Rasenack Ex Rel. Tribolet v. AIG Life Insurance

FILED
United States Court of Appeals
Tenth Circuit

November 2, 2009
Elisabeth A. Shumaker
PUBLISH Clerk of Court

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

HANS-GERD RASENACK, by and through
Jessica Tribolet, his duly appointed Guardian
and Conservator; and JESSICA TRIBOLET,
as duly appointed Guardian and Conservator
of Hans-Gerd Rasenack,

Plaintiffs-Appellants,
No. 07-1521
v.

AIG LIFE INSURANCE COMPANY; and
AIG CLAIM SERVICES INC.,

Defendants-Appellees.

Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:06-cv-01525-WDM-MEH)

John Case of Benson & Case, LLP, Denver, Colorado, for Plaintiffs-Appellants.

James D. Kilroy (Katrin Miller Rothgery and Jessica E. Yates with him on the
brief) of Snell & Wilmer L.L.P., Denver, Colorado, for Defendants-Appellees.

Before BRISCOE, SEYMOUR and PORFILIO, Circuit Judges.

SEYMOUR, Circuit Judge.
 This action arises under the Employee Retirement Income Security Act

(ERISA), 29 U.S.C. § 1001 et seq. Hans-Gerd Rasenack seeks accidental

paralysis and rehabilitation benefits from AIG Life Insurance Company, the

insurer, and AIG Claim Services, the plan administrator (collectively, “AIG”).

The district court reviewed the administrator’s denial of benefits under an

arbitrary and capricious standard and granted summary judgment for AIG. We

reverse and remand.

I.

On May 21, 2003, Mr. Rasenack, then forty-eight years old, was struck as a

pedestrian by a hit-and-run driver while saying goodnight to his friends in front of

his home. The collision launched Mr. Rasenack approximately twenty-five feet

through the air. He was severely injured and remained in a coma for

approximately three weeks.

On June 6, 2003, Mr. Rasenack was transferred to Kindred Hospital. He

was transferred again on July 7, this time to Craig Hospital, where he was

admitted to a brain rehabilitation program. Mr. Rasenack remained at Craig

Hospital until October 2003, and received outpatient treatment thereafter. Dr.

Alan Weintraub, the Medical Director of the Brain Injury Program at Craig

Hospital, served as Mr. Rasenack’s regular treating physician throughout the

course of his treatment. For the sake of clarity and brevity, we save the

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remaining details of Mr. Rasenack’s medical treatment for Part III of the opinion.

At the time of the accident, Mr. Rasenack was insured under an accidental

death and dismemberment (“AD&D”) policy issued to his employer, Marriott

International, Inc., by AIG Life Insurance Company and administered by AIG

Claim Services. Both the insurer and the administrator are owned by American

International Group. Mr. Rasenack purchased the AD&D coverage through

payroll deductions. In addition to accidental death and dismemberment, the

policy provides an accidental paralysis benefit. At issue here is the policy’s

hemiplegia provision. 1 The policy defines “hemiplegia” as “the complete and

irreversible paralysis of upper and lower limbs of the same side of the body.”

Aplt. App. at 359. The policy defines “limb” as the “entire arm or entire leg.”

Id. The policy does not define “paralysis.” Id. The covered loss – i.e.,

hemiplegia – must occur within one year of date of the accident.

The policy provides AD&D benefits for hemiplegia in the amount of one

half of the principal sum. Mr. Rasenack’s principal sum is $248,000. The policy

also provides a rehabilitation benefit for expenses incurred within two years of

the accident up to a maximum of $10,000. The rehabilitation benefit is only

payable where the insured “suffers an accidental dismemberment or an accidental

paralysis for which an Accidental Dismemberment or Paralysis benefit is payable

1
The accidental paralysis provision also covers quadriplegia, paraplegia,
and uniplegia.

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under . . . the Policy.” Id.

Jessica Tribolet, Mr. Rasenack’s spouse and duly appointed guardian and

conservator, filed a claim for AD&D and rehabilitation benefits on July 21, 2004, 2

asserting that Mr. Rasenack “suffer[ed] what the summary plan describes as ‘loss

of use’ of both of his legs as well as his left arm.” Id. at 624. The Plan provides

that claims will be processed within ninety days unless special circumstances

warrant an exception; it instructs that in no event will processing take longer than

180 days. These deadlines track the ERISA regulations. On November 15, 2005,

sixteen months after Ms. Tribolet filed the claim, AIG denied it, concluding that

Mr. Rasenack did not suffer from “hemiplegia” as defined by the policy.

Ms. Tribolet submitted a timely administrative appeal on January 13, 2006. 3

The Summary Plan Description (“SPD”) provides that AIG will render a decision

2
The Plan advises claimants to notify the administrator within twenty days
of the date of the accident and to file a claim within ninety days of the “date the
loss occurred.” Id. at 692. The full provision provides,
Written proof of loss must be furnished to the Company within 90
days after the date of loss. . . . Failure to furnish written proof of
loss within the time frame required neither invalidates nor reduces
any claim if it was not reasonably possible to give proof within such
time, . . . provided such proof is furnished as soon as reasonably
possible and in no event, except in the absence of legal capacity of
the claimant, later than one year from the time proof is otherwise
required.
Id. at 401. Mr. Rasenack’s claim was filed outside the ninety-day period but
within the extended period, i.e., within one year and ninety days.
3
The Plan gives claimants sixty days to submit an appeal from the date of
the notice of claim denial.

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within sixty days unless special circumstances require an extension of an

additional sixty days. On August 3, 2006, several months past the four-month

deadline for a decision on appeal, Ms. Tribolet and Mr. Rasenack filed a

complaint in federal district court seeking a declaration that Mr. Rasenack is

entitled to benefits and an order requiring AIG to pay him benefits under 29

U.S.C. § 1132. On August 31, 2006, AIG belatedly denied the administrative

appeal. 4

On cross motions for summary judgment, the district court denied Mr.

