Lavery v. Restoration Hardware Long Term Disability Benefits Plan et al

Filing 61

Judge Denise J. Casper: ORDER entered. MEMORANDUM AND ORDER - The Court DENIES Lavery's motion to strike, D. 53, ALLOWS the Defendants' motion to file evidence outside the administrative record, D. 55, ALLOWS Lavery's motion for summary judgment, D. 43, and DENIES the Defendants' motion for summary judgment, D. 46. Accordingly, judgment shall enter for Lavery, ordering Aetna to allow his claim for LTD benefits. D. 43 at 18.(Hourihan, Lisa)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
__________________________________________
)
)
JOHN LAVERY,
)
)
Plaintiff,
)
)
v.
)
)
Civil Action No.: 17-10321
)
RESTORATION HARDWARE LONG TERM )
DISABILITY BENEFITS PLAN and AETNA )
LIFE INSURANCE COMPANY,
)
)
Defendants.
)
)
)
__________________________________________)
MEMORANDUM AND ORDER
CASPER, J.
I.

August 6, 2018

Introduction
Plaintiff John Lavery (“Lavery”) brings claims under the Employee Retirement Income

Security Act (“ERISA”) against Defendants Restoration Hardware Long Term Disability Benefits
Plan (“the Plan”) and Aetna Life Insurance Company (“Aetna”) (collectively, “the Defendants”)
over the denial of his claim for disability benefits. D. 1. Lavery and the Defendants each move
for summary judgment. D. 43, 46. Lavery also moves to strike a supplemental filing by the
Defendants, D. 53, and the Defendants move to file evidence outside of the administrative record,
D. 55. For the following reasons, the Court DENIES Lavery’s motion to strike, D. 53, ALLOWS
the Defendants’ motion to file evidence outside the administrative record, D. 55, ALLOWS
Lavery’s motion for summary judgment, D. 43, and DENIES the Defendants’ motion for summary
judgment, D. 46.
1

II.

Factual Background
The facts are drawn from the administrative record, D. 23, and the parties’ submissions and

are undisputed unless otherwise noted. Restoration Hardware, Inc. (“RH”) is the sponsor of the
Plan, which is an employee benefit plan governed by ERISA for which RH also serves as the plan
administrator. D. 44 ¶¶ 1, 2; D. 45 ¶¶ 1, 2. Aetna is the underwriter and claims administrator for
the Plan. D. 44 ¶ 3; D. 45 ¶ 3. Lavery was an employee of RH and a participant in the Plan. D.
44 ¶ 4; D. 45 ¶ 4.
The Plan offers long-term disability (“LTD”) benefits to eligible participants. D. 49 ¶ 4;
D. 52 ¶ 4. Under the Plan, Aetna has “discretionary authority” to “determine whether and to what
extent employees and beneficiaries are entitled to benefits” and “construe any disputed or doubtful
terms of this policy.” D. 49 ¶ 7; D. 52 ¶ 7. The “Summary of Coverage” for the Plan states that a
beneficiary’s eligibility date is “the first day of the calendar month following the date you complete
a probationary period of 30 days of continuous service for your Employer, but not before the later
of the Effective Date of this Plan and the date you enter the Eligible Class.” D. 49 ¶ 9; D. 52 ¶ 9.
That Summary of Coverage was amended to include this language on June 23, 2014, and purported
to become effective as of May 1, 2014. D. 49 ¶ 9; D. 52 ¶ 9. The Plan states that “Long Term
Disability Coverage does not cover any disability that starts during the first 12 months” of coverage
if it is “caused or contributed to by a ‘pre-existing condition.’” AR 78. The Plan further states
that “a disease or injury is a pre-existing condition if, during the three months before the date you
last became covered: it was diagnosed or treated; or services were received for the disease or
injury; or you took drugs or medicines prescribed or recommended by a physician for that
condition.” . D. 49 ¶ 13; D. 52 ¶ 13; AR 78. The three-month period referenced in the language
of the plan is referred to by the parties as the “look back period.” See D. 49 ¶ 37; D. 52 ¶ 37.

