Court Opinion

ID: 3042297
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:08:24.805189+00
Date Added: 2024-06-11T07:38:02.187326
License: Public Domain

United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                ___________

                                No. 05-3974
                                ___________

Bradley J. Hillstrom, M.D.,          *
                                     *
           Appellant,                *
                                     *
      v.                             *   Appeals from the United States
                                     *   District Court for the
John R. Kenefick; Briggs and Morgan, *   District of Minnesota.
PA; GE Group Life Assurance          *
Company, formerly known as Phoenix *
American Insurance Company,          *
                                     *
           Appellees.                *

                                ___________

                                No. 05-3975
                                ___________

Bradley J. Hillstrom, M.D.,         *
                                    *
            Appellee,               *
                                    *
      v.                            *
                                    *
John R. Kenefick; Briggs and        *
Morgan, PA,                         *
                                    *
            Appellants,             *
                                    *
      v.                            *
                                    *
GE Group Life Assurance Company,    *
formerly known as Phoenix American        *
Insurance Company,                        *
                                          *
             Appellee.                    *
                                     ___________

                               Submitted: September 28, 2006
                                  Filed: April 9, 2007
                                   ___________

Before WOLLMAN, BOWMAN, and BENTON, Circuit Judges.
                        ___________

BOWMAN, Circuit Judge.

       Bradley J. Hillstrom; John R. Kenefick and the law firm of Briggs and Morgan,
P.A. (collectively, Kenefick); and GE Group Life Assurance Company (GEGLAC)
are all parties having various roles in this appeal. Hillstrom and Kenefick, as
appellant and cross-appellant, challenge decisions of the District Court1 in this
convoluted case that has its basis in Hillstrom's claim for long-term disability benefits.
We affirm.

                                            I.

      Hillstrom is a physiatrist (a physician specializing in physical medicine or
physical therapy) who is seeking long-term disability benefits under a policy issued
by Phoenix American Life Insurance Company to an entity called Rehab One, Inc.2

      1
        The Honorable Ann D. Montgomery, United States District Judge for the
District of Minnesota. Some of the preliminary orders in this case were entered by the
Honorable Arthur J. Boylan, United States Magistrate Judge for the District of
Minnesota.
      2
       The terms of the policy are set out in two documents, the "certificate" and the
"policy." We use the term "policy" to encompass all relevant terms, whether they

                                           -2-
That policy is an employee benefit plan governed by ERISA.3 GEGLAC is defending
the suit as Phoenix's successor in interest. Kenefick is an attorney and a shareholder
in Briggs and Morgan. Kenefick represented Hillstrom in his initial attempt to collect
disability benefits from Phoenix.

      On April 1, 1989, Hillstrom and Rehab One, of which Hillstrom was part
owner, executed a document captioned "Employment Agreement." Pursuant to that
agreement, Rehab One employed Hillstrom as chief executive officer. Hillstrom's
compensation was limited to stock options in Rehab One "until such time, if ever, that
[Rehab One] agrees, in its sole discretion, to provide additional compensation."
Employment Agreement pt. III. Hillstrom's duties were detailed in an exhibit attached
to the agreement, and he was to "commit such time and effort as is reasonably
required for discharge of his responsibilities under [the] Agreement." Id. pt. I.

        Rehab One purchased a group long-term disability policy from Phoenix with
an effective date of January 1, 1994, covering Rehab One's active full-time non-union
officer employees whose earnings exceeded $35,000. The eligible employees were
not listed by name in the policy, which was cancelled in 1997 as Rehab One went out
of business.

      On January 7, 1994, Rehab One and HCA Partners, L.L.C., entered into a
"Management Agreement." According to this agreement, HCA was a Wyoming
limited liability company formed to provide "directorship and management services
to Rehab One" through HCA's principals: Bradley Hillstrom, Scott D. Hillstrom
(Bradley's brother), and John E. Clark, M.D. Management Agreement at 1.

appear in the "certificate" or the "policy" portion of the documents.
      3
        Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88
Stat. 829 (codified as amended at 29 U.S.C. §§ 1001–1461 (2000 & Supp. III 2003)
and in scattered sections of 26 U.S.C.).

