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Ellis v. Liberty Life Assurance Co. of Boston

No. 19-1074. D.Colo. Judge Hartz.Employee Retirement Income Security Act—Disability Benefits—Choice of Law—Standard of Review—Abuse of Discretion.

May 11, 2020

Plaintiff was employed by Comcast Corporation (Comcast) and worked in Colorado. As part of its employee benefit plan, Comcast had a group disability income policy (the policy) from Liberty Life Assurance Co. of Boston (Liberty). Plaintiff suffered an illness that led to a pulmonary embolism and received short-term disability benefits from Liberty. Plaintiff later applied for long-term disability benefits due to neuropsychological and cognitive deficits. After initially approving these benefits, Liberty terminated the disability benefits based on medical opinions received from its experts.

Plaintiff sought review of the denial of benefits in district court under the Employee Retirement Income Security Act (ERISA). The district court reviewed the plan administrator’s action de novo and determined that the denial was not supported by a preponderance of the evidence.

Liberty appealed, contending that the court should have reviewed the decision under an abuse of discretion standard. A plan administrator’s denial of benefits is ordinarily reviewed de novo, but if a policy gives the administrator discretion to interpret the plan and award benefits, judicial review is for abuse of discretion. Here, the policy gave discretion to the administrator to resolve benefits claims and provided that the law of Pennsylvania, where Comcast is incorporated and has its principal place of business, applied. Unlike Colorado, Pennsylvania does not have a statute limiting benefit eligibility discretion. Based on the policy language, Liberty’s benefits denial is properly reviewed for abuse of discretion, and Pennsylvania law controls. Further, this choice of law provision serves to effectuate ERISA’s uniformity and administrative efficiency objectives.

Under the abuse of discretion standard, a plan administrator’s decision is upheld so long as it is predicated on a reasonable basis. The policy here provides that a claimant cannot receive long-term disability benefits without proof of disability arising from an injury or sickness that renders the claimant unable to perform the duties of any occupation. Based on the record, which shows that Liberty and the experts it retained considered all pertinent evidence plaintiff submitted and reasonably gave less weight to much of plaintiff’s evidence, Liberty did not abuse its discretion in deciding that plaintiff had not established a long-term disability.

The judgment was reversed and the case was remanded for entry of judgment in Liberty’s favor.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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