Opinion
W.C. No. 4-403-661
December 1, 2003
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Mattoon (ALJ Mattoon) which denied temporary total disability (TTD) benefits from June 9, 2000 to August 1, 2000, denied a claim for penalties based on improper termination of TTD benefits, and denied a claim for penalties based on late payment of TTD benefits. We affirm the order with respect to the denial of TTD benefits. We set the order aside insofar as it denied penalties for improper termination of TTD benefits and late payment of TTD benefits.
This matter was before us previously, and we issued a Final Order dated September 1, 2001. In that order we set aside an order of ALJ Wheelock insofar as it denied penalties for an alleged improper termination of TTD benefits, and remanded with directions to determine whether the respondents "had a rational basis in law or fact for terminating claimant's temporary disability benefits on June 11 [1999] pursuant to Rule IX (C)(1)(b)." We further upheld an award of TTD benefits from June 15, 1999 through May 24, 2000, but remanded with directions to determine whether the claimant's right to TTD benefits was terminated after May 24 because the claimant was released to regular employment within the meaning of § 8-42-105(3)(c), C.R.S. 2003. The statement of facts contained in our September 1 order is incorporated herein as if fully set forth.
On June 20, 2001, the Court of Appeals issued an opinion affirming our order with respect to TTD benefits and dismissing the respondents' appeal on the penalty issue because our order was not final for purposes of review. On June 26, 2002, the respondents issued a Final Admission of Liability (FAL) admitting for medical benefits, TTD benefits and whole person medical impairment benefits. The claimant did not object to the FAL or request a hearing within 30 days. However, on August 22, 2002, the claimant filed an application for hearing concerning the issues on "remand from the Court of Appeals" and penalties for late payment of TTD benefits.
The matter proceeded to hearing before ALJ Mattoon on March 21, 2003. In an order dated April 28, 2003, ALJ Mattoon denied penalties for improper termination of TTD benefits in violation of Rule IX. In this regard, the ALJ ruled that Dr. Weinstein's M-3 dated May 24, 2000, which was attached to the June 8, 2000 FAL, constituted a release to regular employment within the meaning of Rule IX (C)(1)(b), and the respondents had a "rational basis in law and fact to terminate TTD benefits on June 11, 1999."
ALJ Mattoon also awarded TTD benefits from May 24, 2000, through June 8, 2000, but denied TTD benefits between June 9, 2000 and August 1, 2000. In so doing, the ALJ ruled that Dr. Weinstein released the claimant to regular employment in June 1999, and this release became effective on June 9, 2000, when the claimant presumably received the June 8 admission together with the May 24 release.
Finally, ALJ Mattoon denied the claimant's request for penalties based on late payments of TTD benefits which allegedly occurred in April 2001 and October 2001. The ALJ first ruled that she lacked jurisdiction to consider these claims because the claimant failed to file a timely objection or request for hearing with respect to the June 2002 FAL. In any event, ALJ Mattoon ruled the claimant's testimony concerning the alleged late payments was not persuasive because the claimant lacked any independent memory of the "date the TTD checks were received or how long they were delayed, if at all, and insufficient persuasive documentary evidence of late payment was introduced into evidence."
I.
On review, the claimant first contends ALJ Mattoon erred in denying penalties based on improper termination of TTD benefits. As noted in ALJ Wheelock's order, and our Final Order, the claimant sought the imposition of penalties for violation of Rule of Procedure IX (C), 7 Code Colo. Reg. 1101-3 at 34. In our prior order, we ruled the June 8 FAL violated Rule IX (C)(1)(a) insofar as it was based on a determination the claimant reached maximum medical improvement (MMI), and we adhere to that view. This was true because the FAL took no position on permanent impairment. However, we remanded to determine whether the respondents could present a rational basis for arguing the termination was proper under Rule IX (C)(1)(b) because the FAL was accompanied by a "medical report from the authorized treating physician who has provided primary care, stating the claimant is able to return to regular employment."
