Cosey v. The Prudential Ins. Co., No. 12-2360 (4th Cir. 2013)

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Justia Opinion Summary

Plaintiff filed suit against Prudential, the plan administrator, and BioMerieux, her employer, after Prudential denied her long-term disability and short-term disability benefits. The district court entered summary judgment in favor of Prudential and BioMerieux. Plaintiff appealed. The court concluded that the language at issue in both plans was ambiguous and did not clearly confer discretionary decision-making authority on the plan administrator. Therefore, the administrator's eligibility determinations denying benefits to a covered employee were subject to de novo judicial review, and the district court erred in reaching a contrary conclusion. The court further held that the district court erred in concluding that the employer's group insurance plan required objective proof of disability in order for an employee to qualify for plan benefits. Accordingly, the court vacated and remanded for further proceedings.

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PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-2360 BETH A. COSEY, Plaintiff - Appellant, v. THE PRUDENTIAL INC., INSURANCE COMPANY OF AMERICA; BIOMERIEUX, Defendants - Appellees. Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Thomas D. Schroeder, District Judge. (1:11-cv-00121-TDS-JEP) Argued: September 20, 2013 Decided: November 12, 2013 Before DAVIS, KEENAN, and FLOYD, Circuit Judges. Vacated and remanded by published opinion. Judge Keenan wrote the opinion, in which Judge Davis and Judge Floyd joined. Norris Arden Adams, II, ESSEX RICHARDS, P.A., Charlotte, North Carolina, for Appellant. Patrick C. DiCarlo, ALSTON & BIRD LLP, Atlanta, Georgia, for Appellees. BARBARA MILANO KEENAN, Circuit Judge: In this appeal, we primarily consider whether certain short-term and long-term disability benefits plans provided by an employer unambiguously confer discretionary decision-making authority on the plan administrator, requiring judicial review of the administrator s benefits determinations under an abuseof-discretion standard. Upon our review, we conclude that the language at issue in both plans is discretionary and does decision-making administrator. eligibility ambiguous Therefore, determinations not clearly authority we hold denying that on the benefits confer the plan administrator s to a covered employee are subject to de novo judicial review, and that the district court erred in reaching a contrary conclusion. We further hold that the district court erred in concluding that the employer s group insurance plan requires objective proof of disability benefits. in order for an employee to qualify for plan Accordingly, we vacate the district court s judgment and remand the case for further proceedings. I. Beth A. Cosey was employed as a senior clinical marketing manager company. for BioMerieux, Inc., a large medical diagnostics BioMerieux has a group insurance contract with the 2 Prudential Insurance Company of America (Prudential), which acts as claims administrator long-term benefits disability plans Prudential. plans. for (LTD) short-term benefits (collectively, the disability under benefits (STD) employee plans) and welfare issued by Cosey was a participant in the STD and LTD benefits Under both plans, a participating employee is entitled to disability benefits if she is unable to perform the material and substantial duties of [her] regular occupation due to [her] sickness or injury (emphasis omitted). Near the end of May 2007, Cosey did not report for work and submitted a claim for disability benefits, hypotension, weight loss, and sleep apnea. 1 citing fatigue, Prudential initially 1 The evidence in the record before us contains a number of medical terms, several of which are defined, in relevant part, as follows: (1) Disequilibrium is [a] disturbance or absence of equilibrium, Stedman s Medical Dictionary 566 (28th ed. 2006); (2) Dysautonomia is [a]bnormal functioning of the autonomic nervous system, id. at 595; (3) Fibromyalgia is [a] common syndrome of chronic widespread soft-tissue pain accompanied by weakness, fatigue, and sleep disturbances, id. at 725; (4) Hypersomnia is [a] condition in which sleep periods are excessively long, but the person responds normally in the intervals, id. at 926; (5) Hypotension is [s]ubnormal arterial blood pressure, id. at 937; (6) Myoclonus is [o]ne or a series of shocklike contractions of a group of muscles, of variable regularity, synchrony, and symmetry, generally due to a central nervous system lesion, id. at 1272; (Continued) 3 approved Cosey s claim and allowed benefits covering about a three-week period, after which Prudential determined that Cosey had presented insufficient evidence of an impairment preventing her from performing the material and substantial duties of her regular occupation. employment in June BioMerieux 2008, and eventually