                         UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


ALEXANDER S. THOMPSON, JR.,           
               Plaintiff-Appellant,
                 v.
LIFE INSURANCE COMPANY OF NORTH
AMERICA,
                Defendant-Appellee,             No. 01-1383

                and
CIGNA CORPORATION; CIGNA GROUP
INSURANCE,
                       Defendants.
                                      
            Appeal from the United States District Court
       for the Eastern District of North Carolina, at Raleigh.
                W. Earl Britt, Senior District Judge.
                        (CA-99-630-5-BR)

                      Argued: December 5, 2001
                       Decided: March 4, 2002

      Before MICHAEL and TRAXLER, Circuit Judges, and
    Joseph R. GOODWIN, United States District Judge for the
     Southern District of West Virginia, sitting by designation.


Reversed and remanded by unpublished per curiam opinion. Judge
Traxler wrote an opinion concurring in part and dissenting in part.


                            COUNSEL

ARGUED: David Alan Vesel, DAVID A. VESEL, P.A., Raleigh,
North Carolina, for Appellant. Mark Stanton Thomas, MAUPIN,
2           THOMPSON v. LIFE INS. CO.   OF   NORTH AMERICA
TAYLOR & ELLIS, P.A., Raleigh, North Carolina, for Appellee. ON
BRIEF: Joanne J. Lambert, MAUPIN, TAYLOR & ELLIS, P.A.,
Raleigh, North Carolina, for Appellee.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                              OPINION

PER CURIAM:

                                   I.

   Alexander Thompson was covered under a long-term disability
benefits plan (the Plan) administered by Life Insurance Company of
North American (LINA). In 1998, Mr. Thompson was working when
he experienced severe angina. He was admitted to the hospital and
underwent emergency cardiac bypass surgery. Before the surgery, Dr.
Scanlan, a cardiologist, noted that Mr. Thompson also might be suf-
fering from chronic obstructive pulmonary disease (COPD). The car-
diac surgery was successful and Mr. Thompson was released from the
hospital. In his second post-operative visit in late February, Dr. Scan-
lan referred Mr. Thompson to Dr. Vora, a pulmonologist. Dr. Vora
diagnosed Mr. Thompson with severe COPD, noting that he had lost
70% of his breathing capacity and that his breathing condition would
only worsen. Dr. Vora found that Mr. Thompson’s COPD perma-
nently disabled him from all activities, but was unrelated to his previ-
ous cardiac problems.

   Mr. Thompson filed his claim for long-term disability benefits on
July 22, 1998, asserting that he was permanently disabled due to "se-
vere obstructive airways disease and emphysema." J.A. 177. On Sep-
tember 21, 1998, LINA wrote Mr. Thompson a letter denying his
claim. J.A. 245-49. The denial relied on the pre-existing condition
limitation in the Plan. Id. Specifically, LINA wrote:
            THOMPSON v. LIFE INS. CO.    OF   NORTH AMERICA             3
     Since you consulted with Dr. Anderson on 9/12/1997 for
     hypercholesterolemia which is a condition related directly or
     indirectly to the cardiac condition that stopped you from
     working, you do not satisfy the Pre-Existing Condition Lim-
     itation as previously defined. Therefore, you are not eligible
     for Monthly Benefit (sic) under the Long Term Disability
     policy BK 3990.

J.A. 248. The letter also advised Mr. Thompson of his appellate
rights, indicating that if he disputed the denial, he could send a written
statement of reasons for his disagreement and "a letter from his physi-
cian(s) explaining and supplying information contrary to the above."
Id.

  On October 5, 1998, Mr. Thompson appealed LINA’s benefits dis-
qualification. Mr. Thompson wrote:

     The cardiac condition is not the condition that has disabled
     me and prevented my return to work. The diseases that have
     caused my disability are COPD (severe obstructive airways
     disease) and emphysema, which have absolutely nothing to
     do with hypercholesteralemia (sic).

J.A. 224.

   On November 18, 1998, LINA affirmed its earlier finding of ineli-
gibility because "the pre-existing condition limitation" was not satis-
fied. J.A. 251. On May 6, 1999, in response to a letter from Mr.
Thompson’s lawyer, LINA reaffirmed its position that Mr. Thompson
was disqualified from benefits because it found his disability resulted
from a pre-existing cardiac condition. J.A. 256-57.

   In September 1999, Mr. Thompson filed this action in federal
court, alleging an improper denial of long-term disability benefits. In
its answer, LINA again stated its position that Mr. Thompson was not
eligible for benefits because he did not satisfy the pre-existing condi-
tion limitation. Then, on November 14, 2000, more than two years
after Mr. Thompson filed his claim, LINA moved for summary judg-
ment and raised for the first time the Plan’s "active service" provision
4           THOMPSON v. LIFE INS. CO.     OF   NORTH AMERICA
as a basis for its denial of benefits. J.A. 5, 397, 403. The district court
granted LINA’s motion, relying on the Plan’s active service provi-
sion. The court reasoned that since Mr. Thompson was not in "active
service" when he was diagnosed with COPD, LINA properly denied
his claim. Mr. Thompson now appeals that decision.

