*

The Honorable Gerald E. Rosen, Un

Eastern District of Michigan, sitting by d

1

RECOMMENDED FOR FULL-

Pursuant to Sixth Circ

ELECTRONIC CITATION: 2000 F

File Name: 00a0

UNITED STATES COU

FOR THE SIXTH 

____________

UNIVERSITY HOSPITALS OFCLEVELAND,

Plaintiff-Appellant,

v.

EMERSON ELECTRIC

COMPANY and EMERSONELECTRIC COMPANY BENEFITPLAN,

Defendants-Appellees.

Appeal from the United St

for the Northern District of 

No. 92-01555—Paul R. Matia

Argued: August 

Decided and Filed: Fe

Before: NELSON and MOO

ROSEN, Distric
2 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

_________________

COUNSEL

ARGUED: Daniel W. Dreyfuss, DANIEL W. DREYFUSSCO., Cleveland, Ohio, for Appellant. Phillip J. Campanella,CALFEE, HALTER & GRISWOLD, Cleveland, Ohio, forAppellees. ON BRIEF: Daniel W. Dreyfuss, DANIEL W.DREYFUSS CO., Cleveland, Ohio, for Appellant. Phillip J.Campanella, CALFEE, HALTER & GRISWOLD, Cleveland,Ohio, for Appellees.

ROSEN, D. J., delivered the opinion of the court, in which

MOORE, J., joined. NELSON, J. (pp. 25-29), delivered aseparate dissenting opinion.

_________________

OPINION

_________________

ROSEN, District Judge. 

I. INTRODUCTION

Plaintiff/Appellant University Hospitals of Cleveland

(“UHOC”) appeals from the most recent award of summaryjudgment in favor of Defendants/Appellees Emerson ElectricCompany and the Emerson Electric Company Benefit Plan(collectively, the “Plan”) in this action brought under theEmployee Retirement Income Security Act of 1974(“ERISA”), 29 U.S.C. § 1001 et seq. In the ruling now on

appeal, the District Court found that the Plan’s administrativereview body, the Employee Benefit Committee (“EBC”), didnot act arbitrarily or capriciously in denying a claim for healthcare benefits made by UHOC as assignee of the claims of adeceased Plan participant, Gerald Weaver. In a prior appeal,we reversed an initial award of summary judgment to thePlan, citing evidence in the record that the EBC had“erroneously relied upon a provision that was not included in
No. 98-4061 Un

Emerso

the actual Plan documents.” SCleveland v. Emerson Elec. Co. Bslip op. at 4 (6th Cir. Dec. 22, ordered the matter remanded to the reconsider UHOC’s claim in liprovisions applicable to such claim

On remand, the EBC once again d

the District Court again affirmed “arbitrary and capricious” standarraises four arguments on appeal: erred in ruling that the EBC’s decisfrom the time limits set forth in requests for review of claim deniaimproperly disregarded the “law oestablished in our earlier decision, of the Plan’s time limits on remanEBC’s decision on remand was tailed us to reverse and remand in the the EBC acted arbitrarily and capribased upon a determination that tsuffered from a pre-existing conditbelow, we find that the EBC’s decarbitrary and capricious, and we award of summary judgment to th

II. FACTUAL AND PROCED

A. The Parties

As we noted in our earlier deci

factual dispute in this case. Pbrought this ERISA action as the aseeking to recover benefits from the for medical services rendered to Mon June 3, 1991. The Plan’s adminEBC, has twice denied UHOC’s cthat the medical services at issue wbecause they constituted treatment 
4 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

suffered by Mr. Weaver before he became eligible for Planbenefits.

Mr. Weaver began working for Automatic Switch Company

(“ASCO”), a division of Defendant/Appellee EmersonElectric Company, on September 24, 1990. He becameeligible for medical benefits under the Plan on December 24,1990, the ninetieth day of his employment. From March 27,1991 until his death on June 3, 1991, Mr. Weaver receivedtreatment at UHOC for myelodysplastic syndrome, a bonemarrow disease. The principal dispute in this case is whetherMr. Weaver received prior treatments for this disease thatwould trigger the Plan’s “pre-existing condition” exclusionfrom coverage.B. Mr. Weaver’s 1990-91 Visits to Physicians and

Medical Treatments

On September 11, 1990, shortly before he began working

for ASCO, Mr. Weaver visited his physician, Dr. UnniKumar, complaining of fatigue and stress. Dr. Kumardiagnosed Mr. Weaver as suffering from anemia,recommended a blood test, and asked Mr. Weaver to returnfor further evaluation. (J.A. at 468-70.) That same day, bloodsamples were taken from Mr. Weaver and submitted to alaboratory for analysis.

