Opinion
W.C. No. 4-732-044.
March 9, 2010.
FINAL ORDER
The respondent First Comp Insurance (First Comp) seeks review of an order of Administrative Law Judge Cannici (ALJ) dated September 24, 2009, that found that Pinnacol Assurance (Pinnacol) had cancelled its insurance policy and found First Comp liable for the decedent's funeral expenses. We affirm.
On August 4, 2007, the decedent suffered fatal injuries as a result of a trench collapse during the course and scope of his employment with Plumbing Company of Colorado (employer). The employer had a workers' compensation insurance policy through Pinnacol, but the ALJ found that the policy had been cancelled effective June 26, 2007. The employer was a subcontractor of Brasiland, LLC, and Residential Niche (statutory employers). First Comp provided workers' compensation insurance for the statutory employers on the date of the fatal accident. The ALJ concluded that First Comp was responsible for the decedent's funeral expenses. First Comp brings this appeal contending that the ALJ erred in ruling that Pinnacol had cancelled its coverage for the employer on June 26, 2007.
First Comp contends that the ALJ erred in determining that Pinnacol properly and effectively cancelled its insurance coverage of the employer pursuant to § 8-44-110, C.R.S. 2009 prior to the fatal injury. We are not persuaded that the ALJ committed reversible error.
Section 8-44-110 deals with notice of cancellation of an insurance policy and provides in relevant part as follows:
Every insurance carrier authorized to transact business in this state, including Pinnacol Assurance, which insures employers against liability for compensation under the provisions of articles 40 to 47 of this title, shall notify any employer insured by the carrier or Pinnacol Assurance, and any agent or representative of such employer, if applicable, by certified mail of any cancellation of such employer's insurance coverage. Such notice shall be sent at least thirty days prior to the effective date of the cancellation of the insurance.
First Comp argues that the record contains no evidence to support the ALJ's ruling that Pinnacol effectively cancelled coverage. First Comp contends that Pinnacol failed to present evidence that they substantially complied with § 8-44-110 and therefore the ALJ erred in determining that Pinnacol met its burden of proof.
The questions of whether the notice of cancellation was actually mailed to and received by the employer become issues of fact for the ALJ based on his assessment of the weight of the evidence. EZ Building Components v. Industrial Claim Appeals Office, 74 P.3d 516 (Colo. App. 2003); Denver v. East Jefferson County Sanitation District, 771 P.2d 16 (Colo. App. 1988). Because the issues involve questions of fact, we must uphold the ALJ's resolutions if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2009. This standard of review requires us to view the evidence in a light most favorable to the prevailing party, and defer to the ALJ's resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo. App. 2003).
We initially note that here there was no denial by the employer of receipt of the notice of cancellation; it appears that the employer did not even participate in the hearing. Therefore, there is no argument by the employer that its rights were affected by the method of giving notice followed by Pinnacol. Rather it is the insurance carrier for the statutory employer that challenges the notice of cancellation.
In our opinion, there is substantial evidence in the record to support the ALJ's determination that Pinnacol had cancelled its coverage for the employer on June 26, 2007. The ALJ made the following findings of fact with record support. On June 8, 2007, Pinnacol issued a Notice of Cancellation to the employer because it had not received the premium payment due on the employer's policy (Exhibit P). The Notice of Cancellation specified that, if premium payment was not received on or before June 25, 2007, the policy would be cancelled effective June 26, 2007. (Exhibit P at 33). The underwriter from Pinnacol testified that the business records of Pinnacol reflected that the Notice of Cancellation was mailed on June 9, 2007 by certified mail. Hurd Depo. at 30-31; Exhibit P at 34-35; Exhibit R. The underwriter testified that once a policy is cancelled for nonpayment of a premium Pinnacol allows a 14-day period for reinstatement of the policy, but the employer here made no effort to reinstate the policy. Hurd Depo. at 39-40, 42-43. The computer peripheral operator from Pinnacol's mail room testified that the Notice of Cancellation was sent by certified mail and that the signature page from the certified notice through the system of the United States Postal Service was obtained. Docter Depo. at 10; Exhibit R; Exhibit P at 34-35. The ALJ found the testimony of the computer peripheral operator to be credible.
An independent insurance agent helped the employer complete an application for insurance with Pinnacol. This agent testified that he received the Notice of Cancellation from Pinnacol because when he received the Notice of Cancellation his company prepared new insurance certificates specifying that the prior policy had been cancelled. Lewis Depo. at 118-19. Furthermore, the Agent testified that an e-mail was sent from his agency to the employer dated July 2, 2007 noting that the employer's policy through Pinnacol had been cancelled effective June 26, 2007. Lewis Depo. at 67-69, Lewis Depo. Exhibit V. The Notice of Cancellation was sent through regular mail to the agent. Docter Depo. at 16. On June 26, 2007, Pinnacol issued a Policy Cancelled Notice to employer for failure to pay its premium. Exhibit S.