                                    II.

   Thompson argues that the district court erred by awarding sum-
mary judgment based on a reason LINA raised for the first time upon
judicial review. We agree.

   In enacting ERISA, Congress established procedural safeguards to
ensure that fiduciaries would administer employee benefit plans
"solely in the interest of the participants and beneficiaries." 29 U.S.C.
§§ 1104(a)(1) & 1001(b); see also Makar v. Health Care Corp. of the
Mid-Atlantic, 872 F.2d 80, 83 (4th Cir. 1989). Fiduciaries must pro-
vide "full and fair reviews" of claims for benefits. 29 U.S.C. § 1133;
29 C.F.R. § 2560.503-1 (2001). Plan administrators are required to
state the reason(s) for a denial and provide the specific plan provi-
sion(s) that formed the basis of the decision. 29 U.S.C. § 1133; 29
C.F.R. § 2560.503-1; see also Weaver v. Phoenix Home Life Mut. Ins.
Co., 990 F.2d 154, 158 (4th Cir. 1993). Fiduciaries must notify claim-
ants of their decisions in writing and in language likely to be under-
stood by one of ordinary intelligence. 29 U.S.C. § 1133; 29 C.F.R.
§ 2560.503-1; see also Grossmuller v. Int’l Union, 715 F.2d 853, 858
(3d Cir. 1983). The decision must be objectively reasonable and based
on substantial evidence. Ellis v. Metro Life Ins. Co., 126 F.3d 228,
233 (4th Cir. 1997).

   These procedural safeguards are at the foundation of ERISA. Fidu-
ciary compliance is essential to upholding the administrative integrity
of this statutory scheme. Fort Halifax Packing Co., Inc. v. Coyne, 482
U.S. 1, 15 (1987); Weaver, 990 F.2d at 157. For these reasons, courts
generally find abuse of discretion where a fiduciary neglects his
responsibilities. Weaver, 990 F.2d at 159; see also Marolt v. Alliant
Techsystems, Inc., 146 F.3d 617, 618 (8th Cir. 1998); Halpin v. W.W.
Grainger, Inc., 962 F.2d 685, 697 (7th Cir. 1992); Grossmuller, 717
F.2d at 855.
            THOMPSON v. LIFE INS. CO.    OF   NORTH AMERICA            5
   LINA would have us bypass ERISA’s procedural safeguards. Here,
LINA denied Mr. Thompson’s claim for benefits in September 1998,
explaining that his cardiac condition disqualified him from receiving
benefits under the Plan’s pre-existing condition limitation. LINA also
relied on the pre-existing condition limitation to affirm the denial on
appeal. When Mr. Thompson filed suit, LINA’s Answer to Mr.
Thompson’s Complaint again set forth the pre-existing condition limi-
tation as the sole reason for its denial. Not until the summary judg-
ment stage in November 2000, did LINA assert the Plan’s "active
service" provision as the rationale for its denial of benefits.

   At this late stage, allowing LINA to raise a new basis for denial
would deprive Mr. Thompson of the procedural fairness guaranteed
to claimants under ERISA. Quite simply, Mr. Thompson and every
other claimant is statutorily entitled to expect that plan administrators
will follow mandatory rules of procedure. LINA had a fiduciary duty
to consider Mr. Thompson’s claim fully and fairly and to provide him
with the specific disqualifying reason or reasons. See Weaver, 990
F.2d at 158. A district court’s review is limited to whether the ratio-
nale set forth in the initial denial notice is reasonable. A court may
not consider a new reason for claim denial offered for the first time
on judicial review. We find that the district court erred in relying on
LINA’s "active service" argument when it reviewed LINA’s decision
for abuse of discretion.

                                  III.

                                   A.

   Having found that judicial review is limited to the reason stated in
the denial notice, we now review that reason. See DeNobel v. Vitro
Corp., 885 F.2d 1180, 1186 (4th Cir. 1989) (reviewing the fiduciary’s
decision directly instead of remanding where there was a developed
record of the fiduciary’s review and immediate review was in the
interest of justice). Where a plaintiff appeals the grant of summary
judgment, this court reviews the decision de novo and applies the
same standards employed by the district court. Brogan v. Holland,
105 F.3d 158, 161 (4th Cir. 1997).

   Here, the Plan provides that payment of benefits begins when the
fiduciary receives "due proof" of eligibility. We find that this provi-
6            THOMPSON v. LIFE INS. CO.    OF   NORTH AMERICA
sion granted LINA the discretion to interpret and apply the terms of
the Plan. See, e.g., Perez v. Aetna Life Ins. Co., 150 F.3d 550, 556
(6th Cir. 1998) (en banc) (finding that plan language requiring "satis-
factory evidence" conferred discretion). Where the Plan confers dis-
cretion, we review the plan administrator’s decision for abuse of
discretion. We will not disturb that decision if it is objectively reason-
able and based upon substantial evidence. Ellis, 126 F.3d at 232 (4th
Cir. 1997); Brogan, 105 F.3d at 161.

