Opinion
W.C. No. 4-105-774.
October 15, 2003.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Stuber (ALJ) which authorized the respondents to reduce the claimant's permanent total disability (PTD) benefits to reflect an offset and to recover an overpayment of benefits. The claimant contends the ALJ erred in holding the respondents are not estopped from claiming the offset and overpayment, that the respondents did not waive the offset and overpayment, and that the respondents are not precluded from claiming the offset an overpayment by the doctrine of laches. The claimant also contends the ALJ abused his discretion in determining the rate of recoupment of the overpayment. We affirm.
Most of the pertinent facts are not disputed. The claimant sustained a compensable injury in June 1991. In November 1992 the claimant was awarded social security disability (SSDI) benefits, commencing in January 1992, at the rate of $271.50 per month. The claimant promptly notified the respondents of the award.
In January 1993 the respondents filed two final admissions of liability (FAL) for PTD benefits. Both admissions claimed the SSDI offset created by § 8-42-103(1)(c)(I), C.R.S. 2002, and reduced the claimant's PTD benefits by $31.33 per week. The claimant then applied for a lump sum award of the PTD benefits. By order dated February 4, 1993, the Director of the Division of Workers' Compensation granted the lump sum request. The order provided that the "balance remaining shall be paid at the rate of $115.54 effective the date of this order, less applicable offsets."
Commencing February 4, 1993, the insurer began paying PTD benefits at the rate of $115.54 per week, and without deducting the SSDI offset. These payments continued until September 20, 2002, when the insurer claimed the offset and reduced the claimant's weekly benefits to $84.24 per week. In October 2002, the respondents filed a petition to suspend or modify benefits claiming a right to recoup an overpayment of $15,583.96 resulting from the failure to take the SSDI offset since February 1993.
At the hearing the claimant testified that had she known in 1993 that her PTD benefits would be only $84 per week, she would have "tried to see if one of my kids could have taken me in" rather than moving into a house. (Tr. P. 31). However, that possibility is no longer available to the claimant.
At the hearing, the parties agreed the issue was limited to whether the respondents should be entitled to recoup the alleged overpayment, not whether the respondents could reduce the PTD benefits to the correct amount after September 2002. (Tr. P. 9; Finding of Fact 9). The claimant raised the defenses of estoppel, waiver and laches.
The ALJ found, from the claimant's testimony and the documentary evidence, that after February 4, 1993, the claimant did not "inform respondents" of the "mistake" in failing to take the SSDI offset, and the respondents "made no statement to the claimant about the failure to deduct" the SSDI offset. The ALJ further found that both parties received the same lump sum order and "neither realized that the insurer was not taking the offset." (Finding of Fact 6, Conclusion of Law 2). Under these circumstances, the ALJ concluded the respondents are not estopped from recouping the overpayment because "this is not a case in which respondents were aware of facts and claimant was not aware of the same facts." Further, the ALJ concluded the respondents did not intend for the claimant to rely on their conduct. Thus, the ALJ found no estoppel.
The ALJ also rejected the waiver defense, finding that prior to the lump sum order the respondents clearly manifested their intent to take the SSDI offset by filing the FALs. In light of the FALS, the ALJ concluded the respondents' failure to take the offset after the lump sum order did not manifest an intent to relinquish the right.
Finally, the ALJ rejected the laches defense. The ALJ concluded that although the delay in asserting the offset was considerable, it was not unconscionable. Further, the ALJ found the claimant failed to prove any prejudice based her "living conditions."
In light of these circumstances, the ALJ ordered the claimant's PTD benefits reduced from $84.22 per week to $64.22 per week. The ALJ found this would balance the interests of the claimant in continuing to receive PTD benefits while allowing the respondents to recoup the overpayment over 15 years.
Initially, we note the claimant appears to be arguing on appeal that it was improper for the ALJ to permit the respondents to reduce the PTD benefits from $115.54 per week to $84.22 per week commencing in September 2002. However, the ALJ found and we agree that at the hearing the claimant agreed to limit the issue to whether the respondents have a right to recoup the overpayment. Hence, the claimant may not now raise an issue which she waived at the hearing. See Schlage Lock v. Lahr, 870 P.2d 615 (Colo.App. 1993) (party may not take one position at hearing and advance a new position on appeal); (Tr. Pp. 9-10).