2

On April 25, 2014, Lavery had an office visit with his primary care physician, Dr. Anthony
Lopez and presented Dr. Lopez with a lesion on his back. D. 44 ¶¶ 13-14; D. 45 ¶¶ 13-14. Dr.
Lopez suspected that the lesion might be a basal cell carcinoma and recommended that Lavery
consult with a dermatologist. D. 44 ¶¶ 14; D. 45 ¶ 14. On June 10, 2014, Lavery went to Dr.
Eileen Deignan, a dermatologist, about the lesion. D. 49 ¶ 18; D. 52 ¶ 18. Dr. Deignan biopsied
the lesion and diagnosed Lavery with malignant melanoma on June 19, 2014. D. 49 ¶¶ 19-20; D.
52 ¶¶ 19-20. On September 29, 2014, Lavery ceased working and sought to commence disability
leave on September 30, 2014, due to impairments caused by the treatments for his malignant
melanoma. D. 49 ¶ 21; D. 52 ¶ 21. Lavery applied for and received short-term disability benefits
under RH’s Short Term Disability Plan (“STD Plan”), also administered by Aetna. D. 49 ¶ 22; D.
52 ¶ 22. In the context of the request for short-term disability benefits, RH communicated to Aetna
that Lavery’s date of hire was May 12, 2014 and the effective date for coverage under the STD
Plan was June 1, 2014. D. 49 ¶ 29; D. 52 ¶ 29; AR 165. 1
On January 26, 2015, an LTD claim file was created for Lavery by Aetna. D. 49 ¶ 24; D.
52 ¶ 24. According to a communication from RH to Aetna on January 26, 2015 regarding the LTD
file, Lavery’s date of employment with RH was May 12, 2014 and the “effective date” for Lavery’s
participation in the Plan was June 1, 2014. D. 49 ¶¶ 14, 30; D. 52 ¶¶ 14, 30; AR 164. The Disability
Benefit Manager (“DBM”) assigned to the initial review of Lavery’s claim was Therese Leimback
(“DBM Leimback”). D. 49 ¶ 36; D. 52 ¶ 36. For the initial review, DBM Leimback applied the
effective date from RH’s communication to Aetna of June 1, 2014. D. 49 ¶ 37; D. 52 ¶ 37. DBM
Leimback thus used a look back period of March 1, 2014 to May 31, 2014, three months prior to

1

Lavery contends that his actual date of employment with RH was earlier than May 12,
2014, and sought to introduce a declaration to support that contention. D. 37-1. The Court denied
Lavery’s motion to expand the administrative record to include that declaration. D. 40.
3

the effective date, to determine whether Lavery’s claim was subject to the pre-existing condition
exclusion of the Plan. D. 49 ¶ 37; D. 52 ¶ 37. On or about March 26, 2014, Pedro Cortero, an
Aetna Clinical Consultant, conducted a “pre-existing assessment” of Lavery’s claim. D. 44 ¶ 18;
D. 45 ¶ 18. Cortero wrote a note in Lavery’s LTD file that considered Lavery’s April 2014 visit
to Dr. Lopez, his primary care physician, and concluded that “[t]here is no evidence of a definitive
diagnosis and management rendered for his malignant melanoma during the look back period.”
D. 44 ¶ 19; D. 45 ¶ 19; AR 805. Cortero further wrote that Dr. Lopez’s April 2014 assessment
was that the lesion was “questionable for BCC [basal cell carcinoma],” that the lesion “may [have
been] present for the past six months but remained undiagnosed,” and that “[d]efinitive diagnosis
was therefore confirmed only after a wide local excision and biopsy on 6/30/14 which has
confirmed his melanoma and basal cell carcinoma (BCC) was ruled out.” AR 805. The note
explains that “[t]here are three major types of skin cancers which include basal cell carcinoma,
squamous cell carcinoma and melanoma.” AR 805.
DBM Leimback, on or about that same day, wrote that she “will recommend approval of
claim.” D. 44 ¶ 20; D. 45 ¶20; AR 812. Lavery’s file also contains a subsequent note from Kathy
Leonard, another Aetna representative, dated March 29, 2015, recommending a different outcome:
a denial of Lavery’s claim. D. 44 ¶ 24-25; D. 45 ¶ 24-25; AR 814-817. The note from Kathy
Leonard states that the DBM, DBM Leimback, “recommends denial due to pre ex[isting]
condition” because Lavery was seen for his lesion in April 2014 by Dr. Lopez which Dr. Lopez
determined was a possible basal cell carcinoma. AR 817. Leonard, in her note, adds the comment
that she has “reviewed the claim and agree that [Lavery] was seen/treated during the look back
period” and she “agree[d] to deny claim at this time.” AR 817. The parties agree that Aetna did

