Opinion
W.C. No. 4-163-653
December 31, 2001
FINAL ORDER
The respondents' former attorney (the attorney) seeks review of the orders of Administrative Law Judge Wells (ALJ Wells) dated July 3, 1996, and Administrative Law Judge Stuber (ALJ Stuber) dated October 12, 1999, which required her to pay penalties. We affirm.
This workers' compensation claim has a long and complicated procedural history. Insofar as pertinent here, the record reveals the claimant suffered a compensable injury in 1992. The claimant reached maximum medical improvement in 1994. Shortly thereafter, the respondents retained a vocational rehabilitation consultant (the consultant) to assess the claimant's employability. The consultant met with the claimant in late March 1995. On April 4, 1995, the consultant called the attorney to share her opinion the claimant was not employable without vocational rehabilitation. During that conversation the attorney instructed the consultant not to prepare a written report on her findings.
In 1996, the claimant sought an order imposing penalties against the attorney under § 8-43-304(1), C.R.S. 2001, for violating the Rules of Procedure, Part IV(M)(2), 7 Code Colo. Reg. 1101-3 at 6.01. That rule provides that a written report must be produced and exchanged with all parties where the claimant participates in a vocational evaluation.
In the July 3, 1996 order, ALJ Wells found that the attorney willfully violated Rule IV(M)(2) when she instructed the consultant not to prepare a written report of the vocational evaluation performed on March 28, 1995. ALJ Wells also found that the violation was prejudicial to the claimant and continued until January 3, 1996, when the claimant discovered the consultant's opinions during a discovery deposition. ALJ Wells also determined the attorney violated his prior order dated October 24, 1994, which required all further motions be filed with him. However, ALJ Wells declined to impose any penalties for the violations.
Following an appeal, we issued an order on August 15, 1997, in which we concluded that § 8-43-304(1) does not permit an ALJ to excuse a violation by declining to impose a penalty. Therefore, we set aside the July 1996 order insofar as it denied the claimant's request for penalties, and remanded the matter for a determination of the amount of penalties to be imposed against the attorney for the violations found by ALJ Wells.
Following our remand, ALJ Wells ceased to be employed by the Division of Administrative Hearings, and the matter was reassigned to ALJ Stuber. In an order dated October 12, 1999, ALJ Stuber assessed penalties at the rate of $20 per day from April 4, 1995 to January 3, 1996, for the attorney's violation of Rule IV(M)(2). ALJ Stuber further imposed a penalty of $1 for the attorney's failure to comply with ALJ Wells' order dated October 24, 1994. The attorney appealed that order.
We dismissed the attorney's appeal in an order issued on June 8, 2000. However, on January 11, 2001, the court of appeals reversed our order and remanded the matter with directions to consider the attorney's substantive arguments.
I.
Section 8-43-304(1) allows ALJs to impose penalties up to $500 per day against "any employer or insurer, or any officer or agent of either, or any employee, or any other person who fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, or fails to comply with a lawful order. The court has held that the failure to comply with the Rules of Procedure is a failure to perform a "duty lawfully enjoined" within the meaning of § 8-43-304(1). See Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997); Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996).
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 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 which resulted in the violation were objectively reasonable. 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. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997).
A.
The attorney first contends ALJ Wells erred as a matter of fact and law in finding she violated Rule IV(M)(2). The attorney contends the term "vocational evaluation" refers to a determination of the claimant's status as "qualified worker" who is eligible for mandatory vocational services under former section 8-49-101(4), C.R.S. (1986 Repl. Vol. 3B), which was repealed July 2, 1987. We disagree.
In interpreting Rule IV(M)(2), the ordinary rules of statutory construction are applicable. Consequently, the words and phrases in the regulation should be given their plain and ordinary meaning. Further, the regulation should be read in connection with other provisions so that the regulation may be interpreted as a whole. Williams v. Colorado Department of Corrections, 926 P.2d 110 (Colo.App. 1996). The regulation should also be interpreted, to the extent possible, to effect a purpose which is consistent with the authorizing statute. See Riley Family Trust v. Hood, 874 P.2d 503 (Colo.App. 1994).
Rule IV(M)(1) states that it applies to vocational rehabilitation reports for injuries which occur prior to July 2, 1987. In contrast, Rule IV(M)(2) expressly provides that it applies to injuries after July 2, 1987. Furthermore, under the applicable law respondents remain free to offer vocational rehabilitation services to avoid liability for permanent total disability benefits. See § 8-42-111(3), C.R.S. 2001. Therefore, in the context of Rule IV(M)(2), the term "vocational evaluation" is not limited to the assessment of whether the claimant is entitled to mandatory vocational services.
