Opinion
W.C. No. 4-520-251.
December 16, 2005.
FINAL ORDER
The claimant seeks review of an order on remand dated July 6, 2005 of Administrative Law Judge Klein (ALJ). The order denied the claimant's claim for penalties on the ground that it was barred by the applicable statute of limitations in § 8-43-304(5), C.R.S. 2005. We affirm.
This matter was previously before us. On that previous appeal, the respondents sought review of an order of ALJ Klein dated June 2, 2004, that imposed penalties under § 8-43-304(1), C.R.S. 2005, for an improper modification of temporary total disability benefits (TTD). In our order dated October 12, 2004, we set aside the ALJ's order with respect to the imposition of penalties and remanded for further proceedings on that issue. ALJ Klein's order on remand dated July 6, 2005 is the subject of this appeal.
The claimant sustained serious head injuries on October 21, 2001, when he rolled a truck in a Wyoming highway accident. In November 2001, the respondents filed a General Admission of Liability (GAL) for TTD benefits.
On May 23, 2002, the respondents filed a Petition to Modify, Terminate or Suspend Compensation (the petition). The petition cited § 8-42-112.5, and alleged the claimant was "under the influence of a controlled substance at the time of the accident." The petition was served on the claimant's first attorney (Litten), but not on the claimant. The petition was not accompanied by any documentation, although the petition listed a Wyoming state trooper and a "representative of Wyoming Chemical Testing" as potential witnesses. Based upon the claimant's failure to object and pursuant to a letter from the Division, on June 28, 2002, the insurer filed a GAL that claimed the reduction in compensation commencing May 23. The GAL reflects it was mailed to the claimant. In July 2002, the claimant's second attorney objected to the GAL and requested an expedited hearing to reinstate the TTD benefits. On May 18, 2004, the matter proceeded to hearing on various issues, including the claimant's assertion that the respondents violated Rule IX (D) by failing to serve the petition on the claimant, and by failing to attach all documents on which the petition was based.
Following the May 18, 2004 hearing, the ALJ entered an order dated June 2, 2004, imposing penalties for the respondents' wrongful modification of TTD. The ALJ found the respondents violated Rule IX (D)(2) because they failed to serve the petition on the claimant, and violated Rule IX (D)(1) because they failed to attach copies of toxicology reports on which the petition was based. The ALJ imposed penalties of $250 per day from January 12, 2004 (20 days after the claimant's application for hearing) until May 18, 2004, the date of the hearing. The ALJ further rejected the respondents' contention that the penalty claims were barred by the one-year statute of limitations contained in § 8-43-304(5), C.R.S. 2005. The ALJ first found that because of the disability caused by the injury, the claimant was not capable of "independent knowledge of the underlying facts giving rise" to the penalties. The ALJ also found that because of the "negligence" of the claimant's first two attorneys, he was not "advised of the factual allegations" giving rise to the penalties until he retained current counsel. The ALJ finally concluded that the statute of limitations argument failed because the claimant was not given actual notice of the petition as required by the rule.
On review, we set aside the ALJ's order dated June 2, 2004, remanding for further proceedings concerning the respondents' statute of limitations defense to the penalty claim. We held that the ALJ did not have jurisdiction to determine that the claimant was incompetent and that the statute of limitations was therefore tolled by the claimant's incapacity. In this regard, we also noted that the claimant could seek a determination of incompetency in the appropriate forum and then establish that the statute of limitations had been tolled. We also held that the negligence of the claimant's former attorney would not have tolled the statute of limitations, and would have been imputed to the claimant. Because the claimant is presumed to know the applicable law, we remanded for a determination of when the claimant became aware of the facts giving rise to the penalty claim.
On remand, the ALJ entered the order presently under review. The ALJ found that the petition, which was not sent to the claimant and did not have attached to it supporting documentation, was received by claimant's counsel on or about May 28, 2002. Claimant's counsel did not object to the petition and the Division sent a letter to the insurer dated June 18, 2002, informing it that no objection had been received and that it was entitled to the relief requested in the petition. On June 28, 2002, the insurer then filed an amended GAL and sent it to both the claimant and his counsel. The ALJ found that the claimant received the amended GAL and, as a consequence, discharged his attorney and retained new counsel. The ALJ further found that the claimant knew of the facts giving rise to his penalty claim on June 28, 2002, and that the claim for penalties was first filed on December 23, 2003.
The ALJ also found that in January 2005, the claimant's wife filed in the Denver Probate Court a Petition for Appointment of Guardian and a Petition for Appointment of Conservator. Pursuant to those petitions, the probate court issued Letters of Conservatorship, a Letter of Guardianship, and orders appointing the claimant's wife his conservator and guardian. However, the ALJ found that those documents and orders are "silent" regarding any request for or adjudication of the claimant's capacity at the time the statute of limitations for the penalty claim was running.
Based upon the findings of fact, the ALJ concluded that the claimant failed to carry his burden of showing that he was incapacitated in the year after June 28, 2002, the date on which the one-year statute of limitations § 8-43-304(5) began to run. Because the claimant did not request a determination from the probate court of his mental status in 2002, the ALJ declined to construe the orders appointing a conservator and a guardian as establishing the claimant's incapacity "retrospectively" to 2002. Accordingly, he denied the claimant's request for an order that the statute of limitations in § 8-43-304(5) was tolled during the claimant's incapacity, and concluded that the penalty claim was barred.