                                         -3-
According to the agreement, the HCA principals were all "directors and/or officers of
Rehab One and . . . responsible for its general management." Id. The parties agreed
that the HCA principals would "perform all general management services" for Rehab
One, except for those furnished by Rehab One's president. Id. But the capacities in
which the HCA principals were to serve were not specified by the agreement. In
return for the services of HCA and its principals, Rehab One was to pay HCA a
"Management Fee" of $1,200,000 annually ($100,000 per month), but the agreement
did not say how the fee was to be divided among the HCA principals—if at all. Id.
at 2. The Management Fee was "the entire consideration for all services to be
rendered by HCA and/or by the HCA Principals, except that in addition to the
Management Fee [Scott] Hillstrom shall be a payroll employee of Rehab One and
shall receive a monthly salary of $8,333.33." Id. (emphasis added). The 1989
Employment Agreement between Rehab One and Hillstrom individually was not
mentioned in the Management Agreement.

       On January 16, 1995, Hillstrom fell while snowboarding and hit his head and
back. The next day, an MRI of Hillstrom's brain was read as normal, notwithstanding
the severe headaches he was experiencing. By his own admission, Hillstrom started
self-medicating with alcohol and Vicodin, a prescription narcotic pain reliever. This
continued until April 19, 1996, when he began inpatient treatment for chemical
dependence. After treatment, Hillstrom continued to complain of neurological
difficulties, including memory problems and difficulty concentrating, and a
psychiatrist declared him disabled as of the date of the snowboarding accident. It was
about this time that Hillstrom retained Kenefick to represent him in his claims for
long-term disability benefits. Kenefick prepared a claim for the Phoenix benefits and
submitted it on October 17, 1996.

       There followed over the months a course of correspondence regarding Phoenix's
review of Hillstrom's claim. Generally, the issues included the source and amount of
Hillstrom's income for his work for Rehab One; whether Hillstrom was under the

                                         -4-
regular care of a physician during the claimed period of disability, as the policy
required; whether the alleged disability was the result of substance abuse; and the
onset date of the alleged disability. Phoenix also sought the assistance of financial
consultant Coopers & Lybrand, who determined that Hillstrom had no insurable
income under the long-term disability policy issued to Rehab One. On January 22,
1998, Phoenix sent a letter to Kenefick noting that Phoenix had yet to receive a
response from Kenefick "regarding the employment, financial, medical and Other
Income documentation previously requested." Letter from Murphy (Phoenix) to
Kenefick (Briggs and Morgan) of Jan. 22, 1998. That letter said, "Based upon the
information made available to us, Dr. Hillstrom has not provided the required Proof
of Eligibility, Proof of Disability and Proof of Loss as defined under this plan in order
to qualify for payment of benefits . . . ." Id. On several occasions after that, Kenefick
submitted to Phoenix additional information on behalf of Hillstrom's claim. Phoenix
responded employing the language of denial quoted above. Kenefick filed an appeal
in February 1999, which Phoenix denied by letter dated May 17, 1999: "[T]he reasons
for our denial of the claim have not changed and are as set forth in our prior
correspondence." Letter from Kelleher (Phoenix) to Kenefick (Briggs and Morgan)
of May 17, 1999.

       In April 2004, Hillstrom filed suit against Kenefick in Minnesota state court
claiming legal malpractice for, among other things, Kenefick's failure to correctly
identify the applicable statute of limitations for mounting a court challenge to
Phoenix's denial of benefits. Hillstrom then filed an amended complaint adding
GEGLAC (Phoenix's successor) as a defendant and seeking "a declaration of his
rights . . . regarding the statute of limitations applicable to his disability claim against
Phoenix Life," or as an alternative to relief on his malpractice claim, an award of
disability benefits directly from GEGLAC. Second Amended Complaint Counts III,
IV. GEGLAC removed the case to federal court in August 2004. A few days later,
Kenefick filed his answer and included a counterclaim and cross-claim for
declarations that (1) the statute of limitations on Hillstrom's claim against GEGLAC

