USCA1 Opinion
United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
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No. 93-2077
GEORGE A. HUGHES,
Plaintiff, Appellant,
v.
BOSTON MUTUAL LIFE INSURANCE COMPANY,
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Douglas P. Woodlock, U.S. District Judge]
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Before
Torruella and Stahl, Circuit Judges,
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and Carter,* District Judge.
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John Silvia, Jr. with whom Long & Silvia was on brief for
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appellant.
Ralph C. Copeland, with whom Copeland & Hession was on brief for
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appellee.
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July 18, 1994
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*Of the District of Maine, sitting by designation.
STAHL, Circuit Judge. In this appeal, plaintiff-
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appellant George Hughes ("Hughes") contends that the district
court erred in granting summary judgment for defendant-
appellee Boston Mutual Life Insurance Company ("Boston
Mutual") on Hughes' claim of entitlement to disability
benefits under a group insurance plan. The lower court
allowed the motion on the basis that Hughes' receipt of
medical treatment for symptoms of multiple sclerosis
triggered the "pre-existing condition" exclusion in the
insurance policy issued to Hughes by Boston Mutual. We
vacate and remand for further proceedings.
I.
I.
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BACKGROUND
BACKGROUND
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Multiple sclerosis ("MS") is a grave disorder of
the nervous system. See generally Cury v. Colonial Life Ins.
___ _________ ____ __________________
Co. of America, 737 F. Supp. 847, 850 (E.D. Pa. 1990). The
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cause of MS remains shrouded in mystery and a cure still lies
beyond the grasp of medical science. Symptoms of MS include
weakness, fatigue, incoordination, and
difficulty walking. Another common
symptom of multiple sclerosis is spastic
paraparesis which is a stiffness,
weakness, or spasticity in the lower
extremities. Finally, depression is very
common in multiple sclerosis patients.
Id.
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MS "follows a slow, progressive course marked by a
history of exacerbations and remissions." Id. The disease
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cannot be diagnosed with certainty during the life of the
patient. Thus, depending on the results of observation and
sophisticated testing, a physician may make a diagnosis of
"most likely," "likely [or probable]," or "possible" MS. See
___
id.
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The circumstances leading to Hughes' claim for
disability caused by MS are relatively straightforward.
Hughes became a permanent employee of the University of
Massachusetts in November 1987, and later applied to enroll
in a group disability insurance plan available to University
of Massachusetts employees through Boston Mutual. Boston
Mutual approved the application, designating February 1, 1988
as the effective date of coverage.
The disability insurance policy ("the Policy")
contains the following language setting forth an exclusion of
coverage for disability arising from a pre-existing
condition:
This policy will not cover any total
disability:
1. which is caused or contributed to by,
or results from a pre-existing condition;
and
2. which begins in the first 12 months
after the insured's effective date ["the
probationary period"], unless he received
no treatment of the condition for 6
consecutive months after his effective
date.
"Treatment" means consultation, care or
services provided by a physician
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including diagnostic measures and taking
prescribed drugs and medicines.
"Pre-existing Condition" means a sickness
or injury for which the insured received
treatment within 6 months prior to the
insured's effective date ["the pre-
probationary period"].
The events that occurred within each of the
relevant periods are essentially undisputed. During the pre-
probationary period (August 1, 1987 to February 1, 1988),
Hughes experienced a number of symptoms consistent with MS.
In August 1987, Hughes visited Dr. Daniel Sullivan,
complaining of numbness in both lower extremities, loss of
balance, and gastrointestinal problems. Dr. Sullivan
prescribed medication for the gastrointestinal symptoms, but
made no diagnosis of MS.
Although the record contains an unrebutted after-
the-fact diagnosis from Dr. David Dawson that Hughes was
"suffering from multiple sclerosis" in August 1987,
deposition testimony from Dr. Dawson and other physicians
suggests that Hughes' condition was not amenable to any type
of clinical diagnosis during the pre-probationary period.
