                                                                NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT


                                      No. 09-3414
                                      __________

                                DAVID MCDERMOTT

                                            v.

                      GMAC MORTGAGE GROUP, LLC
                  COMPREHENSIVE WELFARE BENEFITS PLAN,

                                                     Appellant.


                    On Appeal from the United States District Court
                       for the Eastern District of Pennsylvania
                              (D.C. No. 2-08-cv-05299)
                       District Judge: Hon. Legrome D. Davis


                       Submitted under Third Circuit LAR 34.1(a)
                                   on May 10, 2010


      Before: BARRY and ROTH, Circuit Judges and HILLMAN,* District Judge

                             (Opinion filed: August 6, 2010)


                                     OPINION

HILLMAN, District Judge:



      *
         Honorable Noel L. Hillman, United States District Judge for the District of New
Jersey, sitting by designation.
       GMAC Mortgage Group, LLC Comprehensive Welfare Benefits Plan (“the Plan”)

appeals the granting of David McDermott’s (“McDermott”) motion for summary

judgment. The District Court determined that McDermott was entitled to supplemental

long-term disability benefits under the Plan, and denied the Plan’s cross-motion for

summary judgment. The District Court had jurisdiction to consider the parties’ motions

under 29 U.S.C. §§ 1132(e)(1) and (f), as well as 28 U.S.C. § 1331, and we have

jurisdiction under 28 U.S.C. § 1291. We will affirm.

                                      I. Background

       On January 15, 2007, McDermott applied for supplemental long-term disability

coverage (“the Policy”), which was one component of the Plan offered by his employer,

GMAC Residential Capital Corporation, LLC (“GMAC”), and administered by

Metropolitan Life Insurance Company (“MetLife”). The effective date of the Policy was

April 1, 2007. Shortly after applying for the Policy, McDermott took a medical leave of

absence from January 19, 2007 until April 16, 2007. He then returned to work on April

17, 2007 for three months, until going out indefinitely as a result of illness again on July

17, 2007. After complying with the requisite waiting period and paying his premiums,

McDermott applied for benefits under the Policy. His application was denied by MetLife

in December 2007, on the grounds that he was not “actively at work” as of the effective

date of the Policy. McDermott’s appeals of this decision were also denied and the instant

litigation followed.



                                             -2-
          The District Court found that the Plan did not contain language sufficient to confer

discretionary authority on MetLife and, accordingly, that a deferential standard of review

of its denial of benefits was not appropriate. Applying a de novo standard of review, the

District Court considered two different provisions cited by the parties.

          First, the District Court considered the Short-Form Application for Individual

Disability Income Insurance (“the Application”), cited by the Plan, which provides:

                 MetLife will have no liability unless the Proposed Insured is
                 working 30 hours per week at the regular place of business of
                 the employer named in this application as of the effective date
                 of the policy, or is in school on a full-time basis if a student.

(App. at 44 (emphasis added).) If this provision controlled, McDermott would have been

properly denied benefits since he was on leave on April 1, 2007, the effective date of the

Policy.

          Second, the District Court considered the Summary Plan Description (“SPD”),

cited by McDermott, which provides:

                 When Does Coverage Begin?

                 If you are a new hire, your coverage for a particular benefit
                 begins on the date specified in Schedule A for that benefit and
                 remains in effect through December 31 of the calendar year in
                 which you first become eligible. Please note that you must be
                 Actively-at-Work as an eligible associate (see “Eligibility”
                 section page 6) in order for your benefit to become effective. If
                 you are not actively at work as an eligible associate when your
                 benefits would otherwise become effective, these benefits will
                 become effective on the date of your return to “Active Work” as
                 an eligible associate. “Actively-at-Work” or “Active Work”
                 means that you are performing all the material duties of your job

                                                -3-
              with the Employer where these duties are normally carried out.
              If you were Actively-at-Work on your last scheduled working
              day, you will be deemed Actively-at-Work while on a paid
              vacation or on a scheduled non-working day, provided you are
              not disabled.

