Court Opinion

ID: 3104721
Source: CourtListenerOpinion
Date Created: 2015-10-16 05:40:49.734857+00
Date Added: 2024-06-11T11:51:52.434497
License: Public Domain

CHIEF JUSTICE
 CAROLYN WRIGHT                                                                             LISA MATZ

                                                S
JUSTICES                                                                                CLERK OF THE COURT
 JIM MOSELEY                                                                               (214) 712-3450
 DAVID L. BRIDGES                                                                    lisa.matz@5th.txcourts.gov
 MICHAEL J. O’NEILL
                                                                                           GAYLE HUMPA
 KERRY P. FITZGERALD
 MOLLY FRANCIS                           Court of Appeals                             BUSINESS ADMINISTRATOR
                                                                                           (214) 712-3434
 DOUGLAS S. LANG
 ELIZABETH LANG-MIERS             Fifth District of Texas at Dallas                 gayle.humpa@5th.txcourts.gov
 MARY MURPHY                            600 COMMERCE STREET, SUITE 200                       FACSIMILE
 ROBERT M. FILLMORE                          DALLAS, TEXAS 75202                           (214) 745-1083
 LANA MYERS                                     (214) 712-3400
                                                                                             INTERNET
 DAVID EVANS
                                                                                     HTTP://5TH.TXCOURTS.GOV
 DAVID LEWIS

                                              July 3, 2013

     James L. Johnson
     The Johnson Law Firm
     6500 Greenville Ave., Suite 345
     Dallas, TX 75206-1018

     Linda G. Moore
     Taber Estes Thorne & Carr, PLLC
     3500 Maple Suite 1100
     Dallas, TX 75209

     Re:  Joann Phillips V. Metropolitan Life Insurance Company & The Verizon
     Employee Benefits Committee; 05-11-00678-CV

     Dear Attorneys:

     Enclosed is a corrected page for the above-mentioned case. Please note the following typographical
     errors, which have been corrected:

     Page 4, Footnote 4

     Please replace page four of your previous copy with the enclosed.

     Sincerely,

     Lisa Matz
     Clerk of the Court

     cc:      Trial court judge
              Trial court clerk
AFFIRM; and Opinion Filed May 10, 2013.

                                                         S    In The
                                         Court of Appeals
                                  Fifth District of Texas at Dallas
                                                    No. 05-11-00678-CV

                                             JOANN PHILLIPS, Appellant
                                                                  V.
           METROPOLITAN LIFE INSURANCE COMPANY AND THE VERIZON
                  EMPLOYEE BENEFITS COMMITTEE, Appellees

                                On Appeal from the County Court at Law No. 2
                                            Dallas County, Texas
                                    Trial Court Cause No. CC-10-06957-B

                                                          OPINION
                                          Before Justices Francis and Murphy1
                                              Opinion by Justice Murphy
            JoAnn Phillips appeals from a summary judgment rendered in favor of Metropolitan

Life Insurance Company and The Verizon Employee Benefits Committee (VEBC) on her claim

that MetLife, acting on behalf of VEBC, improperly withheld long-term disability benefits to

which she was entitled. We affirm.

                                                     I. BACKGROUND

          During her employment as a benefit specialist with a subsidiary of Verizon

Communications, Inc., Phillips participated in an employee welfare benefit plan (the Plan)

 1
  The Honorable Joseph Morris was on the panel and participated at the submission of this case. Due to his retirement from this Court on
December 31, 2012, he did not participate in the issuance of this Opinion. See TEX. R. APP. P. 41.1(a), (b).
governed by the Employee Retirement Income Security Act of 1974 (ERISA). 29 U.S.C.A. §§

1001–1461. VEBC is the Plan administrator; MetLife is the Plan’s claims administrator.

           Phillips suffered from various health conditions. In April 2002, Verizon approved her

request for an accommodation under the Americans with Disabilities Act to transition to a

twenty-hour work week. Phillips ultimately stopped working in 2007 and became eligible for

disability benefits under the Plan. Her date of disability is February 16, 2007. After receiving

fifty-two weeks of short-term disability benefits, Phillips applied for and began receiving LTD

benefits in 2008. Although the parties agree that Phillips is disabled and thus entitled to benefits,

they disagree about the amount of monthly benefits due.

           A. The Plan

           LTD claims under the Plan are paid from the Verizon Long Term Disability Trust for

Active Employees, which is funded with employee contributions.                                             MetLife, as the claims

administrator, received a fee to process disability claims and had the authority to make final

determinations regarding eligibility and benefit claims. The Verizon summary plan description

(SPD)2 provided to Phillips specifically identifies MetLife’s authority as including discretion to

(1) interpret the disability income program based on “provisions and applicable law and make

factual determinations about claims,” (2) determine eligibility for benefits, (3) decide “the

amount, form and timing of benefits,” and (4) resolve “any other matter” under the program

raised by a participant or beneficiary or identified by the claims administrator. The SPD also

provides that “[i]n case of an appeal, the claims administrators’ decisions are final and binding

 2
   The parties disagree about which SPD is applicable to Phillips’s LTD claim. Appellees assert the SPD in effect for the 2007 Plan Year
governs because Phillips first became disabled in 2007. Phillips, on the other hand, asserts the SPD in effect for the 2008 Plan Year, which she
claims amended the 2007 SPD, governs because her eligibility for LTD benefits began in 2008. Both SPDs are in the record before us, and based
on our review of the documents, there is no material difference in the provisions relevant to the issues presented in this appeal. Therefore, we
need not determine which SPD governs Phillips’s claim. Any language quoted in this opinion appears in both SPDs.

                                                                    -2-
on all parties to the full extent permitted under applicable law,” unless the participant or

beneficiary later proves the “decision was an abuse of administrator discretion.”

             The SPD describes the details related to a participant’s disability coverage, but it advises

that the person’s health and well-being benefits, such as disability coverage, are governed by the

official plan document, labeled “The Plan for Group Insurance.” Both the SPD and the Plan

expressly incorporate the SPD by reference into the Plan as “the source of specific information

relating to [a participant’s] disability benefits.”3

             B. LTD Benefit Calculation

             According to the SPD, Phillips’s LTD benefit calculation is based on her “annual benefits

compensation” and the LTD coverage option she was enrolled in at that time. The figure used

for Phillips’s “annual benefits compensation” is determined “at the time [she] first became

totally disabled” under the short-term disability plan and is made up of the following amounts as

of July 1 of the previous calendar year:

             • Base pay, including any temporary increases.

             • Short-term incentives, such as Verizon Incentive Plan awards.

             • Commissions (based on a rolling 12-month period, beginning July 1).

             • Foreign service premiums.

Overtime pay, discretionary awards, sales draws, and bonuses are excluded from annual benefits

compensation. The SPD defines “pay” as a participant’s “annual base salary,” which does not

include overtime pay, incentives, or “[a]ny other element of compensation other than base

recurring salary.”

 3
     The Plan does not appear to be part of the administrative record. Appellees submitted the Plan as part of the proceedings in the trial court.

                                                                         -3-
            Phillips’s “monthly unreduced LTD benefit” is calculated by dividing her “annual

benefits compensation by 12 to arrive at [her] monthly benefits compensation amount.” That

amount is then multiplied by Phillips’s benefit level, which was 50%. The monthly LTD benefit

amount also is reduced by benefits provided from “[o]ther sources of disability income,” such as

social security disability income and “[p]ension benefits from a Verizon pension plan, if

[Phillips] elect[s] to receive them.” If the monthly LTD benefit is reduced by other sources of

disability income, the monthly benefit “will not be reduced below whichever of these is greater”:

10% of her unreduced monthly LTD benefit or $100. But this minimum monthly benefit amount

does not apply if the participant receives an overpayment of benefits.

            C. Phillips’s Claim for LTD Benefits

            MetLife approved Phillips’s claim for LTD benefits by letter dated September 30, 2008.

For the period beginning February 15, 2008 (the date she became eligible for LTD benefits)

through December 31, 2009, Phillips was paid LTD benefits based on an annual benefits

compensation figure of $47,400, for an unreduced LTD benefit of $1,975.00 per month.4 That

monthly benefit also was reduced by Phillips’s social security disability income. On December

2, 2008, MetLife wrote to Phillips that it had reduced her monthly benefit by an additional

amount of $760.25 per month based on her receipt of pension benefits effective November 2008.

