Opinion ID: 172826
Heading Depth: 2
Heading Rank: 1

Heading: Policy Construction

Text: Our first task is to determine whether the policy is ambiguous. We interpret the policy according to its plain meaning. Kellogg, 549 F.3d at 829. Under federal common law, the proper inquiry is not what [the provider] intended a term to signify; rather, we consider the common and ordinary meaning as a reasonable person in the position of the plan participant would have understood the words to mean. Miller v. Monumental Life Ins. Co., 502 F.3d 1245, 1249 (10th Cir.2007) (internal quotation marks and alterations omitted). Ambiguity exists when a plan provision is reasonably susceptible to more than one meaning, or where there is uncertainty as to the meaning of the term. Admin. Comm. of Wal-Mart Assocs. Health & Welfare Plan v. Willard, 393 F.3d 1119, 1123 (10th Cir. 2004) (internal quotation marks omitted). The doctrine of contra proferentem, which construes all ambiguities against the drafter, applies to de novo review of ERISA plans. Miller, 502 F.3d at 1249, 1253. ERISA imposes upon providers a fiduciary duty similar to the one trustees owe trust beneficiaries. Just as a trustee must conduct his dealings with a beneficiary with the utmost degree of honesty and transparency, an ERISA provider is required to clearly delineate the scope of its obligations. Id. at 1250 (internal citation omitted). Finally, the insured has the burden of showing that a covered loss has occurred, while the insurer has the burden of showing that a loss falls within an exclusionary clause of the policy. Pitman, 217 F.3d at 1298. Mr. Rasenack contends the policy's hemiplegia provision is ambiguous. He argues the policy's definition of hemiplegia as complete and irreversible paralysis is wholly dependent on the meaning of paralysis, which the policy does not define. AIG responds that the definition of hemiplegia carries a plain meaning, i.e., that the entire arm and leg of one side of the body must be completely paralyzed. Aple. Br. at 36. AIG explains how it arrived at this interpretation: AIG, based on guidance from medical experts, determined that complete and irreversible paralysis on one side of the body means no movement at all of the left or right side. AIG determined that the Plan required that, as a necessary condition of such paralysis, there be no movement in the relevant extremities. Lack of sensation or weakness might also be present in paralysis, but the fundamental underlying requirement for benefits for hemiplegia was that there be no movement at all of the entire arm and entire leg of the same side of the body, and that such paralysis be complete and irreversible. Id. at 31 (emphasis in original, internal citation omitted). In other words, anything less than `no movement at all' would not be `complete' paralysis. Id. We agree that the policy is ambiguous for its failure to define paralysis. AIG's interpretation of paralysis as limited to the absence of movement may be reasonable. But the question that confronts us is not whether their interpretation is reasonable, but whether there is more than one reasonable interpretation of the Plan. Miller, 502 F.3d at 1252. Mr. Rasenack points us to Mosby's Medical Dictionary, which defines paralysis as the loss of muscle function, loss of sensation, or both and complete paralysis as paralysis characterized by a complete loss of motor function. MOSBY'S MEDICAL, NURSING, AND ALLIED HEALTH DICTIONARY 405, 1277 (6th ed. 1994). Motor is defined as 1. pertaining to motion, the body apparatus involved in movement, or the brain functions that direct purposeful activities[;] 2. pertaining to muscle, nerve or brain center that produces or subserves motion. Id. at 1123. Function is defined as 1. an act, process or series of processes that serve a purpose [;] 2. to perform an activity or to work properly or normally.  Id. at 712 (emphasis added). Other medical dictionaries similarly define paralysis in terms of loss of muscle function or sensation, not as the absence of all movement. See, e.g., MATTHEW BENDER ATTORNEYS' DICTIONARY OF MEDICINE P-58 (2008) (defining paralysis as a condition marked by loss of muscle function, i.e., by the inability of the muscles to contract and noting [l]ess frequently, the term paralysis applies to a loss of sensation). See also WEBSTER'S NEW INTERNATIONAL DICTIONARY 1637 (3d ed. 1971) (defining paralysis as a complete or partial loss of function involving the power of motion or of sensation in any part of the body). In fact, the Summary Plan Description (SPD) contains a chart classifying the various types of accidental loss in which it describes hemiplegia as the loss of use of both upper and lower limb on same side of body. Aplt. App. at 685. We conclude that there is more than one reasonable interpretation of the meaning of paralysis, and the Plan is thus ambiguous for its failure to define the term. See Miller, 502 F.3d at 1252-53. AIG suggests that the Plan's definition of hemiplegia as  complete and irreversible paralysis saves it from ambiguity. But complete and irreversible modifies paralysis, and therefore the definition still rests on the meaning of paralysis. We therefore apply the doctrine of contra proferentem and strictly construe the ambiguity against AIG. Id. at 1253. We have explained the policy rationale behind contra proferentem: Strictly construing ambiguous terms presents ERISA providers with a clear alternative: draft plans that reasonable people can understand or pay for ambiguity. Miller, 502 F.3d at 1255. Here, AIG easily could have defined paralysis, the key term in the definition of hemiplegia. It seeks to limit the definition to the absence of movement, but the term is not so limited in medical dictionaries and AIG did not so define it. Strictly construing the policy language against AIG, we consider complete and irreversible paralysis to mean the complete and irreversible loss of muscle function or sensation, not the absence of all movement. [9] The final matter regarding construction of the policy concerns the Plan's requirement that the loss occur to an Insured Person within 365 days of the accident. Aplt. App. at 341; see also Summary Plan Description, Aplt. App. at 686 (To be eligible for benefits, the covered loss must occur within one year from the date of the accident.). Mr. Rasenack interprets this provision to mean we may only consider his medical state during the first 365 days following his accident. On appeal, AIG does not object to this interpretation; in fact, AIG included this phrasing in the questionnaire it sent to one of the reviewing physicians, asking whether the paralysis occur[red] within 365 days of the May 21, accident date. Id. at 84. We note, however, that AIG did not limit its review to the 365-day period; the administrative denial references Mr. Rasenack's progress in the last couple of years. Id. at 69.