Opinion
W.C. No. 4-171-138.
April 8, 2010.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Stuber (ALJ) dated December 2, 2009, that denied and dismissed the petition to reopen filed by Colorado Insurance Guaranty Association (CIGA) and ordered CIGA to file admissions correcting the permanent total disability (PTD) rate. We affirm.
The ALJ made the following pertinent findings of fact. The claimant suffered an admitted industrial injury on April 19, 1993. The claimant's attorney and the adjuster for Home Insurance (Home) negotiated an increase in the admitted weekly wage to $531.41, which included $426.72 for the base wage and $104.69 for the COBRA continuation cost for the claimant's health and dental insurance. On July 27, 1995, Home filed an amended general admission for the negotiated average weekly wage. The claimant became eligible for Medicare coverage on October 1, 1995. The claimant's Medicare premium varied each year from $510 in 1996 to $946 in 2009. On November 17, 1995, the claimant was awarded PTD benefits. In 2003, Home was declared insolvent and CIGA took over the claim. On July 2, 2009, CIGA filed a petition to reopen alleging an error or mistake regarding the claimant's health insurance fringe benefit.
The ALJ found that CIGA failed to prove by a preponderance of the evidence that the claim should be reopened due to an error or mistake. The ALJ found that the average weekly wage admitted to by Home in 1995 reflected a negotiated agreement. The ALJ found that when the claimant enrolled in Medicare in 1995 the parties could have agreed or litigated the "conversion" amount of the health insurance benefits, but they did not. The ALJ determined that when the claimant was awarded PTD benefits commencing in 1993 the case was closed and the AWW was fixed for PTD benefits.
The parties stipulated that the 1997 amendments to § 8-43-303(2)(a), C.R.S. did not apply to the April 19, 1993 injury claim. Consequently, the ALJ determined that the 1997 provisions for reopening because of an "overpayment" did not apply. Rather, the ALJ found that CIGA must prove by a preponderance of the evidence that Home had made an error or mistake by admitting for an AWW of $531.41. The ALJ concluded that CIGA had not demonstrated that an error or mistake existed that warranted reopening. On appeal, the respondents request that we set aside the ALJ's order and remand the matter for a specific determination of AWW and of the overpayment to be applied against future payments.
I.
The respondents first contend that the ALJ erred as a matter of law and abused his discretion by admitting into evidence a COBRA letter. The respondents argue that the letter had not been disclosed by the claimant prior to the hearing. The respondents note that at the commencement of the hearing there was no documentary evidence that the claimant was eligible for COBRA cost of continuation of health insurance because he was not enrolled in a group health plan at the time of termination. However, the COBRA letter, which had not been disclosed to the respondents during discovery, was documentary evidence that the claimant was eligible for COBRA and that the claimant's cost of continuation was $359.14 per month.
We note that the ALJ did rely to some extent on the COBRA letter in finding that the claimant's cost to continue the group health insurance for the family was $359.14. The ALJ concluded that although the claimant did not elect COBRA insurance coverage the employer did not continue to provide the insurance benefits. Consequently the $104.69 per week in COBRA continuation premiums was appropriately included in the agreed-upon AWW.
The ALJ accepted into evidence the COBRA letter, over the objections of the respondents, stating that he did not think there was a willful violation of permitted discovery. The respondents contend that pursuant to C.R.C.P. 37, the claimant failed to make required disclosure and therefore because it was not harmless, the claimant as the party who failed to make required disclosure should not be permitted to present any evidence not so disclosed.
Under section 8-43-207(1), C.R.S., "the ALJ is vested with wide discretion in the conduct of evidentiary proceedings." Ortega v. Industrial Claim Appeals Office, 207 P.3d 895, 897 (Colo. App. 2009); see also Eller v. Industrial Claim Appeals Office, 224 P.3d 397, (Colo. App. 2009) (applying an abuse of discretion standard to evidentiary rulings); Heinicke v. Industrial Claim Appeals Office, 197 P.3d 220, 222 (Colo. App. 2008) ("An abuse of discretion occurs when the ALJ's order is beyond the bounds of reason, as where it is unsupported by the evidence or contrary to law.") This discretion includes whether to impose discovery sanctions, as well as the nature of those sanctions. Shafer Commercial Seating, Inc. v. Industrial Claim Appeals Office, 85 P.3d 619, 621 (Colo. App. 2003); see also Pinkstaff v. Black Decker (U.S.) Inc., 211 P.3d 698, 702 (Colo. 2009) ("When discovery abuses are alleged, courts should carefully examine whether there is any basis for the allegation and, if sanctions are warranted, impose the least severe sanction that will ensure there is full compliance with a court's discovery orders and is commensurate with the prejudice caused to the opposing party.")