4

not receive any new medical information between the initial recommendation to approve Lavery’s
claim and the subsequent recommendation to deny Lavery’s claim. D. 44 ¶ 29; D. 45 ¶ 29.
Aetna sent Lavery a denial letter on or about March 30, 2015, which stated that Lavery had
a pre-existing condition due to his April 2014 visit with Dr. Lopez. D. 44 ¶¶ 30-31; D. 45 ¶¶ 3031. On or about July 22, 2015, Lavery filed an administrative appeal. D. 44 ¶ 35; D. 45 ¶ 35. On
or about August 10, 2015, DBM Leimback requested a review by Tyler Thornton, another clinical
consult, of the pre-existing condition issue. D. 44 ¶ 36; D. 45 ¶ 36. Thornton concluded that “[t]he
documentation supports overturn of the prior pre ex decision.” D. 44 ¶ 47; D. 45 ¶ 37; AR 829.
Thornton referred to “the clinical review dated 3/25/15 by P. Cortero thoroughly and accurately
reviewing the record including” the April 2014 visit with Dr. Lopez. AR 829. Thornton further
explained that “[b]asal cell carcinoma is generally a localized lesion and managed with simple
excision. It does not generally produce any period of disability and does not warrant additional
treatment such as chemotherapy. Malignant melanoma is an entirely different life threatening
condition characterized by wide excision and warrant[s] additional treatment such as
chemotherapy.” AR 829. On August 14, 2015, DBM Leimback added another note stating that
she would “rec[ommend] approval and reinstatement.” D. 44 ¶ 39; D. 45 ¶ 39.
On September 8, 2015, a note was entered in Lavery’s file stating that Lavery’s claim
would be denied due to the pre-existing condition exclusion. D. 44 ¶ 40; D. 45 ¶ 40; AR 834. The
note states that “[n]o benefit is payable for any disability that is caused by or substantially
contributed to by a pre-existing condition, or medical or surgical treatment of a pre-existing
condition . . . .” AR 835. The note reads that the lesion “substantially contributed to the disabling
condition of malignant melanoma. Since the red lesion was examined and services occurred during
the look-back period the condition is pre-ex[isting].” AR 835.

5

On September 9, 2015, a note was entered in Lavery’s file indicating, for the first time in
Aetna’s records, that the effective date of Lavery’s coverage was not June 1, 2014, but July 1,
2014. D. 44 ¶ 42; D. 45 ¶ 42; AR 838. The apparent rationale for the change is the Summary of
Coverage that issued on June 23, 2014, with an effective date of May 1, 2014, which laid out that
the eligibility date is “the first day of the calendar month following the date you complete a
probationary period of 30 days of continuous service for your Employer . . . .” D. 44 ¶ 45; D. 45
¶ 45; AR 61. Under the prior Summary of Coverage, there is no mention of a probationary period,
but the policy rather states that “[a]ll classes of employees of a Member Employer are eligible,”
with certain exceptions that Aetna does not argue apply here. D. 44 ¶ 46; D. 45 ¶ 46; AR 36.2
On September 11, 2015, Aetna issued its final decision denying Lavery’s claim for LTD
benefits. D. 44 ¶ 48; D. 45 ¶ 48. The parties agree that Lavery was not provided with a copy of
the new Summary of Coverage until September 24, 2015 and that at no time prior to September
11, 2015 did Aetna communicate to Lavery that Aetna considered Lavery’s effective date to be
July 1, 2014. D. 44 ¶¶ 49-50; D. 45 ¶¶ 49-50. The September 11, 2015 denial letter explained that
the effective date for Lavery’s benefits was July 1, 2014, and that the look-back period therefore
included both the April 2014 visit with Dr. Lopez and the June 2014 visit with Dr. Deignan, both
of which served as bases for its final decision to deny Lavery’s claim under the pre-existing
condition exclusion. D. 49 ¶¶ 49-50; D. 52 ¶¶ 49-50; AR 693-94.
Additionally, Aetna has filed an affidavit by Stephen E. Simpson II, a senior business
consultant with Aetna, laying out Aetna’s policies and procedures regarding the review of claims.

