Opinion
W.C. No. 4-717-937.
June 11, 2008.
FINAL ORDER
The claimant seeks review of an order of the Director of the Division of Workers' Compensation (Director) dated February 5, 2008, that imposed statutory penalties on the respondents for their failure to mail a benefit check on a timely basis. We affirm.
No hearing was held in this matter. The record reflects that on January 10, 2008, the claimant wrote a letter to the Division complaining that she had not received a benefit check in a timely manner. The letter also asserted that the claimant had not received compensation payments for the mileage driven to medical appointments. An employee of the Division then wrote to the insurer advising it that the Division was construing the claimant's letter as a motion for penalties. The Division granted the insurer ten days within which to respond to the motion. The insurer filed a response to the claimant's motion, in which they asserted that they had no record of receiving a request for payment for mileage driven to medical appointments. The respondents also contested the claimant's assertion that she did not receive payment for a penalty that had been previously imposed by the Director. The respondents submitted documentary information corroborating their factual assertions regarding the payments for mileage and penalties, including a sworn affidavit executed by Lucy Arguello, the adjuster responsible for this claim. Regarding the claimant's contention that she had not timely received a benefit payment, the respondents conceded that a temporary total disability benefit check had been late, but that "as soon as the error was discovered the claims adjuster corrected the error." The respondents asserted that they had therefore "cured" any violation and they argued that no penalty should be imposed. The insurer also offered a factual explanation for the late payment, expressed regret for the error, and assured the Director that measures had been implemented "to make sure the conduct does not occur again."
The respondents concluded the response by noting that in it they were "addressing the complaints raised by Ms. Twiss. . . ." However, they also apparently requested either a meeting with the Director or a hearing in the event the Director was unpersuaded by the response. The respondents' statement is ambiguous and appears to contain typographical errors. It states: "Should the Director find that the penalty was not cured or have other concerns, response or request a hearing or an opportunity to meet with the director to address an understanding any additional concerns, respondents would seek to present evidence addressing any concerns not addressed here of cure and mitigating factors." Although this statement is unclear, it seems evident at least that the respondents were seeking either an evidentiary hearing or a "meeting" with the Director should he have any "concerns" about the matter following his review of the insurer's response to the Division's letter.
The Director then issued an order dated February 5, 2008, which is the order under review here, ordering the respondents to pay $200 per day in penalties, for a total penalty of $1400. The Director noted that because there was a factual dispute regarding the alleged request for reimbursement for mileage costs, the matter would not be considered in the order. However, the Director noted that the respondents conceded that a temporary total disability benefit check was late. He found that the check should have been issued on December 28, 2007, and that the respondents asserted that it was issued "as soon as the error was discovered" on January 4, 2008, and then negotiated on January 14, 2008. The Director also found that the respondents violated the Workers' Compensation Act and the regulations in issuing the late check and that they had recently been penalized in this same claim for similar conduct. The Director incorporated that previous order, which is a part of the present record, and reiterated that the respondents either knew or should have known that they failed to make timely payments. Therefore, the Director rejected the contention that the respondents' cure of the violation obviated the need for any penalty. The Director imposed penalties of $200 per day for a total of $1400 pursuant to § 8-43-304, C.R.S. 2007.
The respondents appealed the Director's order and argue that the Director erred by entering a penalty order in the nature of "summary judgment" when material issues of fact existed that should have been adjudicated after a hearing permitting the respondents to create a factual record regarding the amount of the penalty. In this regard, as we read the respondents' brief, their sole argument is that the Director erred in imposing a penalty without permitting them to produce evidence in "mitigation," presumably intended to persuade the Director that the amount of the penalty should be small. The respondents do not argue on appeal that no penalty was appropriate, nor do they argue that the Director erred in rejecting their defense that they "cured" the violation. However, we disagree with the respondents' argument that the Director was compelled under these circumstances to afford them a "meeting" or a hearing to permit them to present evidence and argument regarding mitigating factors.