Rasenack’s motion and granted AIG’s. The court determined, as a matter of first

impression, that the proper standard of review of the administrative decision was

arbitrary and capricious, not de novo as plaintiffs urged. The court held that

AIG’s interpretation of the term “hemiplegia” was reasonable, and that there was

substantial evidence that Mr. Rasenack’s condition did not meet the policy’s

definition.

On appeal, Mr. Rasenack argues (1) the correct standard of review of the

plan administrator’s decision is de novo and (2) the administrative record

establishes that he suffers from hemiplegia as defined by the policy and is

therefore eligible for benefits.

4
The Plan has two additional levels of administrative review, but because
AIG did not notify Mr. Rasenack of the status of his appeal within the Plan’s
deadline, he was considered to have exhausted his administrative remedies. See
29 C.F.R. § 2560.503-1.

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 II.

We review de novo the “district court’s determination of the proper

standard to apply in its review of an ERISA plan administrator’s decision . . . .”

DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161, 1167 (10th Cir. 2006).

ERISA authorizes a judicial action challenging an administrative denial of

benefits but does not specify the standard of review that courts should apply. See

29 U.S.C. § 1132(a)(1)(B). Applying the principles of trust law, the Supreme

Court resolved this question in Firestone Tire & Rubber Co. v. Bruch, 489 U.S.

101, 115 (1989), holding that “a denial of benefits challenged under

§ 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan

gives the administrator or fiduciary discretionary authority to determine eligibility

for benefits or to construe the terms of the plan.” The parties do not dispute that

the Plan grants AIG this discretionary authority. The Plan provides, “The

insurance company retains sole and absolute final discretion to determine

eligibility for benefits, to construe the terms of the policy and to resolve any

factual issues relevant to benefits.” Aplt. App. at 329.

Under trust principles, a deferential standard of review is appropriate when

trustees actually exercise a discretionary power “vested in them by the instrument

under which they act.” Firestone, 489 U.S. at 111. Following Firestone, we

made clear in Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 631 (10th Cir.

2003), that “not only must the administrator be given discretion by the plan, but

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the administrator’s decision in a given case must be a valid exercise of that

discretion.” Accord Jebian v. Hewlett Packard Co., 310 F.3d 1173, 1176-77 (9th

Cir. 2002)); Nichols v. Prudential Ins. Co. of Am., 406 F.3d 98, 109 (2d Cir.

2005); Gritzer v. CBS, Inc., 275 F.3d 291, 296 (3rd Cir. 2002); Matuszak v.

Torrington Co., 927 F.2d 320, 322-23 (7th Cir. 1991) (applying de novo review

where administrator only offered “reasons” for denial during the course of

litigation); Restatement (Second) of Trusts § 187, cmt. (h) (“[I]f the trustee

without knowledge of or inquiry into the relevant circumstances and merely as a

result of his arbitrary decision or whim exercises or fails to exercise a power, the

court will interpose.”).

The question before us in Gilbertson was “whether a plan administrator

with discretionary authority whose delay in deciding a claim results in its being

‘deemed denied’ is entitled to judicial deference.” Gilbertson, 328 F.3d at 631.

We concluded that deference was not required, explaining:

It follows that where the plan and applicable regulations place
temporal limits on the administrator’s discretion and the
administrator fails to render a final decision within those limits, the
administrator’s “deemed denied” decision is by operation of law
rather than the exercise of discretion, and thus falls outside the
Firestone exception.

Id. By the same analysis, in this case the administrator failed to render a final

decision within the temporal limits. Thus, the remedies were “deemed exhausted”

by operation of law rather than the exercise of administrative discretion, and

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Firestone’s rule of deference does not apply. 5

In holding so, we are not persuaded by AIG’s argument that the 2002

amendments 6 to ERISA somehow abrogated the Gilbertson rule. The 2002

amendments replaced in part the “deemed denied” provision – which permitted a

claimant to file suit if the administrator failed to respond to a claim within a

certain prescribed period – with the following paragraph:

In the case of the failure of a plan to establish or follow claims
procedures consistent with the requirements of this section, a
claimant shall be deemed to have exhausted the administrative
remedies available under the plan and shall be entitled to pursue any
available remedies under section 502(a) of the Act on the basis that
the plan has failed to provide a reasonable claims procedure that
would yield a decision on the merits of the claim.

29 C.F.R. § 2560.503-1(k)(l) (2002). This change does not alter our conclusion

that when an administrator violates the statutory deadlines incorporated into the

plan, Firestone deference no longer applies. The 2002 amendments have,

however, called into question the continuing validity of the substantial

compliance test we have used to avoid creating a rule that would automatically

permit de novo review for every violation of the deadlines. Gilbertson, 328 F.3d

at 635; see also Kellogg v. Metro. Life Ins. Co., 549 F.3d 818, 828 (10th Cir.

2008) (leaving open the question whether “a decision made in the absence of the

5
AIG does not dispute that Mr. Rasenack’s appeal was considered deemed
exhausted under § 2560.503-1(k)(l).
6
Amendments to 29 C.F.R. § 2560.503-1(h)(1)(i) (1999) took effect in
January 1, 2002. See 65 Fed. Reg. 70265, 70271 (Nov. 21, 2000).

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mandated procedural protections should [] be entitled to any judicial deference.”);

Finley v. Hewlett-Packard Co. Employee Benefits Org. Income Prot. Plan, 379

F.3d 1168, 1175 n.6 (10th Cir. 2004) (same). 7 Because AIG has failed

Gilbertson’s substantial compliance test, as we discuss below, we need not decide

whether a minor violation of the deadlines or other procedural irregularities

would entitle the claimant to de novo review under the 2002 amendments. See

Kellogg, 549 F.3d at 828 (“We find it unnecessary to conclusively decide the

continuing validity of the ‘substantial compliance’ rule because, even assuming

its continued existence, there can be little doubt that MetLife was not in

‘substantial compliance’ with the ERISA deadlines.”)