2

Aetna contends that under the prior Summary of Coverage “Lavery would still have had
to satisfy the applicable eligible period, which required him to be employed at [RH] as a full-time
employee for a certain period of time before he could be eligible to participate in the LTD plan.”
Aetna, however, cites to no specific language in the prior Summary of Coverage laying out any
probationary period.
6

D. 47. Aetna also submitted an affidavit by Lori A. Medley, counsel for Aetna and the Plan,
regarding discovery on the subject of Aetna’s policies and procedures regarding the review of
claims. D. 48. These two declarations are the subject of Lavery’s motion to strike, D. 53, and the
Defendants’ motion to file evidence outside the administrative record, D. 55. In the declaration,
Simpson attests, among other things, that it is “Aetna’s practice and intention to review LTD
claims without regard to the manner in which the employee benefit plan is funded,” that “Aetna’s
employees who make decisions regarding the claims of plan participants, including appeals, are
paid fixed salaries and bonuses, which are wholly unrelated to the number of claims paid or claims
denied,” that “Aetna maintains a separate appeal unit for the consideration of denied claims on
appeal,” that the “claim department and appeal unit are separate business units from the financial
underwriters,” and that the financial underwriters “do not advise or influence the claim department
or appeal unit with respect to whether or not to pay a claim.” D. 47 ¶¶ 3, 4, 9, 10, 12. As discussed
below, even with the consideration of these two affidavits, Lavery prevails, and, therefore, the
Court DENIES the motion to strike.
III.

Standard of Review
In an ERISA benefits dispute case, “summary judgment is merely a vehicle for deciding

the case; the factual determination of eligibility for benefits is decided solely on the administrative
record, and the non-moving party is not entitled to the usual inferences in its favor.” Bard v. Bos.
Shipping Ass’n, 471 F.3d 229, 235 (1st Cir. 2006) (citation omitted). “Generally, our review of a
benefits determination will be highly deferential when a plan’s terms clearly grant its decision
makers the discretionary authority to interpret the plan and determine eligibility for benefits.” Id.
The parties agree that the plan at issue here granted its decision makers such discretionary
authority. D. 50 at 12-13; D. 51 at 6-7. Review of the decisions made by the plan’s decision

7

makers, therefore, is “under the arbitrariness standard,” where “the ordinary question is whether
the administrator's action on the record before him was unreasonable.” Liston v. Unum Corp.
Officer Severance Plan, 330 F.3d 19, 24 (1st Cir. 2003). Where, as here, the plan administrator is
responsible for “both adjudicating claims and paying benefits,” arbitrariness remains the standard,
but the court may “take account” of any inherent conflict of interest. Denmark v. Liberty Life
Assurance Co. of Bos., 566 F.3d 1, 7-8 (1st Cir. 2009). “Judges should weigh a conflict as they
would weigh any other pertinent factor; that is, when the relevant considerations are in equipoise,
any one factor, including a structural conflict, may act as a tiebreaker.” Id. at 8. A conflict of
interest will carry less relative weight where “the administrator has taken active steps to reduce
potential bias and to promote accuracy, for example, by walling off claims administrators from
those interested in firm finances, or by imposing management checks that penalize inaccurate
decisionmaking irrespective of whom the inaccuracy benefits.” Id. (citation omitted).
IV.

Procedural History
On February 27, 2017, Lavery filed his complaint in this matter. D. 1. On November 9,

2017, Lavery filed a motion to enlarge the administrative record. D. 37. On January 31, 2018, the
Court denied that motion. D. 40. Lavery subsequently moved for summary judgment, D. 43, and
the Defendants then moved for summary judgment, D. 46. Lavery has now also moved to strike
supplemental affidavits filed by the Defendants in support of their motion for summary judgment,
D. 53, and the Defendants have moved for leave to file evidence outside the administrative record,
D. 55.
V.

Discussion
A.

Lavery’s Motion to Strike (D. 53) and the Defendants’ Motion for Leave to
File Evidence Outside of the Administrative Record (D. 55)

The Defendants seek to add to the record before this Court, and Lavery seeks to strike, the
8