As noted, the respondents apparently concede on appeal that they violated their duty to pay benefits in a timely manner and therefore that some penalty was appropriate pursuant to § 8-43-304. Section 8-43-304(1), C.R.S. 2007, allows the Director to impose penalties up to $500 per day against any employer or insurer who commits one of four types of violations. A person may be penalized "who violates any provision of articles 40 to 47 of [title 8], or does any act prohibited thereby, or fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, for which no penalty has been specifically provided, or fails, neglects, or refuses to obey any lawful order made by the director or panel or any judgment or decree made by any court. . . ." Moreover, a failure to comply with the Workers' Compensation Rules of Procedure is a failure to perform a "duty lawfully enjoined" within the meaning of § 8-43-304(1). See Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997); Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). The imposition of penalties under § 8-43-304(1) is a two step process. The Director must first determine whether the disputed conduct constituted a violation of the Act, of a duty lawfully enjoined, or of an order. If the Director finds such a violation, he may impose penalties if he also finds that the employer's actions were objectively unreasonable. City Market, Inc. v. Industrial Claim Appeals Office, 68 P.3d 601 (Colo.App. 2003). The amount of the penalty is discretionary up to a maximum of $500 per day for each offense.
First, we agree with the respondents that the appropriate legal standard applicable to review of the Director's order is that pertaining to summary judgment. Grants or denials of summary judgment are generally reviewed de novo. See AC. Excavating v. Yacht Club II Homeowners Association, 114 P.3d 862, 865 (Colo. 2005). However, in reviewing the Director's order, we may only correct, set aside, or remand the order on the grounds that the findings of fact are not sufficient to permit review, that conflicts in the evidence are not resolved, that the findings of fact are not supported by the evidence, that the findings of fact do not support the order, or that the order is not supported by applicable law. Section 8-43-301(8), C.R.S. 2007. Summary judgment is only appropriate where there is no genuine dispute regarding material facts and judgment may be rendered as a matter of law. See Goodwin v. Thieman, 74 P.3d 526 (Colo.App. 2003); Mt. Emmons Mining Co. v. Town of Crested Butte, 690 P.2d 231 (Colo. 1984).
We recognize, of course, that here the matter was not presented to the Director on a motion for summary judgment. Nonetheless, the Director is not required to hold an evidentiary hearing where there is no genuine issue of material fact, and judgment may be entered as a matter of law. Service Supply Company v. Vallejos, 169 Colo. 14, 452 P.2d 387 (1969). Here, it is evident from his order that he accepted as true the factual assertions made by the respondents in their written response. That is, for purposes of determining whether to impose penalties he generally accepted those factual assertions as undisputed. Where, however, there was a clear dispute regarding the facts, the Director did not attempt to resolve the conflict based merely upon the pleadings. Thus, the respondents raised a genuine factual dispute regarding the issue of reimbursement for mileage expenses incurred by the claimant in traveling to medical appointments. The respondents denied that they had received any requests for such reimbursement. Because that factual dispute existed the Director declined to weigh the evidence and draw any inference resolving the disputed facts. He therefore declined to impose any penalty for that alleged misconduct. However, where there was no such factual dispute, he evidently accepted as true the respondents' assertions. His determination regarding the amount of the penalty to be imposed was thus based on the respondents' own undisputed factual assertions.
In this regard, the respondents stated that the temporary total disability benefit check was issued "as soon as the error was discovered." The respondents also assured the Director that they took the matter seriously and described the measures implemented to prevent its reoccurrence. They stated that Arguello would henceforth receive a "computer printout of TTD schedules," presumably to permit her to review the payment histories on each claim and insure that benefit checks were being sent on a timely basis. The respondents also stated that Arguello would receive "e-mail notification[s]" on claims where temporary total disability benefit payments were scheduled to end, again presumably to permit her to specifically review those claims to insure that the insurer was taking appropriate measures in each claim. The respondents also referred to "computer changes" that had begun in May 2007 and that were intended to "enhance" the adjuster's ability to insure timely payment of benefits and compensation. The respondents expressed their "sincere regret" for any inconvenience caused to the claimant by the late payment, and stated that the cause of the error was a "change in technology" that was not accompanied by any intent to harm the claimant.
