Opinion
W.C. No. 3-111-363
August 1, 2002.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Stuber (ALJ) which denied her request for penalties based on the respondent's failure to comply with letters from the Claims Management Unit (CMU) of the Division of Workers' Compensation. We affirm.
In 1993 the claimant suffered a compensable injury. The respondent admitted liability for medical benefits and several periods of temporary total disability. On February 26, 1999, the respondent filed a General Admission of Liability which admitted liability for "INTERMITTENT" temporary total disability benefits between September 22, 1998 and January 27, 1999, equal to "1 4/7 wks" in the total amount of $362.05. On July 3, 2001, LWP Claims Administrators (LWP), which was the respondent's third party administrator, filed a General Admission of Liability for additional temporary disability benefits. It is undisputed the admission should have indicated that "intermittent," and not continuous benefits were due for the period September 22, 1998 through January 27, 1999.
By correspondence dated July 17, 2001, Cody Boyd (Boyd) of the CMU notified LWP that the July 3 admission required the payment of continuous temporary disability benefits for the period September 22, 1998 through January 27, 1999. Therefore, Boyd requested that LWP file an amended admission which admitted liability in the amount of $4,213.03 for temporary disability benefits due during that period. LWP did not respond to the July 17 letter nor did it respond to similar correspondence from Boyd dated August 21, 2001 and October 10, 2001.
On October 29, 2001, LWP filed an amended general admission of liability, which erroneously calculated temporary disability benefits due for the period September 23, 1999 through October 20, 2000 as $12,935.31 instead of $12,968.23. The admission also erroneously indicated temporary disability benefits terminated October 19, 1999 instead of October 19, 2000. The errors were not corrected until the filing of an amended admission in December 2001. Under these circumstances, the claimant requested an order imposing penalties under § 8-43-304(1), C.R.S. 2001, for LWP's failure to comply with an "order of the Division of Workers' Compensation."
Section 8-43-304(1) allows the imposition of penalties up to $500 per day against "any employer or insurer, or any officer or agent of either" who fails to comply with a "lawful order of the director." (Emphasis added).
The ALJ determined Boyd's letters were not "orders" within the meaning of § 8-43-304(1). Further, the ALJ determined that Boyd's letters were based upon Boyd's failure to read the numerous admissions the respondent previously filed that admitted liability for "intermittent" temporary total disability benefits between September 22, 1998 and January 27, 1999. The ALJ also determined, the respondent had a reasonable basis for refusing to file an amended admission. Therefore, the ALJ denied the request for penalties. The claimant timely appealed.
On review the claimant contends the ALJ erroneously determined Boyd's letters were not "orders" for purposes of imposing penalties under § 8-43-304(1). We disagree.
Initially, we note that the claimant's Designation of Record includes the "entire files maintained by the Division of Workers' Compensation and Division of Administrative Hearings." The record transmitted to us on appeal apparently does not include the entire Division of Workers' Compensation file. Our review is limited to the evidentiary record before the ALJ, and there is no evidence in the record which tends to suggest the claimant requested the ALJ to consider the entire Division of Workers' Compensation file as part of the evidentiary record for the hearing. See City of Boulder v. Dinsmore, 902 P.2d 925 (Colo.App. 1995); Rules of Procedure, Part VIII(A)(7), 7 Code Colo. Reg. 1101-3 at 22. Consequently, we have not obtained or considered the Division of Workers' Compensation file, but restricted our review to the record made at the hearing.
The imposition of penalties under § 8-43-304(1) requires a two-step analysis. The ALJ must first determine whether the disputed conduct constituted a violation of any provision of the Workers' Compensation Act (Act) or rule. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). If the ALJ finds a violation, the ALJ must determine whether the violator's actions were objectively unreasonable measured by a negligence standard. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). The reasonableness of the violator's actions depends upon whether the actions were predicated on a rational argument based in law or fact and this determination is a question of fact for resolution by the ALJ. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997).