In any event, the result would not be different if the issue is expanded to include the respondents' right to reduce the PTD benefit to the correct amount commencing in September 2002. First, reducing payments in September 2002 does not offend the statute because the SSDI offset provision does not establish a date when the offset must be claimed. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988). Further, for the reasons stated below there is no equitable bar to the reduction.
I.
The claimant first contends that the uncontested evidence establishes the respondents' conduct estopped them from claiming the offset and recouping the overpayment. The claimant reasons that there is "no evidence" of the respondents' intention when failing to claim the offset, and that the nearly ten year delay in asserting the offset gave the claimant a "right" to rely on the respondents' conduct. We are not persuaded.
The claimant had the burden of proof to establish estoppel, and the question of whether she did so is essentially one of fact for determination by the ALJ. Johnson v. Industrial Commission, 761 P.2d at 1146. Because the issue is factual, we must uphold the ALJ's findings if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2002. This standard of review requires us to view the evidence in a light most favorable to the prevailing party, and defer to the ALJ's resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the record. Cordova v. Industrial Claim Appeals Office, 55 P.3d 186 (Colo.App. 2003).
The four elements of estoppel are: (1) the party to be estopped must know the true facts; (2) the party to be estopped must also intend that its conduct be acted on or must so act that the party asserting the estoppel has a right to believe the other party's conduct is so intended; (3) the party asserting the estoppel must be ignorant of the true facts; (4) and the party asserting the estoppel must detrimentally rely on the other party's conduct. The doctrine is based on the "principle of fair dealing" and "is designed to aid in the administration of justice when a rigid and inflexible application of the law would otherwise result in injustice." Johnson v. Industrial Commission, 746 P.2d at 1146.
Contrary to the claimant's assertion, the record contains substantial evidence that the respondents' failure to assert the offset after the lump sum order was a "mistake," and if the respondents' had realized the mistake they would have taken the offset. This is true because the respondents claimed the offset in the FALs which were filed in January 1993. Nothing in the insurer's "file activity" notes admitted into evidence indicates the respondents recognized that they failed to claim the offset after the lump sum order, or that they intended to convey to the claimant that they intended to surrender the offset.
Further, the evidence supports the ALJ's conclusion that the claimant did not have a "right" to rely on the respondents' failure to claim the offset. First, the ALJ found the claimant, like the respondents, was mistaken concerning the correct amount of the weekly benefit after the lump sum order. (Conclusion of Law 2). Thus, the ALJ implicitly found the claimant was not relying entirely on the respondents' conduct, but also on her own miscalculation of the weekly benefit. Further, the ALJ could find the claimant had no "right" to assume the respondents intended to surrender the offset after the lump sum order when they had just asserted the offset in the FALs.
Where, as here, both parties are partially to blame for the respondents' payment and the claimant's receipt of the excess benefits, we cannot say as a matter of law that the equitable principle of "fair dealing" required the ALJ to find an estoppel. The fact that some evidence in the record might have supported a contrary result affords no basis for relief on appeal. Pacesetter Corp. v. Industrial Claim Appeals Office, 33 P.3d 1230, 1234 (Colo.App. 2001).
II.
The claimant next contends the respondents waived the right to claim the offset and recoup the overpaid benefits by failing to assert the claim for nearly ten years after the lump sum order. We disagree.
Waiver, like estoppel, is an affirmative defense concerning which the claimant had the burden of proof. Waiver is the voluntary, knowing and intelligent relinquishment of a known right. Jiminez v. Industrial Commission, 51 P.3d 1090 (Colo.App. 2002). Waiver may be explicit or demonstrated by conduct inconsistent with assertion of the right. However, a waiver implied from conduct should be free of ambiguity concerning the party's intention. Department of Health v. Donahue, 690 P.2d 243, 247 (Colo. 1984).
Here, the record supports the ALJ's finding that the respondents did not waive the offset after the lump sum order. Rather, for the reasons stated above, the failure to claim the offset was the product of a mistake rather than a voluntary, knowing and intelligent decision to give up the offset. Although the respondents' delay in asserting the offset was lengthy, we cannot say it was "unambiguous" conduct exhibiting a waiver. This is true because the respondents actually asserted the offset in the FALs shortly before the lump sum order. Once the respondents made the initial error in calculating the offset after the lump sum order the mistake tended to perpetuate itself.