Dr. Sullivan testified that the symptoms he observed in the
summer of 1987 "would not create the impression of multiple
sclerosis." Dr. Jeremy Worthington (who, in March 1988,
diagnosed Hughes as having MS) confirmed that the loss of
balance reported to Dr. Sullivan in August 1987 is "a very
non-specific complaint," which is "not enough to establish .
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. . [a]nything." Dr. Dawson initially testified that he had
"no opinion about the diagnosability of multiple sclerosis in
1987." Dr. Dawson did testify that Hughes' condition could
have been diagnosed as "clinically probable multiple
sclerosis" in February 19881 (after the expiration of the
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pre-probationary period), but did not advance an opinion as
to the diagnosability of MS during the pre-probationary
period. Finally, Dr. Dunn, an ophthalmologist who treated
Hughes in June 1987 (before the pre-probationary period)
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wrote "possible MS" in his notes, but there is no evidence
that Dr. Dunn communicated his hypothesis either to Hughes or
to any treating physician during the pre-probationary period.
During the first six months of the probationary
period (February 1, 1988 to July 1, 1988), Hughes received
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1. Although Dr. Dawson actually testified that Hughes could
have been diagnosed as suffering from "probable MS" in
February 1987 (before the commencement of the pre-
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probationary period), the record suggests that Dr. Dawson may
have intended to refer to February 1988. The reference to
1987 seems to spring from Dr. Dawson's understanding of a
letter he wrote to Dr. Worthington on May 31, 1988
summarizing Hughes' medical history. The typewritten text of
that letter (attached as part of Exhibit 5 to Boston Mutual's
motion for summary judgment) contains a paragraph describing
an outbreak of suspicious symptoms to February 1988, although
it appears that either the author or the recipient used a pen
or pencil to change "1987" to "1988" as well as to cross out
the paragraph recounting a second issue. To add to the
confusion, the briefs of both parties adopt the district
court's findings, which do not mention an episode in February
1987. In light of this contrary evidence and our duty to
view the evidence in the light most favorable to Hughes, we
infer that February 1988 should be the date of Dr. Dawson's
retrospective diagnosis.
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additional medical attention. On March 1, Hughes experienced
various symptoms, including "extreme fatigue, inability to
maintain balance, double vision, lack of coordination with
walking, and slurring of speech." On March 10, Dr. Jeremy
Worthington diagnosed Hughes as suffering from MS. On April
5, Hughes underwent Magnetic Resonance Imagery ("MRI")
testing, which confirmed the Worthington diagnosis.
Later in the probationary period, Hughes' worsening
condition made it increasingly difficult for him to work. At
the suggestion of Dr. Sullivan, Hughes terminated his
employment with the University of Massachusetts on July 6,
1988, and filed a disability claim with Boston Mutual.
Boston Mutual denied the claim in November 1988,
prompting Hughes to file this action in Massachusetts
Superior Court.2 Because the Policy is a group insurance
plan regulated by the Employee Retirement Income Security Act
of 1974, as amended, 29 U.S.C. 1001 et seq. (1988 & Supp.
__ ____
1992) ("ERISA"), Boston Mutual removed the action to the
United States District Court for the District of
Massachusetts pursuant to 28 U.S.C. 1441 (1988 & Supp.
1992). The district court granted Boston Mutual's motion for
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2. Although Count I refers simply to a breach of contract
claim, the complaint plainly seeks to recover benefits under
an ERISA-regulated plan pursuant to 29 U.S.C. 1132(a)(1)(B)
(1988). Federal and state courts have concurrent
jurisdiction over such claims. 29 U.S.C. 1132(e)(1)
(1988).
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summary judgment, Hughes v. Boston Mut. Life Ins. Co., No.
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91-10179-WD (D. Mass. Aug. 27, 1993), and this appeal
followed.
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II.
II.
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PROCEDURAL PRINCIPLES
PROCEDURAL PRINCIPLES
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Where, as here, the administrator of an ERISA-
regulated plan does not allege that it has discretion under
the plan to interpret the terms of the insurance policy,
judicial review of a denial of benefits entails no deference
to the administrator's explanation of the plan and follows
the familiar course of an action for breach of an insurance
contract. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
___ ___________________________ _____
101, 115 (1989); Allen v. Adage, Inc., 967 F.2d 695, 697-98
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(1st Cir. 1992).