The Supreme Court has held that the term "order" refers to "any decision, finding and award, direction, rule, regulation or other determination." Section 8-40-201(15), C.R.S. 2001; Holliday v. Bestop Inc. 23 P.3d 700 (Colo. 2001); Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211 (Colo.App. 2001), cert. denied January 22, 2002. In Holliday, the court held a Prehearing ALJ's notes on a conference summary sheet did not constitute an "order" because they did not resolve or determine any matter in the case.
Here, there is insufficient evidence to support a finding that Boyd's letters were orders. Cf. Neoplan USA Corp. v. Industrial Commission, 721 P.2d 157 (Colo.App. 1986) (letter from ALJ directing claimant's counsel to prepare a proposed order not an order). In fact, the respondent's failure to respond to Boyd's July 17 letter to "please file a corrected admission," merely triggered the mailing of two additional letters which stated "Please respond within 10 days."
Nevertheless, even if we assume, arguendo, that Boyd's letters "determined" the respondent miscalculated the claimant's workers' compensation benefits, we conclude the letters do not constitute a "lawful order of the director" within the meaning of § 8-43-304(1).
Under § 8-40-201(5), C.R.S. 2001, the term Director refers to the Director of the Division of Workers' Compensation. Rule II of the procedural rules adopted by the Director in accordance with § 8-47-107, C.R.S. 2001 contains a similar definition. (Rules of Procedure, Part II, Code Colo. Reg. 1101-3).
Section 8-43-201 C.R.S. 2001, confers concurrent original jurisdiction to "hear and decide" all matters arising under the Act on the Director and ALJs. Generally, quasi-judicial functions are not delegable. See e.g. Prairie State College v. Illinois Education Labor Relations Board, 527 N.E.2d 538 (Ill.App. 1988); Queensberry v. Washington Suburban Sanitary Commission, 535 A.2d 481 (Md. 1988). However, subdelegation may be authorized by statute. See Manka v. Tipton, 805 P.2d 1203 (Colo.App. 1991).
Section 8-43-217 C.R.S. 2001 authorizes the Director to appoint claim managers in order to "expedite and simplify the processing of claims, reduce litigation and better serve the public." The duties of these claims managers are set forth in § 8-43-218 C.R.S. 2001. In interpreting § 8-43-218, we must attempt to further the legislative intent. To discern this intent we should first give the words in the statute their plain and ordinary meanings, unless the result is absurd. Bestway Concrete v. Industrial Claim Appeals Office, 984 P.d. 680 (Colo.App. 1999).
Section 8-43-218(1) provides that claim managers have authority to "review, audit, and close cases, to educate, inform, and assist the public as to the workers' compensation system, to promote speedy and uncomplicated problem resolution of workers' compensation matters, and to otherwise manage claims." However, nothing in § 8-43-218 authorizes claims managers to issue orders. Rather, subsection 8-43-218(2) suggests that the power to issue enforceable orders is reserved to the Director. That subsection 8-43-218(2) states:
"The director may require any party to a workers' compensation claim to attend, cooperate, and comply with the efforts of claims managers in managing claims or complaints received by the division."
Had the General Assembly intended to grant claim managers the authority to issue enforceable orders, it could have enacted language which allowed claim managers to "resolve workers' compensation matters," or "issue orders for the problem resolution of workers' compensation matters." However, the General Assembly did not adopt such language and we may not read nonexistent provisions into the statute. See Arenas v. Industrial Claim Appeals Office, 8 P.d. 558 (Colo. A.P. 2000). Moreover, such language would nullify the need for § 8-43-218(2) and, thus, we are not persuaded the General Assembly intended to delegate the Director's quasi-judicial function to claims managers.