Cosey filed terminated a civil Cosey s action in federal court to recover STD and LTD benefits. BioMerieux re-hired Cosey in August 2008, allowing her to work from home and assigning her to a limited travel schedule. Several months later, BioMerieux and Cosey reached a settlement agreement in Cosey s lawsuit. In March 2009, after Cosey had been working at BioMerieux in a limited unscheduled benefits. sleep capacity leave about filed seven another months, claim for Cosey took disability In support of her claim, Cosey complained of fatigue, disorder, dizziness. and for fibromyalgia, dysautonomia, myoclonus, and Prudential initially approved Cosey s claim and paid her STD benefits for about seven weeks. (7) Sleep apnea is a disorder associated with frequent awakening during sleep and often with daytime sleepiness, id. at 119; (8) Tremor[s] are [r]epetitive, often regular, oscillatory movements caused by alternate, or synchronous, but irregular contraction of opposing muscle groups; usually involuntary, id. at 2023. 4 Cosey s consultations varying medical instance, fatigue opinions Cosey by physician a established. with initially primary noted with that various regard was care her evaluated physician Cosey to physicians had in [n]o produced condition. for May For overwhelming 2007, but that diagnosis/treatment Later that month, a different doctor diagnosed Cosey with hypersomnia despite her normal sleep at night, an essential tremor that was currently asymptomatic, and chronic disequilibrium despite there being no evidence of cerebellar dysfunction. Further consultations impressions. yielded similarly inconclusive A neurologist diagnosed Cosey with sleep apnea, but stated that the disorder was not severe enough to explain the degree of day time sleepiness. An endocrinologist remarked that Cosey had lost more than thirty pounds in six months, but also noted that Cosey had improved 60% over the last few months of that period and was spontaneously getting better. Although Cosey reported experiencing dizziness, fatigue, and tremors, one neurologist stated that an examination of Cosey was relatively unremarkable after a near complete workup, and a neuropsychologist stated that there are not suggestions of neurocognitive impairment. A cardiologist reported that Cosey had experienced a temporary drop in blood pressure, but opined that she otherwise was 5 in normal cardiovascular condition. Cosey initially told the cardiologist that she was experiencing overwhelming fatigue, but later told the same doctor that she was able to play golf on the weekends, and was no longer having the dizziness or lightheaded episodes. On the basis of this mixed record, the various physicians reached different conclusions about Cosey s ability to return to work. Cosey s In support primary of Cosey s care claim physician for opined disability that benefits, [t]here is no occupation that [Cosey] can sustain at this time and I deem her condition permanent. Also, Cosey s chiropractor thought that Cosey suffered from a structural deficit in her cervical spine and doubted whether Cosey could handle the everyday needs of work. In contrast, four medical reviewers hired by Prudential studied Cosey s patient records and concluded that Cosey s test results did not support a finding of impairment, that there was no medical explanation for Cosey s self-reported symptoms, and that Cosey s condition did not preclude her from engaging in full-time work. Additionally, Prudential hired a company to conduct surveillance of Cosey, which revealed that Cosey had opened a Carolina, stopped coupon-related less working than for one business month BioMerieux. 6 in after Myrtle she Also, most Cosey Beach, South recently was had observed outside her house standing, walking, bending, entering and exiting a vehicle and driving. On May 15, 2009, Prudential notified Cosey that it would not authorize further payments unless Cosey submitted additional medical information supporting her continued disability. Cosey did not timely submit additional evidence in response to that request. Prudential informed Cosey that it had determined that the evidence of her claimed impairment was insufficient, and that, therefore, she was not entitled to further STD benefits. Cosey filed termination of an her administrative STD benefits, appeal but the of Prudential s plan administrator upheld the earlier decision and also declared Cosey ineligible for LTD benefits. administrative decisions. The Cosey retained counsel and filed a second appeal, plan requesting administrator reconsideration again upheld its of both earlier determinations, stating its finding that Cosey s self-reported symptoms are out of proportion to the medical evidence. After exhausting her administrative remedies, Cosey filed the present civil action against Prudential and BioMerieux. The district court applied an abuse-of-discretion standard of review to Prudential s denial of LTD and STD benefits. The court held that the plan administrator s decisions did not constitute an abuse of discretion, and that Cosey had failed to create a genuine issue of material fact for the court s determination. 