The ALJ determined that the credible testimony of Pinnacol employees in conjunction with documentary evidence reflected that Pinnacol sent a Notice of Cancellation by certified mail to the owner of the employer. The ALJ concluded that the owner of the employer also had actual knowledge that the policy through Pinnacol had been cancelled on June 26, 2007 for failure to make a premium payment. The ALJ found that the receipt from the postal service reflects that the Notice of Cancellation had been delivered to the owner on June 12, 2007. Further, the e-mail from the agency to the employer on July 2, 2007 specified that the policy through Pinnacol had been cancelled effective June 26, 2007.
Contrary to the contentions of First Comp, the ALJ's determinations are amply supported by the record. First Comp has cited other portions of the record supporting its theory of the case. However, the existence in the record of conflicting testimony or of evidence that would support a contrary result does not provide a basis for setting aside the ALJ's order. See Mountain Meadows Nursing Center v. Industrial Claim Appeals Office, 990 P.2d 1090 (Colo. App. 1999) (the existence of conflicting evidence does not lessen the import of substantial evidence in support of a finding).
On this record, we perceive no error in the ALJ's finding that insurer sent the Notice Of Cancellation to employer by certified mail. This finding is within the ALJ's province, and inasmuch as it is supported by the evidence, we will not disturb it. See Kroupa v. Industrial Claim Appeals Office, 53 P.3d 1192 (Colo. App. 2002) (ALJ resolves conflicts in the evidence, makes credibility determinations, determines the weight to be accorded to expert testimony, and draws plausible inferences from the evidence). In addition, in our opinion, the record is sufficient to establish a presumption that the notice of cancellation was mailed to and received by the employer based on the business custom. See Nat'l Motors, Inc. v. Newman, 29 Colo. App. 380, 484 P.2d 125 (1971).
First Comp, citing EZ Bldg. Components Mfg., LLC v. Industrial Claim Appeals Office, argues that here the agent for the employer never received from Pinnacol a "Notice of Pending Cancellation" by either regular or certified mail. We do not find a specific mention of a requirement of a Notice of Pending Cancellation in the court's decision in EZ Bldg. Of course, the court found that the insurer sent the employer a notice that if a late payment of premium was not received by a certain date the policy would be cancelled. Here the insurer sent a Notice of Cancellation to employer on June 8, 2007 stating that if the late payment of premium was not received by June 26, 2007 that the policy would be cancelled. Exhibit P. We do not perceive any action by the insurer in cancelling the policy that is inconsistent with the court's decision in EZ Bldg.
We recognize that § 8-44-110 provides that notice from the insurer shall be sent at least thirty days prior to the effective date of the cancellation of the insurance. However, § 8-44-110 further provides that if the cancellation is based on nonpayment of premium then such notice may be sent less than thirty days prior to the effective date of the cancellation of the insurance. Here, the cancellation was for nonpayment of premium and therefore the 30-day notice of cancellation was not mandatory. Consequently, we are not persuaded by the arguments of First Comp regarding a "Notice of Pending Cancellation."
First Comp contends that the ALJ erred in concluding that under EZ Bldg. Pinnacol substantially complied with § 8-44-110 because the agent for the employer received the June 8, 2007 Notice of Cancellation through regular mail as opposed to certified mail. Here, the ALJ found with record support that the agent testified that he believed he had received the Notice of Cancellation (Exhibit P). Lewis Depo. at 116. We also note that First Comp concedes that the agent received the June 26, 2007 Pinnacol Policy Cancelled Notice. Lewis Depo. at 118. The ALJ found the employer had an adequate opportunity to avoid non-insured status because he had received the June 12, 2007 Notice of Cancellation and had actual knowledge that his workers' compensation insurance policy through Pinnacol had been cancelled on June 26, 2007 for failure to make a premium payment. The industrial injury here occurred on August 4, 2007.
In our view, the ALJ's conclusion that the delivery of the Notice of Cancellation to the agent through regular mail did not adversely affect the employer's interests is supported by the record. Further, the ALJ's determination is consistent with EZ Bldg. because here, as in EZ Bldg., the agent had received actual notice of cancellation and there was no indication that the rights of the employer were affected by the method of giving notice to the agent. Thus, we agree with the ALJ that substantial compliance with the notice requirement of § 8-44-110 was sufficient to effect a cancellation of the policy. See Stefanski v. Industrial Claim Appeals Office 128 P.3d 282 (Colo. App. 2005) (concept of substantial compliance has been applied to various notice requirements in workers' compensation proceedings).
