UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


AGATHA SOKOLOSKI,                     
               Plaintiff-Appellant,
                v.                             No. 01-1963
METLIFE INSURANCE COMPANY,
               Defendant-Appellee.
                                      
           Appeal from the United States District Court
            for the District of Maryland, at Baltimore.
              William M. Nickerson, District Judge.
                       (CA-00-2314-WMN)

                     Argued: January 24, 2002

                     Decided: March 7, 2002

     Before WILLIAMS and TRAXLER, Circuit Judges, and
      Cynthia Holcomb HALL, Senior Circuit Judge of the
      United States Court of Appeals for the Ninth Circuit,
                     sitting by designation.



Affirmed by unpublished opinion. Judge Traxler wrote the majority
opinion, in which Judge Williams joined. Senior Judge Hall wrote a
dissenting opinion.


                           COUNSEL

ARGUED: Wayne Stuart Goddard, CUOMO & GODDARD, L.L.P.,
Towson, Maryland, for Appellant. John Snowden Stanley, Jr.,
SEMMES, BOWEN & SEMMES, P.C., Baltimore, Maryland, for
Appellee.
2              SOKOLOSKI v. METLIFE INSURANCE COMPANY
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                               OPINION

TRAXLER, Circuit Judge:

   Baltimore Gas and Electric Company ("BG&E") maintained a
group disability plan for the benefit of its employees. Prior to Septem-
ber 1, 1997, long-term disability benefits were funded through a
group disability policy issued to BG&E by Life Insurance Company
of North America, an affiliate of the CIGNA insurance group
("CIGNA"). As an employee of BG&E, Agatha Sokoloski was
enrolled in and covered under the CIGNA plan. On September 1,
1997, Metropolitan Life Insurance Company ("MetLife") replaced
CIGNA as the disability carrier and issued a group disability policy
that took effect on September 1.

   Under the terms of the MetLife plan, an employee who was
employed by BG&E on September 1, 1997 would be eligible to par-
ticipate in the plan as long as the employee had completed one full
month of "active work" prior to September 1, 1997. There is no dis-
pute that Sokoloski met the eligibility requirements for the MetLife
plan. For coverage under the MetLife plan to become effective for an
eligible BG&E employee, the employee must have been "Actively at
Work" on September 1, 1997.1 The MetLife plan provides that "if [the
employee is] not Actively at Work, because of Disability on the date
[the employee’s] insurance would otherwise become effective, it will
become effective on the day [the employee] return[s] to Active
Work." J.A. 41.

    On September 1, when the MetLife plan replaced the CIGNA plan,
    1
   Under the MetLife plan, an employee is considered "Actively at
Work" if "on a day which is one of [the employee’s] scheduled work
days . . . [the employee is] performing in the usual way all of the regular
duties of [the employee’s] work for the Employer on that day, . . . at one
of the Employer’s usual places of business . . . ." J.A. 37.
              SOKOLOSKI v. METLIFE INSURANCE COMPANY                   3
Sokoloski was out on paid sick leave. She had stopped working on
August 25, 1997, and was awaiting knee surgery that was performed
on September 9. According to Sokoloski, she stopped working on
August 25 and began resting in bed before surgery because her back
and her knee were bothering her, she was having difficulty walking,
and "it was just too difficult for me to work as far as the pain." J.A.
109.

   In November 1997, Sokoloski submitted a claim for long-term dis-
ability benefits under the CIGNA plan, claiming that chronic pain in
both knees and her back prevented her from performing any occupa-
tion. CIGNA denied Sokoloski’s claim. With respect to Sokoloski’s
knee condition, CIGNA concluded that she had recovered well from
knee surgery and that she was "capable of performing [her] duties as
a telemarketer upon [her] discharge from Physical Therapy" on Octo-
ber 28, 1997. J.A. 130. As for Sokoloski’s back problem, CIGNA
determined that because treatment for that condition did not begin
until January 14, 1998, she had not yet satisfied the "Benefit Waiting
Period," a prerequisite for disability benefits under the CIGNA plan
that required Sokoloski to establish that she had been totally disabled
for a 180-day period. J.A. 130. CIGNA did not, however, deny cover-
age of Sokoloski’s back condition based on the September 1, 1997,
effective date of the MetLife plan; in fact, CIGNA conceded that "a
disabling condition may exist" but explained to Sokoloski that she
needed to serve "an additional benefit waiting period . . . based on the
start of this condition," J.A. 130, which CIGNA believed to be Janu-
ary 14.2 CIGNA informed Sokoloski of her right to appeal the denial
of her claim, but she did not pursue benefits under the CIGNA plan
any further.