In Gilbertson, 328 F.3d at 634, we noted that “courts have [] been willing

to overlook administrators’ failure to meet certain procedural requirements when

the administrator has substantially complied with the regulations and the process

as a whole fulfills the broader purposes of ERISA and its accompanying

regulations.” Under this “substantial compliance” exception, “in the context of

an ongoing, good faith exchange of information between the administrator and the

7
Mr. Rasenack has also directed our attention to the Department of Labor’s
(“DOL”) explanatory language accompanying the notification of the final rule
revising 29 C.F.R. § 2560.503-1(h)(4) – the predecessor regulation to 29 C.F.R.
§ 2560.503-1(l ): “[DOL’s] intentions in including [§ 2560.503-1(k)(l )] in the
proposal were to clarify that the procedural minimums of the regulation are
essential to procedural fairness and that a decision made in the absence of the
mandated procedural protections should not be entitled to any judicial deference.”
ERISA Claims Procedures, 65 Fed. Reg. 70246, 70255 n.39 (Nov. 21, 2000).

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claimant, inconsequential violations of the deadlines or other procedural

irregularities would not entitle the claimant to de novo review.” Id. We

elaborated: “an administrator who fails to render a timely decision can only be in

substantial compliance with ERISA’s procedural requirements if there is an

ongoing productive evidence-gathering process in which the claimant is kept

reasonably well-informed as to the status of the claim and the kinds of

information that will satisfy the administrator.” Id. at 636. Pursuant to this test,

a plan administrator is in substantial compliance with a deadline if the delay is:

“(1) ‘inconsequential’; and (2) in the context of an on-going, good-faith exchange

of information between the administrator and the claimant.” Finley, 379 F.3d at

1173-74.

Mr. Rasenack submitted his claim on July 21, 2004. The nurse hired by

AIG to interview Mr. Rasenack met with him on December 14, 2004, and

submitted her report the next day. Following receipt of the nurse’s report, AIG

requested an outside review of Mr. Rasenack’s medical record. The reviewing

physician submitted his opinion letter on February 26, 2005, the last date of

notable activity until AIG’s November 15, 2005 claim denial eight months later.

While AIG did contact Ms. Tribolet on July 18, 2005 with an administrative

update, we do not consider a single contact over such a long span of time to be an

“on-going, good faith exchange of information.” Id. Mr. Rasenack’s appeal was

met with similar delays. The appeal was filed on January 13, 2006, and a second

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reviewing physician submitted a report on May 15, 2006, but the appeal was not

denied until August 31, 2006.

AIG has not offered any explanation for these delays, other than to point

out that in the fall of 2004 it had difficulty contacting Mr. Rasenack and his wife

to schedule an interview. 8 But the interview was successfully completed in

December 2004, and the claim was not denied until November 2005. In sum, we

agree with the district court’s assessment that “the Administrator’s delays in the

initial and appellate decisions were months beyond the deadlines imposed by the

Policy and ERISA and not simply the result of delays by Plaintiffs, which

amounted to a few weeks at most, or a good faith exchange of information.”

Aplt. App. at 749. Based on the foregoing, we conclude that AIG has not met the

substantial compliance standard, and AIG’s delays in denying both the initial

claim and the appeal are not excusable.

Finally, AIG argues that de novo review under Gilbertson only applies

where the administrator never issued a final decision on the merits. Because AIG

eventually did deny both Mr. Rasenack’s initial claim and his appeal, AIG

reasons, the proper standard is arbitrary and capricious. We have not previously

8
AIG also notes Mr. Rasenack’s initial delay in submitting his claim, but
does not explain how the delay interfered with the processing of his claim.
Although the Plan advises claimants that delay in submitting the claim might
result in delays in processing, this does not excuse AIG of its duty to follow the
deadlines set out in the Plan and in ERISA.

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read Gilbertson’s holding so narrowly, and we decline to do so here. The fact

that AIG finally issued a letter denying Mr. Rasenack’s appeal several weeks after

Mr. Rasenack filed suit does not distinguish this case from one in which the

insurer never issued a final decision. In fact, we applied Gilbertson to just such a

scenario in Finley, 379 F.3d at 1173. There, because the administrator did not

respond to the claimant’s administrative appeal until after the deadline had

passed, the claimant’s appeal was considered “deemed denied” under the then-

governing ERISA regulations. Id. at 1172. We held that Gilbertson was

applicable and proceeded to consider whether any exceptions to its general de

novo rule applied. Id. at 1174.

The relevant fact is that the administrator failed to “render a final decision

within [the temporal] limits” prescribed by the Plan and ERISA. Gilbertson, 328

F.3d at 631. As Mr. Rasenack points out, permitting plan administrators to avoid

de novo review by belatedly denying an appeal after the deadline has passed and

the claimant has filed suit would conflict with the ERISA’s stated purposes,

namely “protect[ing] . . . the interests of participants in employee benefit plans

and their beneficiaries, . . . by establishing standards of conduct, responsibility,

and obligation for fiduciaries of employee benefit plans, and by providing for

appropriate remedies, sanctions, and ready access to the Federal courts.” 29

U.S.C. § 1001(b). Accordingly, we apply a de novo standard of review to Mr.

Rasenack’s claim for benefits.

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 III.

We next turn to the merits of Mr. Rasenack’s eligibility for benefits. We

review the district court’s decision to grant summary judgement de novo. Pitman

v. Blue Cross & Blue Shield of Okla., 217 F.3d 1291, 1295 (10th Cir. 2000). As

to the scope of our de novo review, we have sided with the majority of our sister

circuits in agreeing with the Fourth Circuit that “the best way to implement

ERISA’s purposes in this context is ordinarily to restrict de novo review to the

administrative record, but to allow the district court to supplement that record

‘when circumstances clearly establish that additional evidence is necessary to

conduct an adequate de novo review of the benefit decision.’” Hall v. UNUM Life

Ins. Co. of Am., 300 F.3d 1197, 1202 (10th Cir. 2002) (quoting Quesinberry v.

Life Ins. Co. of N. Am., 987 F.2d 1017, 1025 (4th Cir. 1993) (en banc)).

A. Policy Construction

Our first task is to determine whether the policy is ambiguous. We

interpret the policy according to its plain meaning. Kellogg, 549 F.3d at 829.

