Another Instance of Antecedent Ambiguity

New to the third edition of MSCD is a discussion of what I call “antecedent ambiguity.” This recent post on “except as provided below” falls within that category. So does this December 2011 post, this May 2011 post, and this 2011 IP Draughts post.

Well, I have another example for you, thanks to the recent Seventh Circuit Court of Appeals decision in Tompkins v. Cent. Laborers’ Pension Fund (copy here). At issue was the following section of a pension plan:

A Total and Permanent Disability shall mean that the Employee is totally and permanently unable as a result of bodily injury or disease to engage in any further employment or gainful pursuit as a Laborer or other Building Trades Crafts employment in the construction industry for remuneration or profit, regardless of the amount, or unable to engage in further employment or gainful pursuit of non-Laborer or other non-Building Trades Crafts employment for which the employment is considered full-time and a primary source of income. For such non-Laborer or other non-Building Trades Crafts employment, provided a physician, selected by the trustees, considers the disability to be total and permanent, the Participant may earn up to $14,000 per calendar year in non-Laborer or other non-Building Trades Crafts employment and be considered totally and permanently disabled for purposes  of Section 3.10. Such disability must be considered total and permanent and will continue during the remainder of the Participant’s life. The trustees shall be the full and final judges of Total and Permanent Disability and of entitlement to a Disability Pension hereunder.

Here’s the court’s analysis:

The parties dispute the relevance of the phrase “[f]or such” in this excerpt from Section 3.10 (emphasis added):

A Total and Permanent Disability shall mean that the Employee is totally and permanently. . . unable to engage in further employment or gainful pursuit of non-Laborer … employment for which the employment is considered full-time and a primary source of income. For such non-Laborer … employment, … the Participant may earn up to $14,000 per calendar year in non-Laborer … employment and be considered totally and permanently disabled ….

Under Tompkins’s reading of this provision, the “for such” prefatory phrase, which allows pensioners to earn up to $14,000 through non-laborer employment, refers to all the language that precedes it (i.e., “non-Laborer employment for which the employment is considered full-time and a primary source of income”), such that a person employed full-time can remain “totally and permanently disabled” if he earns less than $14,000. In contrast, the Fund interprets the “for such” language as a general reference to the type of work allowed in the $14,000 provision such that a participant can earn up to $14,000 through non-laborer employment and remain “totally and permanently disabled,” but he cannot do so if he is employed as a laborer. According to the Fund, the $14,000 provision does not address the length of time the pensioner works; instead, it argues that the first sentence of Section 3.10 accomplishes this by prohibiting a “totally and permanently disabled” participant from engaging in full-time non-laborer employment. According to the Fund, it intended the $14,000 provision to allow permanently disabled participants to maintain part-time employment without losing their disability pensions.

The court held in favor of the pension fund, because of the deference to which pension funds are entitled. But the court noted that “There are certainly more efficient ways to communicate the Fund’s definition of ‘total and permanent disability'” and that “the ‘for such’ preface seems unnecessarily confusing.”

The drafter could have avoided any ambiguity by making it clear that the “For such” sentence applied just to non-full-time employment.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

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