We first note that the respondents had been supplied with discovery with the first page of the COBRA letter. At the hearing the respondents objected to the second page of an April 14, 1994 COBRA letter. Exhibit 5; Tr. at 11-12. The respondents contend that they had not received the second page of the letter. The claimant's attorney stated he intended it to be sent and thought that he had sent it. The claimant argued that the letter had been originally sent to him from the respondent employer to the claimant. However, (CIGA) argued that the employer had gone out of business and they had only received partial files from Home. The ALJ overruled CIGA's objection commenting that he did not think that there had been a willful violation of discovery.
Here, the respondents during the discovery phase of the litigation apparently received only part of the COBRA letter, but did not seek disclosure of the rest of the letter. Further, the respondents did not request a continuance based upon surprise. Additionally at least one of the respondents, the employer, had the letter at one point. Under the circumstances here, we cannot say that the ALJ's evidentiary order involving a discovery issue was beyond the bounds of reason.
II.
The respondents next contend that the ALJ erred as a matter of law in denying the respondents' petition to reopen the claim. The respondents argue that even if the claimant was enrolled in a group health coverage at the time of termination, the ALJ's order is contrary to law because the respondents are entitled to adjust the claimant's AWW and resulting PTD rate upon enrollment in a similar or lesser plan. The respondents citing Schelly v. Industrial Claim Appeals Office 961 P.2d 547 (Colo. App. 1997) argue that the claimant is only entitled to the cost of Medicare premiums and not the cost of COBRA continuation once he enrolled in Medicare. The respondents argue that the claimant became a Medicare beneficiary on October 1995 and did not inform the respondent of the decrease in his health care premiums until 13 years later.
As we read the ALJ's order, he was aware of the rule in Schelly v. Industrial Claim Appeals Office. The ALJ specifically found that at the point the claimant enrolled in Medicare the parties could have agree or litigated the conversion amount of the health insurance benefits, but they did not do so. Rather, the ALJ determined that the wage admitted by Home in July 27, 1995 reflected a negotiated agreement between the claimant and the insurer. The ALJ noted that finality of determination is still an important part of the workers' compensation process and declined to reopen the case.
Under § 8-43-303(1)(a), C.R.S. an ALJ may reopen any award on the grounds of error or mistake of law or fact. State Compensation Insurance Fund v. Industrial Commission, 80 Colo. 130, 249 P. 653 (1926); Renz v. Larimer County School District Poudre R-1, 924 P.2d 1177 (Colo. App. 1996). Where the claimant alleges a mistake the ALJ is required to determine "whether a mistake was made, and if so, whether it was the type of mistake which justifies reopening a case." Travelers Insurance Co., Industrial Commission, 646 P.2d 399 (Colo. App. 1981). Because the ALJ's authority is discretionary, we may not interfere with the ALJ's decision to deny a petition to reopen unless the ALJ's rule constitutes an abuse of discretion. Renz v. Larimer County School District Poudre R-1, supra; Osborne v. Industrial Commission, 725 P.2d 63 (Colo. App. 1986). An abuse of discretion is not shown unless the ALJ's order is beyond the bounds of reason, as where it is unsupported by the evidence or is contrary to the applicable law. Coates Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1994).
The parties stipulated that the 1997 amendments to § 8-43-303(2)(a), C.R.S. did not apply to the April 19, 1993 injury claim. These amendments provided that upon a prima facie showing that the claimant received an overpayment the award shall be reopened solely as to the overpayment and repayment shall be ordered. Colo. Sess. Laws 1997, Ch. 45 at 114. The respondents were therefore bound to attempt reopening by showing an error or mistake had occurred rather then merely demonstrating that an overpayment had occurred. The ALJ found that CIGA could not prevail in its petition to reopen by merely showing that CIGA adjusters would not have made the agreement made by Home's adjusters.