7 The court alternatively held that even applying a de novo review standard, the court would still find that Cosey failed to meet the definition of disability under the benefits plans. The district court entered summary judgment in favor of Prudential and BioMerieux, and Cosey timely filed the present appeal. II. Before considering the district court s award of summary judgment, we first must determine whether the district court employed the appropriate standard of review in examining the plan administrator s denial of LTD and STD disability benefits. We consider the LTD and STD benefits plans in turn. A. The LTD benefits plan before us is subject to the Employee Retirement Income Security §§ 1001 through 1461. Act of 1974 (ERISA), 29 U.S.C. In the ERISA context, courts conduct de novo review of an administrator s denial of benefits unless the plan grants claimant s the administrator eligibility for discretion benefits, in to determine which case a the administrator s decision is reviewed for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989); see also Williams v. Metro. Life Ins. Co., 609 F.3d 622, 629-30 (4th Cir. 2010). 8 This Court explained in Gallagher v. Reliance Standard Life Insurance Co. that no specific words or phrases are required to confer discretion, but that a grant of discretionary authority must be clear. 305 F.3d 264, 268 (4th Cir. 2002); see also Sandy v. Reliance Standard Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir. 2000) ( Neither the parties nor the courts should have to divine whether discretion is conferred. ). We further have stated that any ambiguity in an ERISA plan is construed against the drafter of the plan, and it is construed in accordance with the reasonable expectations of the insured. Gallagher, 305 F.3d at 269 (citation and internal quotation marks omitted). The LTD plan administered by Prudential states that benefits only will be paid to a claimant who submit[s] proof of continuing added). disability Prudential satisfactory and to BioMerieux Prudential (collectively, (emphasis Prudential) argue that under our decision in Gallagher, we are required to determine that this language in the LTD confers discretion on the plan administrator. plan unambiguously We disagree. In Gallagher, we observed that plan language requiring a claimant to submit[] satisfactory proof of [t]otal [d]isability to us was ambiguous, and could be interpreted as requiring either an objective or a subjective standard for determining whether a claimant s proof was satisfactory. added). Therefore, we held that 9 the plan Id. (emphasis language did not clearly convey that the plan administrator had discretionary decision-making authority in deciding benefits claims. Id. at 269-70. In explaining our decision in Gallagher, we provided an example of a subjective standard different from the language at issue in that case. We noted hypothetically that a requirement that a claimant submit proof . . . that is satisfactory to [the plan administrator] would refer to proof that the administrator finds subjectively satisfactory, and would occasion abuse-ofdiscretion review. Id. at 269. However, because the language provided in the above hypothetical example was not before us for decision in Gallagher, we hold that our discussion of that language was dictum and does not bind our consideration of the plan language before us. Accordingly, we consider as a matter of first impression whether the phrase proof satisfactory to [the plan administrator] unambiguously confers discretionary decision-making authority on a plan administrator. We observe that five of our sister circuits recently have held that this language discretionary authority. does not unambiguously confer such In fact, earlier this year the First Circuit followed the Seventh Circuit s example in departing from its own precedent to join a growing consensus of circuit courts that require stricter clarity in plan language before insulating insurance companies from full judicial review. 10 See Gross v. Sun Life Assurance Co. of Can., --- F.3d ---, 2013 WL 4305006, at *8-12 (1st Cir. Aug. 16, 2013); Diaz v. Prudential Ins. Co. of Am., 424 F.3d 635, 639-40 (7th Cir. 2005); see also Viera v. Life Ins. Co. of N. Am., 642 F.3d 407, 417 (3d Cir. 2011); Feibusch v. Integrated Device Tech., Inc. Emp. Benefit Plan, 463 F.3d 880, 883-84 (9th Cir. 2006); Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 252 (2d Cir. 1999). We agree with the conclusions reached by our five sister circuits. Three major themes pervade the courts and are relevant to our analysis. inherent ambiguity in the wording opinions of those We consider: (1) the of the phrase proof satisfactory to us ; (2) the likelihood that such language will fail to provide disability sufficient claims