On September 28, 1990, four days after Mr. Weaver began

his employment at ASCO, Mr. Weaver again visited Dr.Kumar to discuss the results of his recent blood test. Dr.Kumar advised Mr. Weaver that the serum iron, folic acid,and B-12 portions of this test were “all normal.” (J.A. at474.) Nevertheless, in light of the previous diagnosis ofanemia, Dr. Kumar recommended that the blood test berepeated “before we embark on a complete hematologicalwork-up.” (Id.) In accordance with this recommendation, asecond blood sample was taken from Mr. Weaver that dayand submitted for laboratory analysis. If this second test

No. 98-4061 Un

Emerso

Given the structure of the Pre-exi

where “Pre-existing” has no meanistart of coverage and where the daof the first two of the three time pethe date on which the individual bplan, it was not irrational for the Cthe drafters intended the use of the the third time period as well. Thconstruction of the provision, birrational construction.

The parties agree that there w

when Mr. Weaver was treatment-f1990, the date on which he became June 3, 1991, the date on which hbecause I agree with the district cmost recent decision was rendereremand and was not subject to the capplied during the initial decisionaffirm the challenged judgment.
28 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

489 U.S. 101, 115 (1989), and Yeager v. Reliance StandardLife Ins. Co., 88 F.3d 376, 381 (6th Cir. 1996).

The record leaves no room for doubt as to why the

Committee upheld the denial of benefits in the case at bar. Asthe deposition testimony of Committee Member JamesDraeger shows, the Committee saw no reason even toconsider whether Mr. Weaver had received treatment orservices during the first 90 days after September 28, 1990.The Committee upheld the denial of benefits solely on thebasis of its construction of the provisions of the Plan relatingto pre-existing medical conditions. And the record shows, Ibelieve, that the Committee had a rational basis for construingthe provisions in the way that it did.

Addressing the Pre-existing Limitation clause in the

Schedule of Benefits, Mr. Draeger explained at page 104 ofhis deposition transcript that “this particular provision startswhere an individual is eligible for the plan . . . .” (Mr.Weaver became eligible on December 24, 1990.) Theexclusion for medical expenses incurred in connection withcertain pre-existing conditions, Mr. Draeger went on toexplain, continues “for a period of one year.” Draeger Depo.Trans. at 104-105. Once eligibility starts, in other words, 

“[the exclusion] is going to go for one year from thatdate. Or it is going to go . . . from that date for threemonths. 

Q From which date?A We are talking about an individual becoming

eligible under the plan, so now the individual iseligible. So now we are talking about one date[i.e., one year] from the date of eligibility, or ifthe individual has been free of treatment at anythree-month period during that particular oneyear period of time, whichever fi[r]st occurs.”Id. at 105.

No. 98-4061 Un

Emerso

proved abnormal, Dr. Kumar “Weaver] to a hematologist.” (Id.)

This September 28, 1990 test re

outside the normal range, includinplatelet counts, low hemoglobin anelevated MCV and MCH levels. (on October 8, 1990, Dr. Kumar advised him to see a hematologistthere are two subsequent entries ithe month of October — the first scheduling Mr. Weaver for an addsecond dated October 26, 1990, refusal to submit to this additionaWeaver declined any further treatlack of insurance coverage that wocondition. (Id.)

Instead, Mr. Weaver elected to 

— two weeks after his Plan eligib1990 — to visit a hematology specDr. Kumar. The examining phydiagnosed Mr. Weaver as sufferimoderately severe thrombocytopencourse of the next several days, number of procedures, including marrow tests, a chest x-ray, and a These procedures were intended, adiagnosis of myelodysplastic syndrthe results proved inconclusive, DWeaver to Dr. James Weick at further evaluation. (J.A. at 671.)

Beginning on February 8, 1991 

death four months later, Mr. Weamedical services and treatments UHOC, and elsewhere. His treatmon March 27, 1991, and resulted in services in the amount of $23
6 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

ultimately was diagnosed as suffering from myelodysplasticsyndrome, a bone marrow disease in which defective stemcells proliferate to the exclusion of normal cells. This diseaseevolved to acute leukemia, and led to Mr. Weaver’s death onJune 3, 1991 from kidney and heart failure. (J.A. at 536-37.)C. The Relevant Plan Provisions

This case turns upon the EBC’s determination that all of the

medical expenses incurred by Mr. Weaver at UHOC derivedfrom treatments for a “pre-existing condition” as defined inthe Plan document, and therefore are not “covered medicalexpenses” under the Plan. This determination rests upon thefollowing Plan provision, entitled “Pre-Existing ConditionLimits”:

Hospital expenses and other medical expenses incurred

in connection with a disease or injury for which acovered individual received treatment or services or tookprescribed drugs during the three month periodimmediately preceding the effective date of suchindividual’s coverage under this Plan will not beincluded as covered medical expenses prior to the earliestof the dates shown in the Schedule of Benefits.

(Plan, § 4, ¶ 1.84, J.A. at 609.) The Plan’s Schedule ofBenefits, in turn, sets forth the terms under which aparticipant may obtain coverage for a pre-existing condition:

No benefits are payable for a pre-existing illness or

injury for which an individual was treated or tookprescribed medicine within 3 months prior to coverageuntil:

1) the individual has been covered under this Plan forone year, or2) the individual has been free of treatment for the

pre-existing illness or injury for 3 months.

