Opinion
W.C. No. 4-205-461
January 27, 2003
FINAL ORDER
The claimant and the respondents separately petition for review of an order of Administrative Law Judge Stuber (ALJ) which imposed penalties for the respondents' violation of the Rules of Procedure, Part IV(N)(5), 7 Code Colo. Reg. 1101-3. We reverse.
The claimant suffered an admitted industrial injury in 1994. Dr. Hall assigned a permanent medical impairment rating on September 9, 1997, and Dr. Moffett assigned a rating on April 24, 1998.
Rule IV(N)(5) requires the insurer to file a final admission of liability or request a Division-sponsored independent medical examination (DIME) within 20 days of the receipt of a determination of permanent medical impairment from an authorized treating physician. There is no dispute Dr. Hall and Dr. Moffett are authorized treating physicians. The respondents did not request a DIME and did not file a final admission of liability for permanent partial disability benefits until June 12, 2001.
The claimant objected to the June 12 final admission on the issues of permanent disability and average weekly wage. The claimant subsequently applied for hearing and requested an order imposing penalties against the respondents for their failure to comply with Rule IV(N)(5).
The ALJ found the respondents had received Dr. Moffett's rating at least by August 11, 1998, and violated Rule IV(N)(5). Further, the ALJ found the respondents failed to establish that their actions were predicated on a rational argument in law or fact. However, the ALJ found the violation was mitigated by the respondents' continued payment of temporary total disability benefits during the violation. Therefore, the ALJ determined a minimal penalty of $1 per day from August 31, 1998 to June 21, 2001, was appropriate. Both parties timely appealed that order.
On review, the respondents contend the ALJ erroneously determined the penalty issue was not automatically closed by their filing of the June 12 final admission. We agree.
Former § 8-43-203(2)(b), C.R.S. 1997, which applies to this 1994 injury claim, provided:
"An admission of liability for final payment of compensation shall include a statement that this is the final admission by the workers' compensation insurance carrier in the case, that the claimant may contest this admission if the claimant feels entitled to more compensation, to whom the claimant should provide written objection, and notice that if the claimant does not contest the final admission in writing within sixty day of the date of the final admission the case will be automatically closed as to the issues admitted in the final admission."
The court has interpreted the phrase "issues admitted" as not restricted to those "issues" concerning which the respondents have agreed to pay benefits. Instead, this language refers to "issues" on which the respondents affirmatively take a position, either by agreeing to pay benefits or by denying liability. See Dyrkopp v. Industrial Claim Appeals Office, 30 P.3d 821(Colo.App. 2001). In Dyrkopp, the court concluded that issues not expressly addressed in a final admission were closed by an admonition in the final admission which stated "all benefits or penalties not admitted below are hereby specifically denied."
Here, the respondents' final admission admitted liability for medical benefits, and temporary total and temporary partial disability benefits. It also admitted liability for permanent partial disability based on 52 percent whole person impairment, and future medical benefits. The respondents also indicated "none" for disfigurement, vocational rehabilitation, and permanent total disability benefits. In the "benefit history" section of the final admission, the respondents indicated they had paid "$0.00" for penalties.
Under these circumstances, the ALJ found the admission did not state a position on liability for any "future" penalties. (Finding of Fact 15; Conclusions of Law 2). Therefore, the ALJ determined the penalty issue was open regardless of whether the claimant's written objection had disputed the final admission on the issue of penalties.
However, the respondents' final admission also states: "All issues not specifically admitted for herein are denied." We perceive no meaningful distinction between this case and the facts in Dyrkopp v. Industrial Claim Appeals Office, supra. Therefore, we conclude that Dyrkopp compels a conclusion that the respondents' final admission denied liability for any penalties.
The general purpose of § 8-43-203(2)(b) is to establish a mechanism for administrative closure of claims, without the necessity of litigation, in cases presenting no legitimate controversy. Cibola Construction v. Industrial Claim Appeals Office, 971 P.2d 666 (Colo.App. 1998). The purpose of requiring a written objection is to notify the respondents that the claimant does not accept the respondents' final position concerning the claimant's entitlement to benefits, and to alert the respondents that there is an ongoing controversy which is not subject to resolution by administrative closure. Cf. Smith v. Myron Stratton Home, 676 P.2d 1196 (Colo. 1984). Consequently, we have previously held that the statute inherently requires the claimant to provide notice of the issues that may be in controversy. See Vigil v. Jefferson County, W.C. No. 3-993-995 (January 7, 2003) (objection to final admission which denied liability for disfigurement was ineffective to prevent automatic closure of any other issue); Fletcher v. Department of Institutions, W.C. No. 3-068-198 (November 22, 2001) (objection to final admission on the issue of Grover medical benefits did not prevent closure of the issue of permanent partial disability). We adhere to our previous conclusions.
Here, it is undisputed the claimant did not contest the final admission insofar as the respondents denied liability for penalties. Therefore, the ALJ erred in finding the issue of penalties was open. Moreover, because the issue was closed, the ALJ exceeded his jurisdiction by assessing penalties without an order reopening the claim on that issue. Consequently, we set aside the penalty award.
In view of this disposition, we need not consider the respondents' further contention that the ALJ erroneously determined the penalty claim was governed by § 8-43-304(1), C.R.S. 2002, rather than § 8-43-401 C.R.S. 2002. Neither do we consider the claimant's contention that the ALJ abused his discretion in failing to impose penalties at a rate greater than $1 per day.
IT IS THEREFORE ORDERED that the ALJ's order dated March 12, 2002, is reversed, and the imposition of penalties is set aside.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________
Kathy E. Dean
____________________________________
Bill Whitacre
NOTICE
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, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is 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 decision were mailed _________January 27, 2003 _____to the following parties:
Robert Campello, 3166 Vickers Dr., Colorado Springs, CO 80918
Progressive Insurance, P.O. Box 5070, Cleveland, OH 44101
Ivan Pinto, Liberty Mutual Insurance Company, P.O. Box 168208, Irving, TX 75016-8205
Robert Klingler, Special Funds, Tower 2, #630, Division of Workers' Compensation —
Interagency Mail
Stephanie J. Stevenson, Esq., 815 N. Nevada, #100, Colorado Springs, CO 80903 (For Claimant)
Scott M. Busser, Esq., 300 S. Jackson St., #570, Denver, CO 80209 (For Respondents)
BY: __________A. Hurtado__________