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Employment – ERISA — total disability

By: WISCONSIN LAW JOURNAL STAFF//March 13, 2013//

Employment – ERISA — total disability

By: WISCONSIN LAW JOURNAL STAFF//March 13, 2013//

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United States Court of Appeals For the Seventh Circuit

Civil

Employment – ERISA — total disability

It was not arbitrary or capricious to terminate total and permanent disability benefits for an employee who became employed full-time.

“Tompkins asks us to find the meaning of the $14,000 provision so plain that the Fund acted arbitrarily and capriciously when it relied on it to terminate his benefits. See Hess v. Hartford Life & Accident Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001) (‘In some cases, the plain language or structure of the plan or simple common sense will require the court to pronounce an administrator’s determination arbitrary and capricious.’). The Fund responds that the language in the $14,000 provision is ambiguous. We agree. There are certainly more efficient ways to communicate the Fund’s definition of ‘total and permanent disability.’ And the ‘for such’ preface seems unnecessarily confusing. In addition, Tompkins’s need to resort to extrinsic evidence, such as the 1997 memo and letter and the 2005 draft amendment, also suggests that the provision is, in fact, ambiguous. See Swaback v. Am. Info. Techs. Corp., 103 F.3d 535, 541 (7th Cir. 1996) (with ERISA plans, ‘[e]xtrinsic evidence should not be used where the contract is unambiguous’ (quoting GCIU Emp’r Ret. Fund v. Chi. Tribune Co., 66 F.3d 862, 865 (7th Cir. 1995)). Because of that ambiguity, the Fund’s interpretation of the $14,000 provision is entitled to deference. That interpretation rests on a reasoned understanding of ‘total and permanent disability’: once a participant is engaged in full-time employment, regardless of how much he makes, he is no longer totally and permanently disabled. Given the required level of deference to the Fund’s interpretation of its own plan, we cannot say the Fund acted arbitrarily or capriciously when it denied Tompkins benefits for the time he was employed full-time.”

Affirmed.

12-1995 Tompkins v. Central Laborers’ Pension Fund

Appeal from the United States District Court for the Central District of Illinois, Darrow, J., Williams, J.

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