Under these circumstances, the Director was not compelled to provide the respondents with a "meeting" or an evidentiary hearing, especially in light of the respondents' request for those in the event the Director had "concerns" either about the respondents' cure of the violation or about the amount of the penalty. The Director was evidently satisfied that the respondents had been given an adequate opportunity to submit a response to the motion for penalties, and that response contained both factual assertions and legal argument. He apparently had no "concerns" regarding the factual circumstances surrounding the claim for penalties and he was not compelled to furnish the respondents with an opportunity to persuade him in person of the merits of their position. Insofar as the respondents had further mitigating evidence or other assertions, they could have included those in their response, and that they elected not to do so did not compel the Director to afford them a hearing. Under these circumstances, we disagree with the respondents insofar as they argue that the amount of the penalty was a matter of disputed fact that precluded an order in the nature of summary judgment. Rather, the Director accepted the respondents' factual assertions as undisputed and he exercised his discretion in fixing the amount of the penalty. In our view he did not err in doing so.
It follows from this that we also disagree with the respondents' argument that the Director erred in determining that $200 per day was an appropriate penalty "as a matter of law." Rather, as noted, he evaluated the respondents' conduct, their written response, including their undisputed assertions supporting a minimal penalty, and their past conduct in the same claim. The Director has broad discretion to assess a penalty under § 8-43-304 of an amount not to exceed $500 per day, and in determining the appropriate amount he may consider a variety of factors. See Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996); Trumble v. Choice Casing Service, Inc., W.C. No. 4-125-136 (March 29, 1996), affd. Choice Casing Service, Inc. v. Industrial Claim Appeals Office, No. 96CA0664 (Colo.App. January 16, 1997) (not selected for publication). In our view the Director appropriately exercised his discretion in fixing on the amount of the penalty, and in doing so considered the relevant factors. His decision in this regard was not an abuse of his discretion. Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985) (standard of review of a discretionary decision is whether it "exceeds the bounds of reason").
It also follows from our previous analysis that insofar as the respondents argue that the Director's denial of a hearing on the issue of mitigation was a denial of due process, we also disagree. It is well established that due process requires a hearing where an administrative adjudication turns on questions of fact. Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990). The Supreme Court has noted in this regard that "[e]lementary notions of fairness enshrined in our constitutional jurisprudence dictate that a person receive fair notice not only of the conduct that will subject him to punishment, but also of the severity of the penalty that a state may impose." BMW of North America, Inc. v. Gore, 517 U.S. 559, 574, 116 S.Ct. 1589, 1598 (1996). Here, the respondents do not contend that they had no notice of the conduct that could result in a penalty or of the statutory maximum of the penalty that could be imposed if a violation were found. Rather, they argue that they should have been afforded an opportunity to "meet" with the Director or to appear at a hearing in order to persuade him that a large penalty was not warranted. Because in our view the Director was not compelled to provide a hearing to the respondents there was necessarily no due process violation by his refusal to do so.
IT IS THEREFORE ORDERED that the Director's order dated February 5, 2008, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_______________________ Curt Kriksciun
_______________________ Thomas Schrant
BETTY TWISS, GOLDEN, CO, (Claimant).
ADVANCE AMERICA, GOLDEN, CO, (Employer).
ZURICH INSURANCE COMPANY, C/O: SPECIALTY RISK SERVICES, SCHAUMBERG, IL, (Insurer).
RITSEMA LYON, PC, Attn: T. PAUL KRUEGER II, ESQ., C/O: KYLE L THACKER, ESQ., DENVER, CO, (For Respondents).
SPECIALTY RISK SERVICES, Attn: NHU MILLER, DENVER, CO, (Other Party).