Viera v. Life Insurance Co. of North America

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)
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 employer-
provided 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.

2
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.

3
 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 anti-
coagulant 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 INR2 significantly 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.

4
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;

5
 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.

6
(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.

7
 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.

8
 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).

9
 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).

10
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

11
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.

12
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

13
 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,6 by 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-of-
discretion 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.

14
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

15
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 language7 and 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).

16
(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).

17
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,

18
 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).

19
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.”).

20
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 abuse-
of-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

21
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.”).

22
 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 last-
antecedent 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.

23
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

24
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

25
(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.

26