The Honorable Richard H. Kyle, United States District Judge 1

for the District of Minnesota, sitting by designation. 

 

No. 96-1876

 

Alton Cash, *

 * 

Appellee, * Appeal from the United States

 * District Court for the Eastern

v. * District of Arkansas.

 * 

Wal-Mart Group Health Plan, *

 * 

Appellant. *

 

Submitted: December 9, 1996

 Filed: February 26, 1997

 

Before FAGG and LOKEN, Circuit Judges, and KYLE, District Judge. 1

 

KYLE, District Judge.

Appellee Alton Cash’s (“Cash”) wife was an employee of Wal-Mart,

making Cash eligible for health benefits under Wal-Mart’s Group Health Plan

(“the Plan”). The Plan appeals from the order of the district court

granting Cash’s motion for summary judgment; the district court overturned

the decision of the Plan’s Administrative Committee (“the Committee”) which

had denied benefits to Cash. The Committee had found that Cash’s

diverticulitis was a pre-existing condition based on his previous diagnosis

of diverticular disease. As such, Cash was not eligible for reimbursement

for the medical expenses he had incurred. The district court disagreed and

awarded Cash his claimed benefits. After a careful review of the record,

we reverse the judgment of the district court and direct entry of judgment

in favor of the Plan.
 Diverticular disease is a disease of the sigmoid colon in 2

which bulging pouches (diverticula) in the gastrointestinal wall

push the mucosal lining through the surrounding muscle. 

Diverticular disease has two clinical forms: (1) diverticulosis,

in which diverticula are present but do not cause symptoms; and

(2) diverticulitis, at issue here, in which diverticula are

inflamed and may cause potentially fatal obstruction, infection,

or hemorrhage. See Appellant’s App., Ex. H.

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I. Background

Undisputed Facts

Before the district court, the parties stipulated to the following

facts: 

On the advice of Dr. Michael Koone, Cash periodically had

colonoscopic examinations performed by Dr. Dean Kumpuris. Following a

colonoscopy performed in August of 1992, Dr. Kumpuris’ report to Dr. Koone

noted Cash’s “extraordinary severe diverticular disease for someone of his

age.”2

In January of 1993, Cash became entitled to health benefits in

accordance with the terms of the Plan. In August of 1993, he was

hospitalized complaining of severe abdominal pain. Upon admittance to the

hospital, Cash stated that he had been told he had diverticular disease.

Dr. Kumpuris attended to Cash during this hospital stay. Upon discharging

Cash, Dr. Kumpuris recorded a discharge diagnosis of diverticulitis.

Cash submitted a claim for the costs of his hospitalization and

treatment. After reviewing the relevant medical documentation, the

Committee denied the claim, finding that the expenses incurred were the

result of a pre-existing condition.

The Plan contained the following definition of “pre-existing

condition”:
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Any charge with respect to any PARTICIPANT for any ILLNESS,

INJURY or symptom (including secondary conditions and

complications) which was medically documented as existing, or

for which medical treatment, medical service, prescriptions, or

other medical expense was incurred within 12 months preceding

the EFFECTIVE DATE of these benefits as to that PARTICIPANT,

shall be considered PRE-EXISTING and shall not be eligible for

benefits under this PLAN, until the PARTICIPANT has been

continuously covered by the PLAN 12 consecutive months. (Preexisting conditions include any diagnosed or undiagnosed

condition).

This language also appeared twice in the Summary Plan Description made

available to participants in accordance with the provisions of the Employee

Retirement Income Security Act of 1974 (“ERISA”).

Cash sought further review of his claim. He submitted a letter from

Dr. Kumpuris acknowledging Cash’s diverticular disease but denying the

existence of diverticulitis prior to his August 1993, hospital visit. In

this letter, Dr. Kumpuris stated that Cash “has never had . . . a problem

with an infection in the diverticulum until this occasion.”

In accordance with the Plan’s appeal process, Cash’s claim was then

submitted to Dr. William D. McKnight for further consideration. Dr.