discretionary will be notice subject determination; and to to (3) employees a plan the that their administrator s responsibility of insurance companies to draft clear plan language. First, we conclude that the phrase proof satisfactory to us is inherently ambiguous. As the Second Circuit has explained, such language could be construed as simply stating the truism that the administrator is the decision-maker who initially must be persuaded that benefits should be paid before any amounts actually are paid. See Kinstler, 181 F.3d at 252. Or, as the First, Third, and Seventh Circuits have observed, the phrase could be interpreted as 11 describing the inevitable prerogative of a plan administrator to insist that the form of proof complies with prescribed standards, on the theory that an administrator ought to production submission of on proof, [one administrator and of form the proof deems of Diaz, 424 F.3d at 637, 639 ( [E]very plan requires insist the require reliable. documentary that to types to proof able particular entitled of be most administrator over is another]. (citations omitted)); see also Viera, 642 F.3d at 417 ( In other words, it is . . . proof . . . proof not of clear loss of [in loss whether a satisfactory form] to satisfactory [substantively and Us to means Us or subjectively] satisfactory to Us. ) (brackets in original); Gross, 2013 WL 4305006, at *11 (explaining that satisfactory to us wording reasonably may be understood to state [an administrator s] right to insist on certain forms of proof rather than confer[] discretionary authority over benefits claims ). Similarly, the phrase could mean that the plan administrator is entitled to require that the quantum of proof meets some objective standard that the administrator ultimately has no power to change. Cf. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1089 (9th Cir. 1999). Another possible reading, of course, is that the evidence must comply with the plan administrator s subjective notions of eligibility, disability, or other terms in the plan. 12 Diaz, 424 F.3d at 639. From this perspective, the administrator would be vested not only with the power to insist on proof in a certain form or quantum, but also with the discretion to interpret the rules, to implement entirely. the rules, and even to change them Id. In view of the ambiguity of this plan language, a decision here in favor of Prudential would violate our requirement of clear plan authority. 522 (4th language that expressly creates discretionary Feder v. Paul Revere Life Ins. Co., 228 F.3d 518, Cir. (requiring an 2000); cf. Gross, administrator 2013 to offer WL 4305006, more at than *11 subtle inferences drawn from such unrevealing language to support the administrator s claim of discretionary authority). Thus, we cannot accord Prudential such an expansive inference regarding its plan administrator s decision-making authority. The second reason for our conclusion that the phrase proof satisfactory to us does not confer discretion on an administrator involves the notice function of plan language. We identified this notice function as an important consideration in Gallagher, in which we held in part that a plan did not clearly confer discretion language would because not be an such a construction insured interpretation of that language. 13 employee s 305 F.3d at 270. of the most plan s likely We are concerned that insured employees who read Prudential s ambiguous plan language are not given sufficient notice whether their plan administrator has broad, unchanneled discretion to deny claims. internal quotation marks Diaz, 424 F.3d at 637 (citation and omitted). It is critical that employees understand the broad range of a plan administrator s authority because of the impact that this information can have on employees own decisions. For instance, as the Seventh Circuit has noted, employees may choose a particular employer based on their understanding of the insurance benefits provided by that employer, including whether any award of benefits is subject to a plan administrator s discretionary decision-making authority. See id. at 639 ( [S]ome may prefer the certainty of plans that do not confer discretion on administrators, while others may think that the lower costs that are likely to attend plans with reserved discretion are worth it. ). Additionally, without clear language notifying employees that an administrator s denial of benefits is insulated from plenary judicial review, employees who file claims for benefits may not be fully aware of the gravity of administrative proceedings or the necessity of developing as complete a record as possible early in the claims process. Even a claimant s decision whether to be represented by counsel in administrative proceedings can be affected if the claimant is aware that once 14 administrative avenues of appeal are exhausted, federal courts will review the administrator s determinations under a highly deferential legal standard. 