00-2043, 00-4229 Hess v. Hartford Life & Accident Insurance Company

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“We agree with the district court that Hartford’s argument that it could have denied Hess benefits entirely because her compensation was based solely on commissions ignores both the plain language of the policy and the intent of the parties. As the district court noted, the Hartford policy based an employee’s benefits on her ‘regular monthly pay . . . not counting: (1) commissions; (2) bonuses; (3) overtime pay; or (4) any other fringe benefit or extra compensation.’ In Hess’s case, her ‘regular monthly pay’ was determined based on a formula derived from her commissions; she received no other form of compensation. Unless the plan was to be read as creating a class of employees who had no regular monthly pay at all, which was at a minimum not Fleet’s position, the notion of a regular monthly pay that was dependent in some sense on commissions was the only interpretation consistent with the contract. On this reading, employees who had both a regular monthly pay plus extra commissions would not have been entitled to credit for the commissions. The district court held that Hess’s commissions were not this kind of ‘extra’ compensation, and therefore were not subject to the exclusion quoted above. To read the contract as Hartford urges, so that commissions are excluded regardless of whether they are ‘extra’ compensation or are an employee’s only compensation, renders the word ‘extra’ in the exclusion superfluous. In addition, we note that Fleet withheld insurance premiums from Hess’s pay throughout her tenure at Fleet, and Hartford concedes that Fleet intended for fully-commissioned employees such as Hess to be covered by the insurance policy. Thus, Hartford’s argument that it could reasonably have denied Hess all benefits is unavailing.”

Affirmed.

Appeals from the United States District Court for the Central District of Illinois, McCuskey, J., Diane P. Wood, J.