   Instead, Sokoloski submitted her claim for long-term disability
benefits to MetLife in May 1998. MetLife denied her claim because
she was not "Actively at Work" on September 1, 1997, and never
returned to work after that date. Therefore, according to MetLife, cov-
erage under the MetLife plan never became effective for Sokoloski.
  2
   Although CIGNA identified the beginning of treatment on January
14, 1998, as the date that Sokoloski’s disabling back condition began,
she testified at her deposition that she stopped working prior to Septem-
ber 1, 1997, because of pain in her knee and her back.
4               SOKOLOSKI v. METLIFE INSURANCE COMPANY
Sokoloski followed the procedures under the MetLife plan for con-
testing this decision, but MetLife refused to change its position and
continued to deny coverage.

   Sokoloski filed a declaratory judgment action against MetLife in
state court. MetLife removed the case to federal court on the grounds
that Sokoloski’s claims related to benefits under a plan regulated by
the Employee Retirement Income Security Act (ERISA). See 29
U.S.C.A. § 1001 et seq. The parties filed cross-motions for summary
judgment. The district court agreed with MetLife that coverage under
the MetLife plan never became effective for Sokoloski because she
was out with her disability and thus not "Actively at Work" on Sep-
tember 1, 1997. The district court concluded that the MetLife plan
became effective for an employee who was not "Actively at Work"
on September 1, 1997, on the day the employee returns to active
work. Because Sokoloski never returned to work after August 25,
1997, the district court held that coverage under the MetLife plan
never became effective. Thus, the court granted summary judgment
to MetLife and denied Sokoloski’s cross-motion for summary judg-
ment. We affirm the decision of the district court for the reasons
stated in its opinion.3

                                                            AFFIRMED

HALL, Senior Circuit Judge, dissenting:

    I respectfully dissent.

   Agatha Sokoloski had the bad fortune of requiring total knee
replacement that resolved one problem but created another. In addi-
tion to bad knees, Sokoloski had a preexisting back condition which
had required surgery in 1982. Sokoloski’s back condition was suffi-
ciently serious to require a pre-surgery evaluation from her orthopae-
    3
    On appeal, Sokoloski argues, for the first time, that she may also be
entitled to disability benefits under the "Continuity of Coverage" provi-
sion in the MetLife plan. We follow the rule "that issues raised for the
first time on appeal generally will not be considered." Karpel v. Inova
Health Sys. Servs., 

, 1227 (4th Cir. 1998). Sokoloski has
not given us a reason to withhold application of this general rule.
               SOKOLOSKI v. METLIFE INSURANCE COMPANY                    5
dic surgeon before she was cleared for her knee operation. While the
knee surgery was a success, the difficulties that Sokoloski had with
her knees and her use of crutches and a cane to help her walk exacer-
bated her back condition to the extent that it became a separate source
of long term disability.

   In addition, Sokoloski also had bad timing. Beginning on August
26, 1997 she took sick leave from BG&E on doctor’s advice in order
rest and stay off her legs in preparation for her operation. Due to her
multiple disabilities, she did not return and was routinely terminated
after six months once her sick leave had run out. But for the fact that
the events that left Sokoloski disabled happened to coincide with a
decision of her employer to switch insurance carriers, there is little
question that she would have been eligible for long term insurance
benefits with CIGNA and would probably not be before this Court.1

   Finally, Sokoloski has also now gotten a bad result from the legal
system. Like the majority, I agree with the District Court’s holding
that Sokoloski was not "Actively at Work" at any point on or after
September 1, 1997 and was not covered on that basis. However, that
should not end the matter. The Fourth Circuit has established that
issues raised for the first time on appeal may be considered in "excep-
tional circumstances." United States v. One 1971 Mercedes Benz 2-
Door Coupe, 

, 915 (4th Cir. 1976). As Sokoloski has
argued for the first time before this panel, and as the MetLife policy
documents make clear, she has a second basis for claiming benefits
under the MetLife plan: namely its "Continuity of Coverage" provi-
  1
    It’s true, as noted by the majority, that CIGNA denied Sokoloski cov-
erage because it claimed she was not disabled between late October 1997
and January 14, 1998. However, even assuming this is true, it would not
ultimately have denied her long-term benefits absent the change from
CIGNA to MetLife. It would merely have changed her start date. CIGNA
denied Sokoloski benefits because it claimed she was not continuously
disabled for 180 days as calculated from August 25, 1997. For this rea-
son she did not satisfy its benefits waiting period for a disability begin-
ning on that date. At the same time, CIGNA did not dispute that she had
a disability beginning in January 1998. Had she still been covered by the
CIGNA policy at that time, (which she almost certainly was not), she
would have been eligible for benefits for a disability beginning on that
date.
6             SOKOLOSKI v. METLIFE INSURANCE COMPANY
sion. With respect to the majority, I submit that we are presented with
exceptional circumstances and would remand for the simple factual
determination necessary to resolve Sokoloski’s alternate claim.

   As noted in the last footnote of the majority’s opinion, the MetLife
plan includes a "Continuity of Coverage" provision, which states:

    In order to prevent loss of your coverage because of a trans-
    fer of insurance carriers, This Plan will provide coverage for
    you as follows:

    1. Failure to Be Actively at Work Due to Injury or Sick-
       ness

          This Plan will cover you, if you:

         a. were covered under the prior carrier’s plan at
            the time of transfer, and

         b. are not Actively at Work due to Injury or
            Sickness;

         provided the required payment toward the cost of
         Long Term Disability Benefits is made to us for
         you.