                                            -5-
for benefits had not run and (2) in any event, Hillstrom was not entitled to disability
benefits under the terms of the policy that Phoenix issued to Rehab One. In
September, GEGLAC filed a motion to dismiss all of Hillstrom's claims against the
company as time-barred. On December 9, 2004, the District Court granted
GEGLAC's motion to dismiss on statute of limitations grounds. After that, on
December 30, the District Court granted in part Hillstrom's motion to amend his
complaint to add claims against GEGLAC for breach of fiduciary duty for failure to
provide plan documents. And in January 2005, the District Court granted Kenefick's
motion to reconsider its December 9, 2004, order dismissing all claims against
GEGLAC, in light of the decision to allow Hillstrom to amend his complaint to bring
a claim against GEGLAC for breach of fiduciary duty.

       Kenefick filed a motion for summary judgment on May 16, 2005. He argued
that no genuine issues of material fact remained and that he was entitled to judgment
as a matter of law on Hillstrom's malpractice claim. Kenefick maintained that
Hillstrom could not show that he, Hillstrom, was entitled to long-term disability
benefits under Rehab One's policy, for the reasons set forth in the series of denial
letters from Phoenix. Kenefick further contended that if Hillstrom were indeed
disabled, the disability was the result of mental illness (substance abuse), and any
benefits were therefore subject to a twenty-four-month cap. Finally, Kenefick argued
at some length that, in any event, the applicable statute of limitations would not bar
Hillstrom's suit against GEGLAC for disability benefits, so Hillstrom could not prove
his claim of legal malpractice. He asked the court to reconsider its December 9, 2004,
order to the contrary.

       GEGLAC's May 16, 2005, motion for summary judgment likewise argued no
disability and no eligibility, or, at most, disability by reason of mental illness.
GEGLAC agreed with the District Court's decision that the statute of limitations had
run.

                                         -6-
      Also on May 16, 2005, Hillstrom filed his own motion for summary judgment.
His argument mirrored his amended complaint: he was entitled to either (1) summary
judgment against GEGLAC on his claim for long-term disability benefits or, if that
suit was time-barred, (2) summary judgment against Kenefick for the value of the
long-term disability benefits under the Phoenix policy that he would have received but
for Kenefick's alleged malpractice in handling Hillstrom's claim.

      On June 30, 2005, the District Court heard oral arguments on the motions for
summary judgment and on Kenefick's motion to reconsider the decision on the statute
of limitations. In September 2005, the court granted Kenefick's and GEGLAC's
motions for summary judgment, denied Hillstrom's motion for summary judgment,
and dismissed Hillstrom's third amended complaint. Kenefick's motion for
reconsideration was denied as moot. Hillstrom appeals the denial of his summary
judgment motion. Kenefick cross-appeals on the statute of limitations question,
continuing to argue that Hillstrom filed suit against GEGLAC within the time allowed.

                                          II.

        We review the decision to grant summary judgment de novo and will affirm if,
viewing the evidence in the light most favorable to Hillstrom, we conclude there are
no genuine issues of material fact and Kenefick is entitled to judgment as a matter of
law. See Sanders v. City of Minneapolis, Minn., 474 F.3d 523, 526 (8th Cir. 2007).
In our review, we apply the same standard as the District Court, which brings us to the
first issue we must address: what standard do we, the federal courts, apply in
reviewing this particular denial of benefits? We review de novo the District Court's
determination of the appropriate standard. Butts v. Cont'l Cas. Co., 357 F.3d 835, 837
(8th Cir. 2004).

       Judicial review of a decision to deny benefits under an ERISA plan—whether
for abuse of discretion or plenary—is determined by the terms of the plan in question.

                                         -7-
If the plan administrator is vested with discretionary authority to interpret the plan or
make decisions regarding eligibility for benefits, then the courts review only for an
abuse of that discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989). Otherwise, we review the denial of benefits de novo.