Our conclusions are consistent with our holding in McClelland v. Hewlitt Packard, W.C. No. 3-997-475 (May 18, 1993), in which we concluded an order closing the claim for lack of prosecution that was signed by an administrative clerk "for the Director of the Division of Workers' Compensation," was void. See also Wooden v. Conway's Red Top Inc., W.C. No. 3-842-707 (July 21, 1995) (authority to issue supplemental order following appeal of Director's order which dismissed claim is vested in Director and, therefore, "administrative officer" in Division prematurely "Green Sheeted" record for review). The claimant's arguments notwithstanding, we are not persuaded the circumstances presented here are appreciably different from the facts in McClelland. Furthermore, we are unaware of any statutory change, or rule enacted subsequent to our decision in McClelland that would compel a contrary result. Neither have we been able to locate any interpretative bulletin or publication by the Director which is inconsistent with our conclusions in McClelland. Therefore, we adhere to our prior conclusion that § 8-43-218 does not authorize claims managers to issue orders on behalf of the Director.
We are mindful that § 8-43-202, C.R.S. 2001, authorizes the Director to delegate the duty of taking evidence, and the making of factual findings to "special administrative Law Judges." However, this section does not provide for the delegation of the Director's ultimate decision-making authority.
We also note the § 8-43-218(3), creates a right to penalties under § 8-43-304(1) where an insurer fails to "cooperate or comply with claims management efforts of the division." However, penalties under this subsection require proof the insurer's violation was "willful" as opposed to the imposition of penalties for a violation of an order of the Director which only requires proof the violator's actions were negligent. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, supra. Thus, the plain language of § 8-43-218 suggests that claims management efforts are not synonomous with orders of the Director for purposes of imposing penalties under § 8-43-304(1).
Here, the claimant did not request penalties for the insurer's "willful" failure to comply with "claims management efforts." Rather, the claimant requested penalties for the insurer's negligent failure to comply with an order of the Director.
In addition, § 8-43-219, C.R.S. 2001, provides that nothing in § 8-43-218 "shall be construed to limit any party's rights or privileges as provided by law." It is well established that where an administrative adjudication turns on issues of fact, due process requires that parties be given an opportunity to present evidence and argument in support of their positions. Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990). It follows that a "lawful" order of the Director is inherently consistent with procedural due process.
Insofar as Boyd's July 17 letter may be construed as a "determination" the respondent owed temporary total disability benefits of $4213.03, the determination was made without affording the respondent an opportunity to present evidence that no additional benefits were owed and present additional defenses which might apply. Under these circumstances, the letter was not a "lawful" order and the ALJ correctly determined the respondent's failure to comply with the letter did not entitle the claimant to penalties under § 8-43-304(1).
In any case, even if the July 17 letter was a "lawful order of the Director," we perceive no basis to disturb the ALJ's finding that the respondent's violation was not objectively unreasonable. The record contains the General and Final Admissions of Liability filed in the claim. The employer's Supplemental Report of Accident (Respondent's Exhibit G) indicates the claimant missed several non-consecutive days of work between September 28, 1998 and January 27, 1999 equal to 1 4/7 weeks. Furthermore, the respondent's December 11, 2001 General Admission of Liability for continuous temporary total disability benefits between September 22, 1998 and January 27, 1999, asserted an overpayment. It also stated "all disputed TTD payments have been made" and "no additional TTD payments are owed." We conclude this documentary evidence is sufficient to support the ALJ's determination that the respondent's failure to comply with Boyd's letters was premised on a rational argument in fact that the letters required the payment of temporary total disability benefits the claimant was not entitled to receive. Furthermore, the ALJ's determination supports the denial of penalties.
The claimant's further arguments have been considered and do not alter our conclusions.
IT IS THEREFORE ORDERED that the ALJ's order dated March 4, 2002, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Kathy E. Dean
____________________________________ Robert M. Socolofsky
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, CHRIS 2001. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed August 1, 2002 to the following parties:
Sharon McDaniel, P. O. Box 2433, Vail, CO 81658
Vail Associates, Inc., P. O. Box 7, Vail, CO 81658
Lisa Cruz, LWP Claims, 575 Union Blvd., #310, Lakewood, CO 80228
Steven U. Mullens, Esq., P. O. Box 2940, Colorado Springs, CO 80901-2940 (For Claimant)
Patricia Jean Clisham, Esq., 1200 17th St., #1700, Denver, CO 80202 (For Respondent)
BY: A. Hurtado