under this 

plan will be paid only if the plan administrator decides in [its] 

discretion that the applicant is entitled to them.” Herzberger, 

205 F.3d at 331. This is not to say that “magic words” are 

required for a policy to reserve discretion. See Luby, 944 

F.2d at 1180. Instead, the Policy at issue here simply does 

not clearly indicate that LINA has discretion to “interpret the 

rules, to implement the rules, and even to change them 

entirely,” and thus the District Court erred in applying abuseof-discretion review rather than de novo review to LINA‟s 

decision. Diaz, 424 F.3d at 639.

Because we have concluded that a de novo standard of 

review applies, we need not reach Plaintiff‟s argument 

regarding LINA‟s conflict of interest in being both the payor 

and administrator of benefits. That issue is only pertinent to 
22

an abuse-of-discretion standard of review.11 On remand, the 

District Court must determine whether LINA properly denied 

Plaintiff recovery under the Policy. This determination may 

be based on any information before the administrator initially, 

Hoover, 290 F.3d at 809, as well as any supplemental 

evidence, such as Dr. Gindea‟s report. See, e.g., Luby, 944 

F.2d at 1184-85 (“[A] district court exercising de novo review 

over an ERISA determination between beneficiary claimants 

is not limited to the evidence before the Fund‟s 

administrator.”); Quesinberry v. Life Ins. Co. of N. Am., 987 

F.2d 1017, 1025 (4th Cir. 1993) (district courts have 

discretion during de novo review to consider evidence not 

before administrator); Perry, 900 F.2d at 966 (citing 2 S. 

Childress & M. Davis, Standards of Review § 15.2 (1986)).

 

11 We also decline to address Plaintiff‟s argument that 

LINA‟s motion for summary judgment should have been 

denied because a genuine issue of material fact existed. The 

District Court should have the first opportunity to apply the 

correct standard of review to the facts. See, e.g., Feisbusch, 

463 F.3d at 886 (remanding); Diaz, 424 F.3d at 640 (same); 

Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 

1162 (9th Cir. 2001) (“Normally, upon discovering that the 

district court used the wrong standard of review in evaluating 

a plan administrator‟s decision to deny benefits, we would 

reverse and remand.”).
23

B. The District Court’s Interpretation of Policy 

Language

Although we have already determined that the District 

Court erred in applying an abuse-of-discretion standard, we 

consider nonetheless Plaintiff‟s second contention to provide 

guidance to the District Court on remand. Plaintiff argues 

that the District Court misinterpreted the Policy because the 

Medical Exclusion Provision was ambiguous at best. 

Specifically, she argues that LINA should not be able to apply 

the Exclusion to Viera‟s Coumadin treatment based on a 

canon of statutory construction, the last-antecedent rule, and 

the general maxim that ambiguous contract language should 

be construed against the drafter.12 The District Court rejected 

this argument and held that “although a strict application of 

the last-antecedent rule supports Plaintiff‟s interpretation, 

sufficient indicia of contrary meaning exist to overcome this 

maxim of interpretation.” Viera, 2010 WL 1407312, at *10.

We review the legal interpretation of contractual 

language de novo. Heasley, 2 F.3d at 1254. The lastantecedent rule is a canon of statutory interpretation, but we 

have extended application of the rule to a life insurance 

policy as well. See J.C. Penney Life Ins. Co. v. Pilosi, 393 

 

12 Plaintiff also argued before the District Court that 

summary judgment should be granted in its favor because 

LINA waived its right to exclude coverage because it had 

notice of Viera‟s atrial fibrillation condition prior to issuing 

the Policy. (App. at 23.) The District Court rejected this 

argument, and Plaintiff does not appeal it.
24

F.3d 356, 365-66 (3d Cir. 2004). The rule provides “that 

qualifying words, phrases, and clauses are to be applied to the 

words or phrase immediately preceding and not to others 

more remote.” Stepnowski v. C.I.R., 456 F.3d 320, 324 (3d 

Cir. 2006) (quoting United States v. Hodge, 321 F.3d 429, 

436 (3d Cir. 2003)). In other words, if a sentence reads “A or 

B with respect to C,” it should be interpreted as containing 

two items: (1) “A” and (2) “B with respect to C.” Id. at 324 

n.7. However, the last-antecedent rule “is not an absolute and 

can assuredly be overcome by other indicia of meaning.” 