      There are in the record three versions of the long-term disability policy that
Phoenix issued to Rehab One on January 1, 1994. Each is marked with a different
"LAST DATE PRINTED" on the face of the group certificate: March 12, 1994; March 23,
1999; and November 11, 2004. And there are language discrepancies among the three
versions. The 1994-printed policy is the one Phoenix sent to Kenefick after Hillstrom
engaged Kenefick to represent him in filing claims for disability benefits. That
version is missing every other page and apparently was used throughout much of the
administrative claims process. Later in that process, a colleague of Kenefick's from
Briggs and Morgan requested a complete copy. It remains a disputed fact whether
Kenefick ever worked with a complete copy while he was representing Hillstrom.

       The 1999-printed policy was produced with GEGLAC's Rule 264 disclosures
as the policy in effect on January 16, 1995, the date of Hillstrom's snowboarding
accident. The 2004 version, also produced during discovery, was certified by a
compliance analyst for GEGLAC as the version in effect on January 1, 1995. One of
the many conundrums we have encountered in this appeal is why language in the
policy documents—all of which are for policyholder Rehab One, Inc., number 100-
0870, with an effective date of January 1, 1994—mysteriously changed upon each
reprinting. In particular, why does the policy printed in 2004, and certified to be the
policy in effect on January 1, 1995, have different language from the policy printed
in 1999, when the policy was cancelled before the 1999 print date? That is, how can

      4
       Rule 26 of the Federal Rules of Civil Procedure sets out the disclosures
required, regardless of whether requested, during discovery in civil cases.

                                          -8-
a policy containing language that evolved between 1999 and 2004, after the policy
was cancelled, be the applicable policy? But that is what is in the record before us.

       The fact that the record contains multiple versions of the policy with different
language is more than just a curiosity when it comes to the underlying standard of
review in this case. The versions with the 1994 and 1999 print dates include this
language under the heading "Benefits Fiduciary": "[W]e [Phoenix] are charged with
the obligation, and possess discretionary authority to make claim, eligibility and other
administrative determinations regarding" the long-term disability policy. Policy
printed Mar. 12, 1994, at 22; Policy printed Mar. 23, 1999, at 22. That is, the
language in these versions gives discretion to the plan administrator to make decisions
regarding eligibility. As we have said, the courts would therefore review any such
determinations for an abuse of the plan administrator's discretion. The "certified"
2004-printed policy has no such language, however, so the plan administrator's
decision regarding eligibility would be reviewed de novo under the terms of that
version. The District Court, while recognizing that identifying the operative version
of the policy raises a genuine question of fact, nevertheless determined that the result
would be the same under either standard of judicial review. That is, the question of
fact, while genuine, is not material and does not preclude entering judgment as a
matter of law.5 Admittedly, we were at first skeptical at that notion, but upon our de
novo review of the District Court's de novo review of the plan administrator's
decision, we have to agree. As we explain infra, we conclude that Phoenix made the
correct determination under either standard of review. Before we get to the legal
analysis, however, there are other discrepancies among the three versions of the policy
that we will address here while we are on the subject.

      5
        Kenefick, in his cross-appeal, argues that the which-policy-applies question is
material and would rule out summary judgment for Hillstrom, should we reverse the
summary judgment entered in favor of Kenefick. Hillstrom, of course, does not raise
it as a material fact since it would not be favorable to his position to have Phoenix's
eligibility determination reviewed only for an abuse of discretion.

                                          -9-
       Under the subsection headed "Proof of Loss," the 2004-printed policy gives
Phoenix the right to require proof of "Other income benefits." Policy printed Nov. 11,
2004, at 25. By the terms of the 1999-printed policy, Phoenix may require, in addition
to the "Other income benefits" information, "[b]usiness and financial records or any
other pertinent financial documentation we may deem necessary." Policy printed Mar.
23, 1999, at 23. As for the policy printed in 1994, the "Proof of Loss" subsection
would apparently be found on one of the every-other missing pages since no such
subsection appears in that version of the policy. The extra "Proof of Loss" language
from the 1999-printed policy also appears in a January 1998 denial letter from
Phoenix, causing Hillstrom to claim that Phoenix was requiring more information that
it was entitled to receive in order to determine proof of loss. Again we agree with the
District Court that this difference is of no consequence, as both the 1999 and the 2004
versions of the policy permit Phoenix to "require additional Proof of your claim at any
reasonable time during the Period Of Disability." Id.; Policy printed Nov. 11, 2004,
at 25.

