Renfro v. The Funky Door

A disability insurance plan administrator does not abuse its discretion when (1) it does not have a conflict of interest and (2) the plain language of the plan supports its decision.

Jeff Renfro sued the Funky Door Long Term Disability Plan and the ServiceMaster Long Term Disability Plan (“the Plans”) because the administrator of the two plans, Unum Life Insurance Company (“Unum”) decided that, under each of the Plans, Renfro’s Social Security Disability Insurance (“SSDI”) benefit was deductable income. The district court granted summary judgment in favor of the Plans. Renfro appealed. The Ninth Circuit noted that the standard of review for summary judgment is de novo and that the standard of review for a plan administrator’s decision is abuse of discretion (if, as in the current case, the terms of plan grant discretion to the plan administrator). The Court applied a case-specific multi-factor test for abuse of discretion. First, the court concluded that Unum did not have a conflict of interest because Unum had not impermissibly commingled the Plans’ funds, did not act inconsistently in administering the two plans and did not have a history of biased claim administration. Additionally, the Court noted that both plans stated, “…payment may be reduced by deductible sources of income and disability earnings.” The Court reasoned that, under this language, Renfro’s SSDI benefits were deductable from both plans. The Ninth Circuit held that summary judgment was proper because Unum did not abuse its discretion in deducting Renfro’s SSDI benefits from both plans since Unum did not have a conflict of interest and the SSDI benefits were deductable under the plain language of both plans. AFFIRMED.