As noted in our prior order, the claimant seeks penalties under § 8-43-304(1), C.R.S. 2003, for violation of a rule of procedure. Penalties under § 8-43-304(1) are not assessed on a strict liability standard. Rather, the ALJ must determine whether the insurer took steps a reasonable insurer would have taken to comply with the law. This determination depends on whether the insurer's action was predicated on a rational argument based in law or fact. However, the law does not require that the insurer know that its conduct is unreasonable. Generally, resolution of this issue of reasonableness of the insurer's conduct is an issue of fact for determination by the ALJ. See Jiminez v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 02CA2283, September 11, 2003); Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997).
Because the issue is factual in nature, we must uphold the ALJ's determination if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2003. This standard of review requires us to defer to the ALJ's resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the record. Cordova v. Industrial Claim Appeals Office, 55 P.3d 186 (Colo.App. 2002). However, the issue may become one of law if reasonable minds can draw but one conclusion from the undisputed facts. See Schrieber v. Brown Root, Inc., 888 P.2d 274 (Colo.App. 1993).
Citing Popke v. Industrial Claim Appeals Office, 944 P.2d 677 (Colo.App. 1997), the claimant argues the respondents have no rational basis for contending that termination of benefits on June 11, 1999, under Rule IX (C)(1)(b) was proper because Dr. Weinstein did not release the claimant to regular employment until May 2000, and his report was not "given" to the claimant until the FAL was mailed on June 8, 2000. The respondents assert the termination was in accordance with the statute and argue that the claimant's construction creates the potential for overpayments.
In Popke v. Industrial Claim Appeals Office, supra, the Court of Appeals construed § 8-42-105(3)(c) as requiring that an attending physician's release to regular employment be physically delivered to the claimant in order to effect a termination of benefits. The court recognized the term "gives" is ambiguous because it could mean physical delivery of the release or could mean the mere act of ascribing a release to the claimant. Resolving this ambiguity the court held the legislative intent of the statute is to require that the claimant receive actual notice of the attending physician's release so as to "place the claimant on notice that he must return to employment, contest the release, or suffer the loss of benefits." 944 P.2d at 682. Hence, the Popke court held that a report issued by the putative attending physician on December 14, 1995, stating the claimant was able to return to regular employment on November 6, 1995, was not effective to terminate TTD benefits until the release was mailed to the claimant with an FAL on December 21, 1995.
Rule IX (C)(1)(b), which the claimant alleges the respondents violated by filing the June 8 FAL, does not mention any requirement that the respondents show evidence of physical delivery of the release to the claimant in order to terminate benefits. However, in our opinion it would be irrational as a matter of law for an insurer to terminate TTD benefits when relying on the rule unless the insurer had a reasonable factual basis for believing that a release to regular employment had been delivered to the claimant.
Where, as here, the respondents have been ordered to pay TTD benefits, those benefits must continue until terminated in accordance with the statute or the applicable rules of procedure, and unilateral terminations are considered unlawful. Monfort Transportation v. Industrial Claim Appeals Office, 942 P.2d 1358 (Colo.App. 1997); Rule of Procedure IX (H)(1), 7 Code Colo. Reg. 1101-3 at 36 (temporary disability benefits may not be terminated except in accordance with Rule IX or after a hearing). This is true because once liability for TTD is determined by admission or order, the burden shifts to the respondents to show grounds for termination and the parties are entitled to have contested issues of fact determined by an ALJ. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 18 P.3d 790 (Colo.App. 2000); A. R. Concrete v. Lightner, 759 P.2d 831 (Colo.App. 1988). Rule of Procedure IX substantially "mirrors" the grounds for termination of TTD contained in § 8-42-105(3)(a)-(d), and the rule affords a basis for unilateral termination of benefits without a hearing in cases where the respondents can make a showing that it is highly probable they will meet their burden of proof if the validity of the termination is contested and tried on the merits. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, supra; Jyrkinen v. Peakload, Inc., W.C. No. 4-139-096 (June 15, 1994).
