United States Court of Appeals For the First Circuit

Nos. 18-1885, 18-2027

JOHN LAVERY,

Plaintiff, Appellee,

v.

RESTORATION HARDWARE LONG TERM DISABILITY BENEFITS PLAN; AETNA LIFE INSURANCE COMPANY,

Defendants, Appellants.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Denise J. Casper, U.S. District Judge]

Before

Lynch, Circuit Judge, Souter,* Associate Justice, and Kayatta, Circuit Judge.

Lori A. Medley, with whom Kenneth J. Kelly and Epstein Becker & Green, P.C. were on brief, for appellants. Stephen Churchill, with whom Fair Work, P.C. was on brief, for appellee.

September 3, 2019

* Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation. KAYATTA, Circuit Judge. After being diagnosed with

malignant melanoma, John Lavery applied for benefits under his

employer's long-term disability benefits plan, which Aetna Life

Insurance Company administered and funded. After Aetna denied

Lavery's application under the plan's exclusion for disabilities

caused by pre-existing conditions, Lavery brought this lawsuit in

federal district court against Aetna and the plan, alleging that

the denial of his disability benefits claim violated the Employee

Retirement Income Security Act (ERISA),

et seq.

The district court agreed with Lavery and awarded him back

benefits, interest, fees, and costs. The defendants appealed.

For the following reasons, we affirm and remand for any further

proceedings that may be necessary.

I.

A.

Restoration Hardware offers qualifying employees long-

term disability insurance coverage through the "Restoration

Hardware Long Term Disability Benefits Plan" ("Plan"). The Plan,

underwritten by Aetna Life Insurance Company, is an employee

benefits plan governed by ERISA. Aetna is also the Plan's claims

administrator.

The Plan contains a "pre-existing conditions" clause

that excludes coverage for certain disabilities. It states:

- 2 - Long Term Disability Coverage does not cover any disability that starts during the first 12 months of your current Long Term Disability Coverage, if it is caused or contributed to by a "pre-existing condition."

A disease or injury is a pre-existing condition if, during the 3 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.

The three-month period before the coverage date is referred to as

the "look-back" period.

Lavery worked for Restoration Hardware, first as a

"Construction Associate" and then as a "Regional Facilities

Manager/Store Facilities Leader." On April 14, 2014, Lavery

sought medical attention for a skin lesion on his back that had

been present for six months. His primary care physician,

Dr. Anthony Lopez, observed that the lesion might be basal-cell

carcinoma. He referred Lavery to a dermatologist. Dr. Lopez did

not recommend any other actions, provide any treatment, prescribe

any medications, or take any other action himself.

On June 10, 2014, Lavery was examined by a

dermatologist, Dr. Eileen Deignan, who decided to biopsy the

lesion. On June 19, 2014, Dr. Deignan diagnosed the lesion as

malignant melanoma, and Lavery underwent surgery on June 30 to

- 3 - have the tumor and certain lymph nodes removed. Dr. Lopez later

declared that he was surprised to learn that Lavery was diagnosed

with malignant melanoma and that he had not discussed "any

treatment, recommendations or medications for malignant melanoma

with Mr. Lavery during the April 25, 2014[,] appointment."

Lavery stopped working on September 30, 2014,

subsequently claimed disability, and began receiving short-term

disability benefits because of the malignant melanoma. In late

January 2015, Lavery's claim was converted to a claim for long-

term disability coverage. Aetna informed Lavery:

According to the information in your file, your coverage under the Restoration Hardware, Inc. plan became effective on 06/01/2014 and you have claimed disability as of 9/30/2014. Your coverage was in effect for less than 12 consecutive months as of 9/30/2014, thus we must determine whether you received medical treatment/services, or were prescribed medication during the three month period between 3/1/2014 and 5/31/2014.

Lavery's claim was assigned to Therese Leimback, an

Aetna disability benefits manager (DBM). Leimback referred the

claim to Pedro Cortero, an internal clinical consultant, to perform

a "pre-existing condition review." In his assessment on March 25,

2015, Cortero stated:

There is no evidence of a definitive diagnosis and management rendered for [Lavery's] malignant melanoma during the look back period. Dr. Lopez assessment on 4/25/14 was approx. 5 mm raised lesion on R lower back questionable for BCC [basal-cell carcinoma]

- 4 - with referral to dermatology. The lesion may be present for the past six months but remained undiagnosed. Definitive 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.

