Summary
In Salazar v. Nelson Pipeline Constructors, W.C. No 4-213-910, 1998 WL 792539 at *3-5 (Oct. 29, 1998), aff'd in part and rev'd in part sub nom. Salazar v. Indus. Claim Appeals Office, 10 P.3d 666 (Colo.App. 2000), the Panel held that a statutory construction that permits annual increases in benefits consistent with the unpredictable rise in the state AWW would create uncertainty for the award of future benefits that is inconsistent with the Act's goals of encouraging a climate of certainty conducive to settlements and the setting of premiums.
Summary of this case from Simpson v. Industrial Claim Appeals OfficeOpinion
W.C. No. 4-213-910
October 29, 1998
FINAL ORDER
The respondents seek review of an order of Chief Administrative Law Judge Felter (ALJ Felter) which denied their petition to reopen on grounds of error or mistake. We set aside the order and remand for the entry of a new order.
This appeal concerns the application of § 8-42-111, C.R.S. 1998. Subsection 8-42-111(4), C.R.S. 1998, states that:
"For injuries occurring on or after July 1, 1991, and before July 1, 1994, the average weekly wage of injured employees used for computing compensation paid for awards pursuant to subsection (1) of this section shall be increased by two percent per year effective July 1 of each year, and such increased compensation shall be payable for the subsequent twelve months."
Subsection 8-42-111(1), C.R.S. 1998, provides as follows:
"In cases of permanent total disability, the award shall be sixty-six and two-thirds percent of the average weekly wages of the injured employee and shall continue until death of such person so totally disabled but not in excess of the weekly maximum benefit specified in this article for injuries causing temporary total disability." (Emphasis added)
Temporary disability benefits are calculated under § 8-42-105(1), C.R.S. 1997, which provides that:
"In case of temporary total disability of more than three regular working days' duration, the employee shall receive sixty-six and two-thirds percent of said employee's average weekly wages so long as such disability is total, not to exceed a maximum of ninety-one percent of the state average weekly wage per week." (Emphasis added).
The claimant sustained an industrial injury which is subject to the provisions of § 8-42-111(4). On October 23, 1996, Administrative Law Judge Rumler (ALJ Rumler) entered an order which required the respondents to pay permanent total disability benefits. It is undisputed the claimant's average weekly wage produced a permanent total disability rate of $432.25 per week, the maximum temporary total disability rate provided by § 8-42-105(1) at the time of the injury. On October 24, 1996, ALJ Rumler issued a Supplemental Order which granted a Social Security offset and also states that:
"The claimant is entitled to permanent and total disability benefits at the rate of $432.25 per week. This amount shall be increased on July 1, 1996 by 2% pursuant to the provisions of § 8-42-111(4). The claimant shall receive an additional 2% per year increase effective July 1 each year."
By interlineation, the Supplemental Order further states that "Respondents' counsel agreed by telephone that he did not object to the entry of this Supplemental Order." No appeal was taken from the Supplemental Order.
Thereafter, a dispute arose concerning whether the Supplemental Order required the respondents to increase the claimant's average weekly wage or permanent total disability rate by the 2 percent cost of living adjustment (COLA) provided in § 8-42-111(4). The respondents took the position that ALJ Rumler erred in ordering them to increase the claimant's permanent total disability rate beyond the maximum rate provided by § 8-42-105(1), and therefore, petitioned to reopen the Supplemental Order.
ALJ Felter determined that ALJ Rumler correctly ordered the respondents to increase the claimant's permanent total disability rate by 2 percent each year, subject to the maximum temporary disability rate in effect at the time of the increase. Therefore, ALJ Felter determined the respondents failed to prove an error or mistake of law sufficient to reopen the claim.
On appeal, the respondents contend ALJ Felter erroneously denied their petition to reopen. We disagree with ALJ Felter's interpretation of the applicable law. Therefore, we remand the matter for the entry of a new order concerning whether the respondents established a mistake of law which warrants a reopening.
Subsequent to ALJ Felter's order, we issued Nelson v. Payless Drugstores, Inc., W.C. No. 4-190-449 (December 30, 1997) and Thompson v. Pool Co., W.C. No. 4-238-099 (April 13, 1998), where we concluded that the 2 percent COLA provided by § 8-42-111(4) is subject to the overall benefit ceiling in § 8-42-105(1). The claimant contends that Nelson and Thompson were wrongfully decided. In particular, the claimant notes that § 8-42-111(4) requires the respondents to pay the "increased compensation" resulting from the 2 percent COLA. The claimant contends that if the General Assembly had intended the 2 percent COLA to increase only the claimant's average weekly wage it would not have required that the "increased compensation" be paid to the claimant. Furthermore, the claimant contends that our construction of § 8-42-111(4) does not result in any "increased compensation" to a claimant who is receiving permanent total disability benefits at the maximum rate provided by § 8-42-105(1), and therefore, the provisions of § 8-42-111(4) are rendered meaningless to these claimants.