Here, the respondents have not produced any evidence or testimony that any release to regular employment was delivered to the claimant prior to June 8, 2000, when the FAL was mailed. Further, the respondents are presumed to know that in Popke v. Industrial Claim Appeals Office § 8-42-105(3)(c) was interpreted as requiring actual delivery of a release as a condition of termination. See Boeheim v. Industrial Claim Appeals Office, 23 P.3d 1247 (Colo.App. 2001) (parties are presumed to know the statutory scheme and law).
Thus, although Rule IX (C)(1)(b) does not expressly require that an insurer produce evidence of physical delivery of the release to the claimant when the FAL is filed, the insurer could not rationally contend it is justified in relying on the rule to terminate TTD unless it has some factual basis for believing that the release has been delivered to the claimant as required by the authorizing statute, § 8-42-105(3)(c). To hold otherwise would elevate the language of the rule over the language and judicial interpretation of the underlying statute, and permit the insurer to terminate TTD benefits when it has no factual basis for believing that it will prevail if the issue is litigated on the merits. In this regard, we note that rules are not the equivalent of statutes, and are void if inconsistent with the legislative intent expressed in the authorizing statute. Popke v. Industrial Claim Appeals Office, supra; Monfort Transportation v. Industrial Claim Appeals Office, supra. Thus, we understand Rule IX (C)(1)(b) as presuming that when an FAL is filed based on a release to regular employment the insurer has grounds to believe the release has been delivered to the claimant.
Applying these principles here, we conclude the record does not support the ALJ's conclusion that the respondents had a rational argument that they did not violate Rule IX (C)(1)(b) when they filed the June 8 FAL terminating the claimant's TTD benefits on June 11, 1999. The respondents presented no evidence that there was a delivery of a release to the claimant in June 1999, and such delivery appears to have been impossible since there is no evidence any release was issued until May 2000, and no evidence of delivery until June 8, 2000. While the respondents argue § 8-42-105(3)(c) permits termination of benefits based on the mere issuance of a release, that theory was explicitly rejected by the Popke court as being inconsistent with the legislative intent of the statute. Similarly, no "overpayment" of TTD is created since the right to terminate does not legally exist until physical delivery occurs.
It follows that ALJ Mattoon's order must be set aside insofar as she concluded the respondents did not violate Rule IX (C)(1)(b) when they filed the June 8 FAL purporting to terminate the claimant's TTD benefits effective June 11, 1999. The matter is remanded for entry of an order determining the period for which penalties are to be imposed, and the amount of penalties. We express no opinion concerning the correct period for penalties, nor the amount of penalties. The ALJ may allow the parties further arguments on these issues if she so chooses, but additional evidentiary proceedings are not authorized on these issues. Insofar as our prior order construed the claimant's argument as limiting the penalties to a brief period of time, the order was in error. Consequently, the ALJ may consider the claimant's argument that penalties should commence in June 1999 and continue until June 2002. However, our order does not bind the ALJ to accept this argument.
II.
The claimant next contends the ALJ erred in determining that he was released to regular employment by Dr. Weinstein and not entitled to TTD benefits after the release was delivered to him on June 8, 2002. The claimant argues that Dr. Weinstein's May 24, 2000, opinion that the claimant was released to regular employment is incredible because he had not seen the claimant for one year, and is inconsistent with Dr. Weinstein's report authored in June 1999. The claimant also asserts Dr. Weinstein was no longer an "attending physician" for purposes of § 8-42-105(3)(c) when he released the claimant. We find no error.
TTD benefits terminate when the attending physician gives the claimant a written release to regular employment. Section 8-42-105(3)(c). If the attending physician issues conflicting or ambiguous opinions concerning release, or there are conflicting opinions between multiple attending physicians, the ALJ may resolve the issue as a matter of fact. See Burns v. Robinson Dairy, Inc., 911 P.2d 661 (Colo.App. 1995).