No. 98-4061 Un

Emerso

2) the individual has been frepre-existing illness or injury f

As written, the second claus

interpretations. It is possible thaprovide that the one-year-of-coveroverridden upon the expiration of thcommencing with the last treatmintent, the drafters could have said have said, for example, that the yeawould be overridden once the indtreatment for three months “frotreatment.” Unfortunately, the included in the Pre-existing Limit

It is also possible – and perha

drafters intended to provide threquirement would be overridden been free of treatment for three moof coverage. Unfortunately, howexplicitly say this either. Througthey left their intention ambiguous

Such ambiguities are almost 

document as complex as this onecourse, have left the resolution of thto the courts. But they chose noprovided that a five-member Empappointed by the Emerson ElectDirectors should have “discretioneligibility for benefits or to const. . . .” And they further provided thconstruction of the Plan’s terms capricious” – i.e., simply irrati

decision “shall be final and non-reof such language, it is clear that thto second-guess the Committee uacted irrationally. See Firestone T
26 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

has not been briefed and argued, however, and I haveconducted no independent research on the matter. I dissenthere not because of what was said by the original panel (apanel of which I was a member, incidentally), but because Iremain of the opinion that it was not irrational for theCommittee to construe the terms of the Plan as meaning thatno benefits would be payable in connection with Mr.Weaver’s pre-existing illness during the first year of coverageunless and until there had been three months of coverage inwhich Mr. Weaver had been free of treatment for the illness.

I acknowledge that the language of the Plan is not as clear

as it might be. The Plan’s Benefit Provisions start off plainlyenough by establishing certain “Pre-Existing ConditionLimits” once coverage commences:

“Hospital expenses and other medical expenses incurredin connection with a disease or injury for which acovered individual received treatment or services or tookprescribed drugs during the three month periodimmediately preceding the effective date of suchindividual’s coverage under this Plan will not beincluded as covered medical expenses prior to the earliestof the dates shown in the Schedule of Benefits.”

Under the catchline “Pre-existing Limitation” (a reference,obviously, to the limits pertaining to medical conditions thatwere “pre-existing” as of the commencement of coverage),the Plan’s Schedule of Benefits – speaking as of thecommencement of coverage, in the Committee’s undertaking– then says this:

“No benefits are payable for a pre-existing illness orinjury for which an individual was treated or tookprescribed medicine within 3 months prior to coverageuntil:

1) the individual has been covered under this Planfor one year, or

No. 98-4061 Un

Emerso

1As we observed in UHOC’s prio

reference to a condition “for which you comport with either the Plan or the SPDreceiving treatment or taking prescribed 

(Plan, § 7, at 3, J.A. at 625.)

The Summary Plan Description 

language, in a section entitled “Ex

No medical benefits will be paid • A pre-existing illness or inju

treated or took prescribed mebefore your coverage began u— you have been covered und— you haven’t had any chainjury for 3 months,whichever comes first . . . .

(SPD at 12, J.A. at 157.)D. Procedural Background

This case has a lengthy procedur

shortly before his death, Mr. Weafrom the Plan for a portion of incurred at UHOC and elsewherePlan’s third-party administratoIncorporated (“PAI”), denied this that “[n]o benefits are payable for received diagnosis, were treated or within 3 months before [the] effect(J.A. at 224.)1 On August 15, position upon being presente
8 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

reimbursement of additional medical expenses incurred byMr. Weaver before his death. (J.A. at 355.)

On November 11, 1991, the executor of Mr. Weaver’s

estate, Clark Weaver, assigned to UHOC “all benefits in theform of health insurance or similar benefits under anemployer-sponsored health and welfare fund which GeraldWeaver (deceased) had at the time of his treatment at[UHOC], not to exceed the hospital/physician charges.” (J.A.at 28.) At about the same time, Clark Weaver appealed thedenial of benefits to the Plan’s administrative review body,the EBC, asserting that Mr. Weaver “had never beendiagnosed nor had he ever been treated for any condition”prior to the date of Plan coverage. (J.A. at 364.) On April 10,1992, the EBC denied this appeal, quoting the above-citedPlan language regarding pre-existing conditions, and statingthat “based upon the information which was reviewed by twomedical consultants, it is the Committee’s decision that [Mr.Weaver’s] illness was pre-existing and, as such, the chargeshave been correctly denied.” (J.A. at 225.)