We note the very broad discretion afforded the ALJs in deciding whether to reopen a claim for the adjustment of benefits previously awarded. See Wallace v. Industrial Commission, 629 P.2d 1091 (Colo. App. 1982) (reopening statute is purely permissive and vests broad discretion regarding whether to reopen); Renz v. Larimer County School District, W.C. No. 2-896-485 (July 12, 1995) (ALJ's authority to reopen is broad), affd, 924 P.2d 1177 (Colo. App. 1996). Here the ALJ with record support found that the parties had negotiated the amount of AWW. A broad number of factors can enter into the calculation of AWW and presumably the parties considered these factors in arriving at the agreed upon amount. Under these circumstances, we are not persuaded that the ALJ's order, refusing to alter the agreed upon AWW, is beyond the bounds of reason and we decline to interfere with the ALJ's decision to deny the petition to reopen.
III.
The respondents next contend that the ALJ erred as a matter of law in denying their petition to reopen because there was no substantial evidence that the claimant was enrolled in group health coverage at the time of his termination. The respondents argue the ALJ erred in his reliance on the COBRA letter that the claimant submitted over objection. The respondents also contend the ALJ erred in finding that the pay stubs unmistakably show that the claimant paid monthly premiums for health and dental insurance. The respondents contend the claimant's last pay stub before the industrial injury states that the claimant contributed nothing to the employers' health and dental plan. Exhibit A at 80.
The question of whether the evidence is sufficient to establish an inclusion of an amount in the calculation of AWW is an issue of fact for determination by the ALJ. Western Cultural Resource Management, Inc. v. Krull, 782 P.2d 870 (Colo. App. 1989); Makuski v. Golden Corral W. C. No. 4-337-805 (September 8, 2000). Because the issue is factual in nature, we must uphold the ALJ's determination if supported by substantial evidence in the record. Section 8-43-301(8) C.R.S. This standard of review requires us to consider the evidence in a light most favorable to the prevailing party, and defer to the ALJ's credibility determinations, resolution of conflicts in the evidence, and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo. App. 2003).
Here, the claimant testified that his employer provided him with health insurance benefits. Tr. at 50. The COBRA letter clearly supports the conclusion that the claimant was enrolled in a group health coverage plan at the employer. Exhibit 5 at 15. In addition, the pay stubs submitted into evidence also support the ALJ's conclusion. Exhibit 5. We acknowledge that the stub in the exhibits representing payments made in April 1993 indicate that nothing was paid of medical and dental. Exhibit A at 80. However, other pay stubs indicate contributions were made for medical and dental plans. Exhibit 1. In our view, the claimant's testimony, the COBRA letter and the pay stubs constitute substantial evidence supporting the ALJ's determination that the claimant was enrolled in a group health coverage plan at the employer.
IV.
The respondents next contend that the ALJ erred as a matter of law by failing to address a crucial argument presented at hearing. The respondents contend the ALJ erred as a matter of law by failing to address whether the claimant had under § 8-42-113.5 C.R.S, an affirmative duty to provide notice of his conversion to Medicare health care coverage and the effect of the claimant's failure to do so.
We acknowledge that the respondents did raise this issue in their Post-Hearing Position Statement. However, the respondents did not in their Post-Hearing Position Statement or in their brief filed in support of their petition to review state what the effect of such a breach of duty would result in. Presumably, it is the respondents' contention that such a breach of duty under the Workers' Compensation Act supports their petition to reopen. We are not persuaded that a remand for the ALJ to consider the issue is necessary.
