Opinion
W.C. No. 4-732-201.
November 9, 2010.
FINAL ORDER
The respondent seeks review of an order of Administrative Law Judge Felter (ALJ) dated June 22, 2010, that ordered the claimant's temporary total disability (TTD) benefits to continue without interruption until she reached maximum medical improvement (MMI) and that denied the respondent's Petition to Terminate Benefits based on the contention that the claimant had reached a statutory cap of combined TTD and permanent partial disability (PPD) benefits. We set aside that part of the order denying the respondent's request to terminate benefits and grant the respondent a credit for permanent partial disability benefits already paid against TTD benefits.
The claimant suffered an industrial injury on May 5, 2007 to her right upper extremity. The authorized treating physician placed the claimant at MMI on January 7, 2008 and rated the claimant as having an impairment of 18 percent of the right upper extremity. The respondent filed a Final Admission of Liability based on the rating given by the authorized treating physician.
The claimant underwent a Division-sponsored independent medical examination (DIME). The DIME physician agreed that the claimant was at MMI and rated the claimant as having a 15 percent impairment of the right upper extremity and six percent whole person for the cervical spine. The respondent requested a hearing to challenge the DIME rating but the parties subsequently resolved the issue with a stipulated payment of $30,000 to the claimant. The ALJ found that the $30,000 payment represented an advance payment on permanent disability benefits.
After the settlement the claimant returned to regular full time employment with her employer. The claimant suffered an overuse injury to her left upper extremity. The respondent accepted responsibility for this condition and voluntarily reopened the case. The respondents began paying the claimant TTD benefits. The respondent, relying on Donald B. Murphy Contractors, Inc., Industrial Claim Appeals Office, 916 P.2d 611 (Colo. App. 1995), later filed a Petition to Modify, Terminate or Suspend Compensation on the ground that they were approaching the $75,000 indemnity benefit cap. The claimant objected to the petition contending that she had not reached MMI so her permanent impairment was unknown, and therefore it could not be determined whether the $75,000 cap applied.
The ALJ denied and dismissed the respondent's Petition to Modify, Terminate, or Suspend Compensation. The ALJ ordered that the claimant's temporary total disability benefits must continue without interruption until she reached MMI or until cessation thereof is permitted by law. The ALJ noted that the respondent would be permitted to take credit for the $30,000 it advanced to the claimant under the stipulation at such time as the claimant reaches MMI and all of her injuries were rated.
The respondent first contends the ALJ erred as a matter of law by denying the respondent's request to take a credit for previously paid PPD against ongoing TTD benefits and by failing to apply the principles of Donald B. Murphy Contractors, Inc., Industrial Claim Appeals Office. In Murphy the claimant received TTD benefits for his industrial injury and was then placed at MMI and given an impairment rating. The respondents, under § 8-42-107.5 C.R.S., paid enough PPD benefits to reach the limit set for medical impairment ratings less than twenty-five percent. The claimant's condition worsened and his physician recommended another surgery, but opined that it would not significantly alter the claimant's impairment rating. The claimant sought additional TTD benefits and the respondents objected arguing that they had already paid the limit available for temporary and permanent benefits. The ALJ awarded TTD benefits. The Panel affirmed the ALJ's findings determining that medical impairment cannot be determined until a claimant reached MMI. The Panel concluded that the ALJ was correct in concluding that the record did not establish that the claimant had a medical impairment of less than twenty-five percent. While agreeing with the Panel that the medical impairment rating could not be determined while the claimant was still undergoing medical treatment, the Colorado Court of Appeals determined that no further payment of PPD benefits was currently required. The court was faced with applying the goal of the statutory limit on combined temporary total and permanent partial benefits under § 8-42-107.5. The court concluded that when further benefits were sought after the twenty-five percent or less limit of § 8-42-107.5 has been reached, the respondents were entitled to offset any PPD benefits paid against TTD benefits. The court noted that allowing the offset required the claimant to allocate the PPD benefits already paid toward his current inability to earn wages until such time as permanent medical impairment could be calculated at the time of MMI was again established.