UHOC then brought this action on July 1, 1992, seeking

reversal of the EBC’s decision to deny benefits. On October29, 1993, the District Court granted the Plan’s motion forsummary judgment. In so ruling, the Court found that Mr.Weaver’s September 28, 1990 visit to Dr. Kumar triggeredthe Plan’s “pre-existing condition” exclusion, because itoccurred less than three months before Mr. Weaver becameeligible for Plan coverage on December 24, 1990. The Courtnext held that the EBC had reasonably construed the Plan’sSchedule of Benefits as requiring that a participant go withouttreatment of a pre-existing condition for three months afterhis Plan eligibility date — as opposed to any three-monthperiod, before or after the eligibility date, as UHOCcontended — in order to qualify for coverage of furthermedical expenses incurred in connection with a pre-existingcondition. Because Mr. Weaver had visited a physician onJanuary 8, 1991, just two weeks after his eligibility date, the

No. 98-4061 Un

Emerso

___________

DISSEN

___________

DAVID A. NELSON, Circuit J

with my colleagues on the panel tCommittee did not act irrationallWeaver received “treatment or seKumar on September 28, 1990Committee did not act irrationallhospital and medical expenscommencement of coverage were ithe same pre-existing disease for wtreatment or services on Septemhowever, that the Committee acted that Mr. Weaver failed to come without-treatment exception to the payment of benefits for such a preuntil there has been a full year of c

If the Committee was irrational 

inapplicable, then a unanimous thremust have been equally irrational wwhen the case was here earlier, the sections of the Plan in their entiretneither exception to the preclusion existing conditions – neither provision nor the three-months-w– had been satisfied in the matte

Hospital of Cleveland v. Emerson No. 93-4924, slip op. at 3 n.1 (6tshould be noted that neither excepapplies to the matter at hand”).

I should have thought, at first bl

opinion might well have establisherespect to the issue on which thdecision. The applicability of the 
24 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

13Because the EBC determined that the expenses incurred at UHOC

were wholly excluded from coverage as relating to a “pre-existingcondition,” it appears that neither the third-party administrator nor theEBC considered whether the particular expenses claimed by UHOC werecovered by the Plan, subject to a deductible, or the like. Thus, we cannotorder an award of benefits, but must order the matter remanded to theEBC, with the understanding that further proceedings must be confinedto addressing the specific expenses contained in UHOC’s claim.

it be remanded to the EBC for further proceedings inaccordance with our ruling.13

IV. CONCLUSION

For the foregoing reasons, we REVERSE the judgment of

the court below and REMAND this matter to the DistrictCourt, with instructions that UHOC’s claim be remanded tothe EBC for further proceedings consistent with this decision.

No. 98-4061 Un

Emerso

Court upheld the EBC’s determinmedical expenses were not covere

UHOC appealed to this Court, 

December 22, 1994 Opinion, wdetermination could not be sustainin the record that the EBC had consexisting condition” that could not or in the SPD. Accordingly, we orto the EBC with instructions to revthe terms of the actual Plan provclaim.” University Hosps. of CleveBenefit Plan, No. 93-4924, slip o1994).

On remand, the EBC again conc

June 7, 1995, that UHOC was nobenefits:

After a thorough reconsider

Employee Benefit Committee vothe appeal of the University HosEmployee Benefit Committee ctestimony establishes that Geralfor which he received treatmenthree month period immediately date of his coverage under the P

In addition, the evidence estab

was not covered by the Plan evidence further establishes thbeen free of treatment for the prthe three month period as requPlan. This decision is consistent of the applicable Plan provision

(J.A. at 767-68.)

Following this second EBC d

Court issued an Opinion and Or
10 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

2We recently held in Wilkins v. Baptist Healthcare Sys., Inc., 150

F.3d 609, 617-19 (6th Cir. 1998), that summary judgment generally is aninappropriate mechanism for adjudicating ERISA claims for benefits.The District Court did not have the benefit of this decision, issued just afew days before the ruling now on appeal. In any event, as we explainedin Wilkins, such reliance on summary judgment standards does not

warrant reversal, so long as the District Court’s review of the challengedbenefit decision is confined to the evidence contained in theadministrative record. 150 F.3d at 620. The lower court’s decision in thiscase appears to satisfy this standard. Likewise, in our review of theDistrict Court’s ruling, we will consider only the materials available to theEBC, and not any depositions, affidavits, or similar litigation-relatedmaterials that the parties submitted to the District Court.

restoring the case to its active docket, and setting a briefingschedule for cross-motions for summary judgment. Theparties filed their cross-motions and, by Opinion and Orderdated August 6, 1998, the Court granted the Plan’s motionand denied UHOC’s motion. In this decision, as in its 1993ruling, the District Court found that the EBC’s denial ofbenefits was not arbitrary and capricious. The Court alsorejected UHOC’s argument that the EBC failed to timelyissue its latest decision in accordance with the relevant Planprovision governing appeals of claim denials. UHOC nowappeals this latest award of summary judgment to the Plan.2

III. ANALYSIS

A. The Standards Governing Review of the Challenged

Denial of Benefits

A participant or beneficiary of an ERISA plan — or, as in

this case, an assignee of the rights held by a plan participant— may bring suit in federal district court to recover benefitsallegedly due under the terms of the plan. See 29 U.S.C.

§ 1132(a)(1)(B). It is by now well-established that courtsreview such challenges to benefit determinations under the denovo standard, unless the benefit plan gives the planadministrator discretionary authority to determine eligibilityfor benefits or to construe the terms of the plan. See

No. 98-4061 Un

Emerso

thereby satisfied the Plan’s requireexisting condition. Thus, having sbases for the EBC’s determination each of them lacking in reasoned that the EBC’s decision to deny UHand capricious.

