November 12, 2013 4th Circuit published opinion

Cosey v The Prudential Insurance Company of America

Cosey filed a claim for short and long term disability benefits based on complaints of fatigue and other symptoms. Prudential as the plan administrator denied her claims. The district court applied an abuse of discretion standard and affirmed ruling alternatively that Cosey did not meet the standard to obtain benefits. The panel vacated and remanded. It held that plenary judicial review is required for the long term disability plan because the requirement that a claimant provide “proof satisfactory to” the administrator was ambiguous as it could mean the administrator must be persuaded, the administrator can set format requirements, must be subjectively persuaded or can change the rules as it goes, does not give sufficient notice to beneficiaries that the administrator has broad discretion to deny claims and the contract should be construed against Prudential as the insurer who wrote the document. . The panel noted it joined the majority position among circuits in so holding. The panel held that under North Carolina law, the short term plan was ambiguous as well and plenary review was required for that claim. The panel finally held that the district court improperly added an objective evidence component the eligibility requirements and vacated the award of judgment to Prudential. The case was remanded for plenary review under the correct standard set out in the plan documents.

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