Section 8-42-113.5 C.R.S provides for the recovery of overpayments and certain notices that are required. In relevant part, Section 8-42-113.5 provides as follows:
(1) If a claimant has received an award for the payment of disability benefits or a death benefit under articles 40 to 47 of this title and also receives any payment, award, or entitlement to benefits under the federal old-age, survivors, and disability insurance act, an employer-paid retirement benefit plan, or any other plan, program, or source for which the original disability benefits or death benefit is required to be reduced pursuant to said articles, but which were not reflected in the calculation of such disability benefits or death benefit:
(a) Within twenty calendar days after learning of such payment, award, or entitlement, the claimant, or the legal representative of a claimant who is a minor, shall give written notice of the payment, award, or entitlement to the employer or, if the employer is insured, to the employer's insurer. If the claimant or legal representative gives such notice, any overpayment that resulted from the failure to make the appropriate reduction in the original calculation of such disability benefits or death benefit shall be recovered by the employer or insurer in installments at the same rate as, or a lower rate than, the rate at which the overpayments were made. Such recovery shall reduce the disability benefits or death benefit payable after all other applicable reductions have been made.
The respondents, citing § 8-42-113.5 C.R.S., argue that the claimant is required to give notice to the insurer within twenty days of a receipt of an award for social security disability benefits. The respondents argue under this section of the law the claimant had a duty of reporting his enrollment in Medicare to the insurer. The respondents assert that the claimant's failure to do so resulted in his wrongful receipt of inflated benefits for over 13 years.
In interpreting these provisions, we apply the ordinary rules of statutory construction. The purpose of statutory construction is to effect the legislative intent. Because the best indicator of legislative intent is the language of the statute, words and phrases in a statute should be given their plain and ordinary meanings. Weld County School District RE-12 v. Bymer, 955 P.2d 550 (Colo. 1998). In our view, the statute imposes a duty to report the receipt of such items as social security benefits, or employer-paid retirement benefits. We do not view the conversion provision found in § 8-40-201(19)(b) and discussed in Schelly v. Industrial Claim Appeals Office as triggering the reporting requirements contained in § 8-42-113.5.
Here, the claimant received medical benefits under the Medicare program. Section 8-42-113.5 deals with reporting indemnity benefits, not with medical benefits. Because medical benefits are dealt with separately from indemnity benefits under the Act we do not understand the reporting requirements of § 8-42-113.5 as including changes in AWW triggered by the claimant's acquiring a similar or lesser insurance plan after COBRA benefits are terminated. See Royal Globe Insurance Co. Collins, 723 P.d. 731 (Colo. 1986) (medical expenses are distinguishable from indemnity benefits); see also Wild West Radio Inc. v Industrial Claim Appeals Office, 886 P.2d 304 (Colo. App. 1994) (court concluded that 50 percent reduction of "compensation" for injuries caused by claimant's intoxication did not apply to medical benefits); Support, Inc. v. Industrial Claim Appeals Office 968 P.2d 174 (Colo. App. 1998) (considering other provisions of the Act which treat medical benefits separately from indemnity benefits); Racon Construction Co., v. Industrial Claim Appeals Office, 775 P.2d 61 (Colo. App. 1989) (medical benefits not a form of "compensation" within the meaning of predecessor statute; rather, the phrase "successful on the claim for compensation" means the claimant established the respondents' liability for disability benefits).
In our view the claimant did not have an affirmative duty under § 8-42-113.5 C.R.S. to provide notice of his conversion to Medicare health care coverage as contended by the respondents. Therefore, we do not perceive a reason to remand the matter to the ALJ to address the issue.
V.
The respondents contend the ALJ erred as a matter of law by failing to address the argument that the claimant's AWW should not have included the cost of dental insurance. The respondents argue that § 8-40-201(19)(b) only requires respondents to pay for the cost of continuation of "group health coverage" and not the cost of continuation of dental care coverage. The claimant argues that Home's adjuster mistakenly included the cost of continuation of dental coverage in calculation of AWW and the ALJ erred by failing to address whether such error justified reopening of the claim.
We again acknowledge that although raised by the respondents the ALJ did not directly address this issue. However, in our opinion there is no need for the matter to be remanded. The ALJ did find that the Home adjuster negotiated an agreement with the claimant regarding AWW and the insurer filed an admission reflecting that agreement.
We are not persuaded by the respondents' argument that the Insurance Code of Colorado prohibits the inclusion of dental insurance in the calculation of AWW agreed to by the parties. To the contrary, dental insurance has been considered in the calculation of average weekly wage under the Workers' Compensation Act. See Humane Soc'y v. Industrial Claim Appeals Office, 26 P.3d 546 (Colo. App. 2001) (statute enacted to ensure disabled claimants would have access to funds for purchase of similar or lesser health insurance including dental coverage when employer no longer pays part of premium for health insurance); Sickler v. City Market, W.C. No. 4-638-377 (July 25, 2008) (ALJ allowed claimant to reopen claim regarding AWW and increased AWW to include replacement value of claimant's dental and vision insurance).