After the second reduction, her LTD benefit was $197.50 per month, which was the minimum

monthly benefit amount under the Plan (10% of her unreduced monthly LTD benefit).

            The reduction in Phillips’s monthly LTD benefit based on pension benefits followed her

certification, signed November 17, 2008, that she had “elected the Lump Sum option from the

Verizon Management Pension Plan to commence on November 1, 2008.”                                                      This “payment

 4
     $47,400 (annual benefits compensation) ÷ 12 (months) × 50% (Phillips’s coverage level) = $1,975.00 (unreduced monthly LTD benefit).

                                                                    -4-
option” paid $160,963.40. That same day, her spouse also signed a consent form in which he

certified his consent “to [his] spouse’s election to begin benefits now.”

       When she elected the lump sum option, Phillips chose to roll over her pension benefits

into a traditional IRA. And in accordance with her election, the Verizon benefits center sent

Phillips a check payable to ING Bank for deposit into the “IRA OF JOANN H PHILLIPS.” The

check stub described the payment amount as a “CASH DISTRIBUTION.” Phillips signed an

IRA deposit form, indicating she was enclosing a check for deposit; the “deposit type” was for

“Employer Plan to IRA Rollover.”

       On January 8, 2010, MetLife informed Phillips by letter that her salary from which the

annual benefits compensation was derived was “incorrectly reported” and the correct unreduced

benefit payable was $1,402.08 per month, not $1,975.00 per month. This corrected amount was

based on an annual benefits compensation figure of $33,650. MetLife adjusted Phillips’s LTD

claim to reflect the correct benefit amount, which included reductions for her social security

disability income and pension benefits, and informed Phillips the correction resulted in an

overpayment of her claim. Responding to Phillips’s request for more information, MetLife sent

Phillips another letter dated April 2, 2010, in which it explained that Phillips’s “correct yearly

pre-disability earnings were $33,650” and that her LTD benefit paid from February 2008 through

December 31, 2009 on an annual benefits compensation figure of $47,400 resulted in an

overpayment. MetLife further informed Phillips by a May 14, 2010 letter that the pre-disability

earnings “used to calculate her monthly benefit amount” were provided by Verizon.

       In the April 2010 letter, MetLife also addressed the additional offset to Phillips’s LTD

benefit based on her pension benefits. MetLife stated that in November 2008, it had received

information from Phillips’s employer indicating that she “had commenced her pension benefits

                                                -5-
and elected to take the payment in a lump sum amount of $160,963.40 with a monthly equivalent

amount of $760.25.” It explained that although the lump sum amount was rolled over into an

IRA, her employer confirmed that the rollover was “considered an offset to her monthly LTD

benefit” amount as indicated in the Plan.

       Phillips appealed MetLife’s determination of her benefits in July 2010, contending

MetLife made egregious errors in reducing her monthly LTD benefit based on a “miscalculation

of her annual benefits compensation” and “an improper offset for pension benefits she ha[d] not

received.” She sought $4,390.15 in underpaid LTD benefits through June 2010 because of

“various miscalculations by MetLife.”

       Regarding her contention MetLife miscalculated her annual benefits compensation,

Phillips attached check stubs for the relevant period for determining her annual benefits

compensation, which the parties agree is July 1, 2005 through June 30, 2006 based on her

disability date of February 16, 2007. The check stubs reflected a consistent amount for the

“cycle rate” and differing amounts as “basic wages.” Phillips explained that during the relevant

period, she did not work a straight twenty-hour week or receive the same pay for each week. She

asserted she was entitled to a monthly LTD benefit based on her “basic wages” plus incentive

awards, for an annual benefits compensation amount of $46,037.75. Phillips claimed MetLife

“utterly failed to explain the basis for its statement that Ms. Phillips’[s] ‘correct yearly pre-

disability earnings were $33,650.00’” and failed to connect the figure with the language of the

SPD.

       Regarding her contention MetLife improperly offset pension benefits from her LTD

benefit, Phillips attached excerpts from the SPD related to pension benefits, her Verizon pension

election form, a copy of the lump sum check Verizon issued to Phillips’s bank for deposit into

                                              -6-
her IRA, an IRA deposit form, and other documents showing she rolled over her pension lump

sum from her employer’s plan to a traditional IRA. Phillips asserted this reduction was improper

because she had not “received” any pension benefits from the pension plan as required before the

benefits may be offset. Rather, the bank (not Phillips) “received” the funds. Phillips claimed

MetLife did not apply the terms of the SPD and “instead expressly relied on what ‘is considered’

by ‘her employer’ to constitute an offset.”

       MetLife communicated its denial of Phillips’s administrative appeal by letter dated

August 26, 2010.     In upholding its original determination of her monthly benefit amount,

MetLife first explained that Phillips’s employer is the entity “responsible for calculating” her

salary for purposes of determining her annual benefits compensation figure and for “supplying

this information to MetLife so that monthly disability benefit amounts can be determined.”

MetLife stated her employer confirmed that her salary on her last day worked was $33,650 and

that this amount included “any commissions and VIP awards” she received “based on the rolling

twelve month period beginning July 1, 2005.” MetLife advised Phillips that she should contact

her department supervisor if she did not agree with the salary information provided by her

employer.

       MetLife then addressed the offset to her monthly LTD benefit based on her pension

benefits. MetLife stated Phillips “elected to receive her pension from her employer” and that the

Plan “does not stipulate that pensions rolled over into a traditional IRA would be exempt from

being considered as other sources of disability income as defined by the Plan.”         MetLife

concluded the original determination for her monthly benefit amount using an annual benefits

compensation of $33,650 and including an offset for pension benefits was appropriate.

                                              -7-
       D. This Lawsuit

       Phillips appealed that determination by filing her trial court petition to recover benefits

due under the Plan. See 29 U.S.C.A. § 1132(a)(1)(B) (permitting plan participant to bring civil

action to recover benefits, enforce rights under plan terms, or clarify future benefits rights). She

specifically sought payment of $5,599.87 in unpaid LTD benefits through September 2010. She

also claimed her LTD benefits continue to accrue at a rate of $403.24 per month, which she

alleged was the proper monthly benefit amount based on her annual benefits compensation

amount of $46,037.75 and including a reduction for social security disability income (but no

reduction for pension benefits because she did not receive them).

       Based on the administrative claim record before the trial court, Phillips filed a motion for

summary judgment. She supported her motion with excerpts from the administrative record,

which included portions of the 2008 SPD and her check stubs for the relevant period; she also

attached a service agreement between MetLife and Verizon that she obtained in discovery.

Appellees responded and included a joint cross-motion for summary judgment. The cross-

motion was supported by the 2007 SPD and excerpts from the administrative record, which

included a “Print Claim Activity” log and screen shots of Phillips’s pay history from Verizon.

They also supported the cross-motion with two affidavits with attachments and a print-out of the

definition of “receive” from the Webster’s Online Dictionary.         Phillips filed objections to

appellees’ summary-judgment evidence, objecting to the 2007 SPD and portions of the two

affidavits. She also objected to certain attachments to the affidavits because they were not

included in the administrative record.

       The trial court granted appellees’ cross-motion for summary judgment and denied

Phillips’s motion; it signed a final judgment on May 20, 2011, dismissing Phillips’s claims with

                                               -8-
prejudice. Thereafter, Phillips filed a motion for new trial in which she complained of the

court’s refusal to rule on her objections to appellees’ summary-judgment evidence. She also

filed an amended motion for new trial, arguing the trial court should vacate its order and final

judgment because of a recently-issued United States Supreme Court decision, which she claimed

rejected two of the central arguments raised by appellees in their cross-motion. On July 8, 2011,

the trial court signed one order overruling each objection Phillips raised as to appellees’

summary-judgment evidence and another order denying Phillips’s amended motion for new trial.

                                        II. DISCUSSION

       Phillips presents three issues on appeal. In her first two issues, she contends the trial

court erred in granting summary judgment, upholding the determination of her monthly LTD

benefit amount, because (1) the figure used for her annual benefits compensation had no rational

connection to the evidence in the record and (2) the offset to her monthly LTD amount based on

pension benefits she did not receive was improper. Phillips argues in her third issue that the trial

court erred by overruling her objections to appellees’ summary-judgment evidence.

