Opinion
W.C. No. 3-986-518
November 25, 1998
ORDER OF REMAND
The respondents seek review of a final order of Administrative Law Judge Henk (ALJ), which awarded permanent partial disability benefits based on the claimant's medical impairment. The respondents argue that the ALJ's application of former § 8-42-110(3) (1990 Colo. Sess. Laws, ch. 62 at 494) (reemployment statute) was erroneous because there was no proof the claimant received the usual wage adjustments and because the claimant was not employed at the time of the hearing. We set the order aside and remand for further proceedings and entry of a new order.
In 1990, the claimant sustained a compensable industrial injury to his penis. Following surgical installation of a prosthesis, the claimant was able to return to his usual employment on May 6, 1991.
Eventually, the prosthesis failed and the claimant petitioned to reopen the claim. The petition was granted in January 1997, and the claimant underwent additional surgery in April 1997. The claimant was again able to return to work at full duty on May 22, 1997.
On July 18, 1997, the claimant was examined by Dr. Kleen. Dr. Kleen opined that the claimant had a forty percent whole person impairment under the American Medical Association Guides to the Evaluation of Permanent Impairment, Third Edition (Revised) (AMA Guides). The claimant remained employed with respondent Union Camp until October 31, 1997. He was then terminated because Union Camp sold the plant to another company and the new company did not offer employment to the claimant.
In November 1997 the respondents filed a Final Admission of Liability denying liability for permanent partial disability benefits. In support, the respondents submitted a vocational report indicating that the claimant's physical impairment has not resulted in any loss of earning capacity.
The claimant then filed an application for hearing seeking a determination that the reemployment statute applies to these facts. Relying on Turner v. City and County of Denver, 867 P.2d 197 (Colo.App. 1993), the claimant reasoned that he is entitled to an award of permanent partial disability benefits based on his medical impairment rating regardless of any loss of earning capacity. Alternatively, the claimant argued that the injury has resulted in loss of earning capacity.
Following a hearing, the ALJ determined that the reemployment statute applies and she declined to address the question of whether the claimant sustained any loss of earning capacity. Citing Lerner v. Wal-Mart Stores, Inc., 865 P.2d 915 (Colo.App. 1993), the ALJ concluded that the reemployment statute is applicable because the claimant was still employed by Union Camp on July 18, 1997, the date of maximum medical improvement (MMI). The ALJ also found that Dr. Kleen's report outlining the claimant's medical impairment constituted a "determination of permanent partial disability" for purposes of triggering the reemployment statute. Thus, the ALJ awarded permanent partial disability benefits based on Dr. Kleen's medical impairment rating.
On review, the respondents contend that the claimant failed to satisfy his burden of proof to establish the applicability of the reemployment statute. The respondents argue there is insufficient evidence to show that the claimant was extended the usual wage adjustments. Alternatively, the respondents argue that the reemployment statute is not applicable because the claimant was no longer employed by Union Camp at the time of the hearing on permanent partial disability benefits. Because we agree with the latter argument, we do not consider whether the evidence supports the finding that the claimant was extended the usual wage adjustments.
The reemployment statute provides as follows:
"In any case where an employer reemploys or continues the disabled employee at work in the employment of the employer at the employee's preinjury rate of pay and extends to the employee the usual wage adjustments, the employee's permanent partial disability award shall be limited to permanent medical impairment or a payment under section 8-42-107, whichever is less. This subsection (3) shall not apply if the director finds that due to the injury the employee is permanently unable to perform the duties offered by the employer. If, during the two years following the date of return to work or reemployment, the injured employee, as a result of said employee's permanent disability due to the injury, is dismissed from employment or resigns from employment with the employer, said employee may petition the director for a redetermination of the original permanent partial disability award, and, upon a proper showing of the employee's limitations in the labor market, the director shall order an appropriate award of permanent partial disability."
Unfortunately, the reemployment statute is less than clear concerning the times at which the claimant must be reemployed or continued in employment so as to trigger the provisions of the statute. The question of timing was first addressed in Monfort, Inc. v. Gonzalez, 855 P.2d 19 (Colo.App. 1993). In Monfort, the claimant sustained a compensable injury in June 1989. The employer provided the claimant with modified duty and the claimant remained employed until September 1989 when he quit for personal reasons. In December 1989 the claimant requested the employer to rehire him, but the employer declined. In March 1990, the claimant reached MMI and was assessed with a permanent medical impairment of four percent of the upper extremity equating to two percent of the whole person. Under these circumstances, the ALJ declined to apply the reemployment statute and restrict the claimant's award to the medical impairment rating. Instead, the ALJ found that the claimant sustained a 12.7 percent working unit disability, and awarded permanent disability benefits accordingly.