aforementioned affidavit of Stephen E. Simpson II regarding Aetna’s policies and procedures, D.
47, and a series of communications between the Defendants and Lavery regarding discovery, D.
48, that purport to show that Aetna produced to Lavery certain written policies of Aetna regarding
the putative conflict of interest.
There is a “strong presumption that the record on review is limited to the record before the
administrator.” Liston, 330 F.3d at 24. New evidence may be reviewed by the court where “the
decisional process is too informal to provide a record” or for “certain kinds of claims—e.g., proof
of corruption— [that] may in their nature or timing take a reviewing court to materials outside the
administrative record.” Id. In general, “[w]here the challenge is not to the merits of the decision
to deny benefits, but to the procedure used to reach the decision, outside evidence may be of
relevance.” Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 520 (1st Cir. 2005).
The decision of whether to allow the parties the opportunity to add materials outside the
administrative record rests in the discretion of the Court. Denmark, 566 F.3d at 10. In Denmark,
the First Circuit held that “some discovery on the issue of whether a structural conflict has morphed
into an actual conflict” may be appropriate, but that “any such discovery must be allowed sparingly
and, if allowed at all, must be narrowly tailored so as to leave the substantive record essentially
undisturbed.” Id. The court then remarked that because “[i]n future cases, plan administrators . .
. can be expected as a matter of course to document the procedures used to prevent or mitigate the
effect of structural conflicts,” such that “[t]hat information will be included in the administrative
record,” and that therefore the scope of additional “conflict-oriented discovery” beyond the
administrative record should be limited “only to the extent that there are gaps in the administrative
record,” such as if “the plan administrator has failed to detail its procedures.” Id.
As discussed below, however, even assuming that the evidence put forth by Aetna on the

9

issue of the structural conflict is considered and suffices to show that the structural conflict has not
morphed into an actual conflict, Lavery still prevails. The Court thus DENIES the motion to strike,
D. 53, and ALLOWS Aetna’s cross-motion for the Court to consider evidence outside the
administrative record, D. 55.
B.

Cross-Motions for Summary Judgment (D. 43, D. 46)

The Defendants contend that they are entitled to summary judgment because Aetna’s
decision to deny Lavery’s claim for benefits was reasonable in two independent ways: first, it was
reasonable for Aetna to conclude that, even under a look-back period that ran from March 1, 2014
to May 31, 2014, the pre-existing condition exclusion applied to Lavery’s claim for benefits; and
second, that it was reasonable for Aetna to conclude that the appropriate look back period was
April 1, 2014 to June 30, 2014, because the effective date of Lavery’s coverage was in fact July 1,
2014. D. 50 at 16-21.
i.

The March 1, 2014 to May 31, 2014 Look-Back Period
The Defendants contend that, even using the March 1, 2014 to May 31, 2014 look-back

period (which excludes the June 19, 2014 melanoma diagnosis from the period in which it could
be considered a pre-existing condition), Aetna’s denial of Lavery’s claim for LTD benefits was
reasonable because Lavery’s April 2014 visit with Lavery triggered the pre-existing condition
exclusion. The Summary of Coverage states that coverage is excluded for “any disability that . . .
is caused or contributed to by a ‘pre-existing condition’” and that “[a] disease or injury is a preexisting condition if, during the three months before the date you last became covered: it was
diagnosed or treated; or services were received for the disease or injury; or you took drugs or
medicines prescribed or recommended by a physician for that condition.” AR 78.

10

The Defendants contend that the April 2014 visit constituted a “treatment” for the skin
lesion that subsequently was diagnosed as malignant melanoma. D. 50 at 10-11. Lavery responds
that there was internal conflict within Aetna regarding whether the April 2014 visit could trigger
the pre-existing condition exclusion. D. 43 at 7. Specifically, Cortero, an Aetna Clinical
Consultant, concluded that the pre-existing condition exclusion was not triggered because no
“diagnosis” or “management” of malignant melanoma occurred at the April 2014 visit, but rather
found that Dr. Lopez had only identified a possible basal cell carcinoma, which is a different type
of skin cancer from malignant melanoma. AR 805. DBM Leimback initially recommended
approval of the claim, and then, according to a note by Kathy Leonard, changed her position based
on the fact that Lavery was seen by Dr. Lopez for the lesion which Dr. Lopez diagnosed as a
possible basal cell carcinoma. AR 817. Leonard’s note provides no additional explanation for
DBM Leimback’s change in position, which is especially notable in light of two facts: first, the
parties agree that Aetna did not receive any new medical information in the interim, D. 44 ¶ 29;
D. 45 ¶ 29; and second, the recommendation from Cortero that DBM Leimback had initially relied
upon had laid out detailed and specific reasons why the presentation of the lesion and the diagnosis
of possible basal cell carcinoma at the April 2014 visit with Dr. Lopez did not trigger the preexisting condition exclusion.
Moreover, in reviewing Lavery’s appeal of the denial of his benefits, Tyler Thornton,
concluded that Cortero’s assessment had “thoroughly and accurately review[ed] the record
including” the April 2014 visit with Dr. Lopez. AR 829. Thornton went on to further explain the
distinction between a basal cell carcinoma and a malignant melanoma in the system. AR 829.
Aetna again reversed position from the detailed explanation of a clinical consultant, in the absence
of any new medical information, when a note was written in Lavery’s file stating that Lavery’s