       A. Summary-Judgment Standard of Review

       The parties filed traditional motions for summary judgment, and we apply standard

summary-judgment rules in ERISA cases. See Atkins v. Bert Bell/Pete Rozelle NFL Player Ret.

Plan, 694 F.3d 557, 566 (5th Cir. 2012); Cooper v. Hewlett-Packard Co., 592 F.3d 645, 651 (5th

Cir. 2009); see also Barhan v. Ry-Ron Inc., 121 F.3d 198, 201–02 (5th Cir. 1997) (noting that

“summary judgment is an appropriate procedural vehicle for the administrator to use in obtaining

a resolution of the plan beneficiary’s suit; [o]nce the motion for summary judgment is filed, the

                                               -9-
usual summary judgment rules control.”).5 Under those rules, we review de novo the trial court’s

summary judgment. Mid-Century Ins. Co. of Tex. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007);

Beesley v. Hydrocarbon Separation, Inc., 358 S.W.3d 415, 418 (Tex. App.—Dallas 2012, no

pet.). The movant has the burden of showing that no genuine issue of material fact exists and

that it is entitled to judgment as a matter of law. Beesley, 358 S.W.3d at 418.

           B. Legal Standards for Reviewing ERISA Benefit Determinations

           We also review de novo the trial court’s application of the appropriate standards of

review to be applied to an ERISA administrator’s benefits determinations. Atkins, 694 F.3d at

566 (citing Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211, 213 (5th Cir.

1999)); Lynd v. Reliance Standard Life Ins. Co., 94 F.3d 979, 980–81 (5th Cir. 1996) (question

of whether trial court employed appropriate standard in reviewing ERISA plan administrator’s

eligibility determination is one of law reviewed de novo). The standard of review for an ERISA

benefits determination is dependent upon the language of the controlling plan. In ERISA cases,

an administrator’s interpretation or application of the plan is reviewed using a de novo standard

of review unless the benefit plan expressly gives the administrator or fiduciary discretionary

authority to determine eligibility for benefits or to construe the plan’s terms. Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan language grants an administrator

such discretionary authority, we review the administrator’s determinations for an abuse of

discretion. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008); Firestone, 489 U.S. at 115;

   5
    Cf. LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment & Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir.
2010) (describing summary judgment as mere “vehicle for deciding the case” and “non-moving party is not entitled to the usual inferences in its
favor”) (quoting Bard v. Boston Shipping Ass’n, 471 F.3d 229, 235 (1st Cir. 2006)); Day v. AT&T Disability Income Plan, 733 F. Supp. 2d 1109,
1112 (N.D. Cal. 2010) (summary-judgment motion is “‘merely the conduit to bring the legal question before the district court’” where ERISA
abuse of discretion standard applies and “‘the usual tests of summary judgment, such as whether a genuine dispute of material facts exists, do not
apply’”) (quoting Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 2009)). The parties here do not suggest a fact dispute exists precluding
summary judgment or that a different summary-judgment standard of review exists.

                                                                    - 10 -
Gorman v. Life Ins. Co. of N. Am., 811 S.W.2d 542, 548 (Tex. 1991) (op. on reh’g) (observing

Firestone resolved review standards where administrator maintains discretion).

       The abuse of discretion standard in the ERISA context “is synonymous with arbitrary and

capricious review.” Cooper, 592 F.3d at 652. Under this standard, the plan administrator’s

decision must be supported by “substantial evidence.” Atkins, 694 F.3d at 566 (citing Ellis v.

Liberty Life Assurance Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004)). Substantial evidence

is “‘more than a scintilla, less than a preponderance, and is such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.’” Id. (quoting Deters v. Sec’y

of Health, Educ. & Welfare, 789 F.2d 1181, 1185 (5th Cir. 1986)). A decision is arbitrary if it is

made “without a rational connection between the known facts and the decision or between the

found facts and the evidence.” Meditrust Fin. Servs., 168 F.3d at 215. Our review of the

administrator’s decision is not complex or technical; we must assure the decision “fall[s]

somewhere on a continuum of reasonableness—even if on the low end.” Corry v. Liberty Life

Assurance Co. of Boston, 499 F.3d 389, 398 (5th Cir, 2007) (quoting Vega v. Nat’l Life Ins.

Servs., Inc., 188 F.3d 287, 297 (5th Cir. 1999) (en banc), overruled on other grounds by Glenn,
554 U.S. at 105).

       Under an abuse of discretion standard, our review of the plan administrator’s

determinations is limited to the administrative record. See LifeCare Mgmt. Servs. LLC v. Ins.

Mgmt. Adm’rs Inc., 703 F.3d 835, 841 (5th Cir. 2013); see also Estate of Bratton v. Nat’l Union

Fire Ins. Co. of Pittsburg, Pa., 215 F.3d 516, 521 (5th Cir. 2000) (noting certain limited

exceptions exist for trial court to stray from administrative record, such as “admission of

evidence related to how an administrator has interpreted terms of the plan on other instances”);

Meditrust Fin. Servs., 168 F.3d at 215 (review confined to record available to administrator).

                                              - 11 -
We may “consider only the actual basis on which the administrator denied the claim”; we may

not consider “‘post-hoc rationalization[s].’” Koehler v. Aetna Health Inc., 683 F.3d 182, 190

n.18 (5th Cir. 2012) (quoting Robinson v. Aetna Life Ins. Co., 443 F.3d 389, 395–96 n.4 (5th Cir.

2006)).      Standard evidentiary rules do not apply to the claim administrator’s benefits

determinations; in assessing the reasonableness of the administrator’s decision, we review the

entire administrative record, including hearsay evidence relied on by the administrator. See, e.g.,

Speciale v. Blue Cross & Blue Shield Ass’n, 538 F.3d 615, 622 n.4 (7th Cir. 2008) (because plan

administrator not a court of law, administrator not bound by rules of evidence); Bressmer v. Fed.

Express Corp., 213 F.3d 625, 625 (2d Cir. 2000) (same).

          A two-step process applies to our review of a plan administrator’s interpretation of a

plan’s terms. See Ellis, 394 F.3d at 269–70; Wildbur v. ARCO Chem. Co., 974 F.2d 631, 637–38

(5th Cir.), modified, 979 F.2d 1013 (1992); see also Firman v. Life Ins. Co. of N. Am., 684 F.3d
533, 539 (5th Cir. 2012) (per curiam). In the first step, a court determines the legally correct

interpretation of the plan. Ellis, 394 F.3d at 269; Gosselink v. Am. Tel. & Tel., Inc., 272 F.3d
722, 726 (5th Cir. 2001). To determine if the administrator’s interpretation was legally sound,

we consider: “(1) whether the administrator has given the plan a uniform construction, (2)

whether the interpretation is consistent with a fair reading of the plan, and (3) any unanticipated

costs resulting from different interpretations of the plan.” Ellis, 394 F.3d at 270 (citing Wildbur,
974 F.2d at 637–38); see also Koehler, 683 F.3d at 187 (noting “most important factor” in the

analysis is “whether the administrator’s interpretation is consistent with a fair reading of the

plan”) (internal quotations omitted). If that analysis results in the conclusion the administrator

used a legally correct interpretation, there is no abuse of discretion and our inquiry ends. Ellis,
394 F.3d at 270. But if the administrator’s interpretation is legally incorrect, we proceed to the

                                               - 12 -
second step and determine whether the administrator’s incorrect interpretation was an abuse of

discretion. Wildbur, 974 F.2d at 638. Three factors are important to that analysis—the internal

consistency of the plan under the administrator’s interpretation, any relevant regulations, and the

factual background of the determination and any inferences of lack of good faith.               Id.

Alternatively, we may also bypass the first step if we can determine the decision was not an

abuse of discretion. See High v. E-Systems Inc., 459 F.3d 573, 577 (5th Cir. 2006).