In our view, it is clear that dental insurance may be included in the calculation of AWW. Therefore, although the ALJ failed to address the argument that the claimant's AWW should not have included the cost of dental insurance, we perceive no need to remand the matter to the ALJ.
VI.
The respondents contend the ALJ erred as a matter of law by failing to address whether the claimant is entitled to the cost of "lost and not replaced" coverage for his dependents. The respondents contend that the claimant was divorced from his spouse at the time of the industrial injury and his only child was an independent adult. The respondents contend that the claimant's AWW should not reflect an arbitrary value for the imaginary cost of replacing their health and dental coverage.
We acknowledge that the ALJ did not directly address this issue although it was raised by the respondents. However, in our opinion a remand is not necessary. We are unpersuaded by the respondents that there was no reliable evidence that either the claimant or his dependents were enrolled in a group health plan at the time of the industrial injury.
The ALJ found that the COBRA continuation premium of $104.69 was appropriately included in the agreed-upon AWW. The ALJ based this on the COBRA letter indicating that the claimant's cost to continue the group health insurance for the family was $359.14 per month and the cost to continue dental insurance was $94.52 per month. Exhibit 5 at 16, 18. The total COBRA premium for continuation of the health and dental insurance was $453.66 per month, or $104.69 per week. Exhibit 5 at 16, 18.
In our opinion, there was substantial evidence in the record supporting the ALJ's determination in the form of the COBRA continuation notice sent by the employer's group health coverage carrier and the continuation notice from Delta Dental. Because the issue is factual in nature, we must uphold the ALJ's determination if supported by substantial evidence in the record. Section 8-43-301(8).
VII.
The respondents contend the ALJ erred as a matter of law by failing to address the mistaken application of COLA increases. The respondents assert that COLA increases were made in error because the admitted AWW erroneously included a cost of continuation of health and dental coverage. The respondents argue that the ALJ erred by failing to make any findings as to the effect of the admissions that were based on an incorrect calculation. The respondents conclude that the ALJ abused his discretion regarding reopening by failing to address the argument that the mistakes in COLA increase calculations were a basis for reopening the claim.
However, although the ALJ did not directly address this issue we are not persuaded that a remand is necessary. As noted above in our opinion, the ALJ's determination of the AWW agreed to and admitted by the respondents is supported by record evidence. Consequently we are not persuaded that the COLA increases based upon that AWW were an error mandating reopening. Therefore, we do not perceive an abuse in discretion in failing to reopen the claim.
VIII.
The respondents contend the ALJ's calculation of the correct PTD rate is not supported by substantial evidence in the record. This again is based upon the respondents' contention that the PTD benefits are based upon a mistake in the calculation of the claimant's AWW. We again are unpersuaded that the ALJ abused his discretion in reaching his determination regarding the correct calculation of AWW. Nor are we persuaded that the evidence compels the conclusion that the respondents are entitled to a reduction in the payment of future benefits to recoup an overpayment. We are persuaded neither that the evidence compelled the ALJ to conclude that an overpayment of benefits occurred nor that the record requires reopening of the claim.
IT IS THEREFORE ORDERED that the ALJ's order dated December 2, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ John D. Baird
______________________________ Thomas Schrant
DAVID CORTESE, 1821 MAPLEWOOD, PUEBLO, CO, (Claimant).
HOME INSURANCE AND COLO INSURANCE GUARANTY ASS'N, Attn: CLAUDIA RENEGAR, DENVER, CO, (Insurer).
LAW OFFICE OF MICHAEL W. SECKAR, PC, Attn: MICHAEL W. SECKAR, ESQ., PUEBLO, CO, (For Claimant).
MCELROY DEUTSCH MULVANEY CARPENTER, LLP, Attn: KATHERINE A. KELLEY, ESQ., GREENWOOD VILLAGE, CO, (For Respondents).