                                PUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                               No. 12-2360


BETH A. COSEY,

                 Plaintiff - Appellant,

           v.

THE PRUDENTIAL    INSURANCE    COMPANY   OF   AMERICA;   BIOMERIEUX,
INC.,

                 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 abuse-

of-discretion standard.

       Upon our review, we conclude that the language at issue in

both    plans        is     ambiguous        and        does       not     clearly           confer

discretionary             decision-making              authority          on       the         plan

administrator.            Therefore,     we       hold      that    the     administrator’s

eligibility        determinations        denying            benefits        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      in    order     for     an    employee         to        qualify       for    plan

benefits.     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     for      BioMerieux,      Inc.,        a       large    medical        diagnostics

company.      BioMerieux has a group insurance contract with the

                                              2
Prudential Insurance Company of America (Prudential), which acts

as   claims    administrator     for   short-term   disability       (STD)    and

long-term      disability    (LTD)     benefits   under    employee    welfare

benefits      plans   (collectively,     the   benefits    plans)    issued    by

Prudential.        Cosey was a participant in the STD and LTD benefits

plans.     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,    citing    fatigue,

hypotension, weight loss, and sleep apnea. 1          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.      BioMerieux        eventually    terminated    Cosey’s

employment    in   June   2008,   and    Cosey     filed   a   civil    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   capacity     for     about    seven     months,     Cosey   took

unscheduled     leave     and   filed        another   claim    for    disability

benefits.     In support of her claim, Cosey complained of fatigue,

sleep     disorder,     fibromyalgia,         dysautonomia,    myoclonus,        and

dizziness.     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           with     various       physicians      produced

varying medical          opinions     with    regard       to    her     condition.      For

instance,      Cosey        initially      was      evaluated       for     “overwhelming

fatigue”    by    a    primary      care    physician      in     May     2007,   but    that

physician      noted        that    Cosey      had     “[n]o       diagnosis/treatment

established.”          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          yielded       similarly         inconclusive

impressions.          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     in        normal     cardiovascular

                                              5
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.     In    support    of    Cosey’s      claim    for    disability        benefits,

Cosey’s   primary      care      physician      opined       that    “[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    coupon-related         business        in     Myrtle      Beach,        South

Carolina,      less   than      one   month    after       she    most    recently      had

stopped   working      for      BioMerieux.        Also,         Cosey    was    observed



                                           6
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      an    administrative            appeal    of     Prudential’s

termination         of   her    STD    benefits,         but    the    plan    administrator

upheld the earlier decision and also declared Cosey ineligible

for LTD benefits.               Cosey retained counsel and filed a second

administrative             appeal,        requesting          reconsideration         of    both

decisions.           The    plan     administrator            again   upheld    its    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     Act    of   1974    (ERISA),    29   U.S.C.

§§ 1001 through 1461.          In the ERISA context, courts conduct de

novo review of an administrator’s denial of benefits unless the

plan    grants     the   administrator       discretion       to   determine    a

claimant’s       eligibility    for    benefits,         in   which   case     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        disability      satisfactory        to    Prudential”        (emphasis

added).       Prudential     and    BioMerieux        (collectively,        Prudential)

argue that under our decision in Gallagher, we are required to

determine     that    this     language    in    the       LTD    plan    unambiguously

confers discretion on the plan administrator.                     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.”                          Id. (emphasis

added).       Therefore,     we    held   that    the      plan    language     did    not

                                          9
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-of-

discretion 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          does    not    unambiguously     confer    such

discretionary authority.            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.                      See Gross v. Sun

                                               10
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    opinions      of     those

courts and are relevant to our analysis.                           We consider: (1) the

inherent       ambiguity        in   the     wording         of     the    phrase       “proof

satisfactory to us”; (2) the likelihood that such language will

fail    to    provide     sufficient        notice       to       employees      that     their

disability      claims     will      be   subject       to    a    plan    administrator’s

discretionary        determination;         and     (3)       the     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    describing            the    “inevitable

                                             11
prerogative” of a plan administrator to insist that the form of

proof complies with prescribed standards, on the theory that an

administrator           ought       to    be        able    to      require    production         of

particular     types         of     proof      that      the     administrator       deems       most

reliable.      Diaz, 424 F.3d at 637, 639 (“[E]very plan requires

submission         of    documentary           proof,        and     the    administrator          is

entitled      to    insist         on     [one       form      of   proof     over    another].”