Similarly, an appellate court independently weighs
the merits of a motion for summary judgment, without
deference to the reasoning of the district court. See Bird
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v. Centennial Ins. Co., 11 F.3d 228, 231 (1st Cir. 1993).
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Summary judgment is appropriate if "there is no genuine issue
as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law." Fed. R. Civ. P.
56(c). The party opposing summary judgment "may not rest
upon the mere allegations or denials of [its] pleading[s],
but . . . must set forth specific facts showing that there is
a genuine issue for trial." Fed. R. Civ. P. 56(e). See also
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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986);
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LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841-42 (1st Cir.
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1993), cert. denied, 114 S. Ct. 1398 (1994). Moreover, where
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the non-moving party bears the burden of persuasion at trial,
it can only avert summary judgment with a display of evidence
"sufficient to establish the existence of [the] element[s]
essential to [its] case." Celotex Corp. v. Catrett, 477 U.S.
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317, 322-23 (1986). Finally, a court deciding a motion for
summary judgment cannot assume the skepticism of the fact-
finder, but must draw all reasonable inferences in favor of
the non-moving party. See Levy v. FDIC, 7 F.3d 1054, 1056
___ ____ ____
(1st Cir. 1993).
III.
III.
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DISCUSSION
DISCUSSION
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While we normally look to the law of a particular
state to guide our construction of a contract, "a federal
common law of rights and obligations" governs the
interpretation of an ERISA-regulated group insurance plan.
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56 (1987);
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Burnham v. Guardian Life Ins. Co. of America, 873 F.2d 486,
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489 (1st Cir. 1989). The need for federal uniformity in this
area does not, however, require federal rules at variance
with the general law of the states. Indeed, we have noted
that the emerging federal common law "must embody common-
sense canons of contract interpretation," id., of which state
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law is the "richest source," Rodriguez-Abreu v. Chase
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Manhattan Bank, N.A., 986 F.2d 580, 585 (1st Cir. 1993).
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Thus, "straightforward language in an ERISA-regulated
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insurance policy should be given its natural meaning."
Burnham, 873 F.2d at 489. Similarly, in keeping with the
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rule of contra proferentem, ambiguous terms should be
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strictly construed against the insurer. Rodriguez-Abreu, 986
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F.2d at 586; see also Lee v. Blue Cross/Blue Shield, 10 F.3d
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1547, 1551 (11th Cir. 1994) (collecting cases to demonstrate
that contra proferentem rule "has been widely adopted" among
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circuit courts for resolution of ambiguities in ERISA-
regulated insurance contracts); cf. Allen, 967 F.2d at 701
___ _____
n.6 (holding that contra proferentem principle does not apply
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to ERISA contracts beyond the insurance context). But cf.
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Brewer v. Lincoln Nat'l Life Ins. Co., 921 F.2d 150, 153-54
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(8th Cir. 1990) (holding that state law policy of construing
ambiguities in favor of the insured could not govern
interpretation of ERISA policy), cert. denied, 111 S. Ct.
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2872 (1991); McMahan v. New England Mut. Life Ins. Co., 888
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F.2d 426, 429-30 (6th Cir. 1989) (same).3 Nevertheless,
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3. Brewer and McMahan primarily involve the question of
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whether a state law rule of contract construction controls
the interpretation of an ERISA contract. It is unclear
whether either court actually rejects the contra proferentem
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principle as a rule of federal common law. The court in
Brewer comes closest to doing so, citing as support the
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Supreme Court's statement that courts should construe
provisions in ERISA plans "`without deferring to either
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party's interpretation.'" 921 F.2d at 154 (emphasis in
original) (quoting Bruch, 489 U.S. at 112). The quotation
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from Bruch is accurate, but cannot support the holding in
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Brewer. Bruch concerns the standard for judicial review of
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benefit determinations by fiduciaries or plan administrators
under ERISA. 489 U.S. at 105. The Court's preference for de
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novo review of nondiscretionary decisions, id. at 115, in no
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sympathy for either party cannot justify sophistry.