       The other difference of note among the printed versions of the policy concerns
the crux of this case: the description of persons eligible for benefits under the policy
issued to Rehab One. The versions printed in 1994 and 1999 contain this language:

Coverage Eligibility:
EACH FULL-TIME NON-UNION EMPLOYEE
Eligible Class:
EACH ACTIVE OFFICER WHOSE BASIC ANNUAL EARNINGS ARE MORE THAN $35,000

Policy printed Mar. 12, 1994 (Group Certificate); Policy printed Mar. 23, 1999 (Group
Certificate). "Coverage Eligibility" in the policy printed in 2004 is described the same
as in the earlier versions, but the "Eligible Class" is described as:

                                         -10-
ALL ACTIVE FULL-TIME EMPLOYEES AS LISTED BELOW:
EACH OFFICER WHOSE BASIC ANNUAL EARNINGS ARE GREATER THAN $35,000

Policy printed Nov. 11, 2004, at 3. Although Hillstrom believes the language found
in the 2004-printed "certified" policy should apply to other aspects of the case, such
as the standard of review and the proof of loss discussed above, here he prefers the
language of the versions of the policy dated 1994 and 1999. The District Court noted
Hillstrom's desire to "pick and choose the most favorable policy language" and
decided the case accommodating his wishes, perhaps taking this approach as viewing
the record in the light most favorable to Hillstrom. Mem. Op. & Order at 9. The court
again determined that it would grant summary judgment to Kenefick even applying
the language that Hillstrom sees as more helpful to him. (Frankly, we do not see a
substantive difference when the eligibility provisions are read as a whole and not in
isolation.) We agree with the District Court and conclude that the policy-language
discrepancy on this matter is a question of fact but not a material one.

                                           III.

      We come now to our legal analysis of the issues in this case. To begin, we sum
up the positions of the parties on appeal:

       Hillstrom wants benefits, preferably directly from GEGLAC on the merits of
his disability claim. His desired outcome: we hold that his suit against GEGLAC is
not time-barred, that he is an eligible Rehab One employee, and that he is permanently
disabled within the meaning of the policy since January 16, 1995, and not by reason
of mental illness. If the District Court is correct that the statute of limitations has run
on his lawsuit against GEGLAC, Hillstrom would seek to proceed on his legal
malpractice claim in an attempt to collect the value of disability benefits from
Kenefick. But either way, Hillstrom must be eligible for benefits under the policy to

                                           -11-
succeed, and so we must reverse the holding of the District Court to the contrary for
his claim to damages from either GEGLAC or Kenefick to stay alive.

       Kenefick prefers the conclusion reached by the District Court in granting
summary judgment: Hillstrom is not eligible for benefits. The basis for that
conclusion, as far as the defendants are concerned, can be either that Hillstrom is not
an eligible employee or that Hillstrom is not disabled within the meaning of the
policy. A less satisfactory outcome for Kenefick is that Hillstrom is disabled as a
result of mental illness so that he is only entitled to twenty-four months of benefits.
In any case, Kenefick thinks the District Court got it wrong in declaring that
Hillstrom's lawsuit against GEGLAC is time-barred. If Hillstrom can proceed on his
claim against GEGLAC for benefits, the primary basis for his malpractice claim
against Kenefick—failure to correctly identify the applicable statute of
limitations—disappears.

      Only GEGLAC prefers that we affirm the District Court on all issues raised in
the appeals. GEGLAC maintains that the statute of limitations on Hillstrom's suit for
benefits has expired and that Hillstrom is not an eligible employee anyway. GEGLAC
would have us go even further and declare that Hillstrom is not disabled at all or, at
most, is disabled as a result of mental illness.

                                          A.