In so holding, we cannot be b

circumstances surrounding Mr. WAccording to Dr. Kumar’s mediaffirmatively cited the “pre-existinhis health care coverage when he rOctober of 1990. The Plan opportunistic behavior, and urges ua person can deliberately and recommended course of care in ordthe absence of treatment for (Defendants/Appellees’ Appeal Br“illusion” here, nor any unfairness Weaver’s conduct was the entirely product of Plan language that creatreatment of a pre-existing conditcurtail “deliberate and intentiparticipants to “ignore” recommenthen the Plan should be amended sbehavior.

As the Plan is now written, h

rewarded, and we see no reason to conforming his health care deciindeed, in our view, the only reasonPlan. Accordingly, we find that the claim for benefits was arbitrary and judgment of the court below uphoremand this matter to the District C
22 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

12Tellingly, in an August 20, 1991 letter clarifying “the status of Mr.

Gerald Weaver and the contact he has had with our office,” Dr. Kumardid not even mention any contacts with Mr. Weaver in October of 1990,but instead concluded his summary with the September 28, 1990 officevisit. (J.A. at 367.)

be termed “treatment” was administered or received onOctober 8. See American Heritage College Dictionary 1440(3d ed. 1993) (defining “treatment” as “[a]dministration orapplication of remedies to a patient or for a disease or aninjury,” or “[t]he substance or remedy so applied”). Rather,the treatment was received on September 28, and thedoctor/patient contact on October 8 merely followed up onthis prior treatment, reporting its outcome and recommendingfurther treatment.12 We do not believe that a mere

recommendation constitutes treatment, particularly where, ashere, the patient declines to adopt the recommended course ofcare.

The Plan’s suggestion that the October 8 contact was part

of an ongoing “treatment” is all the more untenable whenconsidered in light of the SPD, which effectively equates“treatment” with “charges.” The record does not indicate thatMr. Weaver incurred any charges based on Dr. Kumar’sOctober 8 telephone call, and one would not expect that sucha physician contact following an office visit would result in aseparate charge. Because we must give controlling effect tothe language of the SPD, it is not enough that the October 8contact might constitute “treatment” under some conceivabledefinition of that term, if Mr. Weaver incurred no charges thatday.

In any event, even if the October 8 contact could be viewed

as “treatment” under the Plan and its SPD, Mr. Weaverwaited three full months, until January 8, 1991, beforeseeking any further treatment of his condition. Under theplain language of the Plan, then, Mr. Weaver remained “freeof treatment for the pre-existing illness or injury for threemonths,” between October 8, 1990 and January 8, 1991, and

No. 98-4061 Un

Emerso

3While conceding that this Plan l

dictates application of the deferential “arbUHOC argues that the de novo standard sh

EBC’s alleged failure to timely issue a remand of this matter to that body for recout, if a plan administrator fails to timedenial, the challenged claim “shall be dC.F.R. § 2560.503-1(h)(4), and the claimato have the merits of his application dete

Firestone Tire & Rubber Co. v. B109 S. Ct. 948, 956 (1989); Smith v863 (6th Cir. 1997). In this latter benefit determination is reviewed capricious” standard. Firestone, 4at 956-57; Smith, 129 F.3d at 863.

The Plan in this case provides th

discretionary authority to determinto construe the terms of the PlAmendment, J.A. at 629), and furt

The Employee Benefit Com

Section One (2.), is empowered review of denied claims submparticipant. The Plan gives Committee the discretionary eligibility for benefits or to constin carrying out the duties outlin

Section 5] and Section One (2Review Board shall be final and found to be arbitrary and capcompetent review.

(Id.) As the parties apparently agrea sufficient grant of discretionapplication of the “arbitrary and review. See, e.g., Bagsby v. CenSouthwest Areas Pension Fund, 11998); Smith, 129 F.3d at 863.3
12 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

action to challenge an outright denial of benefits.” Massachusetts Mut.Life Ins. Co. v. Russell, 473 U.S. 134, 144, 105 S. Ct. 3085, 3091 (1985).Although neither the regulation nor Russell addresses the applicable

standard of review in such circumstances, there is undeniable logic in theview that a plan administrator should forfeit deferential review by failingto exercise its discretion in a timely manner. But see Daniel v. Eaton

Corp., 839 F.2d 263, 267 (6th Cir. 1988) (stating that “the standard ofreview is no different whether the appeal is actually denied or is deemeddenied”), cert. denied, 488 U.S. 826 (1988). In any event, given ourruling on the merits of the EBC’s denial of benefits, we need not decidewhether the EBC timely issued its decision on remand, nor whether anyfailure to timely decide UHOC’s appeal should trigger a less deferentialstandard of review.