That same day, Leimback acknowledged Cortero's clinical assessment

and made an internal note that she would "recommend approval of

[Lavery's] claim and obtain updates as recommended by clinical."

Nevertheless, four days later, Leimback's supervisor,

Kathy Leonard, wrote that "[Leimback] recommend[ed] denial due to

pre ex condition." Leonard further stated that she "agree[d] [that

Lavery] was seen/treated during the look back period" and concluded

that Lavery's claim should be denied. Lavery's claim file contains

nothing from Leimback herself confirming this about-face. Nor

does it contain any explanation for the change in Leimback's

position.

Leimback sent Lavery a denial letter on March 30, 2015,

stating in relevant part:

Based on the clinical review of the medical records we received, we have concluded that you received medical treatment during the pre- existing condition period of March 1, 2014 and May 31, 2014 for a skin lesion, which was diagnosed as melanoma of skin. As such, your Long Term Disability claim has been denied, as your current disability is a pre-existing condition as defined by the plan.

(Emphasis added.)

- 5 - Lavery appealed this decision pursuant to Aetna's

administrative procedures. Leimback referred Lavery's appeal to

another internal clinical consultant, Tyler Thornton. Thornton's

clinical review led him to conclude that Aetna erred in concluding

that Lavery had received medical treatment for the disabling

condition during the look-back period. He wrote:

In this case Dr. Lopez noticed the red spot on [Lavery's] back during the look back period 4/25/14 and was concerned for a possible basal cell carcinoma. There was no definitive diagnosis made and no prescribed treatment. [Lavery] then saw the dermatologist after the look back period and was diagnosed with stage iii malignant melanoma by biopsy on 6/19/14. While [Lavery] had a red spot on his back during the look back period, the record is clear that [Lavery] was not diagnosed or treated for the disabling condition of stage iii malignant melanoma until after the biopsy which is after the look back period. The documentation supports overturn of the prior pre ex decision.

(Emphasis added.)

Without indicating that she had ever thought that

Lavery's claim should be denied, Leimback again entered an internal

note favorable to Lavery, this time stating that the second

clinical assessment supported overturning the prior decision, and

that the "Appeal Triage Determination" was that Lavery's claim

would be reinstated. In a follow-up note, Leimback recorded the

following: "DBM will rec[ommend] approval and reinstatement.

- 6 - Dis[ability] supported and not pre-ex with add[itiona]l medical

rec[ords]."

On September 8, 2015, a note was added to Lavery's claim

file by Catherine Irelan, a member of Aetna's Appeal Triage Unit.

Subtly but materially expanding the previously stated reasons

given to Lavery for denial, Irelan wrote:

[Lavery] received medical treatment, care, or services for the disease or injury during the look-back period; the red lesion or mole 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.

(Emphasis added.)

On September 9, 2015, Ashley Carey, an appeal

coordinator, upheld Irelan's decision to reject Lavery's appeal of

his claim denial. Continuing Aetna's move away from the original

basis for the denial as communicated to Lavery (receipt of medical

treatment), Carey did not claim that Dr. Lopez's examination

constituted the requisite service or treatment for the disabling

condition. Instead, Carey wrote that denying Lavery's claim was

appropriate because Lavery "was referred for treatment (rec'd

services)" by Dr. Lopez in April. Carey also announced that

Lavery's effective date of coverage was actually July 1, 2014, not

June 1, 2014, per changes made to the Plan on June 23, 2014, which

were retroactively effective on May 1, 2014, instituting a thirty-

- 7 - day probationary period from the date of hire before coverage

becomes effective. As a result, Carey wrote, the look-back period

for Lavery's claim was actually April 1, 2014 to June 30, 2014,

encompassing Dr. Deignan's diagnosis of Lavery's malignant

melanoma.

On September 11, 2015, Carey sent Lavery a letter

containing Aetna's final decision rejecting his appeal of the

denial of his long-term disability benefits claim. The letter

provided a two-part rationale. First, Aetna denied Lavery's claim

on the ground that he "was seen, treated, and diagnosed with

malignant melanoma in the [April to June 2014] look back-period."