11

claim would be denied due to the pre-existing condition exclusion. AR 834. That note provided
only the rationale that the pre-existing coverage exclusion extended to disabilities that were
“caused by or substantially contributed to by a pre-existing condition,” and that the lesion that
Lavery presented to Dr. Lopez on April 2014 “was examined” and “substantially contributed to
the disabling condition of malignant melanoma.” AR 835. That note does not explain why it was
reasonable to conclude that the lesion was itself a “disease or injury” such that it could have
constituted a pre-existing condition and the note does not explain why the mere presentation of the
lesion to Dr. Lopez constituted the receipt of “services” for a “disease or injury.” AR 835.
These two unexplained reversals of the recommendation to award benefits, in the absence
of new information and in the face of a detailed explanation for the awarding of benefits, weigh
towards a finding that the administrator acted unreasonably. See Miller v. Am. Airlines, Inc., 632
F.3d 837, 848 (3d Cir. 2011) (holding that “[a]n administrator’s reversal of its decision to award a
claimant benefits without receiving any new medical information to support this change in position
is an irregularity that counsels towards finding an abuse of discretion”). The April 2014 visit,
therefore, is not an adequate ground on which to grant summary judgment to the Defendants, so
the Court moves onto considering whether the June 2014 diagnosis – which the parties do not
dispute would trigger the pre-existing condition exclusion if it fell within the look-back period –
should be considered to have fallen within the look-back period.
ii.

The April 1, 2014 to June 30, 2014 Look-Back Period
Lavery contends that the Defendants should be precluded from relying on the terms of the

updated Summary of Coverage that would change his eligibility date to July 1, 2014, and therefore
would change the look-back period to include the June 2014 diagnosis of malignant melanoma,
because he did not receive timely notice of either the updated Summary of Coverage or Aetna’s

12

use of that document to deny his claim until September 11, 2015. D. 43 at 13-17. Lavery points
to Department of Labor regulations that state that a plan will not “be deemed to provide a claimant
with a reasonable opportunity for” the “full and fair review of a claim and adverse benefit
determination” required by ERISA unless “the claims procedures . . . [p]rovide that, before the
plan can issue an adverse benefit determination on review on a disability benefit claim based on a
new or additional rationale, the plan administrator shall provide the claimant, free of charge, with
the rationale . . . [so as] to give the claimant a reasonable opportunity to respond prior to” a final
decision. 29 C.F.R. § 2560.503-1(h)(4)(ii). The First Circuit has, in the context of an analogous
provision, held that “when a plan with material ambiguous terms violates” its responsibility to
provide notice of the reason behind its denial and “a claimant’s application is prejudiced by these
violations through his reliance on a reasonable interpretation that the plan does not ultimately
adopt, we will bar the plan from using the claimant's reliance against him.” Bard, 471 F.3d at 237.
In that case, the First Circuit barred the plan administrator from relying on a rationale that
depended on an ambiguous and unarticulated interpretation of the plan terms, such that the
claimant produced medical documentation that “ultimately proved quite harmful to his
administrative appeal” under the interpretation eventually used by the plan administrator. Id. at
241. The court relied on its “equitable and common law powers to prevent a plan from taking
actions, even in good faith, which have the effect of ‘sandbagging’ claimants.” Id. at 244. The
First Circuit’s equitable response was to remove from consideration that ultimately harmful
medical documentation. Id. at 245. The First Circuit ordered the district court to enter judgment
for the claimant, reasoning that while “[i]n other circumstances, it might be an appropriate remedy
to remand to a plan administrator for reconsideration,” “here the remaining evidence compels the
conclusion that [the claimant] is entitled to benefits.” Id. at 245-46.