III.
Finally, the claimant contends the doctrine of laches precludes the respondents from claiming the offset and recouping the overpayment. The claimant argues the respondents' delay in asserting their rights was "unconscionable" and that the claimant was prejudiced by the delay because she could have moved in with her son in 1993 if she had known the respondents would ultimately claim the offset. We are not persuaded.
Once again, we conclude the evidence supports the ALJ's finding that the claimant failed to establish the defense of laches. Laches is an equitable defense which may be asserted where a party's unconscionable delay in asserting its legal rights prejudices the opposing party's defenses or causes the opposing party to detrimentally change its position. Cullen v. Phillips, 30 P.3d 828 (Colo.App. 2001); Bacon v. Industrial Claim Appeals Office, 746 P.2d 74 (Colo.App. 1987). Laches may not be established by delay standing alone, and negligence does not bar recovery if both parties are at fault. See Stubbs v. Standard Life Association, 125 Colo. 278, 242 P.2d 819 (1952). Further, the prejudice "must necessarily result from reliance which is justifiable under the circumstances." City of Thornton v. Bijou Irrigation Co., 926 P.2d 1, 74 (Colo. 1996).
Here, the ALJ found that although the delay was substantial, it was not "unconscionable." This determination is supported by evidence that there was a mutual mistake concerning the weekly benefit amount after the lump sum order, and after the respondents had already signaled their intent to assert the offset by claiming it in the FALs. Thus, viewing the totality of the circumstances, both parties bear some responsibility for the delay, and the ALJ was not required to find that the claimant was justified in relying on the respondents' conduct.
Moreover, the ALJ was not persuaded by the claimant's testimony that she could have moved in with her son if she had known the respondents would claim the offset and attempt to recoup the overpayment. We understand the ALJ to have found that this testimony was speculative and insufficient to establish prejudice. The ALJ was under no obligation to credit the claimant's testimony, even though it was unrebutted. Cary v. Chevron U.S.A., 867 P.2d 117 (Colo.App. 1993).
IV.
Finally, the claimant disputes the ALJ's decision to permit the respondents to recoup the offset at the rate of $20 per week. The claimant argues the rate of recoupment should be "nominal" because she will experience a substantial reduction in benefits and be forced to move to an "unsafe" area. We reject this argument.
As the ALJ noted, the 1997 amendments to the Act concerning recovery of overpayments are inapplicable to this claim for a 1991 injury. 1997 Colo. Sess. Laws, ch. 45 at P. 116. Thus, the ALJ had discretion to fashion a remedy, and we may not interfere with his determination unless there was an abuse of discretion. Louisiana Pacific Corp. v. Smith, 881 P.2d 456 (Colo.App. 1994). An abuse is not shown unless the order is beyond the bounds of reason, as where it is contrary to law or unsupported by the evidence. Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App. 2001).
Here, we perceive no abuse of discretion in the ALJ's determination. As noted, there is no equitable or legal barrier to recovery of the substantial overpayment of benefits. Moreover, the ALJ considered the claimant's personal circumstances, and reduced the rate of recoupment below the weekly rate of the SSDI offset. The effect of this decision is to substantially increase the amount of time which will be required to recover the overpayment. Thus, the ALJ balanced the equities, and we cannot say the order concerning the rate of recoupment constitutes an abuse of discretion.
IT IS THEREFORE ORDERED that the ALJ's order dated April 22, 2003, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ 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, Colorado 80203, by filing a Petition to Review with the Court, within twenty (20) days after the date this Order was mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2002. 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 order were mailed to the parties at the addresses shown below on October 15, 2003 by A. Hurtado.
Lilli H. Pfaff, 73 Katbi Cir., Colorado Springs, CO 80911
Broadmoor Hotel, 1 Lake Cir., Colorado Springs, CO 80906-4254
Continental Insurance Company, c/o Ruth Ann Kuehl, RSK Co, P.O. Box 17369, Denver, CO 80217
Michael W. McDivitt, Esq., 19 E. Cimarron St., Colorado Springs, CO 80903 (For Claimant)
Tama L. Levine, Esq., 999 18th St., #1755, Denver, CO 80202 (For Respondents)