Second, even assuming that the other, initial look-back period

applied, Lavery's condition "would still be considered pre-

existing as he was seen for the spot on his back that caused the

diagnoses and the pre-existing clause . . . does not cover any

disability that is caused by or substantially contributed to, a

pre-existing condition." (Emphasis added.) Before receiving this

letter closing out his administrative appeal, Lavery had not been

told that Aetna considered his effective date of coverage to be

July 1, 2014.1 Nor had Aetna previously told him that it regarded

1 On October 10, 2014, Restoration Hardware told Aetna that Lavery's effective date of coverage was June 1, 2014. On January 23, 2015, Restoration Hardware again stated that Lavery's effective date of coverage was June 1. Aetna, in turn, initially and consistently told Lavery, before denying his appeal, that his effective date was June 1.

- 8 - the pre-existing condition exclusion to have been triggered even

using the original look-back period merely because "he was seen

for the spot . . . that caused the diagnoses."

B.

Lavery filed a complaint in federal district court on

February 27, 2017, alleging a wrongful denial of long-term

disability benefits in violation of ERISA,

et

seq. After the parties eventually filed cross-motions for summary

judgment based on the claim record filed by Aetna, the district

court ruled in favor of Lavery, ordering Aetna to allow Lavery's

long-term disability benefits claim. Lavery v. Restoration

Hardware Long Term Disability Benefits Plan, No. CV 17-10321,

, at *7 (D. Mass. Aug. 6, 2018). The district court

also awarded Lavery $27,752.50 in attorneys' fees, $400 in costs,

and $17,123.07 in prejudgment interest. The defendants timely

appealed both the order to pay benefits and the award of fees,

interests, and costs.

II.

A.

The defendants argue that Lavery's April 2014 office

visit with Dr. Lopez sufficiently qualified his malignant melanoma

as a pre-existing condition during the March 1, 2014, to May 31,

2014, look-back period (the "initial look-back period"). Our

assessment of this argument turns in the first instance on the

- 9 - Plan's language. In accordance with that language, the pivotal

question is whether at that April 2014 office visit (or at any

point between March 1 and May 31) any of the following occurred:

(1) Dr. Lopez "diagnosed or treated" the melanoma; (2) Lavery

"received" services "for the" melanoma; or (3) Lavery "took drugs

or medicine prescribed or recommended" by Dr. Lopez "for [the]

condition."

Lavery contends that because Dr. Lopez did not think he

had melanoma and simply referred him to another doctor, Dr. Lopez

could not have diagnosed, treated, provided services for, or

provided drugs or prescriptions for "the disease or injury" that

caused Lavery's subsequent disability. Rather, argues Lavery,

Dr. Lopez preliminarily diagnosed a different, non-disabling

disease and provided no treatment, services, or drugs for it. He

simply referred Lavery to another doctor for a second opinion.

That second doctor then correctly diagnosed the melanoma on June 19

and, later that month, provided treatment and services "for the

[melanoma]."

We previously found materially identical plan language

ambiguous. See Hughes v. Bos. Mut. Life Ins. Co.,

(1st Cir. 1994) (interpreting the phrase "treatment for a

sickness or injury" (internal quotations omitted)). One might

reason that a doctor could not be said to diagnose, treat, or

provide anything "for" a disease or injury if the doctor did not

- 10 - know or believe that the disease or injury even existed. See

. On the other hand, one might more broadly construe the

exclusion to include treatment or services provided for "any

symptom which in hindsight appears to be a manifestation of the

[disabling sickness or injury]."

So, how do we resolve that ambiguity? In Hughes, the

plan administrator claimed no discretion under the plan. We

therefore invoked the standard rules for interpreting insurance

policies, narrowly construing ambiguous language against the

insurer under the doctrine of contra proferentum.

.

Here, though, the Plan contains a clause plainly reserving to Aetna

discretionary interpretation authority. The existence of this

clause requires that we defer to Aetna's reasonable reading of the

Plan unless Aetna's decision to deny a benefits claim was arbitrary

and capricious. See Stephanie C. v. Blue Cross Blue Shield of

Mass. HMO Blue, Inc.,

(1st Cir. 2017).

Our assessment of whether a decision under a plan is

arbitrary and capricious can turn on "several different

considerations," often case-specific. Metro. Life Ins. Co. v.

Glenn,

(2008) ("[A]ny one factor will act as a

tiebreaker when the other factors are closely balanced, the degree

of closeness necessary depending upon the tiebreaking factor's

inherent or case-specific importance."). In Glenn, the Supreme

Court considered one such factor: whether the party deciding the

- 11 - benefits claim suffered from a structural conflict of interest.

