The opinion of the court was delivered by: Judge Terrence F. McVerry
Magistrate Judge Lisa Pupo Lenihan
Currently before the Court for disposition are cross-motions for summary judgment in this ERISA action brought under 29 U.S.C. § 1l32(a)(1)(B) for review of a denial of benefits. The sole legal issue before the Court is which standard of review is to be applied to the denial of a claim for accidental death and dismemberment benefits--the de novo standard of review, or the more deferential arbitrary and capricious standard of review. Because the Court finds as a matter of law that the Policy does not contain either an express or implied delegation of discretionary authority to Connecticut General, the Court concludes that under Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the de novo standard of review should be applied to the denial of Plaintiff's claim for accidental death benefits.
I. STATEMENT OF RELEVANT FACTS
The issue before the Court is purely a legal one. By way of background, the relevant facts have been previously set forth in the Magistrate Judge's Report & Recommendation dated October 16, 2006 (Doc. 24) and in this Court's opinion dated September 28, 2007 (Doc. 36), and therefore, will not be reiterated here.
II. STANDARD OF REVIEW - CROSS-MOTIONS FOR SUMMARY JUDGMENT*fn1
Summary judgment is appropriate if, drawing all inferences in favor of the nonmoving party, "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56 (c). Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's case, and for which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
More specifically, the moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. Once that burden has been met, the nonmoving party must set forth "specific facts showing that there is a genuine issue for trial" or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Elec. Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis added by Matsushita court). An issue is genuine only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
When the parties have filed cross-motions for summary judgment, as in this case, the summary judgment standard remains the same. Transguard Ins. Co. of Am., Inc. v. Hinchey, 464 F.Supp.2d 425, 430 (M.D.Pa. 2006). "When confronted with cross-motions for summary judgment, . . . 'the court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the summary judgment standard.'" Id. (quoting Marciniak v. Prudential Fin. Ins. Co. of Am., No. 05-4456, 184 Fed. Appx. 266, 270 (3d Cir. June 21, 2006)). "If review of [the] cross-motions reveals no genuine issue of material fact, then judgment may be entered in favor of the party deserving of judgment in light of the law and undisputed facts." Id. (citing Iberia Foods Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998)).
"ERISA does not specify the standard of review that a trial court should apply in an action for wrongful denial of benefits." Post v. Hartford Ins. Co., 501 F.3d 154,160 (3d Cir. 2007). However, the United States Supreme Court has held that "a denial of benefits challenged under §1132(a)(1)(B) 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."*fn2 Firestone, 489 U.S. at 115. Hence, if the plan does not clearly grant such discretion, a de novo review is required.
Whether a plan confers discretionary powers upon a fiduciary depends upon the terms of the policy. Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176, 1180 (3d Cir. 1991). Discretionary powers may be implied as well as express. Id. ("no 'magic words,' such as 'discretion is granted . . . ,' need to be expressly stated . . . so long as the plan on its face clearly grants such discretion"(quoting De Nobel v. Vitro Corp., 885 F.2d 1180, 1187)(4th Cir. 1989)). In order to determine whether the plan language implicitly grants discretionary authority, the court must interpret the policy as a whole, and "in light of all the circumstances." Luby, 944 F.2d at 1180.
In this case, the parties agree that the Policy lacks an express grant of discretionary authority to CG to determine eligibility for benefits or to construe the terms of the Policy. Further, in its previous opinion on Defendant's Motion to Dismiss, this Court stated the Policy "does not contain any express provisions regarding the identity of the Plan Administrator(s) or fiduciaries, or the extent of any discretionary authority or control delegated to either the Plan Administrator(s) or fiduciaries. (Doc. 36 at 3.) However, the parties disagree as to whether the Policy grants CG implied discretionary authority to determine eligibility for benefits or to construe the terms of the Policy. Mrs. Erbe asks this Court to apply a de novo standard contending that the Policy contains no language which can be construed as conferring discretionary authority to determine eligibility for benefits or to construe the terms of the plan. (Doc. 53 at 6.) On the other hand, CG requests this Court to apply the arbitrary and capricious standard arguing that a delegation of discretionary authority to it can be implied from certain provisions in the Policy. Specifically, CG contends that three types of provisions in the Certificate,*fn3 when considered together, indicate CG was implicitly granted discretionary authority to determine eligibility for accidental death benefits: (1) provisions requiring that a claimant provide CG with "due proof of loss"; (2) a provision stating that CG has a right to demand a "medical exam of any claimant as often as it may reasonably require"; and (3) a provision requiring that the claimant submit to CG proof of "occurrence, character, and extent of loss." (Doc. 50 at 3.) The Court will examine these provisions, in turn.
A. Provisions Requiring "Due Proof" of Loss
CG first argues that provisions in a plan requiring a client to provide "due proof" or "satisfactory proof" to the insurer demonstrate that the insurer has the discretion to make benefits eligibility determinations and therefore warrants application of the arbitrary and capricious standard. In support of this argument, CG cites Pinto v. Reliance Standard Life Ins. Co., No. 97-5297, slip op. at 7 (3d Cir. May 28, 1998) ("Pinto I"); Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3d Cir. 2000) ("Pinto II"), a number of district court cases from this Circuit, as well as district court cases from the Sixth, Seventh, and Tenth Circuit, and a non-precedential decision from the Sixth Circuit. For the reasons that follow, the Court is not persuaded by either CG's argument or its cited authority.
The "due proof" of loss language in the Certificate, upon which CG relies, is contained in the ...