Here, Dr. Weinstein's report of June 15, 1999 permits the inference that he was of the opinion the claimant was restricted from performing regular duties. However, in May 2000, Dr. Weinstein opined the claimant was able to return to regular employment. He reiterated this opinion on June 15, 2000, and added that in his opinion the claimant remained at MMI and had no impairment. Dr. Weinstein also stated he was unaware of any treatment after June 1999. The ALJ could plausibly conclude that Dr. Weinstein changed his opinion concerning the claimant's ability to perform regular employment, and believed the claimant was in fact able to work. The ALJ is free to resolve inconsistencies in the opinions of an expert, and we may not substitute our judgment for hers on this issue. Similarly, we may not interfere with her judgment to credit Dr. Weinstein's opinions over those of Dr. Jenks. Indeed, the evidence concerning restrictions imposed by Dr. Jenks comes from August 2000, and states "at this time" the claimant may not engage in repetitive use of the upper extremities and lift more that 20 pounds. Thus, it is not clear that Dr. Jenks ever opined the claimant was unable to work before August 2000. See Colorado Springs Motors, Ltd. v. Industrial Commission, 165 Colo. 504, 441 P.2d 21 (1968); Cordova v. Industrial Claim Appeals Office, supra.
The claimant also asserts that Dr. Weinstein was not an "attending physician" for purposes of § 8-42-105(3)(c) because he had not provided treatment to the claimant for one year when he released the claimant in May 2000. However, the ALJ implicitly determined Dr. Weinstein was an attending physician. In our opinion, that determination is supported by evidence that the claimant received little if any treatment from any physicians between June 1999 and May 2000. Indeed, Dr. Jenks stated in his report of August 1, 2000, that the claimant "has not had any diagnostic studies or treatment since I saw him a year ago." Thus, in our view, the ALJ plausibly inferred that Dr. Weinstein was as much an attending physician as anyone on May 24, 2000. Popke v. Industrial Claim Appeals Office, supra (an attending physician is an authorized treating physician who provides care to the claimant, and the identity of the attending physician is an issue of fact).
The claimant also argues ALJ Mattoon's resolution of the conflicts in the evidence demonstrates bias and prejudice. However, we see no basis for this contention. ALJ Mattoon is presumed to be competent and unbiased unless the contrary is shown. Wecker v. TBL Excavating, Inc., 908 P.2d 1186 (Colo.App. 1995). The mere fact that an ALJ resolves conflicting evidence against a party is insufficient to show bias or prejudice. See Kiewit Western, Inc. v. Patterson, 768 P.2d 1272 (Colo.App. 1989); In re Marriage of Johnson, 40 Colo. App. 250, 576 P.2d 188 (1977). We see no evidence of bias in this record.
III.
The claimant next contends ALJ Mattoon erred in determining she lacked jurisdiction to consider the penalty claims based on late payment of TTD benefits. The claimant further contends the ALJ erred in excluding records of payments, which the claimant obtained from the insurance adjustment firm, and are relevant to the penalty claims. We agree with these arguments.
Section 8-43-203(2)(b)(II), C.R.S. 2003, provides that unless a claimant objects to a FAL within 30 days and files an application for hearing on ripe issues, the "case will be automatically closed as to the issues admitted in the final admission." Section 8-42-203(2)(d), C.R.S. 2003, provides that "issues closed may only be reopened pursuant to section 8-43-303." The term "issues admitted" refers to issues on which the employer "affirmatively takes a position, either by agreeing to pay benefits or by denying liability to pay benefits." Dyrkopp v. Industrial Claim Appeals Office, 30 P.3d 821, 822 (Colo.App. 2001). However, if a FAL makes no reference whatsoever to an "issue," that issue is not closed by failure to object to the FAL or request a hearing on the issue. Dalco Industries, Inc. v. Garcia, 867 P.2d 156 (Colo.App. 1993) (issue of penalties for failure timely to admit or deny liability not foreclosed by failure to object to FAL where FAL was limited to issues of temporary and permanent disability).
Here, the June 26, 2002, FAL warns the claimant that a "final determination has been made as to the amount of benefits to be paid in this case" and that if he disagrees with the "amount or type of benefits" which the insurer has agreed to pay the claimant must object within 30 days. The FAL contains no references to any penalties with the exception of a "safety rule" violation.
