Court Opinion

ID: 6928759
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:44:59.99621+00
Date Added: 2024-06-11T16:07:02.790012
License: Public Domain

KENNEDY, Circuit Judge,
concurring.
Whether the administrator of this Plan has discretionary authority to construe the terms of the Plan and determine eligibility is a close question here. This discretionary authority is purportedly derived from the Summary Plan Description:
Subject to the payment of fees, all persons who have
* satisfied the eligibility conditions,
* applied for coverage, and
*have been approved by the Plan
are covered by the group contract. Such persons are called covered persons.
I believe that the requirement that covered persons be “approved by the Plan” must have some meaning.
The majority recognizes that the instant Plan permits Community Mutual the right to decide coverage questions, but holds that that right to decide does not include the grant of discretionary authority. I cannot agree. When the Plan fiduciary has reserved the right to decide coverage issues, it seems to me that is a reservation of fiduciary discretionary authority. Indeed, it is the administrator’s discretionary authority to interpret the Plan that created plaintiffs’ claim to hospital costs for the children here: The claim is not based upon language of the Plan, rather, it is based upon language found in the Administrative Manual, which contains the administrator’s interpretation of the Plan in accordance with what it believed to be its discretionary authority reserved to it under the Plan.1 The Plan only provides for medical and hospital costs for certain children of the employee. I do not think it is argued that under the Plan, these children became “children of the employee” until the adoption was completed. If they are to be covered from the time the petition for adoption is filed until the adoption occurs, it must be because of the provisions of the Manual. The Manual provides coverage for adopted children as soon as the petition for adoption is filed and residence is with the adopting parent, even though the adoption process is not yet complete.
I concur, however, in the majority opinion because I believe that the Plan acted arbitrarily when it concluded that the children here did not reside with the adopting parents after the Ohio Probate Court issued its order acknowledging the placement and petition for adoption. That order placed the children with the adopting parents. The children had to have a residence somewhere. Children ordinarily have the residence of their parents. Here, the legal right to have the children at their residence had been transferred to the adopting parents. These children no longer had the residence of their birth moth*1104er. The children would have gone home with the adopting parents at that time except for their fragile condition. It was the intent of the birth mother and the adopting parents that the children’s residence be transferred to the adopting parents and the State of Ohio had approved of that transfer of residence. Since infants are unable to have intent, we must look to the intent of those adults who have their care. There was no intent on the part of the birth mother, the adopting parents or the state that the children reside at the hospital. Their continued presence in the hospital was a mere fortuitous result of their low birth weights. The residence requirement was intended to avoid the situation where a child would continue to remain with the birth parent(s) while the adoption was proceeding or where someone might adopt a child in order to provide the child with health care and the child might never reside with the adopting parents. It seems to me arbitrary and capricious under the facts of this case to find, as the administrator of the Plan did, that the children did not reside with the adopting parents until they were taken home from the hospital. Thus, I concur in the result reached by the majority and would also AFFIRM.

. As the majority points out, the Manual was apparently created to "assist claim personnel” and "consists of internal guidelines.”