In this 2006 case, the district court held that $ 150,000 in “guaranteed” “minimum compensation” paid to the executrix’s husband was not a salary under his long-term disability plan and, therefore, should not have been included in the calculation of his disability benefits. The court held that the administrator’s decision was subject to a de novo standard of review, and that there were genuine issues of material fact surrounding whether the husband received a salary, prior to becoming disabled, that should have been included in the calculation of his disability benefits. The court held that, because the husband’s benefits had vested, the summary plan description in effect at the time the benefits vested governed for purposes of determining the standard of review. An amendment to the summary plan description granting discretionary authority to the plan administrator did not apply to the husband’s claim because his right to disability benefits vested prior to defendants’ amendment of the plan. The district court erred in disregarding defendants’ admission that the husband was not a so-called “CFA Associate” under the plan. There were material issues of fact concerning whether he received a “salary.”
Outcome: The court vacated the judgment and remanded to allow the district court to determine whether the $150,000 in “guaranteed” “minimum compensation” was intended by the parties to be a salary or a draw on future commissions earned.
If you need assistance navigating your claim for short term or long-term disability benefits under ERISA, or it is time to sue the insurance company, please do not hesitate to give Cody Allison & Associates, PLLC a call (844) LTD-CODY, (615) 234-6000. or send us an e-mail Cody@codyallison.com. We provide representation nationwide and have successfully sued all the major insurance companies in many states. Our headquarters are located in Nashville, Tennessee. We offer a free consultation and would love to speak with you.
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