On appeal, the claimant asserts that the ALJ erred by failing to enter a finding regarding the date of the inception of the claimant's incapacity, and that he erred in concluding that the statute of limitations was not tolled. Further, the claimant argues that the ALJ erred in finding the claimant's former attorneys negligent and in imputing such negligence to the claimant. We are unpersuaded that the ALJ committed reversible error.
The penalties for the alleged violation of Rule IX were sought pursuant to § 8-43-304(1), C.R.S. 2005, which authorizes penalties of up to five hundred dollars per day where an insurer violates any provision of articles 40 to 47 of title 8, fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, or fails, neglects, or refuses to obey an order from the director or the panel. Section 8-43-304(5), C.R.S. 2005 provides that a request for penalties be filed with the ALJ "within one year after the date that the requesting party first knew or reasonably should have known the facts giving rise to a possible penalty claim." Section 8-43-304(5) is in the nature of a statute of limitations that may be tolled by the mental incompetence of the claimant. § 13-81-103(1)(a); Ball v. Industrial Commission, 30 Colo. App. 583, 503 P.2d 1040 (1972).
We disagree with the claimant's argument that the ALJ erred by not entering a factual finding regarding the inception date of the claimant's incapacity. As we read the ALJ's order, he was unpersuaded that the Letters of Conservatorship, the Letter of Guardianship, or the orders appointing a guardian and a conservator adjudicated the claimant's capacity as of June 2002, when the statute of limitations began to run. The ALJ construed those documents as finding the claimant incapacitated as of the date of the petition; however, he did not read them as establishing that the claimant's condition was such in 2002 as to toll the statute of limitations.
In our previous order, we relied upon James v. Brookhardt Lumber Co., 727 P.2d 1119 (Colo.App. 1986), for the holding that the ALJ does not have jurisdiction to determine the competency of a person for purposes of tolling the statute of limitations. James continues to be the law, and we adhere to that opinion. Nonetheless, the ALJ does have jurisdiction to determine whether the scope and meaning of an adjudication of incapacity made by another court is such as to toll the statute of limitations in § 8-43-304(5). Here, the ALJ was not persuaded that the orders entered by the Denver Probate Court established that the claimant was incompetent in 2002, so as to toll the statute. We have examined the Letters of Conservatorship, the Letter of Guardianship, and the orders appointing a guardian and a conservator, which are in the record, and cannot state that the ALJ was compelled to construe them as tolling the statute of limitations. Because the scope of the probate court's order as it relates to the running of the statute of limitations is in the nature of a factual question, we defer to the ALJ's reasonable inferences. See Industrial Commission v. Royal Indemnity Co., 124 Colo. 210, 236 P.2d 293 (1951).
Moreover, we disagree with the claimant's argument that the mere appointment of a guardian and a conservator compels the conclusion that the claimant was under the same disability in 2002. In James v. Brookhardt Lumber Co., the court held that a workers' compensation hearing was not the proper forum for deciding whether the claimant was under a disability for purposes of tolling the statute of limitations. The court stated that there exists a statutory scheme for the determination of a legal disability and that in order for a person's incapacity to toll the statute, "an interested person must petition the court for a specific finding as to the existence of a legal disability." James, 727 P.2d at 1121 (emphasis added). The court also made clear that the appropriate adjudication for purposes of tolling the statute of limitations was one that the person was under a disability "at the time his right to compensation accrued, i.e., at the time of the injury in September of 1971, and that he continued to be under disability at the time he filed the petition to reopen." Id. As we understand the ALJ's order, he was not persuaded that the necessary "specific finding" had been sought and obtained by the claimant in order to establish his incapacity in 2002. The claimant argues that the probate court did not have the power to enter a retroactive determination of incapacity, but to the extent that is true, it does not persuade us that the ALJ did have the power, but rather, that the claimant did not pursue the remedy at the appropriate time in the appropriate forum.
We have considered the claimant's argument that it was error for the ALJ to conclude that any negligence on the part of his attorneys would be imputed to him in 2002. We addressed, and rejected this argument in our order dated October 12, 2004, and we are not now persuaded to depart from that resolution. In any event, there is substantial evidence to support the ALJ's factual finding that the claimant knew about the petition to suspend his benefits at the latest in June 2002. Since it is undisputed that the claim for penalties was not filed within a year of that date, and the claimant has not obtained a legal determination that he was incapacitated during the relevant time period, the record and the law support the ALJ's conclusion that the claim for penalties was barred by the statute of limitations. See Dover Elevator Co. v. Industrial Claim Appeals Office, 961 P.2d 1141 (Colo.App. 1998).
IT IS THEREFORE ORDERED that the ALJ's order dated July 6, 2005, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Dona Halsey
____________________________________ Curt Kriksciun
Carnell Ray, Franklin St., Denver, CO, New World Van Lines of Colorado, Chicago, IL, Jody Estep, Liberty Mutual Insurance Company, Peoria, IL, Jennifer E. Bisset, Esq., Denver, CO, (For Claimant).
Scott M. Busser, Esq., Denver, CO, (For Respondents).