Opinion
W.C. No. 4-218-823
September 28, 2000
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Wheelock (ALJ). The claimant contends the ALJ erroneously refused to redetermine his average weekly wage (AWW) for temporary disability to include post-injury wage increases. We set aside the ALJ's order and remand the matter for the entry of a new order.
AWW is generally determined by the wage the injured worker received at the time of the injury. Section 8-42-102(2), C.R.S. 2000. However, the overall purpose of the statutory scheme is to "arrive at a fair approximation of the claimant's wage loss and diminished earning capacity." Campbell v. IBM Corp., 867 P.2d 77 (Colo.App. 1993). Therefore, if the specified method of computing the claimant's average weekly wage will not render a fair computation of wages for "any reason," the ALJ has discretionary authority under § 8-42-102(3), C.R.S. 2000, to use an alternative method to determine AWW. Campbell v. IBM Corp., supra. This discretionary authority includes the power to increase the claimant's average weekly wage for periods of disability which occur subsequent to the initial period of disability where "manifest injustice" would result if the claimant's benefits are calculated based on lower earnings at the time of the injury. Campbell v. IBM Corp., supra.
On January 3, 1994, the claimant suffered an admitted back injury. At the time of the injury, the claimant was earning $10.95 per hour which results in an AWW of $430. The claimant reached maximum medical improvement (MMI) on January 23, 1995. Following a Division-sponsored independent medical examination (DIME) on the issue of medical impairment, the respondents filed a Final Admission of Liability dated March 31, 1997, for permanent partial disability benefits based on 29 percent whole person impairment. The claimant timely objected to the Final Admission. In November 1998, the respondents petitioned to close the claim for lack of prosecution. The claimant objected and filed an application for hearing on the issue of medical benefits.
The claimant continues to work for the respondent-employer. As a result of a collective bargaining agreement the claimant has received several increases in his hourly rate of pay. The claimant received a raise to $11.15 per hour on March 12, 1994; a raise to $12.05 on March 25, 1994; a raise to $12.85 on September 10, 1994; a raise to $13.15 on September 15, 1995; and a raise to $13.45 on September 6, 1996. Between 1997 and 1999 the claimant's hourly rate further increased to $14.45.
In January 1999, the claimant underwent surgery to treat the industrial injury. On June 4, 1999, the respondents voluntarily reopened the claim and admitted liability for additional temporary disability benefits commencing May 28, 1999. Thereafter, the claimant sought an order redetermining AWW for all temporary disability benefits due after May 27, 1999 to include his post-injury raises.
The ALJ was not persuaded it was manifestly unfair to compensate the claimant's 1999 temporary disability based upon the lower wage earned at the time of the injury. In support of this conclusion, the ALJ rejected the claimant's argument that he would not have sustained multiple periods of temporary disability had the respondents timely provided medical treatment for the industrial injury. Instead, the ALJ determined the claimant was equally responsible for the delay in treatment.
Furthermore, the ALJ determined that increasing the claimant's AWW would result in "substantial unfairness" to the respondents because the respondents fully paid all admitted liability for permanent partial disability benefits, and the issue of permanent disability is not closed. The ALJ reasoned there was nothing to prevent the claimant from requesting that prior temporary disability benefits and all permanent partial disability benefits be paid at the higher AWW. Finally, the ALJ determined that recalculating the claimant's AWW would "essentially punish" the respondents for giving the claimant wage increases and continuing employment.
On review, the claimant contends the ALJ abused her discretion in finding that this case is factually distinguishable from Campbell v. IBM Corp., supra, and Ebersbach v. United Food Commercial Workers' Local No. 7, W.C. No. 4-240-475 (May 7, 1997), where the claimant's AWW weekly for temporary disability benefits was increased to include post-injury raises. We agree with this argument.
Because the ALJ's authority to redetermine AWW is discretionary, we may not interfere with the ALJ's calculation of the AWW wage unless an abuse is shown. Coates, Reid Waldron v. Vigil, 856 P.d. 850 (Colo. 1993). An abuse is shown where the order is not in accordance with applicable law, or not supported by substantial evidence in the record. Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985) ; Coates Reid Waldron v. Vigil, supra.
Contrary to the ALJ's determination we find no significant legal distinction between the facts of this claim and the facts in Campbell and Ebersbach. Campbell involved a claimant who suffered three periods of temporary disability. The claimant's AWW was greater at the time of each subsequent period of disability. The court concluded that, under these circumstances, it would be manifestly unjust to compensate the claimant's temporary "disability benefits in 1986 and 1989 on her substantially lower earnings in 1979." Accordingly, the court held that to "compensate fairly for the claimant's actual loss of income," the claimant's AWW should be determined based on the claimant's earnings at the time of each period of disability.
Relying on Campbell, the Panel in Ebersbach upheld an a redetermination of AWW to include a post-injury raise guaranteed by a union labor contract. The Panel concluded that the claimant's right to receive the increase was sufficiently definite that it would be manifestly unjust to deprive her of the benefit of the increase when calculating her AWW for temporary disability benefits.
We do not disagree with the ALJ's observation that the redetermination of AWW to include a post-injury wage increase is inconsistent with determining AWW based on the "remuneration which the injured or deceased employee was receiving at the time of the injury," as provided by § 8-42-102(2), C.R.S. 2000. As noted by the ALJ, it arguably also undermines the "predictability and certainty" of the respondents' liability. ( See Conclusions of Law 6). However, these consequences are expressly contemplated by Campbell, and Campbell represents the current state of the law on the issue.