"[C]ourts have no right to torture language in an attempt to
force particular results or to convey delitescent nuances the
contracting parties neither intended nor imagined." Burnham,
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873 F.2d at 489.
The exclusion clause at issue here does not apply
to pre-existing conditions in the ordinary sense. A routine
pre-existing condition clause aims to bar coverage for claims
arising from conditions existing before the effective date of
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an insurance policy; such policies focus on the prior
origination or prior manifestation of the condition. See
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generally 1B John Alan Appleman & Jean Appleman, Insurance
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Law and Practice, 396 (1981 & Supp. 1993). The clause in
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Hughes' policy might be described more accurately as a
"recent treatment" exclusion because it prohibits coverage
for any total disability which occurs during a probationary
period and is attributable to a condition for which the
insured received medical treatment just prior to the
probationary period.
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way limits a court's ability to select appropriate rules of
contract interpretation in aid of its independent
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construction of disputed terms. In any event, the Eighth
Circuit has since construed Brewer as allowing the
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application of contra proferentem to an ERISA-regulated
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insurance plan, but only after the court attempts to resolve
an apparent ambiguity by favoring the "ordinary" meaning of a
disputed term. See Delk v. Durham Life Ins. Co., 959 F.2d
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104, 105-06 (8th Cir. 1992) (per curiam).
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Unlike the standard pre-existing condition clause,
the recent treatment exclusion is not strictly designed to
weed out known insurance risks; it would even permit activity
which, if not reported on an application for a policy with a
standard pre-existing condition clause, might suggest fraud.
For example, as counsel for Boston Mutual suggested at oral
argument, an insured who was disabled within the probationary
period and did not receive medical treatment for a condition
contributing to the disability during the pre-probationary
period would be entitled to coverage even if she (1) received
treatment for such a condition before (but not during) the
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pre-probationary period, (2) knowingly suffered from symptoms
of the condition during the pre-probationary period without
seeking medical attention, or (3) received treatment during
the pre-probationary period for a broken arm (not a symptom
of MS) caused by a fall attributable to loss of balance
resulting from undiagnosed MS.
We also note that the exclusion is not triggered by
any medical treatment, only by treatment "for" a "sickness or
injury" (the "[c]ondition") which "caused or contributed to .
. . or results" in a "total disability." As several other
courts interpreting similar language have observed, the
exclusion does not explicitly require diagnosis. Marshall v.
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UNUM Life Ins. Co., No. A3-91-201, 1992 WL 554314, at *2
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(D.N.D. Nov. 6, 1992), aff'd, 13 F.3d 282 (8th Cir. 1994);
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Cury, 737 F. Supp. at 854. But neither does the exclusion
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explain what constitutes treatment "for" a particular
condition. Boston Mutual suggests that treatment "for" a
condition refers to treatment of any symptom which in
hindsight appears to be a manifestation of the condition. We
acknowledge that this would be one reasonable interpretation
of the exclusion. See Bullwinkel v. New England Mut. Life
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Ins. Co., 18 F.3d 429, 432-33 (7th Cir. 1994) (holding that
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treatment of malignant breast lump in pre-probationary period
triggered recent treatment exclusion although lump was not
definitively diagnosed as cancer until later time); Cury, 737
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F. Supp. at 854-55 (holding that treatment for symptoms of
undiagnosed multiple sclerosis in critical period activated
recent treatment exclusion). But Boston Mutual's
interpretation is not the only plausible one. Hughes
reasonably suggests that the exclusion requires some
awareness on the part of the physician or the insured that
the insured is receiving treatment for the condition itself.
See Ross v. Western Fidelity Ins. Co., 881 F.2d 142, 144 (5th
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Cir. 1989) ("[T]here is at least a reasonable argument that,
under [a recent treatment exclusion], treatment for a
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specific condition cannot be received unless the specific
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condition is known.") (emphasis in original); Karagon v.
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Aetna Life Ins. Co., 228 N.W.2d 515, 516 (Mich. Ct. App.