       Finally, the degree of deference we afford an administrator’s decision depends on the

extent to which a claimant substantiates her claim with evidence of a conflict of interest. See

Glenn, 554 U.S. at 115. The Supreme Court instructs that where a plan administrator both

evaluates claims for benefits and pays benefit claims, the administrator is operating under a

conflict of interest. See id. at 112. We must take that conflict into consideration and weigh it as

a factor in determining whether the administrator abused its discretion. See id. at 115–17

(discussing Firestone, 489 U.S. at 115); Anderson v. Cytec Indus., Inc., 619 F.3d 505, 512 (5th

Cir. 2010) (per curiam).

       C. Analysis

       The parties do not dispute that MetLife had discretionary authority to review and decide

Phillips’s benefits claims, including the discretion to make factual determinations about claims

and interpret the Plan. Therefore, the trial court and this Court on de novo review consider

MetLife’s determinations regarding Phillips’s claims for an abuse of discretion. See Atkins, 694
F.3d at 566. Stated another way, we consider whether MetLife’s decisions were reasonable in

light of the record compiled during the administrative proceedings. A trial court properly grants

summary judgment in favor of an administrator if there is no triable issue of fact as to whether

the administrator abused its discretion.

                                              - 13 -
                      1. MetLife’s Determination of Phillips’s Annual Benefits Compensation

           Phillips’s first issue relates to a dispute over the amount of her annual benefits

compensation. She argues MetLife abused its discretion in determining her annual benefits

compensation was $33,650 because this figure has no rational connection to the evidence in the

administrative record.

           The figure used for a participant’s annual benefits compensation is the first part of the

calculation for determining the person’s monthly unreduced LTD benefit. The SPD instructs

MetLife to determine Phillips’s annual benefits compensation at the time she first became totally

disabled; the figure is made up of her “base pay” plus any short-term incentive awards,

commissions, or foreign service premiums paid to her during the calendar year beginning July 1

preceding her total disability (in this case, the period beginning July 1, 2005 and ending June 30,

2006). The SPD also lists certain paid elements that are not included in “annual benefits

compensation,” such as overtime pay, discretionary awards, sales draws, and bonuses.                                                              A

participant’s “pay” is her “annual base salary.”6 It does not include overtime pay, incentives, or

“[a]ny other element of compensation other than base recurring salary.”

           Appellees assert the figure used for Phillips’s annual benefits compensation was based on

information electronically accessed from Phillips’s file on the Verizon computer system as

evidenced by printouts of computer screen shots contained in the administrative record. The

screen shots show the contents of inquiries related to Phillips’s pay rate history and LTD

coverage from her electronic records. The first screen shot provides multiple line items related

to Phillips’s pay rate history as of February 16, 2007, Phillips’s disability date. One line item,

  6
    We reject Phillips’s contentions that the definition of “pay” relates only to the calculation of short-term disability benefits and that applying
the definition of “pay” to the LTD calculation would violate ERISA regulations. The term “pay” is specifically listed in the “Disability terms to
know” section of the SPD. There is nothing in the definition to suggest the term applies to STD benefits only.

                                                                      - 14 -
labeled “ABC Frozen Pay,” indicates Phillips’s annual rate for the year 2007 was $33,650.7

Other line items show an annual figure of $47,400 for purposes of Phillips’s “Life Frozen Pay”

and supplemental life and AD&D; the line item for “Life Frozen Pay” appears directly below the

figure for “ABC Frozen Pay.” Another screen shot shows her LTD coverage detail as “-50% of

Pay.” An additional screen shot shows a list of Phillips’s ABC Frozen Pay rates for each year

starting in 2001 and continuing through 2008.8 Again, the rate for her 2007 ABC Frozen Pay

was listed as $33,650.

           MetLife also verified this figure with an employee in Verizon’s benefits center during

Phillips’s administrative appeal. The employee confirmed by e-mail that Phillips’s “annual

benefits compensation as of 2/15/07 [was] $33,650.00.” The parties agree Phillips earned an

incentive award in the amount of $5,000 during the period, which Verizon confirmed was

included in the figure.

           Phillips agrees the figure of $33,650 appears in the administrative record but complains

there is no evidence of who made the calculation or how it was calculated. She characterizes her

complaint as “a dispute over the evidence that demonstrates [her] annual benefits compensation”

and contends the figure that MetLife “read off a computer screen” and “verified” with a Verizon

employee has no rational connection to the evidence because it was not calculated from actual

data. She further contends the figure was a misstatement because it was based on what she calls

a conclusory lay opinion on “some unknown person’s calculation.”

 7
   The “Disability terms to know” section of the 2008 SPD provides an example of how the annual benefits compensation figure is determined.
The example specifically notes that a participant’s annual benefits compensation or “ABC” is the “[d]ollar amount frozen on 7/1 of the calendar
year preceding [the participant’s] total disability.” It also states that the “ABC date always refers to the calendar year preceding the STD date.
The ABC date and STD date are never in the same calendar year.”

 8
   According to the SPD, a participant’s contributions for coverage are based on the person’s annual benefits compensation as of July 1 of the
previous calendar year and the LTD coverage option chosen.

                                                                    - 15 -
       Phillips maintains the “correct figure” for her annual benefits compensation is

$46,037.75, which she claims includes the amounts she was actually paid “down to the penny”

from July 1, 2005 through June 30, 2006 as shown on her Verizon check stubs. She argues the

check stubs she provided as proof are the “only evidence” that demonstrates the proper amount

and that MetLife “deliberately ignored” the content of her uncontroverted evidence.

       It is evident by looking to the check stubs that Phillips calculated the figure of $46,037.75

by adding the “Total Pay” for each check stub she provided as part of her administrative appeal.

“Total Pay,” which is part of the “Check Summary” on each stub, is the sum of the categories

listed under the “PAYMENTS” heading. The categories of payments under that heading vary

from check to check and include such things as “Basic Wages,” holiday pay, vacation pay,

“Excused Day Off,” “Short Sickness,” “Equivalent Time Off,” and “Other Paid Absence.” The

categories show what Phillips was paid for in each pay period. For example, her “VIP Award”

of $5,000 was listed under that heading on the check stub for the pay period ending March 11,

2006. Many of the stubs also reflect that certain categories (including “Basic Wages”) were

adjusted for the prior period.

       Phillips maintains the undisputed evidence of the “base pay” component of her annual

benefits compensation is reflected in her “Basic Wages” as “specifically denoted” under the

“Payments” heading on each stub. And she claims that her calculation using the actual data on

her check stubs shows what she was actually paid “in the form of base pay and VIP awards” for

the relevant period. Yet her calculation for what she maintains is the “correct figure” includes

more than just “Basic Wages” and the $5,000 incentive award. It includes her “total pay”—

everything else she was paid without reference to how these elements of compensation are part

                                              - 16 -
of her “base pay.” According to the SPD, “pay” does not include “[a]ny other element of

compensation other than base recurring salary.”

           Additionally, Phillips’s calculation assumes that although her work week was a twenty-

hour work week, her base pay would also include the hours she worked over twenty hours. The

“Basic Wages” component of her check appears to be calculated by multiplying the hourly rate

listed on the check stub by the number of actual “Hours Worked.”                                                  Phillips agrees she

transitioned to a twenty-hour work week in 2002 but states her hours and pay fluctuated from

week to week during the relevant period as evidenced by her check stubs. Notably, “pay” is not

defined as what Phillips was actually paid; rather, “pay” is defined in terms of the salary Phillips

was regularly paid, that is, her “base recurring salary” minus overtime pay and any other

element of compensation. (Emphasis added). Whether the number of hours worked over twenty

hours is classified as overtime pay or as extra hours for which Phillips was paid is irrelevant.9

Likewise, “annual benefits compensation” is not defined in the SPD as the sum of everything

paid to a claimant during the relevant period. It is made up of “base pay” plus a limited number

of other elements paid to a claimant during the relevant period.

           There appears to be no dispute among the parties about the validity of the check stubs in

the administrative record. Nor is there a dispute about the time period they cover. Phillips’s

assertions related to the evidence suggest that because MetLife determined her annual benefits

compensation to be a different amount (which it supported with printouts of computer-generated

pay rate information and verification from Phillips’s employer) that the content of her evidence

 9
    We are not persuaded by Phillips’s assertions that “Basic Wages” qualify as “recurring” because “Phillips was paid on a regular basis every
two weeks” and that there “is no evidence to demonstrate that only the first 20 hours could be considered ‘recurring.’” Although Phillips states
her “Basic Wages” reflect what she was actually paid for her hours worked, which varied from check to check, she agrees she transitioned to a
twenty-hour work week. As explained below, other components of the check stubs are consistent with being paid based on a twenty-hour work
week.