Here, the ALJ discussed Murphy in his order and found it to be distinguishable on a number of grounds. The ALJ's contention notwithstanding, we do not understand the Murphy decision as turning on any distinctions drawn by the ALJ between the present case and the circumstances in Murphy. The ALJ distinguished Murphy on the ground that in Murphy the cap on combined TTD and PPD had previously been reached before the reopening unlike the case before him in which it had not been ascertained what the statutory cap would be. We are unable to agree with the ALJ because here the claimant had, as in Murphy, initially reached MMI and the case was at a point where it could be ascertained what statutory cap would be applicable. The ALJ noted in distinguishing Murphy that it was possible that the claimant here might be determined to be permanently and totally disabled in which case no statutory cap would apply. However, while it is possible that the claimant here might at some point be determined permanently and totally disabled the same was true of the claimant in Murphy, who was still undergoing medical treatment. Therefore we are not persuaded that Murphy may be distinguished on that ground.
The ALJ noted that Murphy's reopening was for a second surgery at the same injury site, whereas the claimant's reopening here involved a different body part. However, in the context of permanent partial disability benefits under § 8-42-107 the term "injury" refers to the manifestation in a part or parts of the body that have been functionally impaired as a result of the industrial accident. See Warthen v. Industrial Claim Appeals Office ( 100 P.3d 581 (Colo. App. 2004). Therefore, we see no distinction to the operation of the cap based upon whether the industrial injury affected one part of the claimant's body or multiple parts.
The ALJ noted that the authorized treating physician in the Murphy case had rendered the opinion that the rating would not likely be any greater than the previous rating, whereas here the claimant's left shoulder had never been rated. However, as the Murphy court stated, impairment cannot be determined while the claimant is still undergoing medical treatment. Therefore, the probability of whether a claimant's ultimate impairment will or will not exceed the twenty-five percent level does not appear to be determinative in any role in the Murphy court's reasons for fashioning the credit given to respondents.
The ALJ noted that the ratings in Murphy subjected him to the cap before the reopening, whereas here the claimant may not be subject to the cap at all if a physician gives her a left shoulder rating that combines with her right shoulder and neck ratings to be more that 25 percent and that the ultimate rating on the claimant's neck had not been addressed. But again the possibility that the claimant's ultimate impairment may exceed twenty-five percent was not in Murphy a determinative factor in whether credit should be given to the respondents.
The ALJ further noted that in Murphy the maximum had already been paid under the cap whereas the claimant here had not yet reached any cap. However, here the parties had agreed at the commencement of the hearing that $74,949.90 had been paid as a combination of temporary and permanent benefits and was approaching the $75,000 cap. Tr. at 4. The ALJ even noted that amount in his order. Therefore, at the commencement of the hearing the respondent was approximately $51 short of the cap and were making ongoing temporary benefits being paid at the rate of $584.85. The transcript makes clear that the respondent recognized that it was approaching the cap and only sought relief after the cap had been reached. Moreover, the hearing occurred on June 15, 2010 and the order was issued on June 22, 2010. Therefore to the extent that there existed any distinction between Murphy and the present case because the actual cap had not been reached at the time of the hearing it had evaporated at the time of the entry of the order.
The ALJ also sought to distinguish Murphy on the grounds that the cap might never apply because the claimant was not at MMI for all her admitted injuries, that her final rating might exceed 25 percent and that she might be permanently and totally disabled making all caps inapplicable. However, again the same could be said of any claimant, including the claimant in Murphy, who has not reached MMI. Nevertheless, the court in Murphy granted the respondents the credit. We are not persuaded by the ALJ's analysis distinguishing Murphy.
We turn to the analysis of Murphy made by the court in Rogan v. Industrial Claim Appeals Office, 91 P.3d 414 (Colo.App.2003). The Rogan court again noted that in Murphy it had held that the cap established by § 8-42-107.5 cannot take effect before a claimant attains MMI as defined by § 8-40-201(11.5), C.R.S. The Rogan court again reasoned that because the extent of a claimant's impairment cannot be determined before a claimant reaches MMI, application of the cap is precluded until MMI has been attained and an impairment rating has been assigned.