Under federal common law, “the proper inquiry is not what [the provider]

intended a term to signify; rather, we consider the common and ordinary meaning

as a reasonable person in the position of the plan participant would have

understood the words to mean.” Miller v. Monumental Life Ins. Co., 502 F.3d

1245, 1249 (10th Cir. 2007) (internal quotation marks and alterations omitted).

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“Ambiguity exists when a plan provision is reasonably susceptible to more than

one meaning, or where there is uncertainty as to the meaning of the term.”

Admin. Comm. of Wal-Mart Assocs. Health & Welfare Plan v. Willard, 393 F.3d

1119, 1123 (10th Cir. 2004) (internal quotation marks omitted). The doctrine of

contra proferentem, which construes all ambiguities against the drafter, applies to

de novo review of ERISA plans. Miller, 502 F.3d at 1249, 1253. “ERISA

imposes upon providers a fiduciary duty similar to the one trustees owe trust

beneficiaries. Just as a trustee must conduct his dealings with a beneficiary with

the utmost degree of honesty and transparency, an ERISA provider is required to

clearly delineate the scope of its obligations.” Id. at 1250 (internal citation

omitted). Finally, “the insured has the burden of showing that a covered loss has

occurred, while the insurer has the burden of showing that a loss falls within an

exclusionary clause of the policy.” Pitman, 217 F.3d at 1298.

Mr. Rasenack contends the policy’s hemiplegia provision is ambiguous. He

argues the policy’s definition of hemiplegia as “complete and irreversible

paralysis” is wholly dependent on the meaning of “paralysis,” which the policy

does not define. AIG responds that the definition of hemiplegia carries a plain

meaning, i.e., that the entire arm and leg of one side of the body must be

“completely paralyzed.” Aple. Br. at 36. AIG explains how it arrived at this

interpretation:

AIG, based on guidance from medical experts, determined that

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 “complete and irreversible paralysis” on one side of the body means
“no movement at all of the left or right side.” AIG determined that
the Plan required that, as a necessary condition of such paralysis,
there be no movement in the relevant extremities. Lack of sensation
or weakness might also be present in paralysis, but the fundamental
underlying requirement for benefits for hemiplegia was that there be
“no movement at all” of the entire arm and entire leg of the same
side of the body, and that such paralysis be “complete and
irreversible.”

Id. at 31 (emphasis in original, internal citation omitted). In other words,

“anything less than ‘no movement at all’ would not be ‘complete’ paralysis.” Id.

We agree that the policy is ambiguous for its failure to define paralysis.

AIG’s interpretation of paralysis as limited to the absence of movement may be

reasonable. But “the question that confronts us is not whether their interpretation

is reasonable, but whether there is more than one reasonable interpretation of the

Plan.” Miller, 502 F.3d at 1252. Mr. Rasenack points us to Mosby’s Medical

Dictionary, which defines “paralysis” as “the loss of muscle function, loss of

sensation, or both” and “complete paralysis” as “paralysis characterized by a

complete loss of motor function.” M OSBY ’ S M EDICAL , N URSING , AND A LLIED

H EALTH D ICTIONARY 405, 1277 (6th ed. 1994). “Motor” is defined as “1.

pertaining to motion, the body apparatus involved in movement, or the brain

functions that direct purposeful activities[;] 2. pertaining to muscle, nerve or

brain center that produces or subserves motion.” Id. at 1123. “Function” is

defined as “1. an act, process or series of processes that serve a purpose[;] 2. to

perform an activity or to work properly or normally.” Id. at 712 (emphasis

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added). Other medical dictionaries similarly define paralysis in terms of loss of

muscle function or sensation, not as the absence of all movement. See, e.g.,

M ATTHEW B ENDER A TTORNEYS ’ D ICTIONARY OF M EDICINE P-58 (2008) (defining

“paralysis” as a “condition marked by loss of muscle function, i.e., by the

inability of the muscles to contract” and noting “[l]ess frequently, the term

paralysis applies to a loss of sensation”). See also W EBSTER ’ S N EW

I NTERNATIONAL D ICTIONARY 1637 (3d ed. 1971) (defining “paralysis” as “a

complete or partial loss of function involving the power of motion or of sensation

in any part of the body”). In fact, the Summary Plan Description (“SPD”)

contains a chart classifying the various types of “accidental loss” in which it

describes hemiplegia as the loss of “use of both upper and lower limb on same

side of body.” Aplt. App. at 685. We conclude that there is more than one

reasonable interpretation of the meaning of paralysis, and the Plan is thus

ambiguous for its failure to define the term. See Miller, 502 F.3d at 1252-53.

AIG suggests that the Plan’s definition of hemiplegia as “complete and

irreversible paralysis” saves it from ambiguity. But “complete and irreversible”

modifies “paralysis,” and therefore the definition still rests on the meaning of

“paralysis.” We therefore apply the doctrine of contra proferentem and strictly

construe the ambiguity against AIG. Id. at 1253. We have explained the policy

rationale behind contra proferentem: “Strictly construing ambiguous terms

presents ERISA providers with a clear alternative: draft plans that reasonable

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people can understand or pay for ambiguity.” Miller, 502 F.3d at 1255. Here,

AIG easily could have defined “paralysis,” the key term in the definition of

hemiplegia. It seeks to limit the definition to the absence of movement, but the

term is not so limited in medical dictionaries and AIG did not so define it.

Strictly construing the policy language against AIG, we consider “complete and

irreversible paralysis” to mean the complete and irreversible loss of muscle

function or sensation, not the absence of all movement. 9

The final matter regarding construction of the policy concerns the Plan’s

requirement that the loss occur “to an Insured Person within 365 days of the

accident.” Aplt. App. at 341; see also Summary Plan Description, Aplt. App. at

686 (“To be eligible for benefits, the covered loss must occur within one year

from the date of the accident.”). Mr. Rasenack interprets this provision to mean

we may only consider his medical state during the first 365 days following his

accident. On appeal, AIG does not object to this interpretation; in fact, AIG

9
AIG argues that under Miller, we may only construe the plan against the
drafter where no extrinsic evidence illuminates its interpretation. We recognized
in Miller that “[w]here a plan’s language is ambiguous on its face, courts may
turn to extrinsic evidence of parties’ intent to create vested insurance benefits.”
502 F.3d at 1253. AIG contends, “the Plan clearly defined hemiplegia as
requiring ‘complete and irreversible paralysis,’ in recognition of the fact that the
Plan is an accidental death and dismemberment plan, not a disability plan.” Aple.
Br. at 38. But this statement ignores the fact that AIG itself – both in the Plan
and in the SPD – repeatedly refers to the relevant portion of the Plan as an
“Accidental Dismemberment and Accidental Paralysis Benefit.” Aplt. App. at
359 (emphasis supplied). Furthermore, this assertion in large part begs the
question: What constitutes “complete and irreversible paralysis”?