       For his first issue on appeal, Hillstrom claims that the reasons GEGLAC now
advances, in this litigation, for denying benefits are different from those given in
Phoenix's various denial letters sent during the administrative process. Under ERISA,
Phoenix was required to "set[] forth the specific reasons" for denying benefits "in a
manner calculated to be understood by the participant." 29 U.S.C. § 1133(1). In
addition, Hillstrom was to be afforded "a full and fair review" of the denial of his
request. Id. § 1133(2). According to Hillstrom, Phoenix's letters failed to "identify

                                         -12-
the specific reasons for the denial or the specific provisions on which it is based," or
only "generically" indicated that he had failed to provide the necessary proof of
eligibility for benefits. Br. of Appellant at 51. According to Hillstrom, Phoenix
declared during the administrative process that it was denying benefits because
Hillstrom was not a "Salaried Employee" of Rehab One, and GEGLAC may not now
assert other reasons for denial that were not described with specificity in the letters
from Phoenix. And since "Salaried Employee" is merely a boilerplate or orphan
definition in the policy, and is not found in the "substantive terms" of the policy,
Hillstrom contends that he was not required to be a "Salaried Employee" in order to
be covered by the policy. Id. at 52. Under this reasoning, Hillstrom says he is eligible
for benefits.

       While GEGLAC did declare in its denials that Hillstrom was not a "Salaried
Employee" within the meaning of the Phoenix policy, the record reflects that by no
means did Phoenix rely on that explanation alone. Numerous times over the months
that Hillstrom's claim was pending, Phoenix employees corresponded with Kenefick,
seeking additional information under specified terms of the policy. Policy definitions
were set out, and areas where evidence was lacking were identified. It is clear from
the letters that Phoenix was having difficulty establishing that Hillstrom was an
employee of Rehab One and that he had received insurable income from Rehab One
during the term of the policy. As evidenced by Kenefick's lengthy appeal letter
(nineteen pages plus exhibits), he was fully aware of the reasons for denial. And
Phoenix's response to that appeal letter stated yet again that "[b]ased on the totality of
the information currently available to us," and for reasons "set forth in our prior
correspondence," Hillstrom is not entitled to benefits under Rehab One's long-term
disability policy. Letter from Kelleher (Phoenix) to Kenefick (Briggs and Morgan)
of May 17, 1999. "Although not overly detailed or analytical, this letter, when
combined with the other correspondence between [Phoenix and Kenefick], sufficiently
set out the rationale behind [Phoenix's] denial of benefits . . . ." Collins v. Cent.

                                          -13-
States, Se. & Sw. Areas Health & Welfare Fund, 18 F.3d 556, 561 (8th Cir. 1994)
(citing Davidson v. Prudential Ins. Co. of Am., 953 F.2d 1093, 1096 (8th Cir. 1992)).

        We also reject the contention that GEGLAC is now advancing "post hoc
rationales" for denying benefits.6 Br. of Appellant at 47. As we have said, the letters
from Phoenix consistently iterated that Hillstrom had not shown that he was eligible
to receive benefits, had not shown that he was disabled, and had not shown proof of
loss as defined by the policy. Some of those letters requested specific information to
verify the source of Hillstrom's income; the amount of earnings received from Rehab
One, if any; Hillstrom's duties for Rehab One; and the nature and onset of his
disability. Nothing of substance has been advanced in the litigation that was not
raised in the administrative process. It may be true that GEGLAC devotes far more
diligence in this litigation to challenging the existence, nature, and onset of Hillstrom's
asserted disability than Phoenix did in its administrative denials. There is even some
indication in the record that the insurer may have acquiesced to the fact of disability,
at least on some level. But ineligibility on this basis was mentioned in the denial
letters. In any event, the District Court did not reach the issue of Hillstrom's disability
vel non, and neither do we.