                                                                    - 17 -
was ignored. Her arguments also assume that the “raw data” from the stubs could not be used to

calculate a different result. She presents no evidence, however, to suggest that either MetLife or

Verizon failed to consider the content of her check stubs during the administrative proceedings.

Consequently, Phillips’s contention that MetLife’s calculation was an abuse of its discretion

because MetLife ignored her evidence is without merit.

           Contrary to Phillips’s assertions, the data from the check stubs support MetLife’s

determination for her annual benefits compensation. According to appellees, Phillips’s base rate

of pay is reflected in her “cycle rate,” a figure that appears on both the pay rate history screen

shot and on each check stub. Specifically, the screen shot reports a cycle rate of $1,101.92 as of

March 26, 2006, which was paid on a bi-weekly basis. On the check stubs, Phillips’s cycle rate

was first reported as $1,053.85 and then increased to $1,101.92, as reflected on her check stub

for the period ending April 8, 2006.10 The check stubs also reflect that Phillips was paid every

two weeks. Taking the screen shot’s stated bi-weekly cycle rate of $1,101.92 as evidence of her

base pay in the relevant period and multiplying it by twenty-six weeks, the amount is

$28,649.92. Adding in Phillips’s $5,000 incentive award, the amount is $33,649.92, or $33,650

rounded up, which is the figure MetLife used to calculate her monthly LTD benefit amount.

           Phillips argues that because a “cycle rate” argument was not raised in MetLife’s original

written notice of its determination or in the letter denying her administrative appeal, appellees

cannot use the “cycle rate” as support for its decision in this Court. Alternatively, she maintains

there is “no evidence of what the ‘Cycle Rate’ represents.”                                                In reviewing whether the

determination of Phillips’s annual benefits compensation was reasonable, however, we look to

  10
    Phillips’s hourly rate of pay is reported on the check stubs just below the cycle rate. In conjunction with the change in cycle rate listed on the
stubs, her hourly rate was first reported as $26.35 and increased to $27.55. Dividing the cycle rate by the hourly rate listed, it is 39.99 or 40
hours. Payment for forty hours on a bi-weekly schedule is consistent with Phillips’s scheduled twenty-hour work week.

                                                                      - 18 -
all the evidence compiled during the administrative proceedings. See Corry, 499 F.3d at 401–02.

The check stubs (as well as the screen shot showing Phillips’s pay rate history) are in the

administrative record, and what the cycle rate represents can be calculated based on known facts,

specifically, facts showing that (1) Phillips was paid on a bi-weekly basis; (2) she received a set

hourly rate as shown on the check stubs; and (3) she transitioned to a twenty-hour work week.

We do not construe appellees’ explanation in its brief regarding the cycle rate as providing a new

reason to support its determination of the figure for Phillips’s annual benefits compensation.

Rather, the explanation was in response to Phillips’s contention that MetLife did not contest the

validity of her check stubs. Appellees referenced the cycle rate and argued the check stubs

“actually support MetLife’s ABC determination in that they demonstrate MetLife used the

correct ABC figure to calculate Phillips’s LTD benefit payment.”

       Finally, Phillips asserts Verizon and VEBC’s conflict of interest should be weighed as a

factor against appellees. Citing the Administrative Services Agreement between MetLife and

Verizon (as contracting agent for VEBC), Phillips contends Verizon and VEBC operate under a

conflict of interest because they will be liable for the full amount of any LTD benefits awarded.

She also contends MetLife’s delegated fiduciary responsibility to make claim determinations was

“expressly subject to Verizon’s obligation in the services agreement to ‘provide MetLife with

information and documents necessary’ for MetLife to conduct the administrative appeal.” She

claims Verizon “leveraged its conflict of interest to force underpayment of [her] LTD benefits”

when it failed to provide MetLife with the necessary information and documents and instead

provided an unsubstantiated figure that underreported Phillips’s annual benefits compensation.

She further suggests MetLife’s reliance on the figure of $33,650 provided by Verizon

demonstrates procedural irregularities and states that MetLife’s disregard for her evidence is

                                              - 19 -
“incredibly sloppy claims handling,” constituting, at worst, overt bias as a result of Verizon’s

conflict.

        The provision of the services agreement Phillips cites for Verizon and VEBC’s conflict

pertains to benefits awarded “as a result of Plan Benefits Litigation.” That is, as between

MetLife and Verizon, the parties agreed that Verizon would be liable for plan benefits and other

amounts recovered by a plaintiff in the event of litigation involving those benefits. And while

the services agreement states Verizon has an obligation to provide MetLife with information and

documents within its control necessary to facilitate a full and fair review of a claim on appeal,

the agreement specifically indicates MetLife assumed the responsibility and discretionary

authority for approving or denying plan benefits. The SPD also states that final authority to

determine claims was specifically delegated to a claims administrator.           Despite Phillips’s

contentions, these provisions do not make it “financially advantageous” for Verizon to

underreport her salary in an effort to retain the amount she alleged was underpaid. Further,

Phillips presented no evidence showing that Verizon attempted to influence MetLife’s decision

on the amount of Phillips’s annual benefits compensation. MetLife’s request to Verizon to

verify Phillips’s annual benefits compensation also does not show Verizon had an influence over

MetLife’s determination of LTD benefits due Phillips. Her complaint is that the figure provided

by Verizon deemphasized her “uncontroverted” evidence that supported a different calculation.

        For ERISA purposes, a conflict of interest exists when a plan administrator both

evaluates claims for benefits and pays benefits. See Glenn, 554 U.S. at 112. The Supreme Court

has held that this conflict should be taken into consideration in determining whether the

administrator abused its discretion. See id. at 115. A conflict that leads to the setting aside of a

discretionary decision may be evidenced by a combination of “serious concerns” arising from the

                                               - 20 -
plan administrator’s financial conflict of interest. Id. at 118. Those circumstances are absent

here. Although MetLife makes claim determinations, a claimant’s benefits are paid from a trust

that is funded by employee contributions, not by MetLife or VEBC. Thus, neither MetLife nor

VEBC was in a position to benefit financially from decisions made with respect to a person’s

LTD benefits. MetLife simply receives a fee for its services paid for with funds from the trust.

       Phillips’s characterization of her issue as a dispute over the evidence that demonstrates

her annual benefits compensation, in essence, is that the balance of the evidence in the

administrative record—specifically, her Verizon check stubs—favors her calculation. Our focus

in determining whether there was an abuse of discretion, however, is whether substantial

evidence, which is more than a scintilla, supports MetLife’s decision, not that substantial

evidence supports Phillips’s calculation. See Ellis, 394 F.3d at 273 (“We are aware of no law

that requires a district court to rule in favor of an ERISA plaintiff merely because he has

supported his claim with substantial evidence, or even with a preponderance.”). MetLife’s

determination that the figure for Phillips’s annual benefits compensation is $33,650 prevails if

the decision has rational support in the record. Id. We conclude it does.

       MetLife was vested with broad discretion, as described in the SPD, to decide, among

other things, the amount of benefits due a claimant. The administrative record shows MetLife

obtained the figure for Phillips’s annual benefits compensation electronically from computer-

generated records maintained for Verizon employees. The screen shots of the electronic records

reference Phillips’s correct benefit level (50%) as well as language from the SPD, specifically

the 2008 SPD, by use of the terms “ABC Frozen Pay.” MetLife confirmed the figure with

Phillips’s employer. The employer also verified the figure included an incentive award Phillips

received in the rolling twelve month period beginning July 1, 2005, as indicated in the final

                                              - 21 -
denial letter. Notably, the figure also ties to the raw data from the check stubs for the same

period based on a calculation from facts in the record related to Phillips’s employment. Printouts

from a claim activity summary related to Phillips’s LTD benefits show that MetLife

representatives repeatedly spoke with Phillips’s attorney about the annual benefits compensation

amount, including how the figure reflected Phillips’s salary and that it was adjusted after being

incorrectly reported to MetLife. The claim activity shows that when Phillips questioned the

amount of her annual benefits compensation, MetLife asked her employer to confirm the correct

amount, which it did.