The Monfort court upheld the ALJ's refusal to apply the reemployment statute and cited two major reasons for its decision. First, the court noted that the purpose of the reemployment statute is to encourage employers to retain permanently disabled employees by limiting permanent partial disability benefits to awards based on medical impairment rather than working unit disabilities. The court reasoned that the statutory incentive to retain employees cannot operate until the claimant reaches MMI and the employer can determine the extent of the claimant's permanent disability. The court's other rationale was as follows:
"Furthermore, when read as a whole, the statute required the employee to be reemployed when permanent disability was awarded. The use of the present tense, "reemploys or continues," indicates that the employment had to be ongoing when permanent partial disability was determined. And the provision for redetermination of permanent partial disability based on loss of earning capacity for employees who are dismissed or resign because of the disability shows that an initial determination of permanent partial disability must have preceded the end of the employment." 855 P.2d at 21. (Emphasis is added to the word "awarded", and in the original in the word "redetermination").
In Monfort, the claimant was no longer employed at that the time he reached MMI, nor was he employed at the time permanent partial disability was awarded. Thus, the reemployment statute was not applicable.
In this case the ALJ ruled that Dr. Kleen's assignment of an impairment rating constituted a determination of permanent disability sufficient to trigger the statute. Thus, the ALJ concluded that the reemployment statute was triggered when the claimant reached MMI and his impairment was determinable.
However, we reached a contrary conclusion in the case of Ayon v. Delta Airlines, Inc., W.C. No. 3-978-506, 4-156-224 (August 8, 1996). There, we stated that the Monfort decision stands for the proposition that:
"not only must the claimant be reemployed at the time of MMI, but must continue to be employed at the time permanent disability is administratively determined. The [court of appeals] reads the statute to mean that a determination of whether a claimant is permanently "disabled" does not occur until such time as the ALJ reviews the pertinent evidence and "awards" permanent disability benefits."
The claimant's argument notwithstanding, Dr. Kleen's issuance of an impairment rating did not equate to an "award" as that term is used in workers' compensation cases. An award refers to a final determination of the right to benefits, not simply a point in time at which the right to benefits might be determinable. See Brown Root, Inc. v. Industrial Claim Appeals Office, 833 P.2d 780 (Colo.App. 1991). Dr. Kleen's assignment of an impairment rating did not rise to the level of an award because the respondents retained the right to contest the validity of Dr. Kleen's impairment rating.
Further, as the Monfort court pointed out, the reemployment statute provides for a "redetermination" of permanent disability benefits in cases where the claimant losses the employment. Because the issuance of Dr. Kleen's impairment was not a binding determination of impairment, no "redetermination" could occur until the claimant's impairment was adjudicated in the first instance.
It follows that the ALJ erred in finding that the reemployment statute was applicable in this case. Although the claimant was reemployed at the time of MMI, he was no longer employed at the time permanent partial disability benefits were "awarded." Under these circumstances, the award of benefits based on the claimant's medical impairment rating must set aside and the matter remanded for an additional hearing and a new order concerning whether or not the claimant is entitled to permanent partial disability benefits based on a loss of earning capacity.
We do not perceive this result as being inconsistent with the holding in Lerner v. Wal-Mart Stores, Inc., 865 P.2d 915 (Colo.App. 1993). Lerner cites Monfort for the proposition that the reemployment statute is applicable only if the claimant is reemployed or continued in employment "at the time MMI is reached and the extent of permanent disability is determined." Id. at 917.
Neither do we believe our conclusion is inconsistent with the purposes underlying the reemployment statute. As noted in Monfort, the purpose of the statute is to encourage employers to retain disabled employees, and to benefit employers who choose to retain or rehire disabled workers. In this case, the claimant was not retained by the respondent-employer. Thus, the employer did not choose to accept the "incentive" offered by the statute. It seems anomalous to convert the statute from one based on an incentive for retaining disabled employees into one of adverse consequences where the employer elects not to retain the employee. Further, this situation must be distinguished from that in Turner v. City and County of Denver, supra, where the employer chose to retain the claimant on a permanent basis and the court concluded that application of the reemployment statute was mandated by its plain terms.
IT IS THEREFORE ORDERED that the ALJ's order dated March 25, 1998, is set aside, and the matter is remanded for further proceedings and entry of a new order on the issue of permanent partial disability benefits.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Bill Whitacre
Copies of this decision were mailed November 25, 1998 to the following parties:
David Boswell, 2360 Jamaica Street, Aurora, CO 80010
Union Camp Corporation, 5050 Ironton Street, Denver, CO 80239-2412
Margaret Malone, Liberty Mutual Insurance Company, 13111 E. Briarwood Ave., #100, Englewood, CO 80112
Shelley P. Dodge, Esq., 1763 Franklin Street, Denver, CO 80218 (For the Claimant)
David Kroll, Esq., 1120 Lincoln Street, Ste. 1606, Denver, CO 80203 (For the Respondents)
BY: ______________________