2 The third basis for our conclusion that the phrase proof satisfactory to us is insufficient to confer discretion on a plan administrator ambiguities in an is the ERISA well-settled plan must be principle construed administrator responsible for drafting the plan. 305 F.3d at 269. against that the See Gallagher, As the First Circuit recently observed, it is not difficult to craft clear language granting discretion to a plan administrator. Gross, 2013 WL 4305006, at *12; see also Feibusch, 463 F.3d at 883-84 (same); Kinstler, 181 F.3d at 252 (counseling courts to decline to search in semantic swamps for arguable grants of discretion given the ease in drafting clear language). We acknowledge that no magic words are required to ensure discretionary, rather than de novo, judicial review of a plan administrator s decision. Gallagher, 305 F.3d at 268. However, we also agree with the First Circuit s observation that drafters of ERISA plans have had every 2 opportunity to avoid adverse We note that Cosey appears to have corresponded with Prudential on her own during the processing of her STD claim and her initial administrative appeal of Prudential s termination of STD benefits. She hired counsel to assist her in further administrative proceedings and in civil litigation. 15 rulings on this issue, especially in light of the gradual but unmistakable appellate change in decisions. the precedential landscape See Gross, WL 2013 of 4305006, federal at *12. Indeed, the group insurance contract in the record is dated May 1, 2007, well after the Second, Seventh, and Ninth Circuits already had rejected as inadequate the proof satisfactory to us formulation that we consider here. For these reasons, we now join the circuits that decline to impose an abuse-of-discretion standard of review based solely on a plan s requirement that claimants submit proof . . . satisfactory to [the plan administrator]. 3 This conclusion complements our holding in Gallagher, by requiring clear plan language expressly conferring decision-making discretion on a plan administrator before permitting judicial review of that administrator s discretion standard. court erred in decision under an abuse-of- Accordingly, we hold that the district reviewing the plan 3 administrator s denial of We therefore disagree with the minority of circuits that have concluded that language similar to the language before us confers discretionary decision-making authority on a plan administrator. See Tippitt v. Reliance Standard Life Ins. Co., 457 F.3d 1227, 1233-34 (11th Cir. 2006); Nance v. Sun Life Assurance Co. of Can., 294 F.3d 1263, 1267-68 (10th Cir. 2002); Ferrari v. Teachers Ins. & Annuity Ass n, 278 F.3d 801, 806 (8th Cir. 2002). 16 Cosey s claim for LTD benefits under an abuse-of-discretion standard. 4 B. We next address the plan detailing Cosey s STD benefits. The parties have stipulated, and we agree, that the STD plan is not governed appropriate standard administrator s plan. 6 ERISA. 5 by benefits Therefore, for judicial determination we must ascertain review under the of a present the plan STD We hold that the STD plan did not confer discretionary 4 We are not persuaded to the contrary by Prudential s citation to the summary plan description for the LTD plan, which provides, in relevant part, that the administrator has sole discretion to interpret the terms of the Group Contract, to make factual findings, and to determine eligibility for benefits. We think this argument is foreclosed by the Supreme Court s decision in CIGNA Corporation v. Amara, 131 S. Ct. 1866, 1878 (2011), in which the Court concluded that the summary documents, important as they are, provide communication with beneficiaries about the plan, but that their statements do not themselves constitute the terms of the plan (emphasis in original). Moreover, because we have determined that the language of the LTD plan is ambiguous and have construed that ambiguity against Prudential, we find no basis for crediting a conflicting grant of authority contained in a non-plan document. 5 As the district court noted, the basis for the parties stipulation is an exemption from ERISA for agreements whereby an employer pays an employee s normal compensation out of the employer s general assets during a period in which the employee is physically or mentally unable to perform her duties. See 29 C.F.R. § 2510.3-1(b)(2). 