        This information is more than a scintilla and constitutes concrete evidence in the record

to support MetLife’s decision that the amount of Phillips’s annual benefits compensation was

$33,650. Thus, based on the terms of the SPD and the evidence in the administrative record, we

conclude MetLife’s determination that the figure of $33,650 for Phillips’s annual benefits

compensation was reasonable. See Corry, 499 F.3d at 398 (review of administrator’s decision

“need only assure that the administrator’s decision fall somewhere on the continuum of

reasonableness—even if on the low end”). Because we conclude there is a reasonable basis in

the record to support MetLife’s determination of Phillips’s annual benefits compensation, the

trial court did not err in granting summary judgment in favor of appellees on this basis. We

overrule Phillips’s first issue.

                2. Interpretation of the SPD for Pension Offset

        In her second issue, Phillips challenges MetLife’s interpretation of the offset provision in

the SPD, specifically, MetLife’s decision that pension benefits rolled over into an IRA constitute

benefits Phillips “received” for purposes of an offset to her monthly LTD benefit. Phillips

argues summary judgment in favor of appellees was improper because MetLife’s interpretation

                                               - 22 -
was legally incorrect. She also characterizes her issue as a dispute over the legal standards

applied to interpret the language of the SPD.

       The SPD authorized MetLife to reduce Phillips’s monthly LTD benefit by benefits

provided from other sources of disability income, including “[p]ension benefits from a Verizon

pension plan, if [Phillips] elect[s] to receive them.”      Less than two months after MetLife

approved her LTD claim for benefits, Phillips elected a lump-sum distribution of her pension

benefits from her pension plan, which she then rolled over into a traditional IRA. When Verizon

informed MetLife of her election, MetLife treated the rollover as pension benefits Phillips had

elected to “receive,” resulting in the reduction of her monthly LTD benefits.

       In our two-step inquiry previously described, we first consider whether MetLife’s

interpretation was legally correct, and if it is, our inquiry ends because a correct interpretation

cannot constitute an abuse of discretion. Ellis, 394 F.3d at 269–70; Wildbur, 974 F.2d at 637–38.

We look to the facts in the record and the language of the plan itself in addressing the question of

whether the interpretation was legally correct. Crowell v. Shell Oil Co., 541 F.3d 295, 312 n.72

(5th Cir. 2008). If the interpretation was legally incorrect, we proceed to the second step and

analyze whether the incorrect interpretation was an abuse of discretion. Wildbur, 974 F.2d at

638. If we reach this second step, we must also weigh as a factor whether the administrator

operated under a conflict of interest. See Crowell, 541 F.3d at 312.

       Our analysis under the first step includes consideration of three factors. See Wildbur, 974
F.2d at 637–38. The second factor is said to be the “most important” because it involves the

question of whether the administrator’s interpretation is consistent with a fair reading of the plan.

Koehler, 683 F.3d at 187. In answering that question, we use basic contract interpretation

principles and interpret ERISA provisions “‘in [their] ordinary and popular sense as would a

                                                - 23 -
person of average intelligence and experience.’” Crowell, 541 F.3d at 314 (quoting Tucker v.

Shreveport Transit Mgmt. Inc., 226 F.3d 394, 398 (5th Cir. 2000)); see also Corbello v. Sedgwick

Claims Mgmt. Servs., Inc., 856 F. Supp. 2d 868, 881–82 (N.D. Tex. 2012). That is, we interpret

the provisions as they are likely to be understood “by the average plan participant” with the

language to be given its generally accepted meaning. Crowell, 541 F.3d at 314; Chacko v.

Sabre, Inc., 473 F.3d 604, 612 (5th Cir. 2006).

       Phillips argues MetLife’s interpretation of “receive” is legally incorrect because she had

not “received” any pension benefits; rather, her pension benefits were transferred from one

financial institution to another by direct rollover. She asserts that because the interpretation here

involves the SPD as opposed to the Plan, we employ “more particularized standards” in

reviewing whether MetLife’s interpretation was legally correct and that the three factors under

the first step “are not considered at all.”       She relies on Rhorer v. Raytheon Eng’rs &

Constructors, Inc., 181 F.3d 634, 640 n.7 (5th Cir. 1999). The only particularized standard

Phillips cites is the rule of contra proferentem, the canon of construction requiring us to construe

any ambiguities in the language of the SPD in her favor. Although Phillips appears to assert the

rule of contra proferentem forms the basis of the entire analysis under the first step, logically,

this argument is more properly asserted with respect to the second factor; under this factor we

use basic contract principles to answer the question of whether the administrator gave the plan a

fair reading. See Horn v. Owens-Ill. Emp. Benefits Comm., 424 Fed. Appx. 312, 314–15 (5th

Cir. 2011) (per curiam) (“In addition to the [three] factors, there are some ‘particularized

standards’ that apply in evaluating whether the administrator’s interpretation of [the SPD], as

opposed to the plan itself, is legally correct.”) (internal citations omitted); see also Crowell, 541
F.3d at 314 (contract interpretation principles used under second factor). The heart of her

                                               - 24 -
argument in fact, aligns with the second factor; she asserts MetLife did not give the SPD a fair

reading because the word “receive” is ambiguous and, therefore, the provision must be construed

in her favor. Appellees respond that the pension offset provision in the SPD is unambiguous and

MetLife gave the provision a legally correct interpretation. Appellees also respond that the rule

of contra proferentem does not apply when, as here, a plan vests the administrator with

discretionary authority to interpret the plan.

       Generally, where an administrator has express authority to interpret the plan, that

discretion allows the administrator to resolve ambiguities in the plan language in its favor. See

Koehler, 683 F.3d at 188; High, 459 F.3d at 579 (plan administrator may exercise “interpretive

discretion” when construing ambiguous terms in ERISA plans). But this discretion does not

extend to SPDs. Koehler, 683 F.3d at 188. Rather, ambiguities in the SPD must be resolved in

favor of the beneficiary, even if the terms of the SPD are identical to the plan. Id. (citing Rhorer,

181 F.3d at 642).      That is because SPDs must be “‘written in a manner calculated to be

understood by the average plan participant, and . . . sufficiently accurate and comprehensive to

reasonably apprise such participants and beneficiaries of their rights and obligations under the

plan.’” Id. (quoting 29 U.S.C.A. § 1022(a)). SPDs “provide communication with beneficiaries

about the plan” but “do not themselves constitute the terms of the plan.” CIGNA Corp. v.

Amara, 131 S. Ct. 1866, 1878 (2011). We only reach the rule of contra proferentem and

construe the terms of the SPD in Phillips’s favor, however, if a term remains ambiguous after

applying ordinary contract principles. See High, 459 F.3d at 578–79 (holding rule of contra

proferentem only applied when term is ambiguous); Wegner v. Standard Ins. Co., 129 F.3d 814,

818 (5th Cir. 1997).

                                                 - 25 -
           The administrative record shows Phillips elected a lump-sum distribution of her pension

benefits. Her election paid over $160,000 and required her spouse to consent to her request “to

begin benefits now.” As part of her election, she certified she had not “received a previous

distribution” from the pension plan and that she understood the risk of loss associated with

“receiv[ing] a lump sum distribution.” Following her election, the Verizon benefits center sent

Phillips a check payable to her bank for deposit into an IRA in her name. The check stub

reflected the total amount for deposit was a “cash distribution” paid on January 1, 2009. Phillips,

as the “IRA Holder,” deposited the check and certified that the “funds contributed [were] eligible

to be deposited into [her] IRA Plan.”

           The SPD for the Verizon pension plan and other documents associated with Phillips’s

election were presented as part of the administrative record. The other documents include a

“Special Tax Notice Regarding Plan Payments”11 that Verizon sent to Phillips in response to her

request “to start [her] Disability Pension benefit . . . .” The pension plan SPD contains a section

on “[h]ow taxes affect your pension.” It informs that special tax rules apply to lump-sum

distributions and explains that taxes will be withheld automatically from “your payment” unless

there is a request for “a direct rollover of your distribution” to among other things, a traditional

IRA. The special tax notice states that if Phillips chooses a direct rollover of her plan payment

into a traditional IRA, no income tax will be withheld until she later takes the funds out of the

IRA. The stated purpose of the tax notice to Phillips was to explain how she can “continue to

defer federal income tax on [her] retirement savings” in the pension plan; it told her there was

 11
     This document was among the attachments to an affidavit appellees submitted as part of the summary-judgment proceedings. Although
Phillips objected to certain attachments, which she identified by bates numbers, because they were not included in the administrative record, this
document does not appear to be included in her objections. This document was addressed to Phillips and contains the same date as the election
form she included with her administrative appeal.