. Glenn also recognized "procedural unreasonableness"

as an important factor to consider in deciding whether to set aside

a discretionary decision.

. Glenn otherwise did not

either describe or limit what other factors might be considered.

The circuit courts have since identified many such factors and, in

some instances, have developed standards and tests. See D&H

Therapy Assocs., LLC v. Bos. Mut. Life Ins. Co.,

, 37-

38 (1st Cir. 2011) (summarizing various circuits' standards and

tests). We have considered the standards of other circuits as

instructive only and have not adopted a one-size-fits-all list of

factors. See Santana-Díaz v. Metro. Life Ins. Co.,

(1st Cir. 2019). Recognizing the case-by-case nature of these

inquiries, for purposes of this case we find it helpful to frame

our analysis by asking a simple question: To what extent has Aetna

conducted itself as a true fiduciary attempting to fairly decide

a claim, letting the chips fall as they may? To the extent Aetna

has not so conducted itself in deciding Lavery's claim, we would

tend to move in the direction of viewing its decision as arbitrary

and capricious rather than fair and reasoned.

To answer that question, we turn first to Aetna's

structural conflict of interest. We have held that "a conflict

exists whenever a plan administrator, whether an employer or an

insurer, is in the position of both adjudicating claims and paying

- 12 - awarded benefits." Denmark v. Liberty Life Assur. Co. of Bos.,

(1st Cir. 2009) (citing Glenn,

).

There is no doubt that such a conflict is present here, as Aetna

is both the Plan's underwriter and claims administrator. That

said, Aetna produced evidence showing steps it has taken to

minimize the effects of this conflict. Such precautions would

normally cause us to afford little to no weight to Aetna's

structural conflict. See Glenn,

(instructing that

the conflict-of-interest factor "should prove less important

(perhaps to the vanishing point) where the administrator has taken

active steps to reduce potential bias and to promote accuracy").

However, as the remainder of our analysis will show, we find that

Aetna's behavior suggests that its structural conflict of interest

continued to play a role in its handling of Lavery's benefits

claim. See

("[A] conflict of interest . . . should prove more

important (perhaps of great importance) where circumstances

suggest a higher likelihood that it affected the benefits

decision . . . .").

To explain why this is so, we begin with DBM Leimback's

first decision. Aetna in its brief tells us that only DBMs may

make disability benefits determinations. Fully conversant with

the facts and the Plan language and armed with a clinical review,

Leimback concluded that Lavery was entitled to benefits. The

record then reflects that, after she communicated with a superior,

- 13 - the superior wrote that Leimback "recommend[ed] denial due to pre

ex condition." The record is silent as to how or why Leimback

reversed course, assuming she in fact did so.

Of course, we know of no reason why a person in

Leimback's position cannot change her view. She may have made a

mistake. The superior may have provided information that she had

overlooked. Or the superior may have simply convinced her by the

force of reason. We certainly offer no intimation that the mere

fact that a claims reviewer changed her mind suggests a nefarious

motive.

Here, though, the record further shows that when

weighing in a second time, Leimback persisted in concluding that

Lavery was entitled to coverage. She specifically concluded again

that the disability was "supported and not pre-ex." And this

judgment, too, was directly supported by another clinical

technician. Nevertheless, yet again, a superior entered the

picture, resulting in a 180-degree change, and the record once

more contains no explanation even acknowledging that change.

Shortly thereafter, Aetna denied Lavery's appeal.

The record also evinces something of a hunt for a reason

to deny Lavery's claim. The original denial was predicated upon

the conclusion that Lavery "received medical treatment during the

[initial look-back period]." The second clinical technician --

who presumably was consulted because of his familiarity with

- 14 - medical practices -- flatly opined that the "record is clear that

[Lavery] was not . . . treated for the disabling condition" during

the initial look-back period. Rather than retracting its denial,

Aetna instead internally justified it with two new rationales:

(1) during the initial look-back period, Lavery "was seen for the

spot on his back . . . that caused the [later] diagnosis"; and

(2) a different, later look-back period applied, during which the

melanoma was diagnosed and treated. As we will discuss, Aetna's

last-minute turn to this latter rationale -- without giving Lavery

a chance to reply -- plainly violated ERISA regulations prohibiting

the use of new or additional rationales for denying a benefits

claim without affording the claimant a reasonable opportunity to

respond. See

(h)(4)(ii).