6 Some circuits have reached different conclusions on the separate issue whether abuse-of-discretion review may be applied with respect to certain ERISA-exempt plans. Compare Comrie v. IPSCO, Inc., 636 F.3d 839, 842 (7th Cir. 2011) (applying (Continued) 17 decision-making authority on the plan administrator, and that, therefore, the district court erred in reviewing the plan administrator s denial of Cosey s STD benefits claim under an abuse-of-discretion standard. We begin our analysis by consulting familiar principles of North Carolina contract law, which we apply to the benefits plan before us. 7 contract, parties the In North court s intention as Carolina, primary when function expressed in a court is their to interprets ascertain written a the instrument. See Lane v. Scarborough, 200 S.E.2d 622, 624 (N.C. 1973). If deferential review and noting that it should be easier, not harder to effectuate a grant of discretion in a standard contract than in a highly regulated ERISA plan), with Goldstein v. Johnson & Johnson, 251 F.3d 433, 442-44 (3d Cir. 2001) (applying de novo review to an ERISA-exempt, top hat deferred compensation plan even when the plan conferred discretionary authority on a plan administrator not acting as an ERISA fiduciary), and Craig v. Pillsbury Non-Qualified Pension Plan, 458 F.3d 748, 752 (8th Cir. 2006) (adopting an intermediate standard). However, we need not reach this issue in the present case because we conclude that the contractual terms of the STD plan did not confer discretion on the plan administrator. 7 Although the group insurance contract states that [t]he Group Contract is delivered in and is governed by the laws of the Governing Jurisdiction, which is defined as the State of Missouri, the parties in this case asked the district court to interpret the STD plan under North Carolina law. On appeal, both parties likewise have argued the case based on the trial court s application of North Carolina law. Accordingly, we apply North Carolina law in our analysis. Cf. Am. Fuel Corp. v. Utah Energy Dev. Co., 122 F.3d 130, 134 (2d Cir. 1997) ( [W]here the parties have agreed to the application of the forum law, their consent concludes the choice of law inquiry. ). 18 the plain language of a contract is clear, the intention of the parties is inferred from the words of the contract considered as a whole. See State v. Philip Morris USA Inc., 685 S.E.2d 85, 90 (N.C. 2009) (citations omitted). Only when terms of to apply rules authorized Casstevens, 23 a S.E.2d contract of 303, are ambiguous construction. 305 (N.C. See 1942). are courts Jones Any v. such ambiguities in contract language must be construed against the party responsible Novacare Orthotics for & drafting the Prosthetics uncertain E., S.E.2d 918, 921 (N.C. Ct. App. 2000). Inc. language. v. Speelman, See 528 And, in the context of insurance contracts, North Carolina courts long have held that ambiguities must be construed in favor of the insured. See, e.g., Kirkley v. Merrimack Mut. Fire Ins. Co., 59 S.E.2d 629, 631 (N.C. 1950); McCain v. Hartford Live Stock Ins. Co., 130 S.E. 186, 187 (N.C. 1925). Prudential argues that the STD plan requirement that claimants submit satisfactory proof of continuing disability is a grant of discretionary decision-making authority. In response, Cosey submits that this phrase in the STD plan is indistinguishable from the very similar language that we held ambiguous in Gallagher. See 305 F.3d at 269. We agree with Cosey that the satisfactory proof language in the STD plan is the functional equivalent of the language we 19 held ambiguous in Gallagher. As we discussed in Gallagher, a requirement that a claimant submit satisfactory proof could be interpreted as mandating proof that is objectively satisfactory, or proof that is subjectively satisfactory to the plan administrator. the parties ordinary Id. intention principles of Because we are unable to determine from the contract language of construction the contract, compel us to construe this ambiguous phrase in favor of Cosey, the insured employee, and conclude discretionary that the decision-making STD plan authority fails on to confer the plan administrator. Our conclusion is not altered by Prudential s contention that any ambiguity in the STD plan should be resolved against Cosey because administrator of in the a clear separate grant of discretion Administrative to Services the plan Agreement (ASA), which Prudential asserts we must view as an integral part of the STD plan. 8 The unsigned ASA in the record purports to have been negotiated between BioMerieux and Prudential more than eight months after the commencement of Cosey s coverage under 8 Because we apply state law to decide whether the ASA is a part of the ERISA-exempt STD plan at issue in this case, we do not reach the question whether an ASA can confer discretion absent a discretionary grant in an ERISA plan. Therefore, the ERISA cases cited by the parties are inapposite. We note, however, that in the ERISA context, the Supreme Court s decision in Amara has cast serious doubt on whether non-plan documents can be used to interpret a plan s language. See supra note 4. 