The claimant's arguments do not persuade us to depart from our conclusions in Nelson and Thompson. The following language from Nelson is pertinent.
"In interpreting § 8-42-111(4), we must seek to effect the legislative intent. In so doing, we apply the rule that words and phrases in statutes should be given their plain and ordinary meanings. If the statutory language is clear and unambiguous, we need not resort to other rules of statutory construction. Snyder Oil Co. v. Embree, 862 P.2d 259 (Colo. 1993). Further, a comprehensive statutory scheme should be construed in a manner which gives consistent, harmonious, and sensible effect to all parts of the statute. Henderson v. RSI, Inc., 824 P.2d 91 (Colo.App. 1991).
Here, the plain language of § 8-42-111(4) provides that the two percent per year `increase' is applied to the claimant's `average weekly wage,' not the total compensation itself. It is true that an increase in the average weekly wage may yield a higher compensation rate. However, subsection (4) expressly states that compensation is computed `pursuant' to § 8-42-111(1), which provides that the `maximum' benefit payment for permanent total disability benefits is subject to the same limitation as the maximum benefit payable for temporary total disability under § 8-42-105(1).
If the General Assembly had intended for the COLA to apply regardless of the benefit ceiling, it would have stated that the `compensation rate of injured employees' shall be increased by `two percent per year effective July 1 of each year.' However, the General Assembly did not do so, and we decline to read such a provision into the statute. See Kraus v. Artcraft Sign Co., 710 P.2d 480 (Colo. 1985)."
Furthermore, the predecessor statute provided for the payment of permanent total disability benefits equal to sixty-six and two-thirds percent of the claimant's average weekly wage "not in excess of the weekly maximum benefits" for temporary total disability. Section 8-42-111(1), C.R.S. (1990 Cum. Supp.). Had the General Assembly intended all claimants to receive a 2 percent increase in benefits without regard to the maximum benefit limitation in § 8-42-105(1), it would have repealed the phrase beginning "not in excess of" in § 8-42-111(1), at the same time it enacted § 8-42-111(4). See United States Fidelity and Guaranty, Inc. v. Kourlis, 868 P.2d 1158 (Colo.App. 1994). The legislature did repeal this limitation when it created § 8-42-111(4). See 1991 Colo. Sess. Laws, ch. 219, at 1313. Thus, we must presume that the legislature intended to retain the overall cap on permanent total disability benefits. Consequently, we reject the claimant's contention that § 8-42-111(4) increases the maximum rate of permanent total disability benefits established by § 8-42-111(1). Rather, § 8-42-111(4) provides that overall awards are computed "pursuant to subsection (1)."
Section 8-42-105(1) provides that a claimant's temporary disability rate shall not "exceed a maximum of ninety-one percent of the state average weekly wage per week." The term "exceed" is unambiguous. Webster's Seventh New Collegiate Dictionary (1963) defines the word "exceed" to mean "to be greater than" or "to go beyond a limit." Therefore, § 8-42-105 limits the claimant to temporary disability benefits to a rate not greater than ninety-one percent of the state average weekly wage.
Section 8-47-106 C.R.S. 1998, provides that the Director of the Division of Workers' Compensation shall annually establish the "state average weekly wage" which shall be applicable to "the ensuing twelve months beginning July 1." The statute is arguably ambiguous because it does not expressly indicate whether the "state average weekly wage" applies to benefits which are payable during the "ensuing twelve months" or injuries which occur during the "ensuing twelve months."
However, in Pubanz v. State of Colorado, W.C. No. 3-070-168, (September 9, 1997), we held that in the context of § 8-42-105(1), the term "state average weekly wage" refers to the state average weekly wage at the time of the claimant's injury. Therefore, we rejected the argument that a claimant's temporary disability rate may exceed ninety-one percent of the state average weekly wage at the time of the injury.
In reaching our conclusion we relied upon Bellendir v. Kezer, 648 P.2d 645, 647 (Colo. 1982). In Bellendir, the claimant challenged the constitutionality of the Colorado Workers' Compensation Act (Act) insofar as it failed to provide an escalation of permanent total disability benefits to keep pace with inflation. The facts in that case involved a claimant who was awarded permanent total disability benefits at a rate of $40.65 per week in connection with a 1963 injury. Former § 81-12-2, C.R.S. 1963, the law in effect on the claimant's date of injury, entitled claimants to permanent total disability benefits equal to sixty-six and two-thirds percent of the average weekly wage of the injured employee, not to exceed a statutorily prescribed maximum of $43.75 per week. The statutory maximum thereafter increased with changes in the state average weekly wage. By June 1980 the maximum permanent total disability rate had increased to $244.65 per week. However, the claimant continued to receive benefits at the rate of $40.65 per week under former § 81-12-2.