McKnight recommended overturning the denial of Cash’s claim. He noted that

other than Dr. Kumpuris’ notation of severe diverticular disease, there was

“no evidence in the record of [Cash] having seen a physician for abdominal

pain, or diverticulitis in twelve months that preceded the effective onset

of the group health plan.” Dr. McKnight noted that although Cash had

“documented diverticular disease based on numerous colonoscopies for polyp

surveillance[,] [t]he presence of diverticular disease does not constitute

a diagnosis of diverticulitis, and the first clear evidence of acute

diverticulitis as a diagnosis did not emerge until August, 1993.” 
-4-

 In May of 1994, Dr. McKnight’s recommendation was forwarded to the

Committee. The Committee concluded that Dr. McKnight had based his opinion

on the absence of a prior diagnosis of the condition for which benefits

were claimed, rather than on the Plan’s language defining pre-existing

condition. The Committee declined to follow the recommendation and

upheld denial of Cash’s claim. 

When notified of the Committee’s decision. Cash obtained an

attorney, who argued that “[d]iverticulitis is such a common

occurrence that it is neither an illness, injury nor symptom and

that the infection would not be secondary, but primary.”

The Committee forwarded Cash’s medical records and the

language of the Plan to Dr. James Arkins for further review. Dr.

Arkins recommended denying the claim. Because a person cannot have

diverticulitis without first having diverticular disease, he opined

that “diverticulitis is an exacerbation of a preexisting condition,

specifically, diverticular disease.” 

In October 1994, Wal-Mart notified Cash that his claim was

again denied, explaining that “the existence of diverticula in the

sigmoid colon was the condition which existed within the one year

period prior to [Cash’s] becoming effective under the Plan. The

diverticulitis (inflammation of the diverticula) [was] denied as a

complication and secondary condition of the presence of diverticula

in the wall of the colon.”

Procedural History

Cash filed a complaint in state court, alleging that Wal-Mart

was acting in bad faith by refusing to pay his medical expenses.

Asserting that ERISA was Cash’s exclusive remedy, Wal-Mart removed

the case to federal court. Both parties moved for summary

judgment. The district court granted Cash’s motion, concluding
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that the Committee’s decision to deny his benefits was unreasonable

and constituted an abuse of discretion.

In this appeal, Wal-Mart asserts: 1) the district court erred

in applying the de novo standard of review when assessing the

Committee’s decision; 2) the district court erred in considering

an affidavit from Cash’s physician that was not presented to the

Committee; 3) the Committee’s interpretation of the Plan was

reasonable; and, therefore, 4) the district court erred in denying

the Plan’s motion for summary judgment and granting Cash’s motion

for summary judgment. 

II. Discussion

Standard of Review

We review a grant of summary judgment de novo. Donaho v. FMC

Corp., 74 F.3d 894, 897 (8th Cir. 1996), citing LeBus v.

Northwestern Mut. Life Ins. Co., 55 F.3d 1374, 1376 (8th Cir.

1995). Thus, in the case at bar, we review de novo the district

court’s application of the appropriate standard dictated by ERISA.

ERISA itself does not specify a standard of review; however,

the Supreme Court has held that a reviewing court should use a de

novo standard of review unless the plan gives the “administrator or

fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.” Id. (quoting

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989));

Wilson v. Prudential Ins. Co. of Am., 97 F.3d 1010, 1013 (8th Cir.

1996). If the plan gives such discretionary authority, the court

reviews the plan administrator’s decision for abuse of discretion.

Donaho, 74 F.3d at 898.
 The Plan states in relevant part: 3

The PLAN herein expressly gives the ADMINISTRATIVE

COMMITTEE discretionary authority to resolve all

questions concerning the administration, interpretation

or application of the PLAN, including, without

limitation, discretionary authority to determine

eligibility for benefits or to construe the terms of

the PLAN in conducting the review of the appeal. When

making its initial determination pursuant to the claim

denial and appeals section of the plan document, the

PLAN shall also have such discretionary authority. 

Appellant’s App., Ex. H, pp. 175-76 (Wal-Mart Associates’

Health Plan Document pp.52-53).

-6-

It is undisputed that the language of the Plan is

discretionary. The district court properly found that the plan

3

administrator’s decision should be reviewed under the abuse of

discretion standard. We review the district court’s application of

the deferential standard de novo. Id. (citing Bolling v. Eli Lilly

& Co., 990 F.2d 1028, 1029 (8th Cir. 1993)). 