20 the STD and LTD plans. Among other things, the ASA states that Prudential discretionary will have authority to determine eligibility for benefits and to interpret and construe the terms of the Plan. Prudential s reliance on the ASA is misplaced. plan does not incorporate or even refer to the ASA. The STD Cf. Booker v. Everhart, 240 S.E.2d 360, 363 (N.C. 1978) ( To incorporate a separate document by reference is to declare that the former document shall be taken as part of the document in which the declaration is made, as much as if it were set out at length therein. ). parties Absent any terms in the contract elaborating the intention administrator, we to decline confer to hold discretion that the on ASA s the plan grant of discretion constitutes a part of the STD plan, particularly when doing so would conflict with our duty under North Carolina law to construe ambiguous contract terms against the drafter and in favor of the insured. 9 does not confer Therefore, we conclude that the STD plan decision-making discretion on the plan administrator, and that the district court erred in applying abuse-of-discretion review to the plan administrator s denial of Cosey s STD benefits claim. 9 In view of our holding that the language of the STD plan is ambiguous and must be construed in Cosey s favor, we need not discuss the fact that the version of the ASA in the record is unsigned. 21 III. Generally, we review a district court s award of summary judgment de novo, applying the same standards as those governing the district court s review of the record. Cf. Felty v. Graves- Humphreys Co., 818 F.2d 1126, 1127-28 (4th Cir. 1987). As we have discussed above, the district court was required to review de novo the decisions of the plan administrator with respect to Cosey s LTD and STD claims. After the district court reviewed the plan administrator s decision for abuse of discretion, the court alternatively opined that even under a de novo review, the court would still find that Cosey failed to meet the definition of disability in the STD and LTD benefits plans. Cosey argues that the district court s use of an incorrect standard of review, and the court s erroneous view that both benefits plans required Cosey to present objective evidence of her disability, mandates reversal of the summary judgment award. In response, Prudential asserts that the court s de novo review of the plan administrator s decision permits us to conduct our own de novo review of that alternative holding, and that the district court did not err in holding that Cosey was required to present objective evidence that she was disabled. We district disagree court s with Prudential s alternative holding argument. referenced Although the the correct standard of review, we presently are unable to consider that 22 holding because it was based in part on the court s ruling that Cosey was required disability. to present objective evidence of her The district court articulated its requirement of objective proof, stating: Both the STD and LTD benefits plans state that the claimant is required to submit proof of disability to receive benefits. The use of the word proof communicates that there must be some objective basis to the claimant s complaints, or plan administrators would have to accept all subjective claims of the participant without question. It is hardly unreasonable for the administrator to require an objective component to proof of disability (citations, internal quotation marks, and brackets omitted). We draft express a no benefits opinion plan whether requiring objective proof of disability. a company that a lawfully claimant could produce However, no such requirement appears in either the LTD or the STD plans before us. Neither plan provides that a claimant s submission of proof must contain an objective component. See DuPerry v. Life Ins. Co. of N. Am., 632 F.3d 860, 869 (4th Cir. 2011) (holding that under a plan contain[ing] no provision precluding [a claimant] from relying on her subjective complaints as part of her evidence of disability, a claim cannot be denied based on such reliance). Therefore, we hold that the district court erred in concluding that Prudential could deny Cosey s STD and LTD claims on the basis that her proof lacked such objective evidence. 23 Further, because this improper consideration was part of the district court s ultimate award of summary judgment in Prudential s favor, we must vacate the award and remand for the court to review Cosey s evidence de novo under the actual requirements of the LTD and STD plans. IV. In summary, we conclude that the language of both the STD and the LTD plans is inherently ambiguous and fails to confer discretionary decision-making authority on Prudential, requiring de novo judicial review of the administrator s denial of Cosey s benefits claims under those plans. We therefore hold that the district court erred in reviewing Prudential s decisions for an abuse of discretion. erred in disability requiring when We further hold that the district court objective neither the contain such a requirement. LTD evidence nor the of STD Cosey s claimed benefits plans Accordingly, we vacate the district court s award of summary judgment and remand with instructions that the court apply de novo review to the plan administrator s denial of Cosey s LTD and STD benefits claims. VACATED AND REMANDED 24