Under this deferential “arbitrary and capricious” standard,

we will uphold a benefit determination if it is “rational inlight of the plan’s provisions.” Yeager v. Reliance Standard

Life Ins. Co., 88 F.3d 376, 381 (6th Cir. 1996) (internalquotations and citation omitted). Stated differently, “[w]henit is possible to offer a reasoned explanation, based on theevidence, for a particular outcome, that outcome is notarbitrary or capricious.” Davis v. Kentucky Finance Cos.Retirement Plan, 887 F.2d 689, 693 (6th Cir. 1989) (internalquotations and citation omitted), cert. denied, 495 U.S. 905

(1990).

We note, however, that our deferential review of the benefit

denial at issue here is tempered by two principles. First, asUHOC argued in the early stages of this litigation before theDistrict Court, we should not overlook the fact that the Planis funded largely by Defendant/Appellee Emerson Electric,and that the EBC is appointed by Emerson’s Board ofDirectors. The “possible conflict of interest” inherent in thissituation “should be taken into account as a factor indetermining whether the [EBC’s] decision was arbitrary andcapricious.” Davis, 887 F.2d at 694; see also Borda v. Hardy,Lewis, Pollard & Page, P.C., 138 F.3d 1062, 1069 (6th Cir.

No. 98-4061 Un

Emerso

condition. Although this phrase is Plan, the Summary Plan DescripPlan’s three-month treatment-free “you haven’t had any charges for months.” (SPD at 12, J.A. at Because employees rely on suinformation which will allow tdecisions about their future benefit the language of the SPD contrlanguage in the Plan itself. Helwi

F.3d 243, 247-48 (6th Cir. 1996), c(1997). Accordingly, in considerthat Mr. Weaver was not “free of 1990, we must be mindful of th“treatment” and “charges.”

Viewed in this context, it is c

Weaver’s medical history for reasonably be considered “treatmenfor October 12 does not establisbetween Mr. Weaver and his p“treatment” required under the terOctober 26 entry not only fails received by Mr. Weaver, but affirmof treatment. Plainly, such a refustreatment, as it is the very antitherecord is devoid of any evidence charges relating to these October 1his medical history.

Turning, finally, to the Octobe

Kumar and Mr. Weaver, the Plan ato view this as a continuation of the in which Dr. Kumar reported administered during the office vfurther course of action. Yet, the Pthat only treatment is relevant, and 

“services” that are sufficient to inifor pre-existing conditions. Simply 
20 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

10The record does not indicate whether this blood test was to occur

on October 12 or some other date, nor whether Mr. Weaver was contactedin regard to this matter. In any event, it appears that Dr. Kumar’s officedid not administer any blood tests in October.

11We note that there is nothing in the administrative record to

indicate that the EBC ever made such a finding of a “continuing courseof treatment” extending into October of 1990. Nevertheless, in theinterest of resolving this nearly eight-year-old litigation, we will addressthis argument as a possible alternate ground for sustaining the EBC’sdecision. 

without “treatment” for this condition, whether before or afterhis Plan eligibility date. The parties agree that Mr. Weaverdid not seek treatment in November or December of 1990,and that his treatment resumed on January 8, 1991. Thedispositive question, therefore, is whether Mr. Weaver was“free of treatment” during all or most of October, 1990, sothat there was a three-month period before January 8, 1991 inwhich he received no treatment for his condition.

Dr. Kumar’s medical history for Mr. Weaver includes three

entries for October of 1990. First, on October 8, 1990, Dr.Kumar called Mr. Weaver to inform him of the results of hisrecent blood test and recommend that he see a hematologist.(J.A. at 470.) Next, there is a short entry for October 12,1990, stating only “CBC,” which apparently reflects anattempt to schedule an additional blood test.10 (J.A. at 475.)Finally, an entry dated October 26, 1990 indicates that Mr.Weaver refused a blood test, stating that his health insurancewould not cover a pre-existing condition. (Id.) The Plan

argues that these October entries reflect a “continuing” courseof treatment which began with Mr. Weaver’s September 28office visit. (Defendants/Appellees’ Appeal Br. at 27.)11

We cannot accept this as a reasonable characterization of

Mr. Weaver’s medical history. We begin by observing thatthe Plan itself offers considerable guidance in determiningwhat it means to be “free of treatment” for a pre-existing

No. 98-4061 Un

Emerso

4In its initial decision granting sum

District Court rejected UHOC’s claim of that “[t]he Plan is clearly a separate and dduties under ERISA.” (District Court’s Because we found a different defect in thdid not reach this issue in the initial appein the present appeal. Nevertheless, we bhere that the mere existence of fiduciary din any benefit determination governed bneed to more carefully examine decisioconflict of interest. Courts should be pawhere, as here, the plan sponsor bears aclaims, and also appoints the body designclaims. Under these circumstances, thdecision-making is evident.