                                                                    - 26 -
“important information” she would need before she decided “how to receive [her pension] Plan

benefits.”

       Phillips contends the word “receive” is ambiguous because the tax rules applicable to

requests for a rollover indicate she will not “receive” her pension funds until she has withdrawn

them from her IRA and is taxed on the funds. She therefore maintains that under the rule of

contra proferentem, the word “receive” in the SPD means that she “must obtain actual possession

of the pension benefits by withdrawing them from her IRA without accomplishing another direct

rollover,” or stated differently, “receive” refers to “funds that actually come into the possession

of Phillips” by withdrawal from the IRA. She maintains the word must have a different meaning

than “eligible to receive.”

       Phillips finds support for her interpretation in Blankenship v. Liberty Life Assurance Co.

of Boston, 486 F.3d 620 (9th Cir. 2007). Like here, the issue in Blankenship was whether a plan

participant “received” his retirement funds for purposes of a deduction from his monthly

disability payment when the funds were transferred from his employer’s plan to a Vanguard

IRA. Id. at 624. The court noted the term was not defined in the disability plan and that the

parties defined the term as “to take into possession or control.” Id. at 624–25. The court

determined that because a definition of receipt based on possession and one based on control

may lead to two separate outcomes, the term was ambiguous. Id. at 625. The court applied the

rule of contra proferentem because the plan at issue did not vest the administrator with discretion

to interpret plan provisions and construed the term as possession through actual receipt of funds.

Id. Under that interpretation, the court concluded funds rolled over into an IRA were not to be

offset against a participant’s monthly disability benefit. Id. at 626.

                                                - 27 -
       Unlike the court in Blankenship, we do not consider the word “receive” to be ambiguous

in the context of the SPD for the LTD Plan. Cf. Day v. AT&T Disability Income Plan, 698 F.3d
1091, 1097 (9th Cir. 2012), cert. denied No. 12-1144, 2013 WL 1147413 (Apr. 22, 2013)

(holding pension benefits rolled into IRA were received by plan participant for purposes of LTD

benefit offset because administrator had discretionary authority to review plan). The rule of

contra proferentem therefore does not apply in this case. See Corbello, 856 F. Supp. 2d at 883.

       The SPD states that to qualify for LTD benefits, Phillips must apply for all other types of

disability benefits for which she may be eligible and that benefits provided from these sources

will be subtracted from her monthly LTD benefit. The other sources of disability income include

pension benefits Phillips elected to “receive.” To “receive” means to “be given, presented with

or paid (something).” THE NEW OXFORD AMERICAN DICTIONARY 1421 (2001). Similarly, the

word means “to take possession or delivery of”; it implies that “something comes or is allowed

to come” into one’s possession. WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY              OF THE

ENGLISH LANGUAGE UNABRIDGED 1894 (1981).

       Phillips attempts to demonstrate an ambiguity by relying on the pension SPD and special

tax rules. She argues, in essence, that application of the tax rules renders the word “receive” in

the pension offset provision ambiguous. Under her view, she has not “received” the benefits for

purposes of calculating an offset from her LTD benefits because she will not be taxed on her

pension benefits until a withdrawal from her IRA.

       Consideration of the pension SPD and special tax rules, however, does not support an

interpretation that a pension benefit was not “received” by a person because it was rolled into an

IRA. A rollover is a way to move funds from one investment vehicle to another without being

taxed on the amount; in this case, Phillips moved her pension funds from her employer’s plan

                                              - 28 -
into a traditional IRA that she set up through a bank. Such a rollover is reported to the IRS as

evidenced by the Form 1099-R Phillips included in her administrative appeal. The decision to

roll over the pension amount into an IRA is one of “several decisions” required of Phillips when

she “requested to start” her pension benefit. As explained in the pension SPD, it is one of many

ways in which Phillips could receive her payment.

       Importantly, the special tax rules related to direct rollovers do not change the fact that a

lump-sum distribution of Phillips’s pension was paid to her or that a cash distribution came into

her possession. The tax rules simply say Phillips will not be taxed on the lump-sum distribution

of her pension benefits until she withdraws them from her IRA. The focus under the tax rules is

receipt of the money from her IRA for income tax purposes. The rules tell her that if she

receives the distribution but rolls over the amount to another investment vehicle, she can defer

paying taxes on the amount. And because “pension payments are fully taxable in the tax year

you receive them,” Phillips would have paid taxes on the lump-sum distribution had she not

converted the payment into an IRA.

       Tellingly, the pension SPD and special tax rules repeatedly refer to the lump-sum

distribution from the Verizon pension plan as a “payment” received by the participant. For

example, the pension SPD provides Phillips can “receive [her] benefit as a single lump sum” and

that “[w]ith a lump-sum payment, you receive payment of your entire accrued benefit in a single

payment.”   The documents also refer to the distribution as an amount “received” by the

participant, containing provisions for rolling over more than the amount received and providing a

time for making a rollover: “You generally must complete the rollover of an eligible rollover

distribution paid to you by the 60th day following the day on which you receive the distribution

from your employer’s plan.”

                                              - 29 -
       The SPD at issue here and the pension plan SPD are distinct policies that apply in

different situations. See Loggins v. Nortel Networks, Inc., 206 Fed. Appx. 329, 331 (5th Cir.

2006) (noting separate employer plans should not be construed as single plan; “[a]lthough they

have the single purpose of providing employee benefits, they are clearly distinct policies and

apply in different situations.”). The pension plan SPD concerns a person’s eligibility “to receive

any pension” earned under that plan, and it provides guidance for the ways in which the person

can receive the payment. The context of the direct rollover provisions in the pension SPD and

tax notice is significant because those provisions relate to the effect the rollover has on Phillips

for income tax purposes. The pension offset provision in the SPD for the LTD Plan regards the

pension benefits given or paid to Phillips regardless of how she chooses to receive the funds or

what she does with the funds upon receipt. If, as here, she elects to receive her pension benefits,

those benefits will be deducted from her monthly LTD benefit amount.

       Although Phillips argues “receive” means “funds that actually come into [her]

possession,” she does not explain how the initiation of the process to elect a lump-sum

distribution and “begin benefits now” does not show how her pension benefit did not actually

come into her possession. She simply maintains that because she is not taxed on the amount, she

did not receive it. While it is true she does not physically possess her pension distribution (the

bank does), the reality is the bank simply holds the money for her benefit and operates as a

custodian of the money to which she is entitled at any time. It was Phillips who initiated the

process of electing a lump-sum distribution and made the decision to leave the purview of her

employer’s plan and roll the distribution into an IRA. She acknowledges she maintains control

over the assets in her IRA. For example, after she deposited the “cash distribution” into her IRA,

she divided her IRA into two accounts. Cf. Day, 698 F.3d at 1097 (pension beneficiary has

                                               - 30 -
control over IRA assets, noting he “can choose the IRA and change it; and he can withdraw

funds from it” and therefore it was “not unreasonable to say that he has received these

benefits.”).

        Phillips also argues that in interpreting the SPD, MetLife applied Verizon’s “undisclosed

intent” rather than the language of the SPD. The administrative record does not support this

argument. The claim activity report indicates that before MetLife sent the December 2008 letter

regarding the pension offset to her LTD benefit, Phillips informed MetLife of her decision to

commence a pension. The activity shows a November 2008 telephone conversation in which a

MetLife representative advised Phillips that MetLife would confirm her election with her

employer and that because of the election, there was a potential overpayment. The activity

report also shows Phillips had an attorney at that time and there were repeated action items

involving correspondence or conversations with Phillips or her attorney related to her election.

When we consider MetLife’s reading of the SPD in light of the circumstances surrounding

Phillips’s election of her pension benefit, we cannot conclude the interpretation was not

disclosed.