Moreover, although the parties do not dispute First Comp's standing, we raise it here because it is jurisdictional. See Shelter Mutual Insurance Co. v. Mid-Century Insurance Co., 214 P.3d 489, 495 (Colo. App. 2008) (cert. granted Aug. 31, 2009) (jurisdictional nature of standing requires sua sponte inquiry); see also Adams v. Neoplan U.S.A. Corp. 881 P.2d 373 (Colo. App. 1993) (standing to challenge the order of an adjudicative tribunal is a jurisdictional prerequisite to review or appeal of that order).
In Chevron Oil Co. v. Industrial Commission 169 Colo. 336, 456 P.2d 735 (Colo. 1969), the supreme court in considering a predecessor statute to the present cancellation provision determined that an insurer does not have standing under the cancellation statute to argue that the cancellation of a workers' compensation insurance policy by another insurer was void because of a lack of notice to the then existing Industrial Commission. The supreme court ruled that because the notice provision exists for the protection of the claimant's entitlement to compensation, another insurance company or entity is not a proper party to complain of noncompliance with those provisions. In our opinion, using the same analysis, the cancellation statute in question here does not grant standing to insurers to challenge the cancellation of other insurance policies. Thus we conclude that Chevron Oil Co. v. Industrial Commission applies here and First Comp does not have standing to assert that Pinnacol failed to comply with § 8-44-110. See also Gomez v. Hipolito Gonzales D/B/A/ H G Framing, and /or Rocky Mountain Panel LLC, and/or Ago Builders, Inc. and/or Terra Firma D/B/A/ Resource One LLC, and/or Sovereign W. C. Nos. 4-447-171 4-449-330 (January 28, 2002), rev'd sub nom, Pinnacol Assurance v. Industrial claim Appeals Office; Rocky Mountain Panel L.L.C; Terra Firma, d/b/a Resource One L.L.C; Sovereign Homes of Colorado L.L.C; Sovereign Companies L.L.C; Settlers Chase L.L.C; Gumaro Gomez; and Zurich American Insurance Company, Case No. 02CA0225(Colo. App. January 23, 2003) (not selected for publication) (Court of Appeals concluded that the Panel erroneously considered Zurich's argument concerning cancellation of H G's insurance policy because Zurich lacked standing to raise the argument). Therefore, we affirm the ALJ's determination that Pinnacol afforded no workers' compensation coverage to the employer on the day of the industrial injury.
IT IS THEREFORE ORDERED that the ALJ's order dated September 24, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ John D. Baird
____________________________________ Thomas Schrant
ERICK JONATHAN HERNANDEZ ACOSTA, Attn: ANGELA HERNANDEZ DUARTE, AURORA, CO, (Claimant)
BRASILAND, LLC, Attn: MATTHEW A HOLMES, ESQ., C/O: WALBERG, TUCKER HOLMES, PC., CENTENNIAL, CO, (Employer)
FIRST COMP INSURANCE, Attn: DOUGLAS J KOTAREK, ESQ./FRANK CAVANAUGH, ESQ., C/O: HALL EVANS, LLC, DENVER, CO, (Insurer)
CASTANEDA LAW OFFICE, Attn: JANIE C CASTANEDA, ESQ/JJ. FRASER, ESQ., DENVER, CO, (For Claimant)
RUEGSEGGER SIMONS SMITH STERN, LLC, Attn: JOHN H. SANDBERG, ESQ., DENVER, CO, (For Respondents)
PINNACOL ASSURANCE, Attn: HARVEY D FLEWELLING, ESQ., DENVER, CO, (Other Party)
FOGEL KEATING WAGNER POLIDORI SHAFNER, Attn: BRADLEY UNKELESS, ESQ., DENVER, CO, (Other Party 2)
THE RESIDENTIAL NICHE, Attn: TIM LARSON/CAM BORGES, DENVER, CO, (Other Party 3)
PINNACOL ASSURANCE, Attn: SCOTT NIELSON, DNEVER, CO, (Other Party 4)
PLUMBING COMPANY OF COLORADO, DENVER, CO, (Other Party 5)
FIRST COMP INSURANCE, Attn: MATT BREWER, OMAHA, NE, (Other Party 6)
FIRST COMP INSURANCE, Attn: AMANDA GARTNER, OMAHA, NE, (Other Party 7)
FIRST COMP INSURANCE, Attn: RYAN MCGRANE, OMAHA, NE, (Other Party 8)
WEINBERGER CAVANAUGH, PC, Attn: FRANK CAVANAUGH, ESQ., DENVER, CO, (Other Party 9)
LAW OFICES OF REGINA M WALSH-ADAMS, Attn: REGINA M WALSH-ADAMS, ESQ. GREELEY, CO, (Other Party 10)
VALERIA E ACOSTA-VALLECILLO, AURORA, CO, (Other Party 11)