       Even if GEGLAC were relying on new rationales that were not a part of the
administrative record, Hillstrom's argument would fail. All of the rationales (except
perhaps the one concerning the "Salaried Employee" definition) were based on
specific policy requirements. And we have held that upon de novo review of a denial
of benefits, "a trial court must consider all of the provisions of the policy in question
if those provisions are proffered to the trial court as a reason for denial of coverage,"
even where "not relied upon by the plan administrator at the time the denial was
made." Weber v. St. Louis Univ., 6 F.3d 558, 560 (8th Cir. 1993) (emphasis added).
"[T]o do otherwise would 'permit the oral modification of employee welfare plans

      6
       We assume that Hillstrom means after-the-fact rationales.

                                           -14-
governed by ERISA, a result manifestly in conflict with the intent of the statute and
with the case law governing it.'" Id. (quoting Farley v. Benefit Trust Life Ins. Co., 979
F.2d 653,660 (8th Cir. 1992). Because we are conducting a de novo review of the
plan administrator's decision, Hillstrom's argument that this is unfair to him is
unavailing. In any case, "de novo review on an expanded record would produce the
same conclusion" as de novo review of the administrative record alone. Conley v.
Pitney Bowes, 176 F.3d 1044, 1049 (8th Cir. 1999), cert. denied, 528 U.S. 1136
(2000).

       Hillstrom relies on Marolt v. Alliant Techsystems, Inc., 146 F.3d 617 (8th Cir.
1998), for the proposition that we should not allow him "to be sandbagged by after-
the-fact plan interpretations devised for purposes of litigation." Id. at 620. But we
have determined that after-the-fact interpretations are not at issue here.

      Hillstrom's first argument for reversal fails.

                                           B.

       Hillstrom next argues that he is eligible to receive long-term disability benefits
under the Phoenix policy issued to Rehab One because he was an employee of Rehab
One receiving earnings in excess of $35,000 from Rehab One at the onset of his
disability. We disagree.

       As we explained supra, an employee eligible for benefits under the Phoenix
policy is described a bit differently in the earlier-printed versions than in the 2004-
printed policy. As Hillstrom urges and the District Court did, we apply the language
of the earlier renderings of the policy here. So to qualify for benefits, Hillstrom must
have been, as of the date he became disabled, an active full-time employee officer of
Rehab One with basic annual earnings exceeding $35,000. In granting summary
judgment to Kenefick, the District Court determined Hillstrom was not a Rehab One

                                          -15-
employee and had no earnings from Rehab One. We first consider the "employee"
question and conclude, as a matter of law, that Hillstrom was not an employee of
Rehab One at any relevant time.

       Under the terms of the Phoenix policy, an active full-time employee was
required to work at the employer's usual place of business for at least thirty hours a
week. Viewing the record in the light most favorable to Hillstrom, he satisfied the
active and full-time requirements. But that does not mean he is an "employee" entitled
to benefits. The term "employee" is not further defined in the policy, so we look to
the language and decisional law of ERISA. The Supreme Court has held that in light
of ERISA's "completely circular" definition of employee ("any individual employed
by an employer"), we should apply "a common-law test" to determine if a person is
an employee eligible for benefits under an ERISA-governed policy or an independent
contractor who is not. Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992).
We must "consider the hiring party's right to control the manner and means by which
the product is accomplished." Id. (quoting Cmty. for Creative Non-Violence v. Reid,
490 U.S. 730, 751 (1989)). We do that by looking at the so-called "other" Darden
factors:
•      "the skill required"
•      "the source of the instrumentalities and tools"
•      "the location of the work"
•      "the duration of the relationship between" Hillstrom and Rehab One
•      whether Rehab One had "the right to assign additional projects" to Hillstrom
•      the extent of Rehab One's "discretion over when and how long to work"
•      "the method of payment"
•      Hillstrom's "role in hiring and paying assistants"
•      whether the work is part of Rehab One's "regular business"
•      "the provision of employee benefits"
•      "the tax treatment" of Hillstrom

                                        -16-
Id. at 323–24 (quoting Reid, 490 U.S. at 751–52). We weigh all aspects of the
relationship, with no single factor being determinative.