        The SPD requires that Phillips “receive” pension benefits before they can be offset from

her LTD benefits. An average plan participant, based on the popular and ordinary meaning of

the provision concerning an offset for pension benefits “received,” would understand that the

election of a lump-sum distribution from a pension plan, regardless of how the participant

chooses to receive the distribution, would be paid to the participant, taken in by the participant,

and within the participant’s control. Thus, we conclude that a fair reading of the pension offset

provision is that Phillips “received” her pension benefits when she rolled the lump-sum

                                              - 31 -
distribution into an IRA. The second factor in our determination of whether the interpretation

was legally correct therefore weighs in MetLife’s favor.

       The first factor also supports the interpretation. The first factor requires consideration of

whether MetLife consistently applied the provision to similarly situated persons covered under

the policy. We ask whether MetLife has given the SPD a uniform construction. See Crowell,
541 F.3d at 312. Phillips does not address this factor. Instead, she asserts the three factors used

to analyze whether an interpretation was legally correct “are not considered at all” because the

review involves the SPD; she argues the rule of contra proferentem applies. While we agree the

rule of contra proferentem is implicated when the interpretation involves the SPD (if there is an

ambiguity), the rule is a more “particularized standard” that is used “in addition to the [three]

factors” outlined as part of the analysis in the first step. Horn, 424 Fed. Appx. at 314.

       To support their contention that MetLife gave the SPD a uniform construction, appellees

rely on the affidavits they attached as summary-judgment evidence—the affidavits of Donna

Chiffriller, a Verizon subsidiary’s corporate human resources vice president, and Matthew

Hallford, a MetLife litigation specialist. Chiffriller stated as part of her third paragraph that “any

distribution of pension benefits from the Verizon pension plan made pursuant to a participant’s

election, including but not limited to a lump sum distribution . . . rolled over into an IRA is

‘received’ by the participant” as the term “receive” is used in the SPD. Hallford testified in the

fifth paragraph of his affidavit that “pension benefits are consistently offset” from disability

benefits, “irrespective of the way the participant chooses to receive the pension benefit.” He

added there were “instances where a participant has disputed the offset provision of pension

benefits rolled over into a traditional [IRA],” MetLife’s interpretation included rollovers to IRAs,

and that the plan had been interpreted consistently to mean the participant “has received the

                                                - 32 -
pension benefit even if he or she has rolled the benefit over into an IRA.” Phillips objected to

these statements and argues as part of her third issue that the trial court erred in overruling her

objections.12

           Judicial review of ERISA benefits determinations generally is determined from the

administrative record, which “consists of relevant information made available to the

administrator prior to the complainant’s filing of a lawsuit and in a manner that gives the

administrator a fair opportunity to consider it.” Vega, 188 F.3d at 300. But there are limited

exceptions to this rule, such as “the admission of evidence related to how an administrator has

interpreted terms of the plan in other instances.” Estate of Bratton, 215 F.3d at 521; see also

Wildbur, 974 F.2d at 638 (“Determining whether the administrator has given a uniform

construction to a plan may require a court to evaluate evidence of benefit determinations other

than the one under scrutiny.”). Here, we conclude the statements made by Chiffriller, that any

distribution of pension benefits would be offset because they are “received,” and Hallford’s

statement that pension benefits are consistently offset from disability benefits regardless of how

the benefit is received, fall within the exception and may be considered as part of our analysis.

See Estate of Bratton, 215 F.3d at 521.

           Phillips’s final complaint is that the trial court erred by overruling her objection to

paragraph five of Hallford’s affidavit. Specifically, she argues “[s]aid paragraph is conclusory.”

Without deciding whether the rules of evidence are applicable, we conclude the trial court did

not abuse its discretion by overruling the objection. See Holloway v. Dekkers, 380 S.W.3d 315,

320 (Tex. App.—Dallas 2012, no pet.) (reviewing trial court’s decision to admit summary-

 12
   Phillips specifically objected to Chiffriller’s statement because she maintains it purports to express some person’s or entity’s intent as to the
SPD and expressions of intent are irrelevant. She also objected to certain attachments to Chiffriller’s affidavit because they were outside of the
administrative record. We do not consider her statement about intent or the attachments as part of our analysis. Therefore, we need not
determine whether the trial court properly overruled her objection on that basis. See TEX. R. APP. P. 47.1.

                                                                     - 33 -
judgment evidence for abuse of discretion). Hallford identifies his personal knowledge of the

statements in his affidavit regarding MetLife’s procedures for processing and administering

group disability plans, including claims under Verizon’s LTD Plan. He outlines how Verizon

notifies MetLife when a plan participant elects to receive pension benefits, including the amount

of offset to the participant’s LTD benefit. He then, in paragraph five, provides the referenced

testimony regarding consistent application of the offset. Phillips does not complain Hallford did

not have personal knowledge of the information. She also fails to identify what additional

underlying facts she would require. On this record, we conclude the trial court did not err in

overruling her objection to the entire paragraph as “conclusory.” Thus, to the extent Phillips

complains about the above statements of Hallford as part of her third issue, we overrule that

issue.

          Additionally, we note the affidavit statements regarding uniform application of the offset

are consistent with the record. The claim activity report shows that MetLife consulted with

Verizon about the interpretation of the pension offset provision and that Verizon informed

MetLife that the offset was correct because Phillips elected to receive her pension benefits.

Chiffriller and Hallford simply confirmed the interpretation presented in the administrative

record.

          The third factor in the analysis of whether MetLife’s interpretation was legally correct is

consideration of any unanticipated costs resulting from different interpretations of the Plan.

Ellis, 394 F.3d at 270. Although appellees generally argue that Phillips’s interpretation of the

pension offset provision would result in the unanticipated costs of higher benefit payments,

appellees did not present any factual support to guide us in determining the extent to which the

interpretation would impose unanticipated costs on MetLife or VEBC. Phillips did not present

                                                - 34 -
any argument related to this factor. Consequently, we do not address this factor. See Stone v.

UNOCAL Termination Allowance Plan, 570 F.3d 252, 258 n.4 (5th Cir. 2009).

       Based on our review of the relevant factors, we conclude MetLife’s interpretation of the

pension offset provision was legally correct and, therefore, the trial court properly granted

summary judgment on this basis. We overrule Phillips’s second issue.

                                      III. CONCLUSION

       We conclude the record shows a reasonable basis to support the calculation of Phillips’s

annual benefits compensation. We also conclude MetLife’s interpretation that lump sum pension

benefits elected by a participant and rolled over into an IRA constitute benefits “received” by the

participant for purposes of an offset to a monthly LTD amount. Thus, the trial court properly

granted summary judgment in favor of appellees.

       We further conclude the trial court did not err in overruling Phillips’s objections to

paragraph five of the Hallford affidavit or statements outside the administrative record that fall

within the exception. We do not reach the merits of the trial court’s other evidentiary rulings

relevant to Phillips’s third issue. The evidence made the subject of these rulings would not affect

our analysis or conclusion in this appeal. See TEX. R. APP. P. 47.1.

       Accordingly, we affirm the trial court’s judgment.

                                                   /Mary Murphy/
                                                   MARY MURPHY
                                                   JUSTICE

110678F.P05

                                              - 35 -
                                       S
                              Court of Appeals
                       Fifth District of Texas at Dallas
                                       JUDGMENT

JOANN PHILLIPS, Appellant                               On Appeal from the County Court at Law
                                                        No. 2, Dallas County, Texas
No. 05-11-00678-CV        V.                            Trial Court Cause No. CC-10-06957-B.
                                                        Opinion delivered by Justice Murphy.
METROPOLITAN LIFE INSURANCE                             Justice Francis participating.
COMPANY AND THE VERIZON
EMPLOYEE BENEFITS COMMITTEE,
Appellees

        In accordance with this Court’s opinion of this date, the trial court’s judgment is
AFFIRMED. It is ORDERED that appellees, Metropolitan Life Insurance Company and The
Verizon Employee Benefits Committee, recover their costs of this appeal from appellant Joann
Phillips.

Judgment entered this 10th day of May, 2013.

                                                    /Mary Murphy/
                                                    MARY MURPHY
                                                    JUSTICE

                                               - 36 -