1998).4 Next, to the extent thasusceptible of more than one interp“rule of contra proferentum” and 

against Defendants/Appellees as tv. Aetna Life Ins. Co., 150 F.3d, 55B. The EBC’s Interpretation of 

the Medical Expenses MrUHOC Is Arbitrary and Ca

As indicated by the above-quote

to pre-existing conditions, the UHOC’s claim for benefits involveunder the Plan’s definition of a “pEBC had to determine whether expenses at UHOC were “incurrdisease or injury for which [Mr. Wor services or took prescribed druperiod immediately preceding” Mrdate of December 24, 1990. If so Weaver’s medical expenses were tcondition” — the EBC then would Mr. Weaver satisfied either of the twthe Plan would commence to pay 
14 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

“pre-existing condition”: namely, either (1) that Mr. Weaverwas “covered under this Plan for one year,” or (2) that he hadbeen “free of treatment for the pre-existing illness or injuryfor 3 months.” Upon carrying out this two-step inquiry, theEBC concluded that Mr. Weaver’s UHOC expenses weretraceable to a pre-existing condition, but that he had notsatisfied either of the two conditions for coverage of this preexisting condition by the time he was treated at UHOC.UHOC now challenges both of these conclusions.

As for the first step of the inquiry — namely, whether Mr.

Weaver triggered the “pre-existing condition” exclusion byreceiving “treatment or services” within three months prior tohis Plan eligibility date of December 24, 1990 — we find thatthe EBC’s determination was reasonable in light of theavailable evidence. It is undisputed that Mr. Weaver visitedhis physician, Dr. Kumar, on September 28, 1990, and that heprovided a blood sample for testing that day. Plainly, then,Mr. Weaver received medical treatment or services within thethree-month period prior to December 24, 1990.

UHOC, however, challenges the EBC’s finding that the

condition for which Mr. Weaver received treatment onSeptember 28, 1990, was the same “pre-existing condition”for which he subsequently received treatment at UHOC inMarch through June of 1991. In reaching this conclusion, theEBC obtained and considered two separate and independentmedical opinions, both of which indicated that the conditiondiagnosed in early 1991 was a continuation of the conditionfor which Mr. Weaver sought treatment in September of1990. (J.A. at 543-44.) In addition, in its review uponremand, the EBC heard a presentation from UHOC’s counsel,and was provided an opinion from UHOC’s medical expert,Dr. Lawrence Kass, stating that it was “uncertain” whether theanemia diagnosed by Dr. Kumar in September of 1990“eventually evolved” into myelodysplasia, and that it wouldbe “only speculative” to so conclude. (J.A. at 391.)

No. 98-4061 Un

Emerso

9Although Plan participants are requ

and co-pays, there is nothing in the reparticipant contributions would significaPlan if it were determined that the Plan m

Given all these express reference

coverage commences, we cannot hon the absence of any such lang

treatment-free provision at issue hePlan as “impliedly” including thimposed by the EBC, we would reading and permit the Plan to havEBC’s interpretation, a Plan partexisting condition” exclusion by aservices at any time within the thre

coverage date. Yet, in the EBCattaches to any decision by a Ptreatment during this same thdecisions, we are told, count oncoverage date.

We cannot accept this attempt to 

one-sided limitation not stated in particularly so where, as we have funded by Defendant/Appellee Emis appointed by Emerson’s Board EBC has an evident self-interest in sizable claim is not paid.9 Morproferentum precludes the EBC froin the Plan’s three-month treatmeninvoking its discretionary power to in the Plan’s favor. There is no ambin question includes no limitation three months without treatment.

This leads us to the second sugg

decision: that, following his viSeptember of 1990 which trigcondition” exclusion, Mr. Weaver 
18 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

8Likewise, the SPD requires only that “you haven’t had any charges

for this illness or injury for 3 months,” and does not further specify thatthis three-month period must follow the date of Plan coverage.coverage of expenses incurred in connection with a preexisting condition, a participant must be “free of treatment forthe pre-existing illness or injury for 3 months.” On its face,this language is satisfied by any three-month period withouttreatment, whether it falls entirely after the Plan eligibility

date or extends into the 90-day period before an employee iscovered by the Plan.8 It is not a permissible act of

“construction” to augment this language with the additionalqualifier that a participant must be “free of treatment . . . for3 months after the effective date of Plan coverage.” Rather,the terms of the Plan must be construed “according to theirplain meaning, in an ordinary and popular sense,” Perez, 150F.3d at 556, and those terms simply do not impose therequirement that a participant not seek treatment for threemonths after he is covered by the Plan.

The implausibility of the EBC’s interpretation is amply

illustrated through comparison with other Plan language, alsorelating to “pre-existing conditions,” that does compute timeperiods by reference to a participant’s date of coverage. Forexample, the Plan defines a “pre-existing condition” as one“for which a covered individual received treatment or servicesor took prescribed drugs during the three month periodimmediately preceding the effective date of suchindividual’s coverage under this Plan.” (J.A. at 609(emphasis added).) The Plan further provides that coverageof a pre-existing condition will commence once theparticipant “has been covered under this Plan for oneyear.” (J.A. at 625 (emphasis added).) Similarly, the SPDstates that a pre-existing condition is one “for which you weretreated or took prescribed medicines within 3 months beforeyour coverage began,” and that medical expenses will bepaid for such a condition once “you have been covered underthis Plan for a year.” (J.A. at 157 (emphasis added).)