Aetna's claim file for Lavery looks very little like one

would expect it to look were Aetna proceeding without regard to

its own interest. With two clinical technicians conversant in

construing office-visit records and presumably knowledgeable as to

when a doctor treats an illness, as well as one DBM who twice

reviewed the claim and found the conditions for triggering the

pre-existing exclusion inapplicable, one would expect to see in

the record some explanation for why the superiors overruled these

consistent judgments. One would also not expect to see what looks

very much like a false statement that Leimback initially

recommended denial of Lavery's claim. Cumulatively, the foregoing

- 15 - record of internally inconsistent positions, changing rationales,

missing explanations, and regulatory violations paints a picture

that starts to look quite like the "procedural unreasonableness"

cited by Glenn as an important factor for our consideration.

Of course, it is possible that we are simply seeing a

shortfall in good documentation rather than a manifestation of

Aetna's conflicted interest. Many claim files will have anomalies

or gaps of some type, and we do not suggest that such anomalies or

gaps are always enough to deem arbitrary or capricious the

decisions of a plan administrator. But there is more here.

In explaining its denial decision to this court, Aetna

avers that it was Lavery's burden to "show[] that he was free from

melanoma during the look-back period." This assertion contradicts

the plain language of the Plan. The Plan states that a disease is

a pre-existing condition if, during the look-back period, the

disease was "diagnosed or treated," or the applicant received

"services" or took prescribed or recommended drugs for the disease.

Lavery did not have to show that he was free from melanoma during

the look-back period in order to be covered under the Plan. Nor

does the fact that Lavery had melanoma during the look-back period

establish that the disease was a pre-existing condition as defined

by the Plan.

Aetna's flatly incorrect interpretation of the Plan

strongly suggests that either Aetna has been mistakenly relying on

- 16 - an overly broad reading of the pre-existing condition exclusion or

that it is behaving like a conflicted party intent on advocating

for a desired result rather than a fiduciary explaining its

decision. Cf. Encompass Office Sols., Inc. v. La. Health Serv. &

Indem. Co.,

(5th Cir. 2019) (considering whether

a plan administrator's construction of a plan was contrary to its

plain language in determining whether the administrator acted

unreasonably). Taking all of this together, we find that Aetna's

denial of Lavery's claim was less the decision of a reasoned

fiduciary and more the product of an arbitrary attempt to justify

a preferred result, and so Aetna's decision is not entitled to

deference.

Our decision that Aetna's handling of Lavery's claim was

arbitrary and capricious under Glenn does not mean that Lavery

necessarily prevails. We also need to consider how the plan is

best read without the benefit of a fiduciary decision upon which

we can rely. On this point, Hughes teaches that, left to our own

devices, we should read this exclusion against the insurer.

. Applying contra proferentum, we read the Plan just

as Leimback and the two clinical technicians read it: Dr. Lopez

did not treat melanoma, provide services for melanoma, prescribe

or recommend drugs for melanoma, or diagnose Lavery's disabling

disease as melanoma. We therefore agree with the district court

- 17 - that Lavery's claim should not have been denied based on his office

visit with Dr. Lopez during the initial look-back period.

B.

Aetna next argues that, notwithstanding Lavery's

April 2014 visit with Dr. Lopez, Dr. Deignan's diagnosis on

June 19, 2014, provided a second basis for denying Lavery's claim

under the pre-existing condition exclusion. Aetna argues that,

although it initially represented to Lavery that his look-back

period was March 1, 2014, to May 31, 2014, his actual look-back

period was April 1, 2014, to June 30, 2014 (the "corrected look-

back period"). This, Aetna contends, is because Restoration

Hardware amended the Plan on June 23, 2014 -- retroactively

effective as of May 1, 2014 -- to provide that a participant's

coverage eligibility date (and the date from which the look-back

period is calculated) is the first day of the calendar month

following a thirty-day probationary period. According to Aetna,

because Lavery became a coverage-eligible Restoration Hardware

employee in mid-May 2014, his look-back period under the amended

Plan began three months prior to July 1 (April 1 to June 30),

encompassing Dr. Deignan's June 19, 2014, diagnosis.

Lavery does not dispute that Dr. Deignan's diagnosis

would render his malignant melanoma a pre-existing condition if

his look-back period was indeed April 1, 2014, to June 30, 2014.

He argues, instead, that Aetna violated ERISA and caused him

- 18 - prejudice by failing to give him an opportunity to respond to

Aetna's reliance on the corrected look-back period. We agree.