In rejecting the claimant's constitutional challenge to the permanent total disability statute, the Colorado Supreme court expressly acknowledged the claimant's argument that the payment of lifetime benefits based upon a formula in effect on the date of injury may be unfair, and that "a more just system" could be formulated. However, the court concluded that:
"[T]o effectuate the Act's basic goals of speedy and reliable compensation of injured workers, the General Assembly has enacted a formula which calculates awards to an injured worker based on loss of earning power at the time of injury. [citation omitted] The formula allows all parties involved to determine with some degree of certainty the amount of compensation to which the worker is entitled. Not only does this certainty aid the parties in reaching prompt agreement on compensation issues, it also aids the state insurance compensation fund and other insurers in setting employer premiums." (Emphasis in original)
648 P.2d at 647. Therefore, the court concluded that the statutory formula for awarding permanent total disability benefits was rationally related to the furtherance of a legitimate state purpose.
In Pubanz we reasoned that if the state average weekly wage established on July 1 of each year determines the maximum rate for benefits which become due and payable during the following twelve months, a claimant's temporary disability rate would be subject to change every year. This would lead to uncertainty with regard to the amount of compensation the claimant may receive, and the insurer's liability for disability benefits. Thus, this construction is inconsistent with the basic goals of the Act.
Furthermore, the rights and liabilities of parties in a workers' compensation claim are governed by the substantive law in effect on the day of injury. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). Similarly, "average weekly wage" is the money rate at which services rendered are recompensed under the contract of hire "at the time of the injury." Section 8-40-201(19)(a), C.R.S. 1998. It follows that for purposes of determining a claimant's maximum permanent total disability rate, the state average weekly wage at the time of the injury must control. Consequently, the state average weekly wage established on July 1 of the year applies to all injuries which occur during the"ensuing twelve months."
The principles discussed in Bellendir are no less true for permanent total disability benefits. In particular, if a claimant's permanent total disability rate is limited only by the state average weekly wage established on July 1 of each year, the claimant's rate would be subject to be change every year. Moreover, unlike the 2 percent COLA, the amount of the change could not be predicted. This would lead to uncertainty with regard to the amount of compensation the claimant may receive, and the insurer's liability for permanent total disability benefits. In turn, the uncertainty may impede the parties ability to reach a prompt agreement on compensation issues, and the insurers' ability to establish premiums. Because this construction is not consistent with the basic goals of the Act, we decline to follow it.
Here, there is no dispute that the claimant's average weekly wage without the 2 percent COLA yields a temporary disability rate in excess of ninety-one percent of the state average weekly wage. Therefore, there was a mistake of law insofar as the Supplemental Order requires the respondents to pay any permanent total disability benefits in excess of $432.25.
However, the determination of whether the mistake of law justifies reopening is a matter within the discretion of the ALJ. Travelers Insurance Co. v. Industrial Commission, 646 P.2d 399, 400 (Colo.App. 1981) Klosterman v. Industrial Commission, 694 P.2d 873 (Colo.App. 1984). In resolving this question the ALJ may consider whether the error could have been avoided by the exercise appellate review. See Industrial Commission v. Cutshall, 164 Colo. 240, 433 P.2d 765 (1967); Klosterman v. Industrial Commission, supra. However, a parties' failure to pursue administrative and judicial review does not preclude the ALJ from finding that the overall circumstances warrant reopening. See Ward v. Azotea Contractors, 748 P.2d 338 (Colo. 1987); Standard Metals Corp. v. Gallegos, 781 P.2d 142 (Colo.App. 1989).
Because ALJ Felter determined that there was no mistake of law, he did not make any specific findings concerning whether the overall circumstances warranted a reopening. Therefore, we remand the matter to ALJ Felter for entry of a new order which resolves this issue.
IT IS THEREFORE ORDERED that the ALJ's order dated November 24, 1997, is set aside and the matter is remanded to ALJ Felter for the entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
Copies of this decision were mailed October 29, 1998 to the following parties:
Frank J. Salazar, 7375 West 84th Way, #2017, Arvada, CO 80030
Nelson Pipeline Constructors, PO Box 440638, Aurora, CO 80044
Liberty Mutual Inc. Co., Attn: Vicki Sapp, 13111 E. Briarwood Ave., Suite 100, Englewood, CO 80112
Douglas R. Phillips, Esq., 155 S. Madison, Suite 330, Denver, CO 80209 (For the Claimant)
Scott M. Busser, Esq., Zarlengo, Mott, Zarlengo Winbourn, 300 S. Jackson St., Suite 570, Denver, CO 80209 (For the Respondents)
BY: _______________________