   Because LINA serves as both the insurer and claims administrator,
we apply a modified abuse of discretion review to counteract the con-
flict of interest present. Bedrick v. Travelers Ins. Co., 93 F.3d 149,
152 (4th Cir. 1996). The greater the incentive for the fiduciary to ben-
efit himself by a certain interpretation, the more objectively reason-
able the fiduciary’s decision must be and the more substantial the
evidence must be to support it. Ellis, 126 F.3d at 233.

                                    B.

   A pre-existing condition limitation generally excludes coverage
during the first year for illnesses resulting from underlying conditions
that were present in the three months prior to the insurer’s assumption
of coverage. Here, the Plan’s pre-existing condition limitation pro-
vides that LINA will not be responsible to pay benefits for any period
of disability that "results, directly or indirectly, from an injury or sick-
ness" for which the employee sought treatment in the three months
prior to the effective date of his insurance coverage. J.A. 245 (empha-
sis added).

   Here, LINA applies the limitation because it believes the disabling
condition "relates" to the pre-existing condition. In letters denying
Mr. Thompson’s claim, LINA applied the limitation and explained
that the two conditions were "related," because Mr. Thompson was
diagnosed with COPD while being treated for his heart condition.

   A dictionary definition of the term "results" means "to happen or
exist as a result of a cause." Webster’s II New College Dictionary 946
(2d ed. 1995). "Relates," on the other hand, merely requires any "con-
nection" or "association." Id. at 935. "Results" requires a causal link;
"relates" does not. Although LINA found a relationship between the
            THOMPSON v. LIFE INS. CO.    OF   NORTH AMERICA            7
two conditions, it did not find that Mr. Thompson’s pre-existing car-
diac condition caused his COPD condition.

   We find that LINA’s interpretation of the pre-existing condition
limitation is not objectively reasonable or based on substantial evi-
dence. All the physicians in the record asserted that Mr. Thompson’s
pre-existing cardiac condition was not related to his disabling pulmo-
nary illness. LINA made its decision without seeking the opinions of
other physicians. The record shows that there was no causal connec-
tion between Mr. Thompson’s two illnesses. Therefore, Mr. Thomp-
son’s COPD was not a pre-existing condition and the limitation was
inapplicable.

   Based on LINA’s unreasonable interpretation and lack of substan-
tial evidence, we find that LINA abused its discretion. LINA’s actions
do not reflect those of an unconflicted fiduciary. We reverse the dis-
trict court’s grant of summary judgment for LINA and remand for the
entry of judgment for the plaintiff and a determination of appropriate
attorney’s fees and costs.

                                       REVERSED AND REMANDED

TRAXLER, Circuit Judge, concurring in part and dissenting in part:

   I agree with the majority’s determination that the district court
erred in upholding the denial of ERISA benefits based upon a reason
LINA first raised before the district court. Plan administrators must
set forth the specific reasons for denial "in a manner calculated to be
understood by the participant" and provide for a "full and fair review"
of any such denial. 29 U.S.C.A. § 1133 (West 1999); 29 C.F.R.
§ 2560.503-1(g) (2001); Weaver v. Phoenix Home Life Mut. Ins. Co.,
990 F.2d 154, 157 (4th Cir. 1993). "These procedural guidelines are
at the foundation of ERISA," Weaver, 990 F.2d at 157, and it was
error for the district court to affirm the LINA’s denial on a basis never
advanced by LINA before the administrator.

   I respectfully dissent, however, from the majority’s decision to
remand this case for the entry of judgment for Thompson. I believe
the proper remedy in these circumstances is to remand to the district
8           THOMPSON v. LIFE INS. CO.   OF   NORTH AMERICA
court with directions that the case be returned to the plan administra-
tor for a full and fair review of Thompson’s claim for disability bene-
fits caused by his chronic obstructive pulmonary disease. See Weaver,
990 F.2d at 159 (noting that "where the plan administrator has failed
to comply with ERISA’s procedural guidelines and the plain-
tiff/participant has preserved his objection to the plan administrator’s
noncompliance, the proper course of action for the court is remand to
the plan administrator for a ‘full and fair review.’"); Berry v. Ciba-
Geigy Corp., 761 F.2d 1003, 1007 n.4 (4th Cir. 1985) (also noting
propriety of remand in such circumstances because "[t]he question of
eligibility must be resolved by the plan in the first instance, not the
court.") (internal quotation marks omitted).

   Finally, because I would hold that the plan administrator failed to
comply with ERISA’s procedural guidelines and, therefore, that
remand is necessary, I find it unnecessary to resolve in this proceed-
ing the thorny question of whether the "due proof" provision in
Thompson’s policy is sufficient to confer discretionary authority upon
LINA or whether we would ultimately review a properly-issued deci-
sion under a de novo standard of review.