(Id. at 21 (emphasis added).) In contrast to the Application, if this provision applied to

McDermott, by its terms the Policy became effective on April 17, 2007, the date he

returned from his leave.

       The District Court concluded that the SPD was susceptible to two possible

meanings, as it could be read to apply to all employees (McDermott’s position) or to new

hires only (the Plan’s position). Applying the doctrine of contra proferentem,1 the

District Court held that it must interpret the SPD in the manner most favorable to

McDermott, that when so interpreted the SPD conflicts with the Application, and that the

SPD must control when such a conflict exists. The District Court thus held that the

effective date of the Policy was April 17, 2007, the date McDermott returned to active

work, and MetLife erred in finding McDermott ineligible for benefits because he was not

at work on April 1, 2007.

       The Plan argues that the District Court erred in applying a de novo standard of

review, and that MetLife’s determination should have been reviewed under an arbitrary

and capricious standard because it was granted discretionary authority under the Plan.




       1
       “The doctrine that, in interpreting documents, ambiguities are to be construed
unfavorably to the drafter.” Black’s Law Dictionary 377 (9 th ed. 2009).

                                             -4-
Further, the Plan argues that the District Court erred in finding that a conflict existed

between the SPD and the Application. Instead, it argues, the SPD clearly and

unambiguously related to new hires, MetLife’s interpretation of the SPD was correct and

at the very least reasonable, and even if a conflict existed the Application should have

governed.

                                       II. Discussion

       This Court exercises plenary review over an appeal from a grant of summary

judgment. Jacobs Constructors, Inc. v. NPS Energy Servs., Inc., 264 F.3d 365, 369 (3d

Cir. 2001). Summary judgment is appropriate if there is no genuine issue of material fact

and the moving party is entitled to judgment as a matter of law. Id. (citing Fed. R. Civ. P.

56(c)). “In making this determination, we must consider the evidence in the record in the

light most favorable to the nonmoving party.” Id.

       It is well established that a court must apply a de novo standard of review to

adverse benefits determinations “unless the benefit plan gives the administrator or

fiduciary discretionary authority to determine eligibility for benefits or to construe the

terms of the plan,” in which case an arbitrary and capricious standard of review is

applied. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). In

determining the appropriate standard of review, a court must accordingly start with the

terms of the plan. Id. at 111. A plan’s grant of discretion can be either express or

implied, although a general grant of administrative power does not imply authority to



                                              -5-
determine specific benefits eligibility disputes. Luby v. Teamsters Health, Welfare &

Pension Trust Funds, 944 F.2d 1176, 1180 (3d Cir. 1991). Any ambiguity in the plan

must also be construed in favor of the insured. Heasley v. Belden & Blake Corp., 2 F.3d

1249, 1258 (3d Cir. 1993).

       The Plan argues that the SPD contains several provisions that when read together

with the Application grant MetLife discretionary authority. Specifically, the Plan refers

to the following three provisions of the SPD:

       •      [T]he Employer reserves the exclusive right, power and
              authority, in its sole and absolute discretion, to administer,
              apply and interpret the benefits plans described herein, and to
              decide all matter arising in connection with the operation
              and/or administration of such plans except for matters
              reserved to an insurance carrier under its policy issued in
              connection with this Plan or matters under the control of an
              independent claims fiduciary. (App. at 33.)

       •      The Employer designs eligibility conditions and benefits that
              will be provided under the policy . . . , the insurance company
              administers the policy. (Id. at 19.)

       •      To make a claim for benefits provided under the Plan, you
              should obtain a claim form from the insurance carrier or
              administrator providing the benefit. The form should be sent
              to the insurance carrier or administrator who makes the
              determination with respect to whether you are eligible to
              receive benefits.