Pilosi, 393 F.3d at 365 (quoting Barnhart v. Thomas, 540 

U.S. 20, 26 (2003)).

The Medical Exclusion Provision at issue states:

[B]enefits will not be paid for any Covered 

Injury or Covered Loss which, directly or 

indirectly, in whole or in part, is caused by or 

results from . . . [s]ickness, disease, bodily or 

mental infirmity, bacterial or viral infection or 

medical or surgical treatment thereof, except for 

any bacterial infection resulting from an 

accidental external cut or wound or accidental 

ingestion of contaminated food.

(App. at 83.) Plaintiff argues that the placement of the 

comma immediately preceding the term “bacterial or viral 

infection” suggests that the term “medical or surgical 

treatment thereof” would not be extended to the other terms 

“sickness, disease, bodily or mental infirmity.” In other 

words, Plaintiff contends that the Policy excludes coverage 

only for “medical treatment” of “bacterial or viral 
25

infection[s]” and does not exclude coverage for “medical 

treatment” of “bodily infirmities” like atrial fibrillation. The 

District Court agreed with Plaintiff‟s literal application of the 

last-antecedent rule. However, the District Court ultimately 

concluded that there were sufficient indicia of meaning that 

contradicted Plaintiff‟s interpretation. Specifically, the 

District Court pointed out that:

(1) the term “Covered Accident” does not 

include an injury or accident “contributed to by 

disease, Sickness, mental or bodily infirmity”; 

(2) the cover page of the [] Policy states that it 

is a “group accident” policy and “does not pay 

benefits for loss caused by sickness;” and 

(3) the scope of the [] Policy deals with 

“accidental death and dismemberment.”

Viera, 2010 WL 1407312, at *10. The District Court 

appropriately looked to and analyzed the indicia of meaning 

in the Policy so as not to “contort the language beyond its 

limits.” Pilosi, 393 F.3d at 365. Where the meaning of the 

contract language is clear, the last-antecedent rule should not 

be used to create ambiguity.

Plaintiff also argues that the inherent ambiguity in the 

plan must be construed against LINA under the doctrine of 

contra proferentem. “Whether an ambiguity exists is a 

question of law.” 12th St. Gym, Inc. v. Gen. Star Indem. Co., 

93 F.3d 1158, 1165 (3d Cir. 1996). Under Pennsylvania law, 

an insurance contract is ambiguous where it: “(1) is 

reasonably susceptible to different constructions, (2) is 

obscure in meaning through indefiniteness of expression, or 
26

(3) has a double meaning.”13 Lawson v. Fortis Ins. Co., 301 

F.3d 159, 163 (3d Cir. 2002). To be sure, we must construe 

ambiguous policy provisions against the drafter of the 

contract once a determination of ambiguity has been made, 

but the language at issue here is not ambiguous. Pilosi, 393 

F.3d at 363; 12th St. Gym, 93 F.3d at 1166.

As noted above, Plaintiff‟s alternative reading of the 

provision under the last-antecedent rule is not reasonable. 

“Disagreement between the parties over the proper 

interpretation of a contract does not necessarily mean that a 

contract is ambiguous.” 12th St. Gym, 93 F.3d at 1165. 

Where there is only one reasonable interpretation of a 

contract, that interpretation controls because 

“[s]traightforward language in an insurance policy should be 

given its natural meaning.” Lawson, 301 F.3d at 162. The 

District Court correctly interpreted the Medical Exclusion 

Provision.

IV.

For the foregoing reasons, we will reverse in part, 

affirm in part, and remand to the District Court for 

proceedings consistent with this opinion.

 

13 Neither party disputes that Pennsylvania law applies 

here.