B.
Next, the attorney contends the consultant was hired to perform a "vocational assessment" not a "vocational evaluation." Therefore, she argues the Rule IV(M)(2) does not govern this claim. Again we disagree.
As found by ALJ Wells, the consultant admitted she was hired by the respondents to perform a vocational "evaluation." (Tr. June 27, 1996, p. 38). In any case, we perceive no appreciable distinction between the terms "evaluation" and "assessment." Rule IV does not define the term "vocational evaluation." However, the Websters II New College Dictionary (1995) defines the term "assessment" as the process of evaluating or appraising. The term "evaluate" is defined to mean the appraisal or careful examination of a subject. Under these circumstances, we conclude that the respondents' request for a vocational "assessment" fell within the purview of the Rule IV(M)(2). Cf. Churchill v. Sears, Roebuck Co., 720 P.2d 171 (Colo.App. 1986) (employer letter constituted vocational report).
C.
We also reject the attorney's contention that Rule IV(M)(2) imposes no duty on attorneys. Rule IV(M)(2) requires the preparation of a written report following a vocational evaluation. Here, no written report was prepared because of the attorney's instructions. Regardless of whether the consultant was responsible for preparing the written report, the rule was violated by the attorney's action in instructing the consultant not to prepare the report.
The question of whether the consultant would be subject to penalties for her failure to comply with Rule IV(M)(2) was not raised before the ALJ, and therefore is not before us on review. That issue is separate and distinct from whether the attorney also violated the rule.
D
The attorney also argues the imposition of a penalty is inconsistent with the law. In support, the attorney relies on Senn v. King Soopers, Inc., W.C. No. 4-220-587, May 28, 1996, aff'd Senn v. Industrial Claim Appeals Office, Colo. App. No. 96CA1083, December 27, 1996 (not selected for publication), and Reed v. Demetre Painting, W.C. No. 3-059-138 (January 15, 1993), where we concluded that a vocational rehabilitation expert may testify at a workers' compensation hearing without preparing a written report. Unlike Senn and Reed, the issue in this claim was not whether the consultant could testify without a report. Rather, the issue presented here, which was not addressed in Senn or Reed, is whether penalties may be imposed for failing to disclose a vocational expert's opinions in a "written report" as required by Rule IV(M)(2) after the claimant submitted to a "vocational evaluation."
E.
Next, we reject the attorney's contention that the ALJs' findings of fact do not support the order. Admittedly, the imposition of penalties under § 8-43-304(1) is subject to a negligence standard. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). ALJ Wells' order reflects his determination that the claimant proved the attorney's conduct was not only negligent, but was also willful. ALJ Wells found the attorney "willfully" violated Rule IV(M)(2). (July 3, 1996 Conclusions of Law 3). Furthermore, ALJ Wells determined there was "no reasonable basis for the withholding of a report." (July 3, 1996 Conclusions of Law 3). The ALJ's findings are supported by plausible inferences from the evidence, and we are bound by the findings. Section 8-43-301(8), C.R.S. 2001; Dover Elevator Co. v. Industrial Claim Appeals Office, 961 P.2d 1141 (Colo.App. 1998).
ALJ Stuber expressly recognized that ALJ Wells previously determined the violation was unreasonable and that the matter was only remanded to him for a determination of the amount of penalties to be imposed. (October 12, 1999 Conclusions of Law 2). Accordingly, we understand ALJ Stuber's finding that there was no evidence concerning whether the attorney "intentionally or negligently" directed the rule violation, to reflect his determination that there was no evidence concerning mitigating or aggravating factors relevant to the amount of penalties to be imposed.
F.
The attorney points out that Rule IV(M)(2) does not create a time frame within which the vocational report must be prepared. Consequently, the attorney argues ALJ Wells erred in finding the absence of a written vocational report by April 4, 1995, violated the rule.
Contrary to the attorney's contention, it is irrelevant when the report should or could have been completed. Rather, the violation occurred on April 4, 1995, when the attorney instructed the consultant not to prepare the report.
The attorney's further arguments concerning the date of the violation have been considered and do not alter our conclusions. The consultant testified that she gave the attorney an oral report on April 4, 1995, and that the opinions expressed during that conversation would normally have been stated in a written report. (Tr. June 27, 1996 p. 48). The fact that the consultant may have had to supplement the written report does not change the fact that the consultant was ready to prepare a written report on April 4, 1995, had the attorney not given her contrary instructions.