No. 98-4061 Un

Emerso

5UHOC argues that these expert op

by our ruling in the prior appeal that the EBrested upon a definition of “pre-existing cor the SPD. As the District Court obserhowever, these medical opinions do interpretation or any particular definition instead are based upon analysis of Mr. Wwhether his treatments before and after Dat the same or different medical conditioweighed in on this issue, it was left to tWeaver’s particular interactions with mmonths before December 24, 1990 constservices or t[aking] prescribed drugs” wdefinition of a “pre-existing condition.”

Given this range of medical opi

the EBC, we cannot say that its dwas arbitrary and capricious. In padecision enjoys the support of topinions, it is sufficiently grounded satisfy the “least demanding form arbitrary and capricious standard(internal quotations and citation ommedical expert reached a differconsensus is not required to establadministrative decision. Indeed, unwilling to say that the anemia sSeptember of 1990 was altogmyelodysplastic syndrome that ultstated only that any such connec“speculative.” The EBC could ratito heed the opinions of two otheviewed the evidence in Mr. Wesufficient to make this connection

The next step in the EBC’s in

problematic. All are agreed that Munder the Plan for a year prior to hthat he did not satisfy the first of thcoverage of a pre-existing disease
16 University Hospitals v.

Emerson Electric Co., et al.

No. 98-4061

6As Judge Nelson notes in his dissent, our decision in the prior

appeal of this case included a footnote tersely stating, without discussion,that the Plan’s three-month treatment-free provision did not “appl[y] tothe matter at hand.” University Hosps. of Cleveland v. Emerson Elec. Co.Benefit Plan, No. 93-4924, slip op. at 3 n.1 (6th Cir. Dec. 22, 1994).Notably, in the present appeal, the Plan does not even mention this earlierstatement, much less argue that we have already ruled upon theapplicability of the three-month treatment-free provision. Similarly, whileJudge Nelson quotes this footnote, he elects not to rely on the “law of thecase” doctrine in his dissent. Having considered the matter, we do notbelieve that this statement represents the “law of the case,” where ourearlier ruling did not address the merits of or reasoning behind the EBC’sinitial denial of benefits, but instead rested on the limited ground that theEBC might have erroneously relied on language not found in the Planitself. As we have observed, the “law of the case” doctrine is “limited tothose questions necessarily decided in the earlier appeal.” Hanover Ins.Co. v. American Eng’g Co., 105 F.3d 306, 312 (6th Cir. 1997).

7The dissent sees “no room for doubt” that this construction was the

one adopted by the EBC in denying UHOC’s claim. This conclusion isbased on the deposition testimony of one EBC member, James Draeger;the EBC’s written decision includes no such statement of its reasoning.Our decision in Wilkins, supra, 150 F.3d at 618, however, precludes usMr. Weaver did not satisfy the second condition, stating in itsJune 7, 1995 decision that “the evidence further establishesthat Mr. Weaver had not been free of treatment for the preexisting condition for the three month period as required bythe terms of the Plan.” (J.A. at 768.) We find insufficientsupport in the record to sustain this determination, even underthe deferential “arbitrary and capricious” standard of review.6

While the EBC’s decision is stated in somewhat conclusory

fashion, the Plan suggests two possible rationales for thisdecision, and argues that either is adequate to sustain it. First,we are told that the EBC “construed the Plan as requiringparticipants with a pre-existing disease to be free of treatmentfor a three month period after the effective date of coverage

by the Plan in order to receive benefits for the pre-existingdisease.” (Defendants/Appellees’ Appeal Br. at 25-26(emphasis added).)7 Given the EBC’s discretionary authority

No. 98-4061 Un

Emerso

from considering evidence, such as Draeof the administrative record.

Indeed, we should be all the mor

administrative record where, as here, person’s post hoc explanation of an adminanalogous situation, we do not look to legislators when determining the meani

United Conservation Clubs v. Lujan, 91991). More importantly, it strikes us arecognize an administrator’s discretion tdeferential “arbitrary and capricious” stanhand, allow the administrator to “shore utestifying as to the “true” basis for the litigation, possible deficiencies in the dattorney is consulted to defend the decishoc arguments that can survive deferentiain this scenario are even more pronadministrator has a financial incentive to the administrative record in this fashion terse and conclusory decisions from plan athem — or, worse yet, federal judges — tproposed “rational bases” when their declitigation. At a minimum, if we perm

administrative record, there no longer is apply a more searching de novo review o

Having said this, we do not mean 

testimony fails to accurately reflect the bapoint is, we simply cannot tell from the from the administrative record. Ideally, tpoint of reference in our review of a cha

in matters of Plan interpretation, thdefer to this construction of the threquirement. If this proposed cofollows that the EBC properly denundisputed that Mr. Weaver souweeks after he became eligible for 

Upon reviewing the plain langu

we find that the EBC has exceeded Plan, and instead has effectively