As the claimant argues, there is a distinction between "benefits" and "penalties." The term "benefits" generally refers to substantive compensation for the injury itself including medical, TTD and permanent disability benefits. See Ortiz v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 02CA1723, July 17, 2003). In contrast, the term "penalties" refers to sanctions imposed for the failure to obey orders or adhere to procedural requirements. BCW Enterprises, Ltd. v. Industrial Claim Appeals Office, 964 P.2d 533 (Colo.App. 1997).
The FAL filed by the respondents in June 2002 cannot fairly be construed as either admitting or denying liability for the type of penalties which the claimant seeks here. Rather, the FAL addresses substantive benefits and a possible penalty for a safety rule violation. Under these circumstances, the FAL was insufficient to close the issue of penalties for late payment of TTD benefits, and the claimant's failure to object to the admission did not foreclose his right to litigate these issues. Dalco Industries, Inc. v. Garcia, supra.
The claimant next contends the ALJ erred in refusing to admit a document showing the dates of payments and the periods for which payments were made. The claimant obtained this document by calling the insurance adjusting firm and requesting it. The person who took the call consulted a manager and then stated the document would be mailed to the claimant. The respondents objected to this document on grounds of hearsay, and the ALJ excluded it stating there was an insufficient "foundation" concerning the reliability of the document. (Tr. Pp. 120-126).
We agree with the claimant that this document was admissible pursuant to C.R.E. 801(d)(2). This rule provides a statement is not hearsay if it is offered against a party opponent and is "the party's own statement in either an individual or representative capacity," or a "statement of which the party has manifested an adoption or belief in its truth," or a statement "by the party's agent or servant concerning a matter within the scope of the agency or employment."
Here, the claimant contacted an agent for the insurer concerning a matter within the scope of the agency. The claimant requested specific information which the agent indicated was within the insurer's possession and would be provided in writing. The agent for the insurer then provided the written statement concerning payment dates, and through the agent manifested an "adoption or belief" that the information was accurate. Hence, the documents provided to the claimant were admissible as an admission by a party opponent, and not hearsay. In these circumstances there was no need to lay additional foundation for admission of the documents. Cf. Westland Distributing, Inc. v. Rio Grande Motorway, Inc., 38 Colo. App. 292, 555 P.2d 990 (1976).
We cannot say exclusion of the documents was harmless error. The ALJ rejected the penalty claims because she found the claimant's testimony was not persuasive in the absence of documentary evidence. Exhibit 12 could be the type of evidence which would have persuaded the ALJ had it been admitted. Thus, the matter must be remanded for admission of Exhibit 12. The respondents should be afforded an opportunity to rebut the document and the claimant to challenge any rebuttal.
IT IS THEREFORE ORDERED ALJ Mattoon's order dated April 28, 2003, is set aside insofar as it denied the claim for penalties based on improper termination of TTD benefits and late payment of TTD benefits. On these issues the matter is remanded for further proceedings consistent with the views expressed herein.
IT IS FURTHER ORDERED that the ALJ Mattoon's order is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. DeanNOTICE
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, Colorado 80203, by filing a Petition to Review with the Court, within twenty (20) days after the date this Order was mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2002. 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 order were mailed to the parties at the addresses shown below on December 1, 2003 by A. Hurtado.
Carl Strombitski, 3020 Leoti Dr., Colorado Springs, CO 80922
Mand Made Pizza, Inc., 5735 Industrial Pl., Colorado Springs, CO 80916
Reliance National Indemnity, c/o Linda Scott, Cambridge Integrated Services, Inc., P. O. Box 52106, Phoenix, AZ 85072-2106
William A. Alexander, Jr., Esq., 3608 Galley Rd., Colorado Springs, CO 80909-4349 (For Claimant)
Gregory Daniels, Esq., 999 18th St., #1600, Denver, CO 80202 (For Respondents)