Opinion
W.C. No. 3-104-352
August 3, 1998
FINAL ORDER
The respondents seek review of a final order of Administrative Law Judge Martinez (ALJ), which awarded temporary disability benefits. The respondents contend the ALJ erroneously held that the "cap" on temporary and permanent partial disability payments established by § 8-42-107.5, C.R.S. 1997, does not apply to "scheduled injuries." Thus, the respondents argue the ALJ incorrectly denied an offset against temporary disability benefits based on prior payments for a scheduled injury. We modify the ALJ's order.
In March 1992, the claimant sustained a compensable injury to her left upper extremity. Ultimately, the treating physician placed the claimant at maximum medical improvement (MMI) on February 24, 1997. An accredited physician then rated the claimant as suffering a forty-two percent impairment of the left upper extremity, which converted to a twenty-five percent whole person impairment.
The respondent-insurer (CCIA) filed a final admission of liability on May 2, 1997. The CCIA admitted for two periods of temporary total disability resulting in $50,704.85 of temporary disability benefits. The CCIA also admitted for a forty-two percent upper extremity impairment. Although this admission would ordinarily have entitled the claimant to $13,104 in scheduled benefits, the CCIA restricted the admission to $9,295.15 based on its position that the claimant had reached the $60,000 benefits cap established by § 8-42-107.5. The ALJ found that the claimant was paid $60,000, including $9,295.15 in scheduled benefits.
In November 1997, the claimant was required to undergo surgery to implant a spinal stimulator. The ALJ determined that the claimant was again temporarily and totally disabled commencing November 11.
Relying on Donald B. Murphy Contractors, Inc. v. Industrial Claim Appeals Office, 916 P.2d 611 (Colo.App. 1995) ( Murphy), the CCIA argued that it was entitled to a credit against its liability for additional temporary total disability benefits based on the scheduled disability benefits paid under the final admission of liability. However, the ALJ rejected this argument and held that the "cap" contained in § 8-42-107.5 "does not apply to a scheduled injury." Consequently, the ALJ determined that the offset created by Murphy does not apply to this case.
On review, respondents contend the ALJ incorrectly held that the benefits "cap" does not apply in cases of a "scheduled injury." We agree with the respondents, and therefore, conclude that they are entitled to offset their liability for temporary total disability benefits on account of the scheduled disability benefits paid to the claimant.
In Murphy, the claimant reached MMI and was found to have a seventeen percent whole person impairment. The respondents then admitted liability for $31,508 in permanent partial disability benefits which, together with previously paid temporary benefits, caused the claimant to reach the $60,000 benefits cap set forth in § 8-42-107.5. The claimant "promptly filed an objection" to this admission. The claimant's condition subsequently worsened, and the ALJ awarded additional temporary total disability benefits.
In these circumstances, the Murphy court concluded that application of § 8-42-107.5 was "premature" because the claimant was no longer at MMI, and therefore, his final impairment rating could not be ascertained. However, the court went on to hold that, "when further benefits are sought after the twenty-five percent or less limit of § 8-42-107.5 has been applied, the [respondents] are entitled to offset any permanent partial benefits paid against temporary total disability benefits." 916 P.2d at 614. The court reasoned that, "in the absence of statutory guidance," the purposes underlying the benefits cap mandated the offset.
Here, the ALJ disallowed the Murphy offset because he concluded that scheduled disability benefits do not fall under the cap. However, we disagree with this conclusion for several reasons.
Section 8-42-107.5 creates two limits on combined temporary disability payments and permanent partial disability payments. The express language of the statute is as follows:
"No claimant whose impairment rating is twenty-five percent or less may receive more than sixty thousand dollars from combined temporary disability payments and permanent partial disability payments. No claimant whose impairment rating is greater than twenty-five percent may receive more than one hundred twenty thousand dollars from combined temporary disability payments and permanent partial disability payments." (Emphasis added).
We were called upon to interpret § 8-42-107.5 in Quackenbush v. Tennant Roofing, Inc., W.C. No. 4-218-272 (June 19, 1998). In Quackenbush, the claimant's physician assessed a twenty-nine percent impairment of the right upper extremity, which converted to a seventeen percent whole person impairment. The respondents admitted liability for the scheduled rating, but sought to limit their liability for such benefits because they had previously paid $59,120 in temporary disability benefits. The respondents reasoned that the $60,000 cap applied because the claimant's whole person impairment rating was less than twenty-five percent.
In Quackenbush, the ALJ held that the benefits cap applies to scheduled injuries, but concluded that the relevant "impairment rating" for purposes of § 8-42-107.5 was the twenty-nine percent scheduled rating, not the converted seventeen percent whole person rating. Thus, the ALJ concluded the claimant was entitled to full payment for the scheduled disability because the twenty-nine percent extremity rating brought the case under the $120,000 cap, not the $60,000 cap.
However, we concluded that the claimant's benefits were subject to the $60,000 cap. In so doing, we stated that the term "impairment rating," as used in § 8-42-107.5, is ambiguous. Specifically, it is unclear whether the term refers to the impairment rating which forms the basis for the actual award of benefits, or in cases of extremity injuries, contemplates the converted whole person impairment rating established by the American Medical Association Guides to the Evaluation of Permanent Impairment, Third Edition (Revised) (AMA Guides). In this regard, we noted that § 8-42-101(3.7), C.R.S. 1997, requires that the AMA Guides be used in calculating all "physical impairment ratings," and that the AMA Guides express a preference that all extremity ratings be converted to a whole person rating. See Mountain City Meat Co. v. Oqueda, 919 P.2d 246, 254 (Colo. 1996).