The attorney also contends ALJ Stuber should have terminated the penalty on October 26, 1995, when the claimant obtained an order allowing the deposition of the consultant, instead of January 3, 1996, the actual date of the deposition. We perceive no reversible error. The attorney had not cured the violation of the rule by requesting the preparation of a written vocational report at the time the deposition was ordered or held, or even subsequently. ALJ Stuber's determination that the violation was cured on January 3, 1996, inured to the benefit of the attorney.
In reaching our conclusions we have considered the attorney's letter to the consultant dated June 20, 1995. However, that letter does not request the preparation of a written vocational report. Rather, the letter merely reflects the attorney's interest in getting the consultant's "frank opinions with respect to the Claimant's employability" to determine if vocational rehabilitation services were necessary to avoid an award of permanent total disability benefits. Further, the consultant stated she was never requested to prepare a written report. (Tr. June 27, 1996, p. 50). Under these circumstances, we cannot say ALJ Stuber was compelled to find the violation ended June 20, 1995.
G.
Finally, the attorney contends she was denied due process of law by ALJ Wheelock's order dated May 29, 1996, which added the penalty issue to the hearing set for June 27, 1996. We conclude the attorney waived this argument.
The attorney does not deny timely receiving a copy of the May 29 order. Neither does the attorney deny receiving a copy of the claimant's motion for penalties or the motion to add the issue to the June 27 hearing. However, the attorney did not appear at the June 27 hearing to raise the due process argument or request a continuance. Consequently, the attorney failed to preserve this argument for appellate review. See Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988) (waiver may be established by conduct which evidences a parties intent to relinquish a known right); Robbolino v. Fischer-White Contractors, 738 P.2d 70 (Colo.App. 1987) (failure to object was waiver of objection to litigation of issue).
Similarly, insofar as the attorney contends that the claimant violated the October 24, 1994 order by filing the motion to add the penalty issue to the June 27 hearing with the "judge of the day" instead of ALJ Wells, that argument is not properly before us. See Colorado Compensation Ins. Authority v. Industrial Claim Appeals Office, 884 P.2d 1131 (Colo.App. 1994) (an issue may not be raised for the first time on appeal).
II.
The attorney also contends ALJ Stuber erroneously imposed a penalty for her violation of ALJ Wells' October 24, 1994 order. The attorney contends a party has a statutory right to a pre-hearing conference and therefore, the 1994 order was not a "lawful order" within the meaning of § 8-43-304(1). We disagree.
Contrary to the attorney's contention, the October 24, 1994 order did not prohibit the respondents from setting a pre-hearing conference. In fact, on February 28, 1995, ALJ Wells granted the respondents' motion for a pre-hearing conference. Rather, ALJ Wells merely ordered: "[A]ll future Motions should be directed to me in this case." (Tr. October 24, 1994, p. 155). Furthermore, the order was within ALJ Wells' authority to control the course of the proceedings. Section 8-43-207(1), C.R.S. 2001. Therefore, the attorney has failed to establish grounds to set aside the $1 penalty imposed by ALJ Stuber for her violation of that order.
IT IS THEREFORE ORDERED that ALJ Wells' order dated July 3, 1996 and ALJ Stuber's order dated October 12, 1999, are affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ Kathy E. Dean
________________________________ Bill Whitacre
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, C.R.S. 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 December 31, 2001 to the following parties:
Arnulfo Ramos, c/o Jon C. Thomas, Esq., 1032 N. Wahsatch Ave., Colorado Springs, CO 80903-2484
Wal-Mart Stores, Inc., P. O. Box 116, Bentonville, AR 72712-0116
Emily Smith, Claims Management, Inc., P. O. Box 1288, Bentonville, AR 72716-1288
Subsequent Injury Fund — Interagency Mail
Jon C. Thomas, Esq., 1032 N. Wahsatch Ave., Colorado Springs, CO 80903-2484 (For Claimant)
Richard A. Bovarnick, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents)
Marsha Kitch, Esq., 999 18th St., #3100, Denver, CO 80202
Fred Ritsema, Esq., 999 18th St., #3100, Denver, CO 80202
John Baird, Esq., Office of the Attorney General, 1525 Sherman St., 5th floor, Denver, CO 80203 (For Division of Workers' Compensation)
By: A. Hurtado