Funeral Directors v. ICAO

25CA0147 Funeral Directors v ICAO 07-10-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 25CA0147
Industrial Claim Appeals Office of the State of Colorado
DD No. 27990-2024

Funeral Directors Services LLC,

Petitioner,

v.

Industrial Claim Appeals Office of the State of Colorado and Jenna LaLonde,

Respondents.

ORDER SET ASIDE AND CASE
REMANDED WITH DIRECTIONS

Division I
Opinion by JUDGE BERGER*
Kuhn and Moultrie, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced July 10, 2025

Fisher & Phillips LLP, Kristin R.B. White, Jane Waterman-Joyce, Denver,
Colorado, for Petitioner

No Appearance for Respondents

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2024.
¶1 In this unemployment compensation benefits case, the

Industrial Claim Appeals Office (the Panel) affirmed a hearing

officer’s order that Funeral Directors Services LLC (FDS) did not

show good cause for failing to timely respond to a request for

information regarding a former employee’s benefits claim. As a

result of the Panel’s affirmance, FDS forfeited the right to challenge

the award of unemployment benefits. FDS appeals the Panel’s

order. We set it aside and remand for further proceedings on the

merits of FDS’s challenge to the award of benefits.

I. Relevant Facts

¶2 Nick Hodgdon is the owner of FDS and several other

companies, including First Call of Colorado (First Call) and Autopsy

Center of Colorado (Autopsy Center). (For convenience, we refer to

these three companies collectively as “employer.”)

¶3 Claimant Jenna LaLonde served in a management role for all

three companies, with duties including “dispatch, HR, fleet

manager, and payroll.”

¶4 LaLonde sent Hodgdon a text on July 25, 2024, informing him

that she was “resigning from all positions within all of [his]

companies.” Her last day of work was August 11. She then applied

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for unemployment benefits. The Division of Unemployment

Insurance (Division) mailed form questionnaires to employer asking

for information about LaLonde’s job separation.

¶5 The record shows that First Call and Autopsy Center received

these questionnaires and timely responded, indicating that LaLonde

had resigned her employment voluntarily. Those responses, which

were faxed to the Division on August 26, indicated that LaLonde

had also been employed by FDS.

¶6 On September 19, 2024, a deputy for the Division notified FDS

that it had lost its right to protest the award of unemployment

benefits to LaLonde under section 8-74-102, C.R.S. 2024. That

section provides that an employer has seven days to present any

information pertinent to the claim before it loses its right to protest.

Id. See also Department of Labor and Employment Regulation

7.2.8, 7 Code Colo. Regs. 1101-2 (deeming a nonresponding

employer not an “interested party”). FDS appealed the

determination and requested a hearing.

¶7 In November 2024, a hearing was held to determine whether

FDS’s failure to respond should be excused for good cause under

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Department of Labor and Employment Regulation 12.1.8, 7 Code

Colo. Regs. 1101-2 (Regulation 12.1.8).

¶8 Hodgdon, appearing on behalf of FDS and represented by

counsel, testified that LaLonde was the person responsible for

“performing all of unemployment” and that she was in charge of

handling, setting up, and processing unemployment insurance

accounts for FDS.

¶9 Hodgdon testified that he received the questionnaires for First

Call and Autopsy Center “pretty much the day of, or the day before

they were due, and we responded immediately.” He explained that

his companies had moved from a physical location on Acoma Street

to one on Kalamath Street. Although the questionnaires he

received were mailed to the Acoma Street address, they were

forwarded to the Kalamath Street address in time to respond by the

due date of August 26. He testified that he did not receive any

questionnaire for FDS, and that he only became aware there was an

issue concerning FDS when he received the September 19 notice of

determination.

¶ 10 According to Hodgdon, LaLonde was responsible for setting up

and maintaining the electronic accounts concerning unemployment

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benefits for his companies. This included setting up a payroll

company to have access, which he was unaware of until after she

resigned. He also testified that his new manager had been unable

to get into FDS’s electronic unemployment account. He further

testified that LaLonde denied him access to her email after

resigning, and hid business vehicles, necessitating the filing of a

police report concerning stolen property. He asserted that FDS did

not fail to respond because FDS never received any notification that

“there was anything to respond to.” None of Hodgdon’s testimony

was controverted either by other witness testimony or documentary

evidence.