       As we have said, Hillstrom entered into an Employment Agreement with Rehab
One in 1989. He received no earnings from Rehab One, only stock options. In 1994,
HCA, of which Hillstrom was a principal, entered into a Management Agreement with
Rehab One. Under the terms of the Management Agreement, HCA was "at liberty to
organize and perform [all general management] services [for Rehab One] in the
manner HCA considers to be in the best interest of Rehab One, allocating the
resources and facilities of Rehab One and HCA in such fashion as HCA sees fit from
time to time in the reasonable exercise of its discretion." Management Agreement at
1–2 (emphasis added). It is almost as if this sweeping delegation of authority to HCA
was based on the "right to control the manner and means" language from Darden. The
agreement delegated total control to HCA and its principals, making Bradley
Hillstrom an independent contractor working for Rehab One, not an employee of
Rehab One. While some of the "other" factors support Hillstrom's argument that he
was an employee, we determine that the factors favoring the conclusion that Hillstrom
was an independent contractor win the day.

       The agreement did not designate which of the principals should have what
responsibilities or even how much time any of them were required to devote to Rehab
One's management. In fact, by the terms of the Management Agreement itself, the
HCA physician-principals (Bradley Hillstrom and Clark) continued to practice
medicine, but with less time devoted to the practice and "corresponding reductions in
their income" while attending to Rehab One's business. Id. at 1. The non-physician
HCA principal, Scott Hillstrom, was a "payroll employee" of Rehab One; the
physicians were not. Hillstrom did have an office at Rehab One and was assisted by
employees paid by Rehab One. But the ultimate control of the job to be done by
Hillstrom, the responsibility to assign specific duties to Hillstrom, and the authority

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over the manner in which those duties were to be accomplished were vested in HCA,
not Rehab One.

       Moreover, the economic circumstances favor the conclusion that Hillstrom was
an independent contractor, not an employee. Hillstrom received no compensation at
all from Rehab One under the 1994 agreement. Instead, Rehab One paid a
Management Fee to HCA, but the agreement did not indicate how—or if—the fee was
to be divided among the principals. The agreement did state however, that one—and
only one—of the HCA principals, Scott Hillstrom, would actually receive a paycheck
from Rehab One, in addition to whatever recompense he may have received from
HCA. It appears from the record that Rehab One did pay HCA according to the terms
of the agreement, and HCA did transfer money to Rehabilitation Medicine
Consultants (RMC), an entity owned by Bradley Hillstrom. But it was RMC that paid
Hillstrom and issued him a W-2 form for income tax purposes.

       For some of the same reasons, we conclude that Hillstrom did not receive
$35,000 in "Basic Annual Earnings" from Rehab One. "Basic Annual Earnings" is
undefined in any of the versions of the policy in the record. "Basic Monthly
Earnings" is defined, although the definition is slightly different in the 2004-printed
version. Under the terms of the policy, an eligible employee's "Basic Monthly
Earnings" was to be used to calculate the monthly disability benefits due that
employee. Assuming the "monthly earnings" definition may be used to ascertain
"annual earnings" for the purpose of determining eligibility for benefits in the first
instance, the term is defined as the gross monthly rate of pay (or earnings, in the case
of the 2004-printed policy) from Rehab One, exclusive of commissions, bonuses, or
any extra compensation. Of course, Rehab One paid Hillstrom nothing. It paid a
salary to Scott Hillstrom and a Management Fee to HCA that was the "entire
consideration" for Bradley Hillstrom's services under the Management Agreement.
Because of HCA and RMC, Hillstrom's "accounting conduits," as he calls them, Br.
of Appellant at 62, Hillstrom cannot show he received "pay" or "earnings" of any kind

                                         -18-
from Rehab One. Rehab One was the policyholder of this particular long-term
disability policy, not HCA and not RMC.

      Hillstrom's second argument for reversal fails.

                                          IV.

      For the reasons stated, Hillstrom is ineligible to receive benefits under the long-
term disability insurance policy that Phoenix issued to Rehab One. Summary
judgment in favor of Kenefick is affirmed. Kenefick's cross-appeal from the District
Court's decision on the statute of limitations question is dismissed as moot.
                       ______________________________

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