Lanclos v. United States, No. 21-1750 (Fed. Cir. 2022)Annotate this Case
Lanclos was born in 1982 at the Keesler Air Force Base Medical Center. During childbirth, she was seriously injured and as a result, suffers from Athetoid cerebral palsy. The settlement agreement for Lanclos’s medical malpractice suit required the government to make lump sum payments to Lanclos’s parents and their attorney; Lanclos would receive a single lump sum payment followed by specific monthly payments for the longer of 30 years or the remainder of her life. The government would purchase an annuity policy to provide the monthly payments. The government selected Executive Insurance to provide the monthly annuity payments. Executive encountered financial difficulties and, in 2014, reduced the amount of the monthly payments by 42%. Lanclos estimates that the reduction will result in a shortfall of $731,288.81 from the amount described in the settlement agreement.
The Court of Federal Claims reasoned that the “guarantee” language in the Lanclos agreement applies to the scheduled monthly structure of the payments but not the actual payment of the listed amounts and that the government was not liable for the shortfall. The Federal Circuit reversed. Under the ordinary meaning of the term “guarantee” and consistent with the agreement as a whole, the government agreed to assure fulfillment of the listed monthly payments; there is no reasonable basis to conclude that the parties sought to define “guarantee” or to give the term an alternative meaning.