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included this phrasing in the questionnaire it sent to one of the reviewing

physicians, asking whether “the paralysis occur[red] within 365 days of the May

21, accident date.” Id. at 84. We note, however, that AIG did not limit its review

to the 365-day period; the administrative denial references Mr. Rasenack’s

“progress in the last couple of years.” Id. at 69.

B. Review of the Administrative Record

Resolving the Plan’s ambiguity in Mr. Rasenack’s favor, we proceed to

our review of the record. The first piece of relevant information is a pre-

admission assessment dated June 20, 2003, performed by Nurse Karen Hildebrand

from Craig Hospital. She noted that Mr. Rasenack had no volitional or

spontaneous movement on his left side and only very limited movement in his

right upper and lower extremities. On July 1, in a referral update, Nurse

Hildebrand noted that Mr. Rasenack’s left side remained “plegic.” On July 7, the

date of Mr. Rasenack’s admission to Craig Hospital, Dr. Weintraub wrote in the

section entitled “History of Present Illness”: “He is moving the right upper

extremity more so than the lower extremity and does not move the left side.” Id.

at 240 (emphasis added). In the “Neurologic” section, Dr. Weintraub recorded:

“The left upper extremity is plegic and spastic, held in an extensor position. Left

lower extremity is plegic as well, spastic and hyperreflexic. . . . He had a painful

sense with pressure throughout the entire left extremities.” Id. at 243 (emphasis

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added). Under “Impressions,” Dr. Weintraub noted Mr. Rasenack’s condition as

“bilateral hemiparesis, left worse than right.” Id. 10

A brain injury evaluation performed by a physical therapist at Craig

Hospital on October 10, 2003, noted that Mr. Rasenack required assistance for all

functional mobility and had “limited left upper extremity uses.” Id. at 248. An

Outpatient Rounds Note, dated October 21, 2003, describes Mr. Rasenack’s

progress after one week of outpatient care:

PT reports that the patient is physically making good progress. He is
now minimum assist for squat pivot transfers . . . . He is, in therapy,
walking in the parallel bars for two lengths, which is approximately
30 feet, with minimum assistance and verbal cues. . . . The patient
can do most self-care right-handed and uses his left for a stabilizer.
Active movement is increased in his left upper extremity muscle
groups, which is important as the patient was left dominant.

Id. at 160 (emphasis added). In a Clinic Note dated November 12, 2003, Dr.

Weintraub observed:

Hans-Gerd is making nice progress. He is improving in his
ambulation. He is still using an assistive device. He is starting to
navigate stairs. He is gaining range of motion and strength of the
left side. He still has limits in range of motion at the left elbow, left
knee and ankle that in the future he may need some surgery in this
regard.

10
According to AIG, the records from June 20, July 1, and July 7, 2003,
were omitted from the medical records sent from Craig Hospital to AIG. Thus,
they were not in the claims file reviewed by AIG during its initial claim
processing; Mr. Rasenack sent them to AIG when he filed his appeal in January
2006. Because they were before the agency on appeal, they are therefore part of
the administrative record.

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Id. at 154. On February 20, 2004, Dr. Weintraub noted, “We discussed the

eventual goal of household ambulation with a walker. . . . We anticipate the need

for wheelchair use for longer distances, etc. over the next six months.” Id. at 141.

Nurse Kellianne Boris, hired by AIG to assist with the processing of Mr.

Rasenack’s claim, interviewed him in December 2004, seven months after the

365-day period had passed. Mr. Rasenack remained belted into a wheelchair for

the duration of the interview, and Nurse Boris did not observe any leg

movements. He did occasionally squeeze a therapy ball with his left hand, but

she did not see him make any other motions with the left hand. Id. In

correspondence with AIG, Nurse Boris advised that Dr. Weintraub used the term

“hemiparesis,” but that it “means the same as hemiplegia.” Id. at 111.

We turn next to the assessments of Dr. Weintraub, Mr. Rasenack’s treating

physician, and Drs. Ronald DeVere and James Sarno, the physicians hired by AIG

to review Mr. Rasenack’s file. When Dr. Weintraub was asked by AIG in

October 2004 whether Mr. Rasenack suffered hemiplegia, he responded

affirmatively, “Yes, the accidental injury . . . did result in hemiplegia.” Id. at

170. He stated that “Mr. Rasenack’s paralysis does appear to be complete and

irreversible, although from a quantitative standpoint, he has benefitted from

rehabilitation treatment.” Id.

In February 2005, AIG sought review from an outside physician. It sent

Dr. DeVere the claim file as well as a series of questions to complete. We quote

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AIG’s questions (indicated by italics) and Dr. DeVere’s answers at length, as they

are instructive:

1. Did Mr. Rasenack sustain any of the above paralysis conditions
as a direct result of the May 21, 2003 accident? According to the
medical records, the best that I can tell from the detailed review is
that this claimant was comatose and very poorly responsive the first
few weeks of his hospital stay after the injury. . . . It appears from
his current evaluations and throughout his progress in the last couple
of years, that he currently has a left hemiparesis involving the left
arm and left leg. Hemiparesis is a weakness of the left arm and leg,
or right arm and leg, i.e., weakness in one side of the body due to a
disturbance in brain function. . . . He does not appear to be
hemiplegic, which means no movement at all of the left or right side.
. . . [I]t appears that the claimant has some movement and strength in
[the] left arm and leg, which classifies the weakness as hemiparesis.
2. Did the paralysis occur within 365 days of the May 21 accident
date? It appears that the hemiparesis, which is the term that I am
using, occurred within 365 days of the May 21, 2003, accident date.
3. Does he have complete and irreversible paralysis of the entire
limbs? . . . According to the recent notes of November of 2004[,] the
claimant still continued to have hemiparesis. The exact details of
that weakness are not evident on review of the record. There is no
detailed evaluation of specific muscle groups in his left arm and leg
in regard to how much weakness there is. Hemiparesis is the only
term used. I cannot give you a definite description of function of his
left arm and leg muscles because of the incompleteness of records
available for my review at this time. After this length of time, which
is almost two years, there is a remote possibility that he could make a
little bit more improvement. But more likely than not, he would not
improve much more in his weakness of his left upper and left lower
extremities after the next months.
4. If the paralysis is not complete, but permanent, please indicate
his level of functioning regarding activities of daily living,
ambulation, and transfer? [M]ost likely his hemiparesis is likely
permanent, but not complete. The exact level of functioning of his
left arm and leg and capabilities is poorly described in the medical
records that I have reviewed. The best I can state from the
information available to me is that the claimant still requires
continued assistance and supervision for all of his activities of daily

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 living . . . . It appears that he has some function of his left upper and
left lower extremities that enable him to assist in these activities of
daily living. . . . Unfortunately, the specific functional abilities of
his left arm and leg are not well documented or described in this
record to give you any further information. . . .
6. One of the letters from the insurance company to one of the claim
examiners asked about Dr. Weintraub’s response that the accident
resulted in hemiplegia with severe balance and coordination
difficulties and the paralysis appears complete and irreversible. As
stated previously, in all medical probability, I believe that the current
state of the claimant is a hemiparesis, which I have already defined,
and which may very well be complete and irreversible at this point in
time, the beginning of 2005.

Id. at 83-85.

Dr. DeVere undoubtedly concluded that Mr. Rasenack suffered from

hemiparesis, not hemiplegia, a distinction that became the basis for AIG’s denial

of Mr. Rasenack’s claim. It is less clear whether or not Dr. DeVere considered

Mr. Rasenack to be completely and irreversibly paralyzed. He did not say, for

example in response to Question 2, that because Mr. Rasenack has hemiparesis,

he is not paralyzed. Rather, Dr. DeVere predicts that the “weakness” will not

improve much. Id. at 84. In response to Question 4, he indicated that the

hemiparesis is permanent but not complete, but then later that it “may very well

be complete and irreversible.” Id. at 85. Significantly, he stressed repeatedly that

the records were insufficient regarding the exact level of functioning of Mr.

Rasenack’s left arm and left leg. Finally, the file Dr. DeVere reviewed did not

contain the medical records from Craig Hospital dated June 20, July 1, and July 7,

2003, which were notable as early assessments of Mr. Rasenack’s condition.

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 AIG hired a second outside physician, Dr. Sarno, to review Mr. Rasenack’s

file while the appeal was pending. AIG asked Dr. Sarno whether the accidental

injury resulted in hemiplegia. He responded:

No. . . . This claimant is a hemiparetic with the left lower extremity
worse than the left upper extremity. The left lower extremity is
spastic and rigid and demonstrates a righting reaction which keeps
him up. The left upper extremity is also spastic and limited.
However, he is able to use it somewhat in helping the right side in
various activities of daily living. Although he was a left handed
individual prior to this[,] he can no longer use that left hand the way
he did previously. Hemiplegic means paralysis of one side of the
body. There was no paralysis of either side. He is able to use the
left side. . . . The word hemiparesis applies to this situation. The
fact that he had sensory loss has nothing to do with hemiplegia. That
is a hemisensory dysfunction based on the injury to the sensory
parietal cortex vs. the posterior frontal cortex for motor activity.

Id. at 397. In response to the question, “Is the paralysis complete and

irreversible,” Dr. Sarno concluded, “The claimant has made significant strides.

Nonetheless he has a significant hemiparesis on the left side. This will be

permanent. He may have some slight improvement but beyond what he has

presently I doubt that there will be much more improvement.” Id. (emphasis

added). In the “comment” section, Dr. Sarno wrote, “This person is one who

sit[s] on [the] cusp, enough to be called hemiparetic and not enough to be

hemiplegic or uniplegic. He is . . . severely disabled and will be disabled

permanent [sic] and totally but just outside the meaning of this policy.” Id. at

398.

Ms. Trioblet submitted a detailed affidavit regarding her husband’s

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condition. She reported that he had no control over or sensation in the left side of

his body during the 365 days following the accident. She explained that the

references to movement in the medical record refer to therapists placing Mr.

Rasenack’s arms and legs in a passive motion machine. She provided the

following chronology:

At the time he transferred to Craig Hospital, [Hans-Gerd] could move
only his right hand and occasionally but not consistently, he could
twitch the toes of his right foot. The left side of his body, including
left arm and left leg, remained paralyzed. . . . Throughout the 365
days after the accident, Hans-Gerd did not have muscular control or
sensation in his left arm and left leg. . . . From a standing position,
Hans-Gerd learned to lift his left foot off the floor and swing it
forward with his hips. His left leg and left foot remain straight and
stiff during this motion. He swings his left leg in a semi-circular arc
so it lands in front. He maintains balance by grasping my shoulder
with his right hand. Hans-Gerd uses his stiff left leg to bear weight
like an amputee uses a prosthesis. This imitation of “walking” is
only possible with assistance from me or a therapist. Using a walker
for support, Hans-Gerd can move forward, if I am beside him or
behind him to give verbal cues and prevent falls. Without a walker
and human assistance, Hans-Gerd cannot walk.

Id. at 222-23.

The overall picture that emerges from the record is that Mr. Rasenack was

unable to move his left arm and leg immediately after the accident but made some

gains in mobility and strength as a result of intense physical therapy over the

course of the year following the accident. In the letter to Mr. Rasenack denying

his claim for benefits, AIG explained its decision:

After careful review of the information received, we have determined
that we must decline payment of this claim as there is no evidence in

-24-
 the information received that you sustained a complete and
irreversible paralysis of your limbs. Rather, it appears that you have
hemiparesis and are not paraplegic or hemiplegic.

