Thanks to longtime undercover blog informant Steven H. Sholk (drat, I’ve blown his cover!), I’m pleased to bring to you today a recent opinion of the Connecticut federal district court, Tyll v. Stanley Black & Decker Life Insurance Program. It’s discussed in this blog post by the law firm McDermott Will & Emery, but go here for a PDF of the opinion.
The fight was over the benefits to which a widow was entitled under a life insurance plan. The language at issue was an element of the definition of “Principal Sum”:
Five (5) times Salary subject to a Minimum of $100,000 and a Maximum of $1,000,000
What we have here is the kind of ambiguity most likely to result in litigation—syntactic ambiguity, which involves confusion over what modifies what. The MWE blog post says that the word “maximum” was ambiguous, but that’s not so. Instead, the question was what was subject to the minimum, “Salary” or “Five (5) times Salary”? The court opted for the former meaning:
In sum, the parties present two interpretations of a clause, both of which set a floor and a ceiling of a dollar amount. The defendants argue that the floor and ceiling reference the principal sum, and that the principal sum therefore could be no less than $100,000 and no greater than $1 million. See AR 3817 (“So if we had a decedent that made $15,000 per year salary, 5 times is $75,000 in this case we would pay $100,000 (minimum amount).”). Mrs. Tyll argues that the floor and ceiling reference the salary to be multiplied by five, which salary would be calculated as no less than $100,000 and no greater than $1 million.
The court concludes that the language defining the principal sum for Class 1 Insured Persons is ambiguous. Viewed objectively, the language at issue—“Five (5) times Salary subject to a Minimum of $100,000 and a Maximum of $1,000,000”—could reasonably be read to have more than one meaning. The sentence could be read to mean that the Principal Sum was equal to five times an employee’s salary, but that in no event would the Principal Sum equal less than $100,000 or greater than $1,000,000. Just as easily, the sentence can be read to mean that the Principal Sum was equal to five times a person’s salary, but that in no event would the salary amount equal less than $100,000 or greater than $1,000,000.
…
Having concluded that the clause in question is ambiguous, the court must construe it in favor of Mrs. Tyll, so long as her interpretation of the clause is reasonable.
How would I have expressed the language at issue? It’s an unrealistic exercise, as I would probably have rewritten the definition of “Principal Sum” entirely. But what the heck, here we go:
To express the meaning intended by the widow in a pared-down form, I might have said this:
Five times the greater of (1) $100,000 and (2) the lesser of (A) the Salary and (B) $1,000,000
To express the meaning intended by the insurers in a pared-down form, I might have said this:
The lesser of (1) $1,000,000 and (2) the greater of (A) $100,000 and (B) five times the Salary
But neither formulation is particularly clear, so I would probably have been more deliberate about spelling out the minimum and the maximum.
Now, a gratuitous Monty Python reference:
After a number of attempts to rewrite this to make it clearer while still using the original language, it is clear that your approach is the best one even if it is a bit of a logic maze. The words “subject to” began to create a sense of condition on the outcome. That was the biggest flaw in the original language apart from the ambiguity of the min/max reference.
Insurer: Five (5) times Salary, but such product is subject to a Minimum of $100,000 and a Maximum of $1,000,000, or widow: Five (5) times Salary, but such Salary is subject to a Minimum of $100,000 and a Maximum of $1,000,000
it was poorly drafted from the start.
– Krumhorn