              If your claim for benefits is denied for any reason, you have
              the right to appeal the denial directly with the insurance
              carrier or administrator providing the benefit.

              You may consult the applicable benefit booklet or contact the
              carrier or administrator for a complete description of the

                                            -6-
              claim procedure and the claim appeals procedures.

              The Employer does not have the authority to consider any
              claim made to an insurance carrier or decision the insurance
              carrier reaches. (Id. at 28.)

The Plan also refers to the following two provisions of the Application:

       •      Written proof of loss satisfactory to [MetLife] must be sent to us
              within 90 days after the end of each monthly period for which
              You claim benefits. (Id. at 53.)

       •      At [MetLife’s] expense, as often as is reasonably necessary, We
              may require You to have an independent examination by a
              Physician of Our choice. (Id.)

       We disagree that these provisions grant MetLife discretionary authority. Rather,

these provisions are at most a grant of decision-making authority to MetLife, and not a

grant of discretionary authority in making those decisions. See Ingram v. Martin Marietta

Long Term Disability Income Plan for Salaried Employees of Transferred GE

Operations, 244 F.3d 1109, 1112-13 (9th Cir. 2001) (“An allocation of decision-making

authority to MetLife is not, without more, a grant of discretionary authority in making

those decisions.”); Cathey v. Dow Chem. Co. Med. Care Program, 907 F.2d 544, 559 (5th

Cir. 1990) (distinguishing between allocation of authority to review claims and

discretionary authority).

       Although the SPD clearly reserved discretionary authority for the Employer,

GMAC did not make any of the decisions at issue in this case and there was no such

reservation of discretionary authority for MetLife. In the absence of any express or



                                             -7-
implied grant of discretionary authority to MetLife, we must apply a de novo standard in

reviewing MetLife’s denial of McDermott’s benefits.2

       The District Court carefully parsed the language of the SPD provisions and noted

that while they vest discretionary authority in the employer, they created “a cut-out in that

authority so that the employer’s authority does not extend to ‘matters reserved to an

insurance carrier under its policy issued in connection with this Plan.’” (App. at 5.) The

District Court also noted that the SPD “vest[ed] no authority, let alone discretionary

authority, in insurance carriers like MetLife.” (Id.) If GMAC intended to give MetLife

discretionary authority to interpret the language of the Plan it could have easily done so.

Having failed to do so, the District Court was correct to apply a de novo standard of

review.

       The Plan also argues that no conflict exists between the SPD and the Application,

because the SPD only applies to new hires. Further, even if a conflict were to exist, the

Plan argues, the SPD expressly integrates the Policy and the Plan, and provides that the

Plan governs in the event of any conflict. We disagree. The language of the SPD, which

is set forth above, can reasonably be interpreted as applying to all employees or to just

new employees. Faced with such ambiguity, the District Court was required, as we are, to




       2
         Having held that a de novo standard of review applies, we need not consider
either the Plan’s arguments regarding the application of an arbitrary and capricious
standard, or McDermott’s arguments regarding the untimeliness of MetLife’s
determination of his appeal.

                                             -8-
construe the SPD in favor of McDermott. Heasley, 2 F.3d at 1258. So construed, we find

that the SPD provides for an effective date of April 17, 2007, the day McDermott

returned to active work, for the Policy. This effective date governs regardless of any

conflicting language that may exist in the Application, the Policy, or the Plan, as it is well

established that a summary plan description governs when any conflict exists with the

plan language. Burnstein v. Ret. Account Plan for Employees of Allegheny Health Educ.

& Research, 334 F.3d 365, 379 (3d Cir. 2005) (holding that terms of summary plan

description governed over conflicting plan language even where it provided that the plan

would govern in the event of any differences between the documents). We therefore

conclude that MetLife erred when it found McDermott ineligible for benefits under the

Policy.

                                      III. Conclusion

          Accordingly, we will affirm the District Court’s order granting summary judgment

in favor of McDermott.




                                             -9-