The proper inquiry under the deferential standard is whether

“the plan administrator’s decision was reasonable; i.e. supported

by substantial evidence.” Id. at 899. While the word “reasonable”

possesses numerous connotations, this Court has rejected any such

definition that would “permit a reviewing court to reject a

discretionary trustee decision with which the court simply

disagrees[.]” Id. (quoting Cox v. Mid-American Dairymen, Inc., 965

F.2d 569, 572 (8th Cir. 1992)). The Committee’s decision will be

deemed reasonable if “a reasonable person could have reached a

similar decision, given the evidence before him, not that a

reasonable person would have reached that decision.” Id. If the

decision is supported by a reasonable explanation, it should not be

disturbed, even though a different reasonable interpretation could

have been made. See id.
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In determining whether a committee’s interpretation of a plan

is reasonable, this circuit utilizes the five-factor test outlined

in Finley v.Special Agents Mut. Benefit Ass’n, 957 F.2d 617 (8th

Cir. 1992). See Donaho, 74 F.3d at 899 n.9.; see also Buttram v.

Central States, S.E. & S.W. Areas Health & Welfare Fund, 76 F.3d

896, 901 (8th Cir. 1996) (applying Finley five-factor test to

evaluate reasonableness under deferential review); Lickteig v.

Business Men’s Assurance Co. of Am., 61 F.3d 579, 583-84 (8th Cir.

1995) (noting that deferential review of plan’s interpretation

“requires us to examine” the Finley factors). These factors are: 1)

whether the Committee’s interpretation is consistent with the goals

of the Plan; 2) whether the interpretation renders any language in

the Plan meaningless or internally inconsistent; 3) whether the

Committee’s interpretation conflicts with the substantive or

procedural requirements of the ERISA statute; 4) whether the

Committee has interpreted the relevant terms consistently; and 5)

whether the interpretation is contrary to the clear language of the

Plan. See Finley, 957 F.2d at 621; Buttram, 76 F.3d at 901.

District courts should apply all five factors, or explain why a

particular factor is inapplicable. Lickteig, 61 F.3d at 584. 

In making its evaluation, the court does not substitute its

own weighing of evidence for that of the Committee. See Bolling v.

Eli Lilly & Co., 990 F.2d 1028, 1029 (8th Cir. 1993). To do so

would be to ignore the appropriate deferential standard of review

and impose an improper de novo review. See Cox, 965 F.2d at 573.

Moreover, review under the deferential standard is limited “to

evidence that was before” the Committee. Collins v. Central States

S.E. & S.W. Health & Welfare Fund, 18 F.3d 556, 560 (8th Cir.

1991). Even when reviewing a plan’s decision de novo, courts are

discouraged from considering “evidence in addition to that

presented” to the Committee. Donatelli v. Home Ins. Co., 992 F.2d

763, 765 (8th Cir. 1993). The purpose of this caveat is to “ensure

expeditious judicial review of ERISA benefit decisions and to keep
 The affidavit was prepared over 15 months after the Committee 4

had made its final determination.

-8-

district courts from becoming substitute plan administrators.” Id.

Discussion

The District Court’s Review

The Plan alleges that while the district court articulated the

abuse of discretion standard in its analysis, it, in fact,

reviewed the Committee’s decision de novo. We agree.

In its review of the Committee’s decision, the district court

considered the January 11, 1996 affidavit of Dr. Kumpuris, which

had not been submitted to the Committee. In that affidavit, Dr.

4

Kumpuris opined that “the fact that you have diverticula does not

mean that you will have diverticulitis. Millions and millions of

Americans have diverticular changes in their colon and the vast

majority will never have diverticulitis.” Cash, No. LR-C-94-837,

slip. op. at 8. The district court “accept[ed] that representation”

to support its finding that Cash was entitled to judgment as a

matter of law. See id. 

In reviewing Dr. Kumpuris’ affidavit, the district court

acknowledged that it could only consider “evidence the committee

had before it when it made its decisions.” Cash v. Wal-Mart Health

Plan, No. LR-C-94-837, slip op. at 7 (E.D. Ark. Feb. 21, 1996),

(citing Oldenberger v. Central States S.E. & S.W. Areas Teamster

Pension Fund, 934 F.2d 171 (8th Cir. 1991)). However, the court

stated that while it could not consider the factual representations

in the affidavit, it could “consider [Dr. Kumpuris’] explanation

of the medical issues in this case.” Id. We disagree with the

district court’s implicit assertion that these explanations are

somehow not “evidence” outside the permissible scope of deferential
 The district court noted that this assertion was “undoubtedly 5

true.” Cash, No. LR-C-94-837, slip op. at 8.