Department of Labor regulations provide claimants with

a reasonable opportunity to respond to new or additional rationales

for why their claims have been denied.

-

1(h)(4)(ii) specifically provides:

(4) The claims procedures of a plan providing disability benefits will not, with respect to claims for such benefits, be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless . . . the claims procedures --

. . .

(ii) Provide 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; the rationale must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided under paragraph (i) of this section to give the claimant a reasonable opportunity to respond prior to that date.

Aetna's initial decision in March 2015 to deny Lavery's

claim relied only on Lavery's office visit with Dr. Lopez during

the initial look-back period. It was not until its September 2015

final denial decision that Aetna first told Lavery that there was

a corrected look-back period upon which Aetna relied as an

- 19 - alternative basis for denial. Indeed, prior to the September

decision, Aetna repeatedly told Lavery that his look-back period

was March 1, 2014, to May 31, 2014. Because Aetna made clear that

the September decision was "final" and that Aetna would take "no

other action," Lavery was never given an opportunity to respond to

the corrected look-back period. We find this to be a clear

violation of

(h)(4)(ii).

Having found a procedural violation, we next turn to the

issue of whether that violation prejudiced Lavery. See Stephanie

C., 813 F.3d at 425 ("[E]ven if the claimant shows that procedural

irregularities have occurred in the course of a review, we

typically require her to show prejudice as well." (citing Bard v.

Bos. Shipping Ass'n,

, 240–41 (1st Cir. 2006); Recupero

v. New Eng. Tel. & Tel. Co.,

(1st Cir. 1997))).

Lavery asserts that had he been given the opportunity to

challenge the corrected look-back period, he would have argued

that he was working for Restoration Hardware in a coverage-eligible

position before May 2014, creating a pre-June 2014 look-back period

even under the amended Plan. Aetna responds that Lavery had the

opportunity to make this argument during the administrative review

process.2 Aetna points to a declaration Lavery submitted when he

2 If Lavery could have shown that his look-back period pre- dated not only the June 2014 visit with Dr. Deignan, but also the April 2014 visit with Dr. Lopez, neither visit could be used by Aetna as a basis for denying his claim.

- 20 - appealed the initial denial of his claim, in which Lavery stated,

among other things, that he (1) worked for Restoration Hardware

from April 15, 2013, to May 12, 2014, as a "Construction

Associate"; (2) was asked to join the Restoration Hardware team

"full time" as a "Regional Facilities Manager/Store Facilities

Leader"; (3) "actually started working more than 40 hours per week

for Restoration Hardware by the end of April 2014"; and (4) began

his new job as Regional Facilities Manager/Store Facilities Leader

on May 12, 2014 -- his "formal start date" -- "with full time

benefits to begin June 1, 2014." This declaration, Aetna says,

shows that Lavery was fully capable of contesting the initial look-

back period on the same grounds on which he now challenges the

corrected look-back period.

But even if Lavery could have contested the look-back

period, he "had little reason" to do so. Bard,

.

Throughout the entire administrative process up until he received

the final decision, Lavery had no cause to believe that his claim

was being denied for any reason other than the April 2014 visit

with Dr. Lopez. And Lavery's declaration states that he did not

begin working as a de facto full-time Restoration Hardware employee

(full-time employment being a condition of benefits coverage

eligibility under the Plan) until the end of April 2014. In

accordance with his declaration, Lavery's look-back period under

the pre-amended Plan -- three months before the first day of the

- 21 - first full calendar month of eligible employment -- would have

been February 1, 2014, to April 30, 2014, encompassing the

Dr. Lopez visit nonetheless. Therefore, Lavery had no reason to

contest the look-back period until Aetna used the corrected look-

back period and the June 2014 visit with Dr. Deignan to deny his

claim. But by that time, as explained above, Aetna had foreclosed

his opportunity to respond.

We will not now hold against Lavery his decision to train

his efforts on fighting Aetna's initial basis for denying his claim

to the exclusion of the corrected look-back period basis, when

that decision was made in reliance on Aetna's repeated

representations about the look-back period. See, e.g.,

at 243

n.20 (noting the harm to a claimant caused by an ERISA plan's

failure to put him on notice of a fact that precluded him from

making a "substantial argument"). Because it is apparent from the

record that Lavery was lulled into foregoing the presentation of

the substantial argument that he qualified even under the amended

Plan,3 we find that Lavery has met his burden of showing that he

was prejudiced by Aetna's last-minute, unchallengeable invocation

of the corrected look-back period in the final letter rejecting

his appeal. See Stephanie C., 813 F.3d at 425; see also Buntin v.