¶ 11 The hearing officer ruled FDS failed to show good cause for its

failure to respond, listing the factors that the Division considers

when determining good cause under Regulation 12.1.8. The six

factors are:

1. Whether the party acted in the manner that
a reasonably prudent individual would have
acted under the same or similar
circumstances;

2. Whether there was administrative error by
the [D]ivision;

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3. Whether the party exercised control over the
untimely action, except that the acts and
omissions of a party’s authorized
representative are considered the acts and
omissions of the party and are not considered
to be a factor outside the party’s control as
intended by this rule;

4. The length of time the action was untimely;

5. Whether any other interested party has
been prejudiced by the failure to act or
untimely action[.] “Prejudiced,” as used in this
section, means that an interested party will be
prevented from presenting [or] substantially
hindered from presenting probative evidence in
support of the interested party’s position or in
the ability to refute the position of the
opposing party; and

6. Whether denying good cause would lead to a
result that is inconsistent with the law.

¶ 12 The regulation also provides that “[g]ood cause cannot be

established to accept or permit an untimely action or to excuse the

failure to act, as required, that was caused by the party’s failure to

keep the division directly and promptly informed by a written,

signed statement of his or her current and correct mailing address

in person, by mail, by facsimile machine, or by other division-

approved electronic means.” Regulation 12.1.8.7. But that

“provision shall not apply if the party establishes that he or she

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reasonably believed that the division would not have any need for

his or her new address under the circumstances.” Id.

¶ 13 The regulation provides that “[a] written decision concerning

the existence of good cause need not contain findings of fact on

every relevant factor, but the basis for the decision must be

apparent from the order.” Regulation 12.1.8.8.

¶ 14 The hearing officer determined that FDS’s questionnaire was

emailed to “the email address in the employer’s unemployment

insurance account,” which was an address for a payroll company.

The hearing officer found that FDS “was not diligent when it failed

to follow up with the Division and update their contact information

if needed after [LaLonde] left her employment.” The hearing officer

further concluded that this failure should be counted towards

determining whether “the employer has engaged in a pattern of

failing to respond adequately or timely” under section

8-79-102(5)(a), C.R.S. 2024.

¶ 15 FDS appealed the hearing officer’s determination to the Panel,

which affirmed. The Panel concluded that (1) FDS was aware that

LaLonde’s job duties included maintaining accurate contact

information with the Division and (2) a “reasonably prudent

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employer would not have failed to update the employer’s contact

information with [the Colorado Department of Labor and

Employment (CDLE)] following the separation of the employee

responsible for that task.”

II. Discussion

¶ 16 FDS contends that the Panel erred by relying on the hearing

officer’s determination that FDS did not establish good cause. FDS

also argues that the Panel erred by finding that a reasonably

prudent employer would have updated its account after LaLonde’s

separation from employment.

A. Standard of Review

¶ 17 We review de novo the Panel’s legal conclusions. See Cath.

Health Initiatives Colo. v. Indus. Claim Appeals Off., 2021 COA 48,

¶ 14. As relevant here, we may set aside the Panel’s decision if the

findings of fact do not support the decision or the decision is

erroneous as a matter of law. See § 8-74-107(6)(c)-(d), C.R.S. 2024.

B. Analysis

¶ 18 Upon receipt of a claim for unemployment, the Division must

notify other interested parties of the claim by mail or electronic

means. § 8-74-102(1). An interested party must be afforded at

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least seven calendar days after the date of the notice to present

information pertinent to the claim. Id. An interested party may

present information out of time only if it shows good cause. Id.

¶ 19 Hodgdon was the only witness at the hearing. He testified that

he never received a questionnaire for FDS by regular mail, but he

did receive the questionnaires for First Call and Autopsy Center via

regular mail. The latter forms, completed and faxed to the Division

on August 26, indicated that LaLonde was also employed by FDS.

He also provided the email where he could be contacted, which was

different than the email for the payroll company that LaLonde set

up. Importantly, he testified that he did not think he needed to

update the unemployment accounts for his companies with the

Division because he (1) timely responded to the questionnaires he

received and (2) indicated that LaLonde resigned voluntarily.