13

Lavery’s case is distinct from Bard in two ways: first, Lavery does not contend that the
language of the updated Summary of Coverage is ambiguous as to the effective date of his
coverage; and second, the putative prejudice suffered by Lavery is not that he submitted medical
documentation that was ultimately harmful to his case but rather that Lavery was not given a full
and fair opportunity to contest the Defendants’ contention that his date of employment at RH was
May 12, 2014. The first distinction does not alter the rationale for declining to award summary
judgment to the Defendants on a basis that Lavery did not have a full and fair opportunity to contest
before the administrator. See Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113, 132 (1st Cir.
2004) (barring a plan from relying on a previously unarticulated justification where that
justification did not relate to any ambiguity in the plan terms). The second distinction affects
whether the appropriate remedy for the Defendants’ failure to provide adequate notice to Lavery
should result in judgment for the claimant, as occurred in Bard and Glista, or a remand to the
administrator to provide Lavery with a full and fair opportunity to contest the appropriate
employment date.
At first glance, this case might appear to present the “other circumstances” referenced by
the First Circuit in Bard, 471 F.3d at 245, where remand would be appropriate where it is not clear
that the claimant would be entitled to benefits if the claimant had been on notice of all relevant
information at the appropriate times. A different factor, however, counsels in favor of entering
judgment for Lavery rather than remanding. The updated Summary of Coverage was published
on June 23, 2014 – after Lavery had been diagnosed with malignant melanoma – with an effective
date of May 1, 2014 – even before Lavery began his employment. Even if Lavery had received
notice of the updated Summary of Coverage on June 23, 2014, he still would not have been on
notice at the time of his appointment with Dr. Deignan, the dermatologist, on June 10, 2014 (or at

14

the time of his diagnosis on June 19, 2014) that his malignant melanoma would be a pre-existing
condition not subject to coverage under the LTD plan. If he had been aware of this fact, he might
have altered the timing of his appointment to July 1, 2014 so as to avoid losing coverage.
Although “[i]t is well-established that ERISA does not prevent employers from adopting,
modifying or terminating welfare plans at any time and for any reason,” Coffin v. Bowater Inc.,
501 F.3d 80, 85 (1st Cir. 2007), courts have blocked “attempts to apply plan modifications
retroactively to affect benefits that had already become due.” Member Servs. Life Ins. Co. v. Am.
Nat. Bank & Tr. Co. of Sapulpa, 130 F.3d 950, 955 (10th Cir. 1997). In that case, the Tenth Circuit
held that “[b]ecause plan administrators have an obligation imposed by ERISA to operate the plan
according to current plan documents, a post hoc amendment clearly cannot alter a plan provision
in effect at the time performance under the plan became due.” Id. at 957. While Lavery’s case is
not exactly analogous, because the obligation to pay LTD benefits arose at the time that Lavery
became disabled and not at the time that Lavery was diagnosed, and thus performance from Aetna
was not yet due on June 23, 2014, Lavery is able to show prejudice due to his reliance on the terms
of the Summary of Coverage that were in effect at the time he sought treatment from Dr. Deignan.
Thus, not only did Lavery have no opportunity to litigate his claim below that he had been
an employee as of an earlier date, a remand to allow him to make that claim would be unfair.
Lavery made the decision to visit Dr. Deignan on June 10, 2014, and at that point in time, he
reasonably understood – based on the Summary of Coverage in effect at that time – that any
diagnosis he received from Dr. Deignan would not be considered a pre-existing condition subject
to exclusion from long-term disability coverage. The record on remand would therefore be shaped
by the reasonable decisions that Lavery made in reliance on a Summary of Coverage that was
retroactively changed by Defendants, resulting in prejudice to Lavery. See Bard, 471 F.3d at 245

15

(entering judgment in favor of claimant where “bar[ring] the defendant plan from using [the
claimant’s] earlier medical evidence against him” to “undo the prejudice that resulted from [the
claimant’s] reliance on his initial reasonable interpretation of the Plan” would “result[] in a
conclusion that the [Plan’s] denial of benefits was invalid under any standard of review”). The
Court thus declines to remand and ALLOWS Lavery’s motion for summary judgment, D. 43, and
DENIES the Defendants’ motion for summary judgment, D. 46.
VI.

Conclusion
For the foregoing reasons, the Court DENIES Lavery’s motion to strike, D. 53, ALLOWS

the Defendants’ motion to file evidence outside the administrative record, D. 55, ALLOWS
Lavery’s motion for summary judgment, D. 43, and DENIES the Defendants’ motion for summary
judgment, D. 46. Accordingly, judgment shall enter for Lavery, ordering Aetna to allow his claim
for LTD benefits. D. 43 at 18.
So Ordered.
/s/ Denise J. Casper
United States District Judge

16