Opinion
W.C. Nos. 4-301-502, 4-363-232
August 9, 2001
FINAL ORDER
Respondents Express Personnel (Express) and Pinnacol Assurance (collectively Pinnacol respondents) seek review of an order of Administrative Law Judge Mattoon (ALJ) which ordered them to reimburse the Insurance Company of the State of Pennsylvania (ICSP) for temporary disability benefits which ICSP paid under a general admission of liability. The Pinnacol respondents contend ICSP was precluded from seeking reimbursement because it filed a final admission of liability and because admissions may not be retroactively withdrawn. We affirm.
On July 8, 1996, the claimant sustained an injury to her left hand and index finger while employed by Express. At the time of this injury, Express was insured by Pinnacol. On June 17, 1997, Pinnacol filed a final admission of liability for temporary total disability benefits and permanent partial disability benefits commencing May 16, 1997.
On August 18, 1997, after the claimant returned to work for Express, the claimant's left wrist "popped" while she was cleaning cylinders. At the time of this incident, Express was insured by ICSP. ICSP filed a general admission of liability for this injury in December 1997, and a final admission of liability on January 1998. The final admission of liability admitted for temporary total disability from December 6, 1997 through December 15, 1997, and permanent partial disability benefits from December 16, 1997 through July 22, 1998.
The claimant's left wrist condition deteriorated over time and, on January 8, 1999, the claimant was placed on restrictions which Express could not accommodate. Surgery was performed in March 1999, and the claimant remains temporarily totally disabled. On June 7, 1999, ICSP filed a general admission of liability admitting for temporary total disability benefits commencing January 8, 1999.
However, in September and October 1999, one of the claimant's treating physician's opined the claimant's wrist condition (mid carpal instability) was attributable to the July 1996 injury, and the August 18, 1997 "episode" did not constitute a "substantial permanent worsening of her original wrist problem." Thus, in December 1999, ICSP filed a petition to modify, terminate, or suspend compensation on grounds the claimant's disability was attributable to the 1996 injury for which Pinnacol is liable.
The ALJ found, on conflicting evidence, the claimant did not sustain a "new injury" in August 1997. Instead, the ALJ determined the 1997 incident was a "natural and inevitable result" of the 1996 injury. However, the ALJ concluded ICSP was not entitled to withdraw its final admission of liability, and was not entitled to reimbursement from Pinnacol for any benefits paid under that admission. Nevertheless, the ALJ concluded ICSP should be allowed to withdraw the general admission of liability filed on June 7, 1997, and Pinnacol should reimburse ICSP for temporary total disability benefits (commencing January 8, 1999) paid pursuant to the admission.
On review, Pinnacol contends the ALJ erred in ordering it to reimburse ICSP for temporary total disability which ICSP paid commencing January 8, 1999. Pinnacol argues the ALJ's order had the effect of improperly permitting ICSP to "withdraw" its final admission of liability. Further, Pinnacol argues there is no authority for "retroactive withdrawal" of a general admission of liability. Under the circumstances here, we find no error.
Section 8-43-203(2)(b)(II), C.R.S. 2000, provides that when a final admission of liability is filed, the claim is "closed as to the issues admitted" if the claimant does not contest the final admission. Section 8-43-203(2)(d), C.R.S. 2000 provides that when a claim is "closed pursuant to this subsection (2), the issues closed may only be reopened pursuant to section 8-43-303."
In Safeway, Inc., v. Industrial Claim Appeals Office, 968 P.2d 162 (Colo.App. 1998), the court applied these statutes and concluded that where an employer filed a final admission of liability for permanent total disability benefits, but did not reserve the issue of Subsequent Injury Fund (SIF) liability, the employer was foreclosed from seeking SIF liability. Similarly, in Seibold v. T.H., Inc., W.C. No. 4-250-049 (August 19, 1999), we held that an insurer which filed a final admission of liability for permanent partial disability benefits and medical benefits was precluded from subsequently raising the issue of the second insurer's liability "under the last injurious exposure rule." Relying principally on the Safeway decision, we concluded the first insurer's filing of the final admission of liability constituted an admission that it was "solely responsible for the claimant's temporary and permanent disability benefits." Seibold also distinguished a series of decisions in which we have held that the prohibition against retroactive withdrawal of admissions of liability does not apply where the issue involves reimbursement of one insurer by another. We noted that those decisions were "based upon the withdraw of a `general' admission of liability, and it is the final admission of liability which is dispositive of the insurer's liability."
Here, unlike the situations in Safeway and Seibold, ICSP filed a final admission of liability for permanent disability benefits, and then filed a subsequent general admission of liability for temporary total disability benefits commencing January 8, 1999. Thus, the June 1999 general admission effectively reopened the claim on a voluntary basis and admitted liability for benefits not addressed in the final admission of liability. In these circumstances the ALJ's order did not permit withdrawal of the final admission of liability. To the contrary, the "issue" of the claimant's entitlement to temporary disability benefits after the final admission of liability was simply not addressed by the final admission.
