In a recent case out of the Southern District of Florida, the district court held that while the PNC Plan provided PNC with discretion to determine questions of coverage and eligibility for benefits, there was not a proper grant of discretion to the third-party administrator who actually made the claim decision, The Liberty Life Assurance Company (“Liberty Life”). The court explained that although the Plan permitted PNC to delegate its discretion to another party, the Plan did not contain a clear and unambiguous grant of discretion to Liberty Life. The court rejected PNC’s argument that it properly granted Liberty Life discretion in a separate, Administrative Services Agreement (“ASA”), explaining that the ASA was not a plan document and the discretionary language in the ASA was not appropriate to cloak Liberty Life’s decisions with full discretionary authority. Accordingly, the court determined that the de novo standard of review applied, rather than the more stringent, arbitrary and capricious standard of review. The court also determined that the denial of disability insurance benefits was de novo wrong and must be overturned.
Miller worked as a Branch Manager at PNC Financial Services Group, Inc. She participated in PNC’s employee welfare benefit plan and the plan provided salaried employees who were out of work for longer than ninety-one (91) days with Long-Term Disability benefits of up to 60% of their base salary.
Miller suffers from degenerative disc disease causing chronic back pain that radiates down to her hips and legs. Due to her condition, Miller has undergone five (5) surgical procedures in an attempt to alleviate the pain, has been unable to return to work, and thus made a claim for Long-Term Disability benefits under the PNC Plan.
Although the plan administrator determined that Miller was eligible for benefits at first, it later determined that she no longer met the definition of disability under the plan and terminated further benefits based on the findings of Liberty Life’s hired medical reviewers.
The Court determined that these physicians ignored Miller’s reliable evidence, establishing Miller’s disability and showed no sign of substantively addressing such evidence. The Court took issue with the fact that Liberty Life “ignored] inconvenient evidence.”