-9-

review. See, e.g., Davidson v. Prudential Ins. Co. of Am., 953

F.2d 1093, 1095 (8th Cir. 1992) (noting that administrative record

was “replete with medical reports, physicians statements,

vocational assessments and other evidence” bearing on appellant’s

ability to work, and characterizing additional report of neuropsychiatrist as “evidence” ). 

We determine that the district court conducted a de novo

review. It impermissibly considered the affidavit of Dr. Kumpuris,

weighed this evidence against that before the Committee, and then

accepted Dr. Kumpuris’ contentions over the opinion before the

Committee. This process clearly exceeded the scope of deferential

review. See, e.g., Bolling, 990 F.2d at 1029-30 (finding district

court conducted de novo review when it construed evidence in light

most favorable to the appellant, faulted the Committee for its

conduct, and held that conclusions formed by appellant’s doctors

years after relevant injury were binding on Committee); Cox, 965

F.2d at 573 (noting that district court’s substitution of its own

weighing of conflicting evidence for that of the committee’s

constituted an improper de novo review). Further support for our

conclusion that the district court conducted a de novo review is

its failure to utilize the Finley test in its analysis.

The Committee’s Decision

We now review the Committee’s decision, applying the

deferential standard and the Finley test. The issue before the

Committee was whether Cash’s diverticulitis was a pre-existing

condition based on his previous diagnosis of diverticular disease.

To support its conclusion that it was, the Committee primarily

relied on the opinion of Dr. Arkins, who stated that one cannot

have diverticulitis without first having diverticular disease. We 5
 We note that Cash’s arguments to this Court consist of 6

debunking the testimony of Dr. Arkins; reiterating the testimony

of Dr. Kumpuris, which, he alleges, contains nothing “new”; and

asserting that the district court applied the appropriate

standard of review. As it is not our province to reweigh the

evidence before the Committee, we must rely on the testimony of

Dr. Arkins, irrespective of Cash’s criticism of its validity.

Since we have already determined that Dr. Kumpuris’ testimony was

erroneously considered by the district court, and that the

district court conducted a de novo review, Appellee’s other

arguments are equally unavailing. 

-10-

are not allowed to reweigh the evidence before the Committee, and

thus are constrained to rely on Dr. Arkin’s opinion as well.6

Therefore, our task is to determine whether it was reasonable for

the Committee to conclude that the presence of a condition

(diverticular disease) which is a necessary precursor to a later

illness (diverticulitis), means that the later condition was preexisting within the meaning of the Plan. We find that such a

conclusion is reasonable.

The first of the five Finley factors is whether the

Committee’s interpretation was consistent with the goals of the

Plan. See Finley, 957 F.2d at 621. The stated purpose of the Plan

is “to provide to Participants and their Beneficiaries certain

welfare benefits described herein.” Appellant’s App. at 15, Article

I, Section 1.2 of the Plan. The intent of the Plan document is “to

clearly define the health benefits provided for the PARTICIPANTS in

this PLAN. It will describe each aspect of these benefits and the

eligibility requirements for PARTICIPANTS.” Appellant’s App. at

173, Introduction to Wal-Mart Associates’ Health Plan Document. The

Plan goes on to define pre-existing condition, stating that

participants with such conditions are not eligible for benefits

under the Plan until they have been continuously covered by the

Plan for twelve consecutive months. Id. We agree with Appellant’s

argument that the “obvious purpose of the pre-existing condition

exclusion is to insure the actuarial soundness” of the Plan. 
-11-

Second, we examine whether the Committee’s interpretation of

the pre-existing condition exclusion conflicted with the

requirements of the ERISA statute. See Finley, 957 F.2d at 621. 

We find that it did not. This circuit has upheld pre-existing

condition exclusions under ERISA. See Kirk v. Provident Life &

Accident Ins. Co., 942 F.2d 504, 506 (8th Cir. 1991) (upholding

district court’s finding that appellant had a pre-existing

condition, and rejecting argument that ERISA violates the Seventh

Amendment). Nothing presented here convinces us that this case

represents a unique situation warranting a contrary determination.

