S. Kay Dansby Asbestos Litigation Law Blog on Lawyers.com

The 5th Circuit Court of Appeals upheld the denial of a widow’s motion to compel arbitration of her claim that her deceased husband’s employer failed to fulfill its contractual obligation to maintain the husband’s life insurance policy.  Nicholas v. KBR Inc, No. 08-20140 (5th. Cir. 4/15/2009).  The husband contracted mesothelioma in 1998 due to exposure to asbestos on the job.  He took a medical leave of absence and then signed a severance agreement under which the employer agreed to continue his company supplied benefits.

After he died in 2006, his wife discovered that the employer failed to continue to pay for her husband’s life insurance policy.  She sued in state court and the employer removed it to federal court, citing ERISA’s preemption provision.  After the parties conducted some discovery and a scheduling conference was conducted by the court, the widow filed a motion to compel arbitration, which was provided for in the severance agreement.  The employer argued that it had been prejudiced by having to litigate the matter for more than 10 months.  The district court agreed and denied the motion.  The 5th Circuit also agreed and remanded for further proceedings in the district court.

The obvious moral of this story is that you must carefully read contracts (including severance agreements) that you sign and make sure the other party is fulfilling its end of the bargain.  Arbitration can have some benefits in terms of speed and cost when it comes to enforcing contractual rights.  Of course, when you have mesothelioma, or if you are caring for someone who is suffering from it, it is very difficult to think about your legal rights.  This is what lawyers are for.