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 Plaintiff was awarded disability benefits from December 30, 2002 through December 30, 2005.

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Senior Judge Wiley Y. Daniel

Civil Action No. 11-cv-02749-WYD-KLM

KIMBERLY ADAIR,

Plaintiff,

v.

EL PUEBLO BOYS & GIRLS RANCH, INC. LONG TERM DISABILITY PLAN (a/k/a

“Your Group Employee Benefits Plan”; a/k/a Plan Number G204821/00001; also left

specifically unnamed in an Addendum To Summary Plan Description),

Defendant.

ORDER

THIS MATTER is before the Court on Defendant’s Motion for Summary

Judgment and Brief in Support Thereof filed July 2, 2012. The motion is fully briefed. 

Defendant contends in the motion that judgment is appropriate as a matter of law on

Plaintiff’s action under the Employee Retirement Income Security Act (“ERISA”)

because she failed to exhaust her administrative remedies in connection with her plan

administrator’s denial of disability benefits beyond December 30, 2005.1

I. FACTUAL BACKGROUND

Plaintiff began her employment with El Pueblo Boys’ & Girls’ Ranch on June 18,

2001, as director of human resources. Plaintiff’s last day of work with El Pueblo Boys’ &

Girls’ Ranch was September 30, 2002.

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On or about December 9, 2002, Plaintiff submitted a claim for long term disability

benefits. Pursuant to the El Pueblo Boys’ & Girls’ Ranch, Inc. Long Term Disability

Plan, Plaintiff submitted the claim to United States Life Insurance Company, the entity

that issued the subject disability policy for the employer. 

Plaintiff’s application was analyzed by Disability Reinsurance Management

Services, Inc. (“DRMS”). On or about March 14, 2003, DRMS notified Plaintiff that her

claim was denied. On or about June 25, 2003, Plaintiff appealed the denial of benefits.

DRMS affirmed the denial of benefits on or about January 8, 2004. 

On July 11, 2006, Plaintiff commenced a prior action in this Court, styled Kimberly

Adair v. El Pueblo Boys’ & Girls’ Ranch, Inc. Long Term Disability Plan, Civil Action No.

06-cv-01343-WYD-CBS. She claimed that the plan administrator had denied her

application for long term disability benefits in violation of ERISA and sought an award of

past and future disability benefits. (See Complaint in 06-cv-01343, Ex. A to Mot. for

Summ. J.) On March 20, 2008, after having reviewed the denial of benefits on a de

novo basis, I denied Plaintiff’s Motion for Judgment on the Pleadings and Defendant’s

Motion for Judgment on the Administrative Record and remanded the case to

Defendant for further fact finding. (Mot. Summ. J., Ex. B.) The remand was based on,

among other things, my finding that the denial of benefits to Plaintiff by Defendant’s plan

administrator “did not take into account or make adequate findings as to all of Plaintiff’s

impairments and whether these impairments impacted her ability to work.” (Id. at 36.)

On June 19, 2008, AIG Employee Benefit Solutions’ Disability Claims Center

(“AIG”), who handled Plaintiff’s claim for LTD benefits on remand, sent a letter to

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Plaintiff’s counsel requesting additional records. The letter only requested medical

information between the dates of October 2003 and December 2004. On August 7,

2008, Plaintiff’s counsel sent AIG medical records from 2004 through July 2008,

including a psychiatric evaluation dated February 20, 2004, which AIG acknowledged

receiving. On September 15, 2008, Plaintiff’s counsel sent the psychiatric evaluation to

AIG again after AIG stated that it did not have this in its records. 

On October 15, 2008, AIG issued a letter approving Ms. Adair’s claim for long term

disability (“LTD”) benefits from December 30, 2002 through August 20, 2004. (Mot.

Summ. J., Ex. F.) The letter stated that in order for LTD benefits to continue beyond

August 20, 2004, Plaintiff “must provide additional medical documentation from

February 20, 2004 through the present.” (Id.) Plaintiff’s counsel responded by letter of

October 17, 2008, questioning why benefits were not awarded beyond August 20, 2004,

and asking AIG to identify (a) what information it believed it was lacking in its file and

(b) what, if any, information in the file indicated that Plaintiff’s qualifications for disability

benefits changed on August 20, 2004.

On October 20, 2008, AIG sent a letter stating it had determined that Plaintiff met

the definition of disability defined in the Group Disability Policy. It did not limit LTD

benefits to those accruing before August 20, 2004. AIG also faxed a letter on October

23, 2008, to Plaintiff’s counsel, indicating this.

