Shawn E. McDermott - Blog

.
Clients and lawyers alike are often surprised to learn that when ERISA litigation is successful, and a plan administrator’s decision is overturned by a court as arbitrary and capricious, the court “may either remand the case to the plan administrator for a renewed evaluation of the claimant’s case or . . . may order an award of benefits.” Flinders v. Workforce Stabilization Plan, 491 F.3d 1180 (10th Cir. 2007). According to this 10th Circuit Court of Appeals decision, if the plan administrator (often an insurance company) failed to make adequate factual findings or failed to adequately explain the grounds for the decision, then the proper remedy is to remand the case to the administrator (insurance company) for further findings or additional explanation. The judge makes the decision to either remand the case or to issue an award of benefits. If the judge remands the case, the claimant will have technically won the case without having actually obtaining a recovery. In this circumstance, the case/claim is simply remanded back to the insurance company (more…)

.
The term “contra proferentem” refers to a doctrine of contractual interpretation which instructs courts to construe ambiguous language found in contracts against the drafter of the contract. In our practice, we often come across terms or provisions of insurance contracts which are capable of more than one meaning. In the non-ERISA context, this ambiguity is always construed against the insurance company. However, in ERISA governed cases, the analysis can change in favor of the insurance company. The 10th Circuit Court of Appeals has rejected the applicability of contra proferentem in cases where the Administrator (e.g. insurance company) retains discretion, thus the court’s review of an adverse benefit determination (more…)