Opinion
W.C. No. 4-532-443
November 15, 2002
ORDER OF REMAND
The respondents seek review of an order of Administrative Law Judge Mattoon (ALJ) insofar as the ALJ imposed penalties for the respondents' failure timely to admit or deny liability. We set aside the ALJ's order and remand the matter for entry of a new order.
Section 8-43-203(1)(a), C.R.S. 2002, provides that within twenty days after notice of an injury which disables the claimant for more than three shifts or three calendar days, or results in permanent physical impairment, or death, the employer or, if insured, the insurance carrier, shall notify the "injured employee" and the Division of Workers' Compensation (Division) in writing whether liability is admitted or denied. If the insurer fails to comply with § 8-43-203(1), the insurer may be ordered to pay up to one day's compensation for each day's failure timely to notify the Division as provided by § 8-43-203(2). The statute also provides that knowledge on the part of the employer is not imputed to the insurer. State Compensation Insurance Fund v. Wilson, 736 P.2d 33 (Colo. 1987); Campbell v. IBM Corp., 867 P.2d 77 (Colo.App. 1993).
The claimant suffered a work-related injury on November 4, 2001. The injury was immediately reported to the employer. On November 5, the claimant was examined by Dr. Bergland, who imposed medical restrictions. On November 7, 2001, the employer discharged the claimant. The claimant remained unemployed until April 2002.
On February 27, 2002, the claimant filed a formal claim for workers' compensation benefits. The respondents filed a Notice of Contest on March 26, 2002, which was 27 days after notice of the formal claim for compensation. Under these circumstances, the respondents argue they were only 7 days late in filing the Notice of Contest.
The ALJ found:
"Respondents were notified of Claimant's injury on November 4, 2001. The first business day following 20 days after notice of the injury is November 26, 2001."
Consequently, the ALJ imposed a penalty equal to one day's compensation for a period of 120 days based on the insurer's failure to admit or deny liability between November 26, 2001 and March 26, 2002.
On review, the respondents contend the ALJ erred by imposing penalties commencing November 26, 2001. We agree.
Contrary to the ALJ's determination, mere notice of the occurrence of an "injury," does not trigger the insurer's duty to admit or deny liability. Rather, § 8-43-203(1), does not require the insurer to admit or deny liability until it has knowledge the claimant has sustained a permanently impairing injury or missed more than three work shifts. Further, evidence of the imposition of medical restrictions does not trigger the insurer's statutory duty to admit or deny liability unless, the restrictions preclude the claimant from performing his regular employment for three shifts, and that no modified employment has been made available. See Ralston v Purina-Keystone v. Lowry, 821 P.2d 910 (Colo.App. 1991) ; Davila v. CF I Steel Corporation, W.C. No. 4-343-840 (November 15, 1999) ; Williams v. Leo Brumley, W.C. No. 4-108-733 (June 8, 1992).
Here, the injury occurred on November 4, and there is no evidence the insurer knew on November 4 that the injury caused permanent impairment. Further, the insurer could not have known on November 4 the injury would cause the claimant to miss more than 3 work shifts. Indeed, even though Dr. Bergland imposed medical restrictions, the claimant testified he did not leave work until November 7 when he was laid off. (Tr. pp. 42, 45, 47, 48). Consequently, the record is legally insufficient to support the ALJ's finding that the insurer possessed the requisite knowledge on November 4, 2002 to invoke the duty to admit or deny liability under § 8-43-203(1). Therefore, the record does not support the order for a penalty.
However, the record contains some evidence Dr. Bergland's November 5 report was immediately sent to the insurer. (Tr. pp 12-13). Further, the Employer's First Report of Injury, dated November 4, 2001, states the claimant's last day of work was November 7, 2001, and the record contains evidence the Employer's First Report of Injury was sent to the insurer the day it was prepared. (Tr. p. 43). It follows the record contains some evidence which, if credited, could support an inference the insurer knew prior to February 2002 that the claimant suffered an injury which disabled the claimant for more than three work shifts.
We cannot ascertain what inference the ALJ would have drawn from the record had she recognized that the duty imposed by § 8-43-203(1) is not triggered until the insurer knows the injury resulted in permanent impairment or the claimant lost more than three days of work. Consequently, the matter must be remanded to the ALJ for additional findings which reflect the ALJ's application of the elements of proof required by § 8-43-203(1), and the entry of a new order.
IT IS THEREFORE ORDERED that the ALJ's order dated June 13, 2002, is set aside insofar as it imposed penalties under § 8-43-203(2), and the matter is remanded for additional findings and the entry of a new order on the issue of penalties consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________
David Cain
____________________________________
Kathy E. Dean
Copies of this decision were mailed ___________November 15, 2002 _________to the following parties:
Richard Atencio, 1913 Beechwood Ln., Pueblo, CO 81008
Holiday Retirement Corporation, 5820 Flintridge Dr., Colorado Springs, CO 80918
Liberty Mutual Insurance, P. O. Box 168208, Irving, TX 75016
Robert Klingler, Special Funds, Tower 2, #630, Division of Workers' Compensation — Interagency Mail
Steven U. Mullens, Esq., 1401 Court St., Pueblo, CO 81003 (For Claimant)
David G. Kroll, Esq., 1120 Lincoln St., #1606, Denver, CO 80203 (For Respondents)
BY: A. Hurtado