On November 25, 2008, AIG notified Plaintiff that it did not possess medical records

beyond the date of a psychiatric evaluation of March 29, 2004, and that based on that

record, it would extend LTD benefits only through December 29, 2004. (Mot. Summ. J.,

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Ex. G.) On December 3, 2008, AIG changed the date on its November 25, 2008 letter

to December 3, 2008, and resent the same letter.

On December 17, 2008, Plaintiff’s counsel sent AIG a letter from Dr. Reynolds, who

Plaintiff had seen on December 15, 2008. Counsel also sent AIG updated records from

Dr. Ramos from 2008, a letter from Dr. Ramos dated December 15, 2008, and an AIG

form that was signed by Plaintiff in December 2008. 

On February 17, 2009, AIG sent a letter stating that the only updated records it had

received were “two office notes from Dr. Michael Ramos, dated 7/22/08 and 12/15/08.” 

(EPR0138.) Despite that letter, on March 11, 2009, AIG sent a letter stating that it had

not received Dr. Ramos’ office records and it was “still awaiting additional medical

records from December 30, 2004 through the present.” (EPR 0133.) Then on April 13,

2009, AIG sent a letter stating that it had not received Dr. Ramos’ office records from

December 30, 2004 through the present.” (EPR0121).

On April 14, 2009, Plaintiff’s counsel sent AIG a letter with a CD containing all the

records again, and stating that it should “already have everything on this disk, with the

exception of some proof of mailing scans, etc.” (EPR0115.) 

AIG did not issue any further written communications to either Plaintiff or her

counsel until December 29, 2009. On that date, AIG notified Plaintiff her benefits were

extended to December 29, 2005, and terminated effective December 30, 2005. (Mot.

Summ. J., Ex. C.) This final termination letter included a notice that any appeal of the

termination decision must be submitted in writing within 180 days of receipt of the

notification. (Id. at EPR 0028.) 

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Plaintiff did not submit an appeal of the termination decision. Instead, on June 2,

2010, Plaintiff moved to reopen the case and requested that the Court award further

benefits. (Mot. Summ. J., Ex. D.) I denied that motion by Order of October 29, 2010. 

(Id., Ex. E.) Plaintiff commenced the current action with the filing of her Complaint on

October 21, 2011. 

II. ANALYSIS

A. Standard of Review

Summary judgment may be granted where “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and the ... moving party is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(c). “A fact is ‘material’ if, under the

governing law, it could have an effect on the outcome of the lawsuit.” E.E.O.C. v.

Horizon/ CMS Healthcare Corp., 220 F.3d 1184, 1190 (10th Cir. 2000). “A dispute over

a material fact is ‘genuine’ if a rational jury could find in favor of the nonmoving party on

the evidence presented.” Id. 

The burden of showing that no genuine issue of material fact exists is borne by

the moving party. Horizon/CMS Healthcare Corp., 220 F.3d at 1190. “‘Only disputes

over facts that might affect the outcome of the suit under the governing law will properly

preclude the entry of summary judgment.’” Atl. Richfield Co. v. Farm Credit Bank of

Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000) (quotation omitted). When applying the

summary judgment standard, the court must “‘view the evidence and draw all

reasonable inferences therefrom in the light most favorable to the party opposing

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summary judgment.’” Id. (quotation omitted). All doubts must be resolved in favor of

the existence of triable issues of fact. Boren v. Sw. Bell Tel. Co., 933 F.2d 891, 892

(10th Cir. 1991). 

B. Whether Summary Judgment is Appropriate in this Case

Defendant argues that there is no genuine dispute that the Plaintiff, with no

excuse, failed to exhaust her administrative remedies, and that Defendant is entitled to

judgment as a matter of law. The Tenth Circuit holds that “‘exhaustion of administrative

(i.e., company-or-plan-provided) remedies is an implicit prerequisite to seeking judicial

relief’” on an ERISA claim. McGraw v. Prudential Ins. Co. of Am., 137 F.3d 1253, 1263

(10th Cir. 1998) (quotations omitted). “[O]therwise, premature judicial interference with

the interpretation of a plan would impede those internal processes which result in a

completed record of decision making for a court to review.” Id.

Nevertheless, “‘because ERISA itself does not specifically require the exhaustion

of administrative remedies available under pension plans, courts have applied this

requirement as a matter of judicial discretion.’” McGraw, 137 F.3d at 1263 (quotation

omitted). In exercising this discretion, courts have held that exhaustion is not required

under two limited circumstances: first, when resort to administrative remedies would be

futile; or, second, when the remedy provided is inadequate.” Id. 