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1975) (holding that treatment of symptoms of undiagnosed
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multiple sclerosis did not trigger recent treatment exclusion
where disease did not manifest itself with sufficient clarity
to allow reasonably accurate diagnosis and treatment).4 Nor
is there extrinsic evidence which would allow us to choose
one plausible interpretation over the other as a matter of
law. Because the exclusion is susceptible to "reasonable but
differing interpretations," we find it to be ambiguous.
Rodriguez-Abreu, 986 F.2d at 586.5 And, because we
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interpret ambiguities against the insurer, id.; Lee, 10 F.3d
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4. We note that Ross is not irreconcilable with Bullwinkel,
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in which the court may not have had the occasion to address
the ambiguity alleged here and in Ross. Indeed, the Seventh
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Circuit specifically stated that "this case is unique because
the Bullwinkels' attorney really rested his entire appeal on
the argument that a court may not infer that a lump
discovered to be cancerous in one month was also cancerous
two months before. . . . We make no statement about what
might happen if an attorney in a future case presents
different arguments and authority to the court." 18 F.3d at
433.
5. In so stating, we obviously reject the reasoning of some
other courts that have construed similar language by focusing
exclusively on the absence of a requirement for diagnosis
without seriously considering whether the language concerning
treatment "for" a particular condition is ambiguous. See
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Marshall, 1992 WL 554314, at *2 ("[T]he language of the
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policy in the instant case is clear and unambiguous;
diagnosis is not required by the policy for a finding that
there is a pre-existing condition."); Cury, 737 F. Supp. at
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854 ("There is no requirement that a diagnosis, definite or
otherwise, of the pre-existing condition must be made during
the pre-existing condition period."). Under the
interpretation suggested by Hughes, a physician's awareness
of the sickness would probably require at least a tentative
diagnosis; however, it may be that no diagnosis would be
necessary if the insured was already aware of the condition.
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at 1551, we adopt for purposes of summary judgment the
construction offered by Hughes.6
The sole remaining task is to apply the exclusion
to the facts at hand. The parties have identified MS as the
"[c]ondition" which "caused or contributed to . . . or
result[ed]" in Hughes' "total disability." E.g., Appellee's
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Br. at 14. At this stage, it is undisputed that neither
Hughes nor the physicians who treated his symptoms during the
pre-probationary period were aware that he was being treated
for "most likely MS," "probable MS," or even "possible MS."
Therefore, we cannot say as a matter of law that Hughes
received treatment "for" MS during the critical six months
before the effective date of the Policy.
IV.
IV.
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6. The trier of fact must resolve any ambiguities in an
ERISA contract identified by the court and incapable of
definitive resolution on the existing record. See Allen, 967
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F.2d at 698; see also Jos. Schlitz Brewing Co. v. Milwaukee
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Brewery Workers' Pension Plan, 3 F.3d 994, 999 (7th Cir.
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1993); Teamsters Indus. Employees Welfare Fund v. Rolls-Royce
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Motor Cars, Inc., 989 F.2d 132, 135 n.2 (3rd Cir. 1993);
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D.E.W., Inc. v. Local 93, Laborers' Int'l Union, 957 F.2d
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196, 199 (5th Cir. 1992). Moreover, despite any interpretive
presumption favoring the insured, an insurer may seek to
overcome that presumption with probative evidence. See
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Stephen L. Liebo, 13 Appleman's Insurance Law and Practice
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7403, at 75 (Supp. 1993) ("Where a policy is ambiguous,
grounds, including appropriate extrinsic evidence, may be
found to show that the interpretation unfavorable to an
insured was the one reasonably understood by both parties; it
is only when the ambiguity still remains after the resort to
such extrinsic evidence that an ambiguous provision is to be
construed against the insurer."). Therefore, Boston Mutual
would remain free to introduce evidence at trial that its
interpretation is the more reasonable one.
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CONCLUSION
CONCLUSION
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For the foregoing reasons, we vacate the judgment
below and remand for further proceedings consistent with this
opinion.
So ordered.
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