Id. at 69. AIG provided a similar explanation in its letter denying Mr. Rasenack’s

administrative appeal: “The Committee reviewed the entire administrative records

of this claim and concluded that the record contains substantial evidence that

Hans-Gerd Rasenack did not sustain a complete and irreversible paralysis of his

limbs . . . . Rather, it appears that he has hemiparesis and is not paraplegic or

hemiplegic.” Id. at 402. In the section entitled “Pertinent Facts,” AIG also noted,

“In addition, you failed to file the Proof of Loss and Notice within the time line

set forth in the Policy and Summary Plan description.” Id. at 402.

C. Analysis

Although the insured ultimately carries the burden of showing he is entitled

to benefits, the plan administrator has a fiduciary duty to the insured to conduct

an investigation and to seek out the information necessary for a fair and accurate

assessment of the claim. See Gaither v. Aetna Life Ins., 394 F.3d 792, 807-08

(10th Cir. 2004) (“While a fiduciary has a duty to protect the plan’s assets against

spurious claims, it also has a duty to see that those entitled to benefits receive

them.). As we made clear in Gaither, “An ERISA fiduciary presented with a

claim that a little more evidence may prove valid should seek to get to the truth of

the matter.” Id. at 808. The Supreme Court recently explained:

-25-
 ERISA imposes higher-than-marketplace quality standards on
insurers. It sets forth a special standard of care upon a plan
administrator, namely, that the administrator “discharge [its] duties”
in respect to discretionary claims processing “solely in the interests
of the participants and beneficiaries”of the plan, § 1104(a)(1); it
simultaneously underscores the particular importance of accurate
claims processing by insisting that administrators “provide a ‘full
and fair review’ of claim denials,” Firestone, 489 U.S. at 113
(quoting [29 U.S.C.] § 1133(2)); and it supplements marketplace and
regulatory controls with judicial review of individual claim denials,
see § 1132(a)(1)(B).

Metro. Life Ins. Co. v. Glenn, 128 S.Ct. 2343, 2350 (2008) (emphasis added).

Following receipt of Mr. Rasenack’s administrative appeal, which included

a detailed affidavit from Ms. Tribolet regarding the extent of her husband’s

paralysis and records from Craig Hospital indicating paralysis on Mr. Rasenack’s

left side, AIG performed no further investigation, instead sending the records to a

second reviewing physician. AIG’s decision not to investigate Mr. Rasenack’s

appeal is especially perplexing given its first reviewing physician’s insistence that

the records were inadequate to determine the motor function of Mr. Rasenack’s

left arm and left leg, as we quoted above. This is no small detail because an

accurate assessment of the specific functional abilities of Mr. Rasenack’s left arm

and leg is precisely what resolution of his claim required. But rather than having

Mr. Rasenack actually examined by an outside physician or asking Dr. Weintraub

to explain Mr. Rasenack’s condition in more detail, AIG sent the very same

inadequate claim file to a second physician to review from afar.

“Nothing in ERISA requires plan administrators to go fishing for evidence

-26-
when it has not been brought to their attention that such evidence exists. Gaither,

394 F.3d at 804. Here, however, evidence that Mr. Rasenack suffered from

hemiplegia was brought to AIG’s attention. The reports from Nurse Hildebrand,

Dr. Weintraub, Nurse Boris, and the affidavit of Ms. Tribolet should have led

AIG to inquire further, by requesting additional information from Ms. Tribolet,

following up with Dr. Weintraub, or having Mr. Rasenack examined by an outside

physician. The claim process is not designed to be adversarial; “indeed, one

purpose of ERISA was to provide a nonadversarial method of claims settlement.”

Gaither, 394 F.3d at 807 (quotation marks omitted). Under the specific facts of

this case, simply sending another physician a case file that has already been

declared inadequate was not sufficient to discharge AIG’s fiduciary duty.

AIG’s letter denying Mr. Rasenack’s claim concluded that “there is no

evidence . . . that [he] sustained a complete and irreversible paralysis of [his]

limbs.” Aplt. App. at 69 (emphasis added). This statement makes us question

whether AIG considered Dr. Weintraub’s determination that Mr. Rasenack’s

injury did result in hemiplegia and that it appeared “complete” and “irreversible.”

ERISA does not require plan administrators to “accord special deference to the

opinions of treating physicians,” nor does it place “a heightened burden of

explanation on administrators when they reject a treating physician’s opinion.”

Black & Decker Disability Plan v. Nord, 538 U.S. 822, 823 (2003). Here AIG

apparently gave Dr. Weintraub’s conclusion that Mr. Rasenack suffered

-27-
hemiplegia no weight.

In Nord, the Supreme Court observed that, “[a]s compared to consultants

retained by a plan, it may be true that treating physicians, as a rule, have a greater

opportunity to know and observe the patient as an individual.” Id. at 832

(quotation marks and alterations omitted). The Court noted that this rule does not

always hold true, for example, when “the relationship between the claimant and

the treating physician has been of short duration, or when a specialist engaged by

the plan has expertise the treating physician lacks.” Id. This case does not fit in

either scenario: Dr. Weintraub, a board-certified specialist in Physical Medicine

and Rehabilitation and Medical Director of the Brain Injury Program at Craig

Hospital, served as Mr. Rasenack’s treating physician from the time of Mr.

Rasenack’s admission to Craig Hospital six weeks after his accident though the

entire course of his treatment there. “Plan administrators . . . may not arbitrarily

refuse to credit a claimant’s reliable evidence, including the opinions of a treating

physician.” Id. at 834; see also Fought, 379 F.3d at 1001 n.1. Yet AIG’s

explanation of its denial of the claim and the appeal appear to do exactly that, by

failing to even acknowledge Dr. Weintraub’s conclusion that Mr. Rasenack

suffered complete and irreversible hemiplegia.