Plaintiff first argues that she satisfied her exhaustion requirements prior to filing

the first lawsuit, as the administrative review requirement runs from the first denial of the

claim, not the final denial, citing 29 C.F.R. § 2560.503-1(h)(3)(1). She further argues

that there is no statute, regulation, or case law applying an exhaustion requirement to

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post remand reviews. Here, she asserts that there was no new claim application,

denial, and review process initiated after the case was remanded by the Court’s March

20, 2008 Order. Plaintiff notes that the Court did not remand for a renewal of the

administrative appeal process, but rather for further fact-finding, i.e., for reconsideration

of the Plan’s previous denial. Thus, she asserts that, in effect, the Court continued the

previous administrative process. 

I reject this argument. The Tenth Circuit has specifically held that the exhaustion

requirement is applicable to a case that had been previously remanded, as here. 

DeMoss v. Matrix Absence Mgmt., Inc., 438 F. App’x 650, 653 (10th Cir. 2011)

(plaintiff’s failure to request administrative review of the denial during the remand period

prohibited his pursuit of relief via litigation); see also Kumar v. Nat’l Med. Enters., 267

Cal. Rptr. 452, 456 (Cal. App. 1990) (appeal dismissed; appellant must exhaust

administrative remedies after remand before returning to court). Further, it is undisputed

that AIG issued a detailed decision on December 29, 2009, that clearly notified Plaintiff of its

exhaustion requirement – it notified Plaintiff as required by regulation that she had 180 days

following its “adverse benefit determination” to appeal the determination. Instead of

pursuing the appeal, Plaintiff proceeded directly to this action, nearly two years after

AIG’s termination decision was issued. 

Plaintiff also argues that an exhaustion requirement would result in “an endless

loop” or “endless cycle” of administrative determinations. This argument makes no

sense. Whether in the initial claims process or on remand, the exhaustion of remedies

requirement serves the same purposes: 

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 First, exhaustion protects “administrative agency authority.” Exhaustion

gives an agency “an opportunity to correct its own mistakes with respect to

the programs it administers before it is haled into federal court,” and it

discourages “disregard of [the agency's] procedures.” 

 Second, exhaustion promotes efficiency. Claims generally can be

resolved much more quickly and economically in proceedings before an

agency than in litigation in federal court. In some cases, claims are settled at

the administrative level, and in others, the proceedings before the agency

convince the losing party not to pursue the matter in federal court. “And even

where a controversy survives administrative review, exhaustion of the

administrative procedure may produce a useful record for subsequent judicial

consideration.” 

Woodford v. Ngo, 548 U.S. 81, 89 (2006) (internal citations omitted). These purposes

are served just as well by the administrative appeal of a decision on remand as by the

administrative appeal of an initial decision. Theoretically, “an endless cycle” could

ensue any time an administrative decision is remanded for reconsideration, but an

appeal is more likely to abate than to create such a cycle, as recognized by Woodford. 

Plaintiff is also incorrect in her statement that no “new” review and denial process

occurred after this case was remanded. On the contrary, the case was remanded

specifically for a reevaluation of Plaintiff’s prior claim and a review of “further relevant

evidence” to be submitted by Plaintiff. (Mot. Summ. J., Ex. B, March 20, 2008, Order at

45.) In compliance with the Court’s Order, AIG reevaluated Plaintiff’s claim in light of

both previously submitted records and Plaintiff’s additional submissions, paid her

disability benefits for 2002-2005, and terminated those benefits effective December 30,

2005. Plaintiff’s characterization of the process as mere “further fact-finding” does not

distinguish this evaluation and determination from any other ERISA proceeding

requiring the exhaustion of administrative remedies prior to the filing of litigation.

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The final issue is whether Plaintiff was excused from the exhaustion requirement. 

Plaintiff does not assert that exhaustion would have been futile or that the remedy

provided by AIG was inadequate. Instead, Plaintiff complains about the numerous

procedural irregularities that allegedly occurred on remand, including AIG’s alleged

protraction of the review process, deficiencies in the initial adverse benefit decision,

AIG’s denial of benefits based on lack of medical information despite the fact that this

information had allegedly been provided to AIG on several occasions, and the fact that

AIG did not issue its determination within 45 days of the Court’s remand as allegedly

required by regulation. Based on these irregularities, Plaintiff argues that she should

“be deemed to have exhausted the administrative remedies. . . .” 29 C.F.R.

§ 2560.503-1(l). Defendant disagrees, arguing that when a plan deviates from ERISA’s

procedural requirements, the remedy is a de novo review of the plan’s benefits

determination.

Turning to my analysis of this issue, the Tenth Circuit has noted that 29 C.F.R.

§ 2560.503–1(l) was revised, effective in 2002, to provide:

[i]n 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 [29 U.S.C. § 1132(a)] 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.

LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment and

Dependent Life Ins. Plan, 605 F.3d 789, 797-99 (10th Cir. 2010) (citing § 2560.503–1(l)

(2002)(emphasis added); see also Rasenack ex rel. Tribolet v. AIG Life Ins. Co., 585

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 While LaAsmar also noted that the court may apply a de novo standard of review to the plan

administrator’s decision based on such procedural irregularities, as pointed out by Defendant, this does

not impact or diminish in any way its other holding as to exhaustion of administrative remedies.

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F.3d 1311, 1315 n. 4 (10th Cir. 2009) (“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”). The LaAsmar court noted that “[t]his regulation, like its

predecessor, protects a claimant by insuring that the administrative appeals process

does not go on indefinitely.” Id.

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I note that LaAsmar did not decide whether the specific types of irregularities

argued by Plaintiff are sufficient to excuse exhaustion. While Defendant argues that

exhaustion should only be deemed excused under § 2560.503-1(l) in connection with

the appeal of an adverse benefit determination, see § 2560.503-1(h), I disagree. 

Instead, I find that exhaustion should be deemed excused under § 2560.503–1(l) when

the plan administrator fails to comply with any of the claim procedures set out in the

regulation. That appears to be consistent with the plain language of the regulation,

stating that a claimant shall be deemed to have exhausted administrative remedies 

“[i]n the case of a failure of a plan to establish or follow claims procedures consistent

with the requirements of this section. Id. (emphasis added). If the claim procedures

were limited only to procedures regarding the appeal of an adverse benefit

determination, the regulation would need to have referred only to subsection (h) of the

regulation.

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 While the regulation also provides that this period may be extended for two periods of up to 30

days, AIG also did not issue its decision within that time frame. Nor did it notify Plaintiff “of the

circumstances requiring the extension(s) and the date by which the plan expected to render a decision, as

required for the plan administrator to be able to obtain such an extension. Id.

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One claim procedure under the regulation that is pertinent to this case requires

as to disability benefit claims that the plan administrator “notify the claimant, in

accordance with paragraph (g) of this section, of the plan’s adverse benefit

determination. . .not later than 45 days after receipt of the claim by the plan.” 29 C.F.R.

§ 2560.503-1(f)(3). Defendant does not dispute that this provision is applicable to AIG’s

LTD benefit ruling, and it is undisputed that AIG did not issue its decision within this time

frame.3

 I find that this failure means that Plaintiff is deemed excused from exhaustion. 

As further support for my finding, I note that the Ninth Circuit in Barboza v. Cal.

Ass’n of Prof’l Firefighters, 651 F.3d 1073, 1080 (9th Cir. 2011), found that the district

court erred in dismissing a claimant’s case without prejudice for failure to exhaust. The

court based its finding on the fact that the claimant’s administrative remedies should

have been deemed exhausted under § 2560.503–1(l) because the plan administrator

failed to resolve the claimant’s request within the required time limits. Id. at 1077-80. 

Similarly, the Second Circuit stated, “[i]f the plan administrator misses any of the

deadlines [including the initial deadline to decide a claim within 45 days], the claim is

deemed denied with administrative remedies exhausted thereby permitting a claimant to

immediately bring an action in federal court”. Burke v. PriceWaterHouseCoopers LLP

Long Term, 572 F.3d 76, 80 (2d Cir. 2009). I believe this authority is consistent with 

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 Plaintiff also argues that AIG’s letter of October 15, 2008, was the initial adverse benefit

determination, see § 2560.503-1(m)(4), and that the letter did not comply with all the requirements of

§ 2560.503-1(g). For example, the letter does not provide a statement of Plaintiff’s right to bring a civil

action under section 502(a) of ERISA. § 2560.503-1(g)(1)(iv). This would appear to provide another basis

for finding that Plaintiff is deemed to have exhausted her administrative remedies. 

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§ 2560.503-1(l), and is likely how the Tenth Circuit would rule on the issue based on

LaAsmar.

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III. CONCLUSION

Based upon the foregoing, it is

ORDERED that Defendant’s Motion for Summary Judgment, seeking judgment

as a matter of law on Plaintiff’s ERISA action for failure to exhaust, is DENIED. Plaintiff

is deemed to have exhausted her administrative remedies pursuant to 29 C.F.R.

§ 2560.503–1(l). It is

FURTHER ORDERED that a hearing on Plaintiff’s ERISA claim for long term

disability benefits is set for Thursday, March 21, 2013, at 2:00 p.m.

Dated: January 24, 2013.

BY THE COURT:

s/ Wiley Y. Daniel 

Wiley Y. Daniel,

Senior United States District Judge

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