However, the Rogan court went on to note that under the circumstances in Murphy where additional TTD benefits become due, because the claimant's condition worsened after an initial MMI determination and at a new date of MMI a 25% impairment was possible, an employer could take an offset against PPD benefits already paid to minimize or avoid any overpayment if the new MMI equaled twenty-five percent or less. We realize that the Rogan court's discussion of Murphy might appear to be dicta, but it appears to us to be a fair summary of the holding in Murphy and demonstrates that Murphy applies to the present case.
Here, after the initial MMI determination the claimant's condition worsened, additional TTD benefits were voluntarily paid, and it is possible that when the claimant again achieves MMI an impairment of 25% is possible. Additionally, the ALJ has determined that the respondent at the time of the initial MMI determination paid $30,000, which represented an advance payment on permanent disability benefits. Therefore, the essential fact pattern in Murphy appears to be the same as in the present case. Consequently, under the reasoning in Murphy the respondents should be entitled to offset any PPD benefits paid against TTD benefits and the claimant must allocate the PPD benefits already paid toward her current inability to earn wages until such time as permanent medical impairment could be calculated at the time MMI is again established.
There may be some difficulty in reconciling the reasoning in Leprino Foods Co. v. Industrial Claim Appeals Office 134 P.3d 475 (Colo. App. 2005) with the application of Murphy to the circumstances of this case. Here, because the claimant's medical condition has not stabilized the extent of her impairment cannot be determined. Under the reasoning in Leprino Foods Co. v. Industrial Claim Appeals Office, application of the cap is precluded until MMI has been attained and an impairment rating has been assigned.
However, under circumstances similar to the present case, the Murphy court concluded that application of the cap was premature because the claimant had not reached MMI due to the worsening of his condition, and his permanent impairment could not be determined. Nevertheless, the court concluded that the respondents were entitled to offset the previously paid permanent partial disability benefits against their additional liability for temporary total disability benefits. The court concluded that the credit was appropriate in order to effectuate the "goal of the statutory limit on combined temporary total and permanent partial benefits when the claim is pursued following payment under the provisions of the statute." 916 P.2d at 614. The court stated that allowing the credit maintains incentives to employers and insurers to settle and provide permanent partial benefits, and avoids the need for "further proceedings to seek recovery of overpayment." Moreover, the court pointed out that the claimant could obtain additional benefits if, after attaining MMI, he has a permanent impairment rating in excess of twenty-five percent. See Seagrave v. Eugene Sanders, W. C. No. 3-107-326 (November 19, 1997)
In our view, the Murphy court's reasons for fashioning the credit apply to the present case. In Murphy and here the respondents are subjected to the potential of a large, unrecoverable overpayment if it is ultimately determined that the claimant's medical impairment rating is twenty-five percent or less, and the respondents have been required to pay ongoing temporary disability benefits pending a new date of MMI. We perceive no principled distinction between the present case and Murphy. Therefore, the ALJ's order must be set aside. We also note that because we conclude that the respondent is entitled to the requested credit it is unnecessary to address the remaining issue of whether the ALJ erred in determining that the claimant ever reached MMI.
IT IS THEREFORE ORDERED that the ALJ's order dated June 22, 2010 requiring the payment of ongoing temporary total disability benefits is set aside and we grant the respondent a credit for permanent partial disability benefits already paid against TTD benefits. The order is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________
John D. Baird
______________________________
Thomas Schrant
CATHERINE ADDINGTON, 19645 E. MILAN CIRCLE, AURORA, CO, (Claimant).
SELF INSURED, Attn: JENNIFER GREEN, C/O: GALLAGHER BASSETT, ENGLEWOOD, CO, (Insurer).
BRADLEY CARROLL PC, Attn: REBECCA L. BRADLEY, ESQ., AURORA, CO, (For Claimant).
RITSEMA LYON, PC, Attn: LYNN P. LYON, ESQ., DENVER, CO,(For Respondents).