                                  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,1 District Judge.



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.




     1
   The Honorable Richard H. Kyle, United States District Judge
for the District of Minnesota, sitting by designation.
                                    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”:




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

                                           -2-
     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).

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.”




                                    -3-
       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




                                     -4-
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.




                                      -5-
      It   is    undisputed      that    the      language      of     the     Plan    is
discretionary.3        The district court properly found that the plan
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.




  3
      The Plan states in relevant part:

      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-
     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



                                   -7-
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.4 In that affidavit, Dr.
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


  4
   The affidavit was prepared over 15 months after the Committee
had made its final determination.

                                     -8-
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 neuro-
psychiatrist 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.5         We




  5
   The district court noted that this assertion was “undoubtedly
true.” Cash, No. LR-C-94-837, slip op. at 8.

                                    -9-
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 pre-
existing 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.




  6
   We note that Cash’s arguments to this Court consist of
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-
      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


                                       -11-
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



                                   -12-
his diverticular disease, and thus his diverticulitis was a pre-
existing 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.




  7
   Neither party argues that, in the case at bar, the Committee
has somehow deviated from its standard applicable definitions of
the relevant terms.

                                     -13-
