from the United States District Court for the District of
Colorado (D.C. No. 1:14-CV-00958-WYD-NYW)
M. Englert, Jr., Holland and Hart LLP, Greenwood Village,
Colorado, for Appellant.
Lichtenstein (Matthew Molinaro, with him on the brief), Law
Office of David Lichtenstein, LLC, Denver, Colorado, for
MATHESON, PHILLIPS, and EID, Circuit Judges.
PHILLIPS, CIRCUIT JUDGE.
Hodges submitted a claim for long-term-disability (LTD)
benefits to Life Insurance Company of North America (LINA)
through his employer's group-insurance plan. Although
LINA approved his claim, Hodges asserted that LINA should
have classified him as a "sales" employee under the
group-insurance policy, which would have entitled him to more
benefits. This led Hodges to sue LINA. The district court
remanded for further factfinding, but LINA once again reached
the same result. The district court then reversed LINA's
decision, concluding that Hodges qualified as a salesperson
under the policy. LINA now appeals that ruling. Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm.
2012, Hodges worked for Endo Pharmaceuticals, Inc. as a
cryotherapy technician. That year a degenerative eye
condition forced him to retire. He participated in Endo's
employee-welfare-benefit plan, for which Endo had appointed
LINA as the administrator. In 2011, LINA issued to Endo a
group LTD insurance policy (the Policy), governed by the
Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. §§ 1000-1461. Under "Claims
Procedures," the Policy names LINA the fiduciary for
deciding claims as well as appeals of denied claims.
Appellant's App. vol. 2 at 312. The Policy allows LINA
"45 days from the date it receives a claim for
disability benefits . . . to determine whether or not
benefits are payable in accordance with the terms of the
Policy divides employees into two classes: Class 1, which
includes "[a]ll active, Full-time and part-time
Employees of the Employer, excluding Sales personnel,
regularly working a minimum of 20 hours per week"; and
Class 2, which includes "[a]ll active, Full-time
Employees of the Employer classified as Sales Personnel
regularly working a minimum of 20 hours per week."
Id. at 290. The Policy entitles all covered
employees to monthly disability payments worth 60% of their
average pre-disability earnings, but it defines the pay of
sales personnel more broadly than that of non-sales
personnel. Specifically, the Class 2 definition of earnings
includes payments "received from bonuses or target
incentive compensation bonus[es]," but the Class 1
definition "does not include amounts received as
bonus[es]." Id. Despite favoring sales
personnel in the provision of benefits, however, the Policy
defines neither "sales" nor "sales
leaving the company, Hodges submitted a claim under the
Policy. After granting him short-term-disability benefits,
LINA informed Hodges that it would begin evaluating his
eligibility for LTD benefits. LINA eventually concluded that
Hodges was medically eligible for LTD benefits, but later
sought information from Hodges and Endo about Hodges's
job description and duties to determine whether he qualified
as "sales personnel" under the Policy. In a
telephone interview, Hodges explained to a LINA claim manager
that "he was a technician, but often times did things to
sell the compan[y']s products." Id. at 516.
And in an e-mail to another LINA claim manager, an Endo
representative "confirmed" that Hodges
"received monthly sales bonuses based on the number of
cases he treated," which totaled "$9[, ]800 for the
nine months he worked in 2011." Id. vol. 5 at
1226. But the representative also stated, "These
earnings are not part of the overall bonus or [incentive
compensation] program at Endo and were not included in the
premium calculation." Id.
March 21, 2012, LINA informed Hodges that it had approved his
claim for LTD benefits but that it deemed him a Class 1
employee, not a Class 2 salesperson. Hodges objected to this
classification, arguing that he "sold products while out
in the field" and that the classification would
significantly reduce his benefits. Id. vol. 2 at 494.
About 70% of Hodges's earnings came from his base salary,
and about 30% came from sales-driven compensation, including
November 2012, Hodges filed an administrative appeal asking
LINA to reconsider its decision to classify him as a Class 1
employee. Hodges attached several supporting documents to his
appeal. First, he submitted e-mails from two senior Endo
officials referring to the "bonuses" that Hodges
and other cryotherapy technicians had earned selling the
company's products and services. Id. vol. 4 at
1044-46. Second, he submitted e-mails from senior Endo staff
emphasizing the importance of marketing the company's
products. In one such e-mail, Allyn Chung, Endo's Senior
Director of Cryo Operations, wrote to Hodges and other
employees, "I cannot stress enough the importance of
making regular visits to your physician[s'] offices and
helping to market the technology." Id. at 1039.