Moreover, the purpose of the ALJ's determination of AWW (and resulting temporary disability rate) is to compensate the claimant for the actual loss of wages. Irrespective of the ALJ's finding that the claimant's periodic raises bore "no causal relationship" to the industrial injury, the claimant is not compensated for his "actual loss of wages" if the 1999 award of temporary disability benefits is based on his 1994 AWW.
Further, we disagree that the redetermination of the claimant's average weekly wage "essentially punishes" the respondent-employer for giving the claimant the raises and ongoing employment. Nothing in the record suggests that the claimant's continued employment or his wage increases were charitable gestures by the respondent-employer. To the contrary, the undisputed evidence indicates that the wage increases were paid in accordance with a union labor agreement that applied to all employees.
Insofar as the ALJ's order may be read as finding that the claimant is responsible for failing to prosecute his request for a redetermination of AWW, we perceive no prejudice to the respondents. In fact, the claimant objected to the March 1997 Final Admission, and thus, the respondents were on notice of the claimant's assertion that he was entitled to additional benefits.
Here, it is undisputed the claimant's rate of pay increased more than $3 per hour between his original period of temporary disability and the 1999 temporary disability. Under these circumstances, Campbell compels a conclusion that the payment of temporary disability benefits based on the claimant's lower wage at the time of the injury would significantly understate his actual loss of wages in 1999.
In view of our conclusions, we necessarily disagree with the ALJ's determination that this case is factually distinguishable from Campbell and Ebersbach insofar as these respondents fully paid all admitted liability for permanent partial disability benefits. Whatever the merits of the respondents' arguments that requiring the payment of permanent partial disability benefits at a higher AWW would be unfair, those arguments do not resolve the issue presented here, which is the calculation of AWW for the claimant's 1999 temporary disability benefits.
In any case, it has been held that the ALJ's discretionary authority under § 8-42-102(2), permits ALJs to redetermine the AWW for purposes of calculating a permanent medical impairment award under the statutory provision currently codified at § 8-42- 107(8)(d), C.R.S. 2000. Broadmoor Hotel v. Industrial Claim Appeals Office, 939 P.2d 460 (Colo.App. 1996); Moses v. Digital Equipment Corporation, W.C. No. 4-336-048 (April 5, 1999). In Broadmoor, the court upheld an ALJ's order increasing the claimant's AWW, and hence the award of permanent disability benefits as calculated under § 8-42-107(8)(d), to include wages from concurrent employment. See also Berkenkotter v. Public Service Company of Colorado, W.C. No. 3-644-433, April 18, 1996 (not selected for publication) (ALJ has discretion to increase AWW for permanent total disability benefits to include post-injury wage increases); cf. Kenney v. Bi Incorporated, W.C. No. 4-276-317 (October 9, 1998) , aff'd., Kenney v. Vigilant Insurance/Chubb Group of Insurance Companies (Colo.App. No. 98CA2072, May 27, 1999) (not selected for publication) (ALJ may increase AWW for medical impairment benefits to include the COBRA replacement cost for health insurance).
Furthermore, in Moses v. Digital Equipment Corporation, W.C. No. 4-336-048 (April 5, 1999) we relied on Campbell and Broadmoor to uphold an ALJ's redetermination of AWW for permanent medical impairment based on the claimant's higher earnings at the time of maximum medical improvement. We concluded the record supported an inference that the claimant's permanent partial disability award would significantly understate the impact of the industrial injury on the claimant's future loss of earning capacity if it was based upon the claimant's lower earnings at the time of the injury instead of her higher wage in 1997. We reasoned that the actual loss of earnings is a relevant concept to the calculation of medical impairment benefits under § 8-42-107(8)(d) insofar as the statutory formula incorporates AWW as a factor in the equation. We adhere to our conclusions in Moses.
Even if the claimant had requested additional permanent partial benefits based on the redetermination of his AWW, the situation would not be appreciably different from circumstances where the insurer paid permanent partial disability benefits based upon a treating physician's medical impairment rating, and an ALJ subsequently ordered the insurer to pay additional permanent disability benefits based upon a higher rating resulting from a DIME. It follows that we fail to perceive how the mere potential for a subsequent order requiring the respondents to pay additional permanent partial disability benefits is "grossly unfair" to the respondents.
We recognize a potential unfairness if an insurer is required retroactively to pay disability benefits based on wages that are higher than the claimant earned at the time such disability benefits were accrued. However, the claimant did not request any increase in the temporary and permanent disability benefits which accrued prior to May 28, 1999, therefore, that potential unfairness does not alter our conclusions concerning the claimant's entitlement a redetermination of the AWW for temporary disability benefits commencing May 28, 1999. Therefore, we conclude the ALJ abused her discretion in denying the claimant's request for a redetermination of AWW and we remand the matter for a new order on the issue.
In view of our disposition we do not address the claimant's remaining arguments.
IT IS THEREFORE ORDERED that the ALJ's order dated January 11, 2000, is set aside and the matter is remanded to the ALJ for the entry of a new order which grants the claimant's request for a redetermination of AWW for temporary disability benefits due and payable after May 27, 1999.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
Copies of this decision were mailed September 28, 2000 to the following parties:
Edward Romero, 5550 S. Lowell Blvd., Littleton, CO 80123
Cub Foods, 1985 Sheridan Blvd., Edgewater, CO 80214-1325
Liberty Mutual Fire Insurance Co., Leona Zuffoletto, 13111 E. Briarwood Ave., Ste. 100, Englewood, CO 80112
Shelly P. Dodge, Esq., 1763 Franklin St., Denver, CO 80218-1124 (For Claimant)
Gregory K. Chambers, Esq., 3900 E. Mexico Ave., Ste. 1300, Denver, CO 80210 (For Respondents)
BY: A. Pendroy