    The benefit payable will be that which would have been
    paid by the prior carrier had coverage remained in force,
    less any benefit for which the prior carrier is liable.

The plain purpose of this provision is to provide coverage to persons
like Sokoloski. The "Continuity of Coverage" clause anticipates that
people in her position may not be able to qualify for long term bene-
fits under the "Effective Dates" provision because they happen to
have become unable to work during a period when coverage is being
transferred.

  For the most part, it is also plain that Sokoloski qualifies for cover-
age under the specific terms of the provision. It is not disputed that
               SOKOLOSKI v. METLIFE INSURANCE COMPANY                  7
she was "covered" under the prior policy at the time of transfer as
required by part "a" of the "Continuity of Coverage" provision.
Indeed, as a former employee with more than 20 years’ service to her
company, it should be evident that she had both earned and paid for
her coverage. There is also no dispute that Sokoloski was not "Ac-
tively at Work" due to injury on or after September 1, 1997, the date
the record indicates the policies transferred.2 MetLife itself vigorously
argues this very point. The only open issue in determining whether
Sokoloski should be covered is therefore whether, as seems likely,
BG&E paid premiums on behalf of Sokoloski to MetLife.

   Especially in light of the obviousness of this claim, I believe it is
wrong to deny Sokoloski benefits to which she is probably rightfully
entitled on procedural grounds. Ordinarily, of course, this Court does
not consider issues not previously raised. 

consider-
ations of judicial economy, this rule is rooted in the recognition that
it is essential for fair process that each side have the opportunity to
fully argue the merits and introduce relevant evidence. See Hormel v.
Helvering 

(1941). However, the matter of what ques-
tions may be taken up for the first time on appeal is one left to our
discretion. Singleton v. Wulff 

, 121 (1976). Consistent
with that discretion, when an error is "plain" and a refusal to address
it would result in a denial of fundamental justice, it should be cor-
rected. United States v. Barge Shamrock, 

, 1111 (4th
Cir. 1980). This court has held:

      Rules of practice and procedure are devised to promote the
      ends of justice, not to defeat them. A rigid and undeviating
      judicially declared practice under which courts of review
      would invariably and under all circumstances decline to
      consider all questions which had not previously been specif-
      ically urged would be out of harmony with this policy.
      Orderly rules of procedure do not require sacrifice of the
      rules of fundamental justice.
  2
   While there is no direct evidence from CIGNA or BG&E in the
record conclusively demonstrating that September 1, 1997 was the date
that CIGNA ceased insuring employees of BG&E, the fact that the
MetLife policy was purchased to begin on that day is strong indirect evi-
dence to that effect.
8              SOKOLOSKI v. METLIFE INSURANCE COMPANY
Washington Gas Light v. Virginia Electric & Power Cor. 

, 250 (4th Cir. 1971) (quoting 

); see also
Barge 

; Furka v. Great Lakes Dredge &
Dock Co. 

, 1089 (4th Cir. 1985). This is precisely what
is at issue here.

   The system has failed Agatha Sokoloski. The "Continuity of Cov-
erage" provision is documented in the record. The issue of whether
it provided coverage to Sokoloski should have been obvious to the
parties. In the first instance, of course, the error must be attributed to
Sokoloski’s counsel who was certainly remiss not to raise the issue
below. At the same time, however, this is not a case where an unsus-
pecting defendant is surprised by a last minute claim. It is simply not
plausible that MetLife was unaware of Sokoloski’s probable rights
under the "Continuity of Coverage" provision. It was the party most
familiar with its own policy, it had been given notice of a claim aris-
ing at the time of transfer from another insurance carrier, and it was
certainly in a good position to determine whether premiums had been
paid to it on Sokoloski’s behalf. Moreover, in both its correspon-
dences with Sokoloski denying benefits and its subsequent position
during litigation, MetLife argued the very set of conditions that
should have suggested Sokoloski was likely covered under the "Con-
tinuity of Coverage" clause. Yet, at no time did MetLife notify
Sokoloski of this fact. This smacks of bad faith, and the fact that the
issue was consequently not addressed by the District Court should not
inhibit us from considering it.

   Justice requires us to recognize Sokoloski’s obvious claim and
remand to the District Court to resolve the limited factual issues
remaining to determine Sokoloski’s right to benefits under it.
Sokoloski has put evidence in the record showing that her pay was
being deducted for "flexible benefits" such as MetLife coverage.
MetLife argues that it does not conclusively show that the deductions
were to pay for MetLife premiums. It should be a relatively straight-
forward evidentiary exercise to determine whether this was in fact the
case. In the case that it is, the District Court should grant Sokoloski’s
claim for coverage and determine the amount and timing of benefits
payable consistent with the other terms of the MetLife policy and the
date of transfer.