(citations omitted)); see also Viera, 642 F.3d at 417 (“In other

words,   it    is       not       clear       whether       ‘satisfactory       to    Us’     means

‘. . . proof        of       loss       [in     a    form]       satisfactory        to    Us’     or

‘. . . proof            of        loss        [substantively            and      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.”                                     Diaz, 424

                                                    12
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          the        rules,     and     even   to      change      them

entirely.”      Id.

      In view of the ambiguity of this plan language, a decision

here in favor of Prudential would violate our requirement of

clear    plan     language          that        “expressly        creates      discretionary

authority.”       Feder v. Paul Revere Life Ins. Co., 228 F.3d 518,

522   (4th      Cir.       2000);       cf.     Gross,     2013    WL    4305006,       at    *11

(requiring       an        administrator             to   “offer     more      than       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          because          such    a   construction      of    the     plan’s

language     would         not     be    an     insured     employee’s        “most     likely”

interpretation of that language.                      305 F.3d at 270.



                                                 13
       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.”            Diaz, 424 F.3d at 637 (citation and

internal     quotation      marks     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     is    the         well-settled    principle       that

ambiguities     in    an   ERISA   plan    must    be   construed    against   the

administrator responsible for drafting the plan.                   See Gallagher,

305 F.3d at 269.       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       opportunity    to   avoid   adverse


       2
       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       change        in    the   precedential         landscape        of    federal

appellate       decisions.            See    Gross,       2013    WL    4305006,        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             decision    under      an     abuse-of-

discretion standard.                  Accordingly, we hold that the district

court     erred    in     reviewing         the    plan    administrator’s         denial      of




      3
       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    by     ERISA. 5      Therefore,     we   must   ascertain    the

appropriate       standard       for     judicial      review       of   a     plan

administrator’s     benefits        determination     under   the    present   STD

plan. 6   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         In   North    Carolina,     when    a     court    interprets    a

contract,    the       court’s      primary     function       is   to   ascertain   the

parties’    intention        as     expressed    in   their     written     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    a     contract      are    ambiguous      are    courts

authorized        to    apply     rules       of     construction.          See    Jones     v.

Casstevens,        23    S.E.2d        303,        305     (N.C.    1942).         Any    such

ambiguities in contract language must be construed against the

party     responsible       for    drafting          the    uncertain      language.        See

Novacare        Orthotics    &    Prosthetics            E.,   Inc.   v.     Speelman,     528

S.E.2d 918, 921 (N.C. Ct. App. 2000).                          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.               Id.    Because we are unable to determine

the   parties’      intention         from    the     language      of     the    contract,

ordinary     principles          of    contract      construction          compel      us     to

construe this ambiguous phrase in favor of Cosey, the insured

employee,     and    conclude         that    the     STD    plan    fails       to    confer

discretionary            decision-making             authority        on         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    of    the    clear      grant    of    discretion      to     the      plan

administrator       in    a    separate      Administrative         Services      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        will    have     discretionary      authority    to     determine

eligibility for benefits” and “to interpret and construe the

terms of the Plan.”

       Prudential’s reliance on the ASA is misplaced.                       The STD

plan does not incorporate or even refer to the ASA.                       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.”).        Absent any terms in the contract elaborating the

parties’         intention     to     confer        discretion     on     the   plan

administrator,       we    decline     to    hold    that   the   ASA’s    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           Therefore, we conclude that the STD plan

does       not    confer     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   disagree     with    Prudential’s    argument.       Although      the

district      court’s   alternative     holding   referenced     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        to   present     objective    evidence    of    her

disability.          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       express   no   opinion      whether    a   company     lawfully    could

draft       a     benefits     plan      requiring     that   a    claimant    produce

objective proof of disability.                     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.                          Further,


                                             23
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.        We further hold that the district court

erred     in   requiring   objective         evidence      of     Cosey’s   claimed

disability     when   neither   the    LTD    nor    the    STD    benefits   plans

contain such a requirement.           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