We also note that in order to reopen the claim for the 1997 injury and receive additional temporary disability benefits the claimant would have been required to prove, but for the June 1999 general admission, that the 1997 injury was the cause of his worsened condition and consequent disability. Chavez v. Industrial Commission, 714 P.2d 1328 (Colo.App. 1985). Here, the ALJ's order determined as a matter of fact that the claimant's disability commencing January 1999 was not causally related to the incident of August 1997, but was attributable to the injury of July 1996. Again, the issue of the "cause" of the claimant's disability commencing January 1999 was not addressed in ICSP's January 1998 final admission of liability. Thus, the ALJ's order did not run afoul of § 8-43-203(2)(d), Safeway, Inc. v. Industrial Claim Appeals Office, supra, or Siebold v. T.H. Inc., supra.
The Pinnacol respondents also argue that the ALJ erroneously ordered them to reimburse ICSP because there is no authority permitting "retroactive relief" from admissions of liability. As authority for this position, the Pinnacol respondents cite § 8-43-203(2)(d), Kraus v. Artcraft Sign Co., 710 P.2d 480 (Colo. 1985), and HLJ Management Group, Inc. v. Kim, 804 P.2d 250 (Colo.App. 1990). Adhering to our prior decision, we reject this argument.
The pertinent portion of § 8-43-203(2)(d) states that "if any liability is admitted, payments shall continue according to admitted liability." As the Pinnacol respondents recognize, we have previously held that cases such as Kraus and HLJ, which note that § 8-43-203(2)(d) prohibits retroactive withdrawal of a general admission of liability, do not control where the issue involves reimbursement of one insurer by another. Eg. Seibold v. T.H., Inc, supra; Alexander v. La Plata Electric Association, Inc., W.C. No. 3-034-667 (July 17, 1991). The rationale for distinguishing Kraus and HLJ in such situations was set forth in Alexander v. La Plata Electric Association, Inc., as follows:
In our view, the court's holding in Kim [ HLJ] and Vargo that admissions of liability may not be withdrawn retroactively is not applicable here. The issue in Kim and Vargo was whether an employer or its insurer could be permitted to withdraw retroactively its admission that the injured worker was entitled to benefits. See also Kraus v. Artcraft Sign Co. [citation omitted]. Here, the issue is which of two insurance carriers is liable for benefits payable to the claimant as a result of his disabling back condition in 1988. The court held that the underlying purpose of the statute in requiring the continued payment of benefits pursuant to an admission is to provide for the prompt payment of benefits to injured workers, and this purpose would not be served by holding that an insurer which is actually liable for the benefits cannot be required to reimburse an insurer which paid the benefits erroneously.
Thus, we have held that § 8-43-203(2)(d) must be construed and applied in accordance with the underlying statutory objectives discussed in the case law. The Court of Appeals recently reached a similar conclusion in Arenas v. Industrial Claim Appeals Office, 8 P.3d 558 (Colo.App. 2000), where the court retroactively applied the intoxication penalty regardless of the fact the respondents filed a general admission of liability for temporary disability benefits without claiming the penalty. In Arenas, the court expressly recognized the holding in HLJ, but concluded the deterrent effect of the intoxication penalty provided a sufficiently compelling reason to create "another exception to the general rule that the withdraw of an admission of liability must be granted prospectively." Id. at 562.
The Pinnacol respondents's arguments notwithstanding, we decline to depart from our prior rulings which permit an insurer retroactively to withdraw an admission of liability where the only effect of the withdrawal is to place liability on the insurer which is otherwise liable under the Act. This result does not interfere with the claimant's right to receive benefits in a timely fashion nor permit an insurer unilaterally to terminate benefits. This result also serves to insure just and equitable treatment of insurers where to do so does not interfere with the claimant's rights under the Act.
IT IS THEREFORE ORDERED that the ALJ's order dated August 17, 2000, 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, 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. 2000. 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 August 9, 2001 to the following parties:
Natalie Stevens, 2801 High St., Pueblo, CO 81003
Express Personnel Services, 1615 Bonforte Blvd., Pueblo, CO 81001-1602
Insurance Company of the State of Pennsylvania, AIG Claim Services, P. O. Box 32130, Phoenix, AZ 85064
Gallagher Bassett Services, Inc., P. O. Box 4068, Englewood, CO 80155-4068
Curt Kriksciun, Esq., Pinnacol Assurance — Interagency Mail (For Express Personnel Services)
William C. Jolliffe, Esq., 1401 Court St., Pueblo, CO 81003 (For Claimant)
James R. Clifton, Esq., and Harvey D. Flewelling, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Express Personnel Services and Insurance Company of the State of Pennsylvania)
Matthew C. Azer, Esq., 600 17th St., #1600N, Denver, CO 80202
BY: A. Pendroy