It is also unclear whether AIG considered Ms. Tribolet’s affidavit. AIG

claimed that it reviewed the entire administrative file, but the denial letter does

not mention any of the information contained in the affidavit. An ERISA plan

-28-
administrator must give “full and fair consideration” to affidavits submitted by

the claimant and his or her relatives. Rekstad v. U.S. Bancorp, 451 F.3d 1114,

1211 (10th Cir. 2006) (holding that a plan administrator’s decision to deny

benefits without giving consideration to affidavits submitted by the claimant and

her relatives was arbitrary and capricious). AIG’s apparent failure to do so

rendered its consideration of the evidence “impermissibly one-sided.” Id.

Mr. Rasenack accurately notes that all of the healthcare personnel who

actually examined or treated him agreed that he suffers from hemiplegia

(including the nurse hired by AIG to interview him), yet their opinions are

conspicuously omitted from AIG’s denial letters. Comparing AIG’s explanations

of its decision to deny the claim to the information contained in the administrative

record, it appears that AIG cherry-picked the information helpful to its decision to

deny Mr. Rasenack’s claim and disregarded the contrary opinions of the medical

professionals who examined, treated, and interviewed Mr. Rasenack. Cf. Glenn,

128 S.Ct. at 2352 (noting with approval lower court’s treatment of the plan

administrator’s emphasis of medical reports favorable to a denial of benefits and

de-emphasis of unfavorable reports as a serious concern). “ERISA and the

Secretary of Labor’s regulations under the Act require ‘full and fair’ assessment

of claims and clear communication to the claimant of the ‘specific reasons’ for

benefit denials.” Nord, 538 U.S. at 825 (citing 29 U.S.C. § 1133; 29 C.F.R. §

2560.503-1 (2002)). As we emphasized in Gilbertson, 328 F.3d at 635 (quoting

-29-
Booton v. Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th Cir. 1997)).:

“In simple English, what [29 C.F.R. § 2560.503-1(f)] calls for is a
meaningful dialogue between ERISA plan administrators and their
beneficiaries. If benefits are denied the reason for the denial must be
stated in reasonably clear language[,] if the plan administrators
believe that more information is needed to make a reasoned decision,
they must ask for it. There is nothing extraordinary about this: it’s
how civilized people communicate with each other regarding
important matters.”

AIG justified its decision to deny coverage with the conclusion that Mr.

Rasenack had “hemiparesis,” not “hemiplegia.” Although the administrative

record does contain notes from Dr. Weintraub stating that Mr. Rasenack has

hemiparesis, it is not clear that Dr. Weintraub drew a firm distinction between

hemiplegia and hemiparesis, and the nurse hired by AIG concluded he meant

hemiplegia. Dr. Weintraub responded affirmatively when asked specifically

whether Mr. Rasenack suffered from hemiplegia. AIG did not follow-up with Dr.

Weintraub on this matter, instead asking its reviewing physicians to explain the

difference between the two conditions. Given AIG’s failure to perform a more

thorough investigation and to credit the evidence submitted by Mr. Rasenack

supporting a diagnosis of hemiplegia, we are not persuaded the references to

hemiparesis and the conclusions of the reviewing physicians provide a sufficient

grounds for AIG’s denial of Mr. Rasenack’s claim for benefits.

D. The Remedy

-30-
 Based on the foregoing analysis, we reverse and remand to the district court

for reconsideration under a de novo standard of review. See Gilbertson, 328 F.3d

at 636-37 (reversing and remanding to district court for application of de novo

review); Vanderklok v. Provident Life & Accidental Ins. Co., 956 F.2d 610, 617

(6th Cir. 1992) (remanding to district court with instructions to take additional

evidence and reconsider plaintiff’s claim). In the event of a reversal, AIG asks us

to remand the case to the plan administrator, but we decline to do so. The cases

cited by AIG in support of its argument for remand were applying an arbitrary

and capricious standard of review and are fully distinguishable from the present

case. See Rekstad, 451 F.3d at 1121 (remanding to plan administrator for full

consideration of all the evidence in the record); Caldwell v. Life Ins. Co., 287

F.3d 1276, 1289 (10th Cir. 2002) (remanding for administrative interpretation of

the plan and further findings of fact). We agree with the Fourth Circuit’s

conclusion that under de novo review, remand to the administrator is an available

remedy but is not always the appropriate one. Quesinberry, 987 F.2d at 1025 n.6

(4th Cir. 1993) (en banc) (“We do not believe . . . that remand [to the plan

administrator] in every case of an inadequate record is consistent with the de novo

standard of review or in the interests of judicial economy.”). AIG’s delay in

responding to Mr. Rasenack’s claim and administrative appeal resulted in his

claim being deemed exhausted, depriving him of two additional levels of

administrative appeal and forcing him to seek judicial review. See Vanderklok,

-31-
956 F.2d at 617 (holding that because the plan administrator failed to provide

timely written notice of its denial of benefits, therefore preventing the claimant

from supplying additional information and seeking administrative review, the plan

administrator was “not entitled to the protections concerning administrative

review”). AIG had its chance to exercise its discretion and it failed to do so in

accordance with the clear guidelines of the Plan and ERISA. Under these

circumstances, we conclude that remand to the district court is the most

appropriate remedy.

As noted above, a court conducting de novo review of an ERISA plan

administrator’s decision may supplement the record “when circumstances clearly

establish that additional evidence is necessary to conduct an adequate de novo

review of the benefit decision.” Hall, 300 F.3d at 1202 (quoting Quesinberry,

987 F.2d at 1025). We have listed as an example of one such circumstance

“claims that require consideration of complex medical questions or issues

regarding the credibility of medical experts.” Id. at 1203 (quoting Quesinberry,

987 F.2d at 1027). In light of our conclusion that the administrative record is

inadequate for a full consideration of Mr. Rasenack’s eligibility for benefits given

the lack of information on the specific functional abilities of his left arm and leg

during the relevant time period, the district court should supplement the record

with additional evidence as it deems necessary and appropriate to make a proper

determination of the extent of Mr. Rasenack’s disability.

-32-
 IV.

For the foregoing reasons, we REVERSE and REMAND for further

consideration of Mr. Rasenack’s claim consistent with this opinion.

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