In another e-mail (subject: "job descriptions and 2011
goals"), Chung declared that cryotherapy
technicians' goals for the year included a
"requirement to submit a minimum of [one] lead a month
for new cryo[therapy] users, new applications for existing
cryo[therapy] users, or any other lead for any of our
business lines." Id. at 1042. Third, Hodges
submitted pay stubs withholding a higher rate of the payments
for federal taxes than for his regular income. Finally, Hodges
submitted the company's official job description of a
cryotherapy technician. The job description's
"summary of purpose" requires cryotherapy
technicians to "[a]ssist in the growth and development
of existing and new business lines," though none of the
job's "essential functions" involve sales
responsibilities. Id. at 1035-36. Based on this
evidence, Hodges complained to LINA that "Endo appears
to have recharacterized . . . [his bonus] compensation as
commissions solely for the purpose of reducing [LINA's]
exposure, and presumably reducing Endo's indirect
exposure . . . ." Id. at 1032.
deciding the appeal, LINA asked Endo for more information
about Hodges's job classification and duties. Lori
Capozzi, Endo's benefits consultant, responded that
"Hodges was not classified as 'sales, '"
that "[h]e worked in a mobile unit that permitted him to
perform medical tests at doctor[s'] offices based on a
predetermined schedule," and that "he was paid a
'bonus' for those additional tests."
Id. at 949, 1008. On January 7, 2013, LINA affirmed
its initial decision. LINA acknowledged that the Policy did
not define "sales personnel" but explained:
The Employer has confirmed Mr. Hodges['s] occupation as a
CryoTherapy Technician is not classified as a sales position
with the employer. According [to] the Employer, Mr. Hodges
worked in a mobile unit that permitted him to perform medical
tests at doctor[s'] offices based on a pre-determined
schedule. If he was able to incorporate and schedule a few
more tests during his work week, he was paid a bonus for
those additional tests. According to the [d]efinition of
Covered Earnings under Class 1, earnings do not include
bonus[es], commissions, overtime pay or extra compensation,
[and] therefore would not be considered as part of the
Disability Benefits Calculation.
Id. vol. 3 at 833.
March 28, 2013, Hodges sent LINA a letter requesting further
reconsideration of his Class 1 classification and protesting
that "the extent of [LINA's] consideration" of
his first appeal "involved a single e-mail to Endo's
benefits consultant Lori Capozzi inquiring into whether the
company classified Mr. Hodges's position as a sales
position." Id. vol. 4 at 948. LINA responded
that it "w[ould] accept two (2) appeals from a claimant
for any single denial" but that "the second request
for appeal is a voluntary level of appeal" and requires
"additional information that has not previously been
reviewed." Id. vol. 3 at 606. So Hodges wrote
back, attaching several more documents. Among these were
various e-mails from Endo supervisors to cryotherapy
technicians, including one mentioning plans to discuss
"the development of [their] specific geographic
territory" and another about the protocol for questions
regarding "marketing materials." Id. vol.
4 at 875, 888. Hodges also submitted a company PowerPoint
presentation with a slide instructing cryotherapy technicians
to "help growth" by (1) "[a]sk[ing] [their]
partners if they know of any other doc[tor] that might be
interested in performing cryo[therapy],"
(2)"[v]isit[ing] offices of former users and doctors who
seldom do cases," (3)"[m]ak[ing] sure that [they]
always have literature," and (4) "[b]e[ing]
persistent [because] they might say no a couple of
times." Id. at 879. But LINA replied that the
PowerPoint presentation and e-mails "ha[d] already been
reviewed" and would "not be considered new
evidence." Id. vol. 3 at 836. As such, LINA
denied Hodges a second appeal.
April 2014, Hodges filed suit in the United States District
Court for the District of Colorado. In February 2017, the
district court, having concluded that the Policy failed to
reserve to LINA discretion to decide employee-classification
questions, reviewed LINA's decision de novo and ruled
that LINA had breached its fiduciary duty to Hodges by
"accept[ing] Endo's bare assertion that Hodges was
not 'Sales personnel' without requiring documentation
or a justification for that assertion." Id.
vol. 1 at 181-82. The court remanded the case for LINA to
conduct "further factfinding" on Hodges's
employment classification. Id. at 183.
remand, Hodges submitted three additional documents, which
governed Endo's "Incentive Compensation Plan"
for cryotherapy technicians. Id. vol. 6 at 1423-34.
Meanwhile, LINA requested that Endo submit further
information showing that Hodges was not a salesperson.