The remaining three Finley factors: 1) whether the Committee’s

interpretation renders any language in the Plan meaningless or

internally inconsistent; 2) whether the Committee has interpreted

the words at issue consistently; and 3) whether the Committee’s

interpretation is contrary to the clear language of the Plan,

Finley, 957 F.2d at 621, can all be addressed through an

examination of the meaning of the terms in the Plan’s definition of

pre-existing condition.

The Plan defines “pre-existing condition” as follows:

Any charge with respect to any PARTICIPANT for any

ILLNESS, INJURY or symptom (including secondary

conditions and complications) which was medically

documented as existing, or for which medical treatment,

medical service, prescriptions, or other medical expense

was incurred within 12 months preceding the EFFECTIVE

DATE of these benefits as to that PARTICIPANT, shall be

considered PRE-EXISTING and shall not be eligible for

benefits under this PLAN, until the PARTICIPANT has been

continuously covered by the PLAN 12 consecutive months.

(Pre-existing conditions include any diagnosed or

undiagnosed condition).

The Committee gave the following explanation of its reason for

rejecting Cash’s benefits: “the existence of diverticula in the

sigmoid colon was the condition which existed within the one year

period prior to [Cash’s] becoming effective under the Plan. The

diverticulitis (inflammation of the diverticula) [was] denied as a
-12-

complication and secondary condition of the presence of diverticula

in the wall of the colon.” 

The Plan did not define the terms within the pre-existing

condition exclusion. In such circumstances, “[r]ecourse to the

ordinary, dictionary definition of words is not only reasonable,

but may be necessary.” Finley, 957 F.2d at 622 (quoting Central

States, S.E. & S.W. Areas Pension Fund v. Independent Fruit &

Produce Co., 919 F.2d 1343, 1350 (8th Cir. 1990)). “[W]ords are to

be given their plain and ordinary meaning as understood by a

reasonable, average person.” Id. Thus, we turn to the dictionary to

aid our analysis. See Finley, 957 F.2d at 622 (using dictionary to

determine ERISA claim).

According to Webster’s Third New International Dictionary, a

“complication” is “a secondary disease, or condition developing in

the course of a primary disease either as a result of the primary

disease or arising from independent causes.” Webster’s Third New

International Dictionary 465 (3d ed. 1986). A “condition” is “a

mode or state of being” or “something that exists as an occasion of

something else : a circumstance that is essential to the appearance

or occurrence of something else.” Id. at 473. “Secondary” is

defined as “immediately derived from something original, primary,

or basic : dependent on or following something fundamental or

first,” or “not first in order of occurrence or development” or

“dependent or consequent on another disease.” Id. at 2050. 

At the outset, we again note that it is undisputed that one

cannot have diverticulitis without first having diverticular

disease. A “complication” is a “secondary disease.” One needs

diverticular disease to develop diverticulitis. Cash had

diverticular disease and eventually developed diverticulitis.

Therefore, we cannot say that it was unreasonable for the Committee

to have determined that Cash’s diverticulitis was a complication of
 Neither party argues that, in the case at bar, the Committee 7

has somehow deviated from its standard applicable definitions of

the relevant terms. 

-13-

his diverticular disease, and thus his diverticulitis was a preexisting condition as defined by the Plan. 

Likewise, diverticulitis could reasonably be considered a

secondary condition of diverticular disease. Since diverticular

disease is necessary to the later development of diverticulitis;

a “condition” is “essential to the appearance or occurrence of

something else,”; “secondary” means “dependent or consequent on

another disease,” it is not unreasonable to construe diverticulitis

as a secondary condition of Cash’s diverticular disease. Under

either of the above constructions of the terms of the Plan, the

Committee’s decision was consistent with the clear language of the

Plan. The Committee’s finding does not appear to render any

language in the Plan meaningless or internally inconsistent, nor is

there any indication that the Committee has not consistently

interpreted the relevant terms. 

7

In light of the undisputed facts, and an evaluation of the

Finley factors, when the evidence before the Committee is viewed

deferentially, we cannot say that the Committee’s decision denying

Cash benefits was unreasonable. Accordingly, we reverse the

district court’s order and direct the entry of judgment in favor of

the Plan.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.