3 The parties agree that Lavery did not receive the amended Plan until at least September 24, 2015, after Aetna issued the final decision denying his benefits claim.

- 22 - City of Bos.,

(1st Cir. 2015) (observing that

this court may affirm "on any basis made evident by the record").

C.

Having determined that Aetna's decision to deny Lavery's

benefits claim does not pass muster under arbitrary and capricious

review, we next address the remedy. Aetna argues that remand is

required so that it can "address[] the principal issue for

adjudication of a disability claim, that is, whether Lavery's

condition and restrictions prevented him from performing the

principal functions of his own occupation." But while "[t]here is

no question that this court has the power to remand to the claims

administrator[,] it also has the power, in appropriate cases, to

award benefits to the disability claimant." Buffonge v. Prudential

Ins. Co. of Am.,

(1st Cir. 2005) (citing Cook v.

Liberty Life Assur. Co. of Bos.,

(1st Cir. 2003)

("Once a court finds that an administrator has acted arbitrarily

and capriciously in denying a claim for benefits, the court can

either remand the case to the administrator for a renewed

evaluation of the claimant's case, or it can award a retroactive

reinstatement of benefits.")). A retroactive benefits

reinstatement is appropriate in ERISA cases where there is no

record evidence to support a denial of benefits. Cook,

(quoting Grosz-Salomon v. Paul Revere Life Ins. Co.,

(9th Cir. 2001)).

- 23 - There is ample, indeed compelling, evidence to conclude

that, at least at the time his benefits claim was denied, Lavery

was disabled. In its initial March 2015 denial letter to Lavery,

Aetna referred numerous times to Lavery's "disability," stating:

Our records indicate that you became disabled on 09/30/2014 due to melanoma of skin. Your file shows that . . . you became disabled on September 30, 2014 due to melanoma of skin . . . . As such your Long Term Disability claim has been denied, as your current disability is a pre-existing condition as defined by the plan.

Internal records also demonstrate unanimous belief amongst Aetna

insiders that Lavery was entitled to benefits unless the pre-

existing condition exclusion applied. Further, internal records

and a letter from one of Lavery's doctors show that Lavery

underwent an eleven-month interferon therapy treatment that was

scheduled to end in October 2015. This treatment had severe side

effects and, according to Aetna's records, left Lavery "unable to

perform his duties." Though Aetna's records state that Lavery's

work capacity beyond February 2015 would need to be reevaluated,

there is no evidence justifying the denial of Lavery's claim based

on a lack of a disability. See id. at 24. Therefore, we can say

that, at least for some period of time, Lavery "was denied benefits

to which he was clearly entitled." Buffonge,

.

We now consider a more difficult issue: the duration of

time for which Lavery is entitled to back benefits. Aetna asks us

- 24 - to remand because it does not have "any updated or recent medical

information to evaluate to determine whether Lavery could continue

to meet the Plan's test of disability beyond the initial limited

time period for which he originally submitted information." Aetna

also correctly notes that the standard for determining whether an

employee has a disability entitling him or her to long-term

benefits grows more difficult to meet after the first twenty-four

month period. During the first twenty-four month "own occ" period,

an employee is entitled to long-term benefits if he or she is

unable "to perform the material duties of [his or her] own

occupation." After that twenty-four month "own occ" period, an

employee is entitled to long-term benefits only if he or she is

unable "to work at any reasonable occupation," i.e., "any occ."

Therefore, Aetna asserts, "there is no basis upon which a court or

Aetna could find that Lavery, as of approximately March 29,

2017 . . . would qualify for benefits under the Plan's 'any

reasonable occupation' test of disability." In short, Aetna's

argument is that because no determinations were made and no record

evidence is now available as to whether Lavery was disabled during

the latter part of the "own occ" period and throughout the relevant

"any occ" period to date, remand is appropriate.

We start with the principle that "Congress gave the

federal courts a range of remedial powers . . . encompass[ing] an

array of possible responses when the plan administrator relies in

- 25 - litigation on a reason not articulated to the claimant." Glista

v. Unum Life Ins. Co. of Am.,

(1st Cir. 2004);

(noting that "[i]n this context, no single answer fits

all cases"). Here, as in Glista, we find that several factors

weigh in favor of precluding Aetna from completely asserting their

"no disability" defense as a means for achieving remand.

