livelihood, even though the income is not as much as he earned before the disability."
Id at 1421-22.
Federal common law, as well as the law of all fifty states, dictates that when a
term can be interpreted in two different ways, in must be construed in favor of coverage
for the insured and against the drafter of the Plan. Kunin v. Benefit Trust Life Ins. Co.,
910 F.2d 534, 540 (9th Cir. 1990), cert. denied, 498 U.S. 1013, 112 L.Ed. 2d 587, 111
Ct. 581 (1990).; also see, Lee v. Blue Cross/Blue Shield, 10 F.3d 1547 (11th Cir.
(applying contra proferentem after determining correct standard of review is
arbitrary and capricious). Since an ERISA fiduciary must act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matter would use in the conduct of an
enterprise of like character and with like aims, it would be unreasonable, under any
standard of review, to not apply the rule of contra proferentem when interpreting a plan35.
“We additionally note that in determining whether a decision has been made solely for the benefit of the participants, we may take account of the principle that in making a reasonable decision, ambiguity . . . must be construed against the drafting party, particularly when, as here, the contract is a form provided by the insurer rather than one negotiated between the parties. See Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 539 (9th Cir.)(using a presumption such as construction against the drafter in evaluating the reasonableness of an interpretation is not inconsistent with review for abuse of discretion), cert. denied, 498 U.S. 1013, 112 L.Ed. 2d 587, 111 S.Ct. 581 (1990).”
Doe v. Group Hospitilization & Medical Services, 3 F.3d 80, 88-89 (4th Cir. 1993).
Delta did not act solely in the interests of the plan participants and beneficiaries
when it imposed an additional requirement for eligibility and narrowly interpreted the
35 This is true unless a fiduciary has the unbounded discretionary authority to interpret terms differently than the dictates of every state and federal law.