Resolving this ambiguity, we determined that the term "impairment rating," as used in § 8-42-107.5, refers to the claimant's whole person impairment rating even if benefits were actually awarded in accordance with the schedule of disabilities. We observed that the statutory purpose for distinguishing between scheduled disability awards and whole person awards under § 8-42-107(8), C.R.S. 1997, is to award greater benefits to more seriously injured workers. This is true because injuries to the extremities are usually not as serious as injuries to the head or trunk. Duran v. Industrial Claim Appeals Office, 883 P.2d 477 (Colo. 1994); Torres v. Canam Industries, Inc., 942 P.2d 1384 (Colo.App. 1997). Similarly, the statutory purpose for distinguishing between the $60,000 cap and the $120,000 cap in § 8-42-107.5 is to insure that more seriously injured workers are eligible for greater benefits than less seriously injured workers. Colorado AFL-CIO v. Donlon, 914 P.2d 396 (Colo.App. 1995).
In light of these statutory objectives, we reasoned in Quackenbush that the term "impairment rating," as used in § 8-42-107.5, must refer to the converted whole person impairment rating even in cases where the award is based on an extremity rating. This is true because, under the AMA Guides, the numerical value of the extremity rating is inevitably greater than the corresponding numerical value of the whole person impairment rating. Consequently, using the extremity "impairment rating" for purposes of § 8-42-107.5 would result in awarding greater benefits to a claimant with a scheduled injury than a claimant with a corresponding whole person rating. In our view, this anomalous and unjust result should not be countenanced.
Significantly, the claimant in Quackenbush argued that the ALJ's full award of scheduled benefits was correct because § 8-42-107.5 does not apply to scheduled injuries. However, we rejected this argument for the same reasons that we concluded the term "impairment rating" refers to the claimant's whole person rating. To apply the cap in § 8-42-107.5 to whole person impairments, but not to scheduled injuries, would result in awarding greater benefits to less seriously injured workers. We see no reason to depart from our conclusions in Quackenbush, and adopt the reasoning of that decision as if fully set forth in this order.
Here, the claimant argues that the cap should not apply to scheduled injuries because of procedural distinctions between scheduled injuries and whole person injuries, including the fact that the IME procedure does not apply in ascertaining the rating for a scheduled injury. See Mountain City Meat Co. v. Industrial Claim Appeals Office, 904 P.2d 1333 (Colo.App. 1995), aff'd., 919 P.2d 246 (Colo. 1996); Mestas v. Curtice Burns Meat Snacks, Inc., W.C. No. 4-000-190 (May 24, 1994). However, we find these procedural distinctions to be unpersuasive.
Section 8-42-107.5 places a cap on combined temporary disability payments and "permanent partial disability payments." Section 8-42-107, C.R.S. 1997, is entitled "permanent partial disability benefits — schedule — medical impairment benefits — how determined." Thus, "scheduled" disability benefits are a form of "permanent partial disability" benefits. Waymire v. Industrial Claim Appeals Office, 924 P.2d 1168 (Colo.App. 1996).
Moreover, in Colorado AFL-CIO v. Donlon, supra, the court observed that the purpose of "permanent partial disability" awards is to compensate the claimant for lost earning capacity regardless of whether the benefits are paid under the schedule or § 8-42-107(8). The following language is pertinent:
"Whether computed from a statutory schedule or from a formula based upon the AMA schedule, the benefits payable, either temporary or permanent, are intended to compensate a claimant for the extent to which his or her physical impairment impacts upon the claimant's past and future ability to earn wages." 914 P.2d at 404.
Thus, the general reference to "permanent partial disability payments" in § 8-42-107.5 necessarily includes all categories of permanent partial disability benefits, including scheduled awards under § 8-42-107(2).
It follows that the ALJ erroneously concluded that the "cap" contained in § 8-42-107.5 does not apply in cases where the claimant receives permanent partial disability benefits under the schedule. Further, because the cap does apply to scheduled awards, the ALJ erroneously held that the respondents are not entitled to offset payments for the claimant's scheduled disability against their liability for temporary total disability benefits commencing November 11, 1997. Donald B. Murphy Contractors, Inc. v. Industrial Claim Appeals Office, supra. Therefore, the ALJ's order must be modified to permit the respondents to claim the offset based on their payment of $9,295.15 in scheduled disability benefits.
IT IS THEREFORE ORDERED that the ALJ's order dated April 16, 1998, is modified to permit the respondents to reduce their liability for temporary total disability benefits commencing November 11, 1997, on account of the $9,295.15 in scheduled disability payments.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. 1997.
Copies of this decision were mailed August 3, 1998 to the following parties:
Michelle R. Krizman, 632 30 Road, Grand Junction, CO 81504
S.O.S. Services, Inc., 1415 S. Main St., Salt Lake City, UT 84115
Colorado Compensation Insurance Authority, Attn: Michael Steiner, Esq. (Interagency Mail)
Kendra M. Oyen, Esq., 415 Brach Drive, Grand Junction, CO 81503 (For the Respondents)
Gudrun Rice, Esq., P.O. Box 3207, Grand Junction, CO 81502 (For the Claimant)
By: _______________________