First, Lavery's medical condition "calls for resolving

this controversy quickly."

. Aetna's internal records

state that, as of mid-2014, Lavery had Stage III malignant

melanoma. At argument, Lavery's counsel represented that Lavery's

cancer has now advanced to Stage IV.

Second, and importantly, the unfortunately unsurprising

picture of a worsening illness suggests that Aetna's assessment of

Lavery as disabled would have been unlikely to change as time went

by.

Third, it is now August of 2019. It is impossible to do

contemporaneous exams or to document with specificity Lavery's

day-to-day activity over the now past few years. This is

presumably one of the reasons why Aetna reserves the right to deny

claims that are not promptly brought to its attention. Here,

Aetna's wrongful denial rather than Lavery's delay has caused the

inability to do contemporaneous assessments of his condition.

Cook,

("It would be patently unfair to hold that

an ERISA plaintiff has a continuing responsibility to update her

- 26 - former insurance company and the court on her disability during

the pendency of her internal appeals and litigation, on the off

chance that she might prevail in her lawsuit."). As in Cook, the

"reconstruction of the evidence of disability during the years of

litigation" could be difficult, if not impracticable, for Lavery.

.

With these factors in mind -- especially considering the

fact that the record suggests that it is unlikely that Lavery's

disability has lessened -- we conclude that it would be inequitable

to vacate the district court's order and judgment. Lavery's short-

term benefits claim was converted to a long-term disability claim

in January 2015. Since then, he has received no long-term

disability benefits. This delay was caused by Aetna's wrongful

denial of his benefits. The potential risk of more years of

administrative review and subsequent litigation, particularly in

light of Lavery's deteriorating medical condition, leads us to

hold that the "appropriate equitable relief" is to affirm the

district court's order of back benefits. Id.; see also Glista,

.

Recognizing that more than a year has passed since the

district court's order and initial judgment, we remand with

instructions for the district court to extend its award of back

benefits through the date of the mandate corresponding with our

opinion today. If Lavery seeks any further disability benefits

- 27 - for time periods after that date, he must proceed pursuant to

Aetna's administrative process under the Plan's "any occ"

standard.

D.

Aetna's final argument is that the district court's

prejudgment interest award of $17,123.07 should be vacated because

"[t]here is simply no basis in the record for the trial court to

arrive at this number." However, Aetna neglects to address Docket

Entry Number 73, in which the district court concluded that

prejudgment interest was "appropriate given the passage of time

from the denial of benefits (September 11, 2015) to the Court's

Order ordering the payment of same on August 6, 2018," and found

that Lavery's prejudgment interest calculation was "reasonable."4

Lavery, in reaching his proposed prejudgment interest award,

detailed the manner in which he determined the principal amount of

back benefits, identified the applicable interest rate (which

Aetna does not contest), and used an interest calculator.

Aetna does not challenge Lavery's calculation or provide

its own. It merely asserts that the district court's prejudgment

4 In referencing Lavery's calculation, the court appears to have mistakenly cited page ten of Docket Entry Number 65 (the defendants' first notice of appeal) rather than of Docket Entry Number 64 (an affidavit in support of Lavery's motion to alter the judgment to include an award of fees, costs, and prejudgment interest). Page ten of the affidavit contains the prejudgment interest calculation.

- 28 - interest award was "based on no foundation." As shown, that is

not so. Rather, pursuant to its "broad discretion both to

determine whether to award prejudgment interest and to determine

the parameters of such an award," Radford Tr. v. First Unum Life

Ins. Co. of Am.,

(1st Cir. 2007), the district

court reviewed, credited, and adopted Lavery's supported

calculation. Finding no abuse of discretion, we therefore decline

to vacate the court's prejudgment interest award. On remand, we

expect that the parties should be able to agree upon the amount of

past benefits due, additional interest, costs, and perhaps

attorneys' fees. If not, the district court can resolve any

disputes.

III.

For all the reasons stated above, we find that Aetna's

resolution of the relevant ambiguity was arbitrary and that an

unconflicted fiduciary would likely have found coverage. We

therefore affirm and remand to the district court for further

proceedings that may be necessary in view of this opinion and the

passage of time from the prior entry of judgment.

- 29 -