¶ 20 After hearing that testimony and reviewing the record, the

hearing officer based the good cause determination on a finding

that the FDS questionnaire was emailed to the payroll company.

The hearing officer recognized that LaLonde had set up that email,

and that the payroll company, if it received the questionnaire for

FDS, did not forward it to Hodgdon. The hearing officer then listed

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all the good cause factors under Regulation 12.1.8, but did not

discuss any of them, and apparently based the decision on 12.1.8.7

(whether a failure to act is caused by a party’s failure to keep the

division informed of current contact information). The hearing

officer determined that the FDS questionnaire was “emailed to an

email address belonging to the employer.” Then, the hearing officer

concluded that the payroll company should have forwarded it to

FDS. And because the payroll company was an “authorized

representative” of FDS, its actions and omissions were imputed to

FDS.

¶ 21 The Panel affirmed the hearing officer’s decision. It observed,

in a footnote, that the fact that LaLonde resigned was not

dispositive, because she still could have established some qualifying

circumstance that entitled her to unemployment. Citing Esparza v.

Industrial Commission, 702 P.2d 288, 290 (Colo. App. 1985), the

Panel recognized that whether good cause is established requires a

balancing of relevant factors and consideration of the totality of the

circumstances. The Panel stated that “there are factors that weigh

in favor of finding good cause, and factors that weigh in favor of not

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finding good cause.” But the Panel ultimately determined that the

hearing officer’s good cause determination was not erroneous.

¶ 22 On appeal, FDS specifically objects to the finding that “a

reasonably prudent employer would not have failed to update the

employer’s contact information with CDLE following the separation

of the employee responsible for this task.” FDS argues that this

burden was neither in the applicable statute nor reasonable. Under

the specific circumstances of this case, we agree.

¶ 23 We recognize that, under Regulation 12.1.8, a hearing officer

is not required to make findings of fact on every relevant good cause

factor. See Regulation 12.1.8.8. Nevertheless, the basis for the

decision must be apparent from the order. Id. Here, we agree with

FDS that the hearing officer failed to consider what a reasonably

prudent person would have done under the totality of the

circumstances, as required by Esparza, 702 P.2d at 290.

¶ 24 The record, viewed in its entirety, supports FDS’s argument

that, as of August 26, it had no reason to think it needed to update

its contact information with the Division. By that time, employer’s

other two entities had received the questionnaires from the

Division, timely completed them, indicated that LaLonde was also

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an employee of FDS, and updated the employer’s contact

information. The hearing officer completely disregarded these

circumstances and relied only on the fact that the FDS

questionnaire was apparently emailed to a payroll company that

LaLonde set up. We also disagree on this record that the actions of

the payroll company can automatically be attributed to FDS,

especially since Hodgdon testified that LaLonde set up that access

and then locked electronic accounts upon her departure.

¶ 25 Generally the application of the good cause factors is at the

Panel’s discretion, see Nguyen v. Indus. Claim Appeals Off., 174

P.3d 847, 848-49 (Colo. App. 2007). But especially when, as here,

the relevant facts are undisputed, we review de novo the Panel’s

ultimate legal conclusion. See Harbert v. Indus. Claim Appeals Off.,

2012 COA 23, ¶ 9. Moreover, while procedural rules are important

and must be complied with, the law favors decisions on the merits

of a dispute, not on alleged procedural defects. See Beeghly v.

Mack, 20 P.3d 610, 614 (Colo. 2001).

¶ 26 We conclude that the hearing officer’s order (and the Panel’s

affirmance of that order) is not supported by the record. We

conclude, based on the undisputed evidence before the hearing

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officer, that FDS established good cause and that FDS must have

its protest rights reinstated.

¶ 27 Ordinarily when we find legal error by a hearing officer or the

Panel, we remand for reconsideration under the correct view of the

law. See, e.g., Sheridan Redev. Agency v. Knightsbridge Land Co.,

L.L.C., 166 P.3d 259, 266 (Colo. App. 2007). We decline to further

prolong this litigation because, in our view, the only legally and

factually supported result is a finding of good cause.

III. Disposition

¶ 28 The Panel’s order is set aside, and the case is remanded for

further proceedings on the merits of FDS’s challenge to an award of

unemployment benefits.

JUDGE KUHN and JUDGE MOULTRIE concur.

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