Opinion
W.C. No. 2002-50381.
January 8, 2004.
ORDER OF REMAND
The respondent seeks review of an order of Administrative Law Judge Jones (ALJ) which granted summary judgment and required the respondent to pay a fine and penalties. We set aside the order and remand the matter for further proceedings.
The Division of Workers Compensation (Division) applied for a hearing and requested an order imposing a fine and penalties for the respondent's failure to maintain workers' compensation insurance and failure to respond to the Division's requests for information. An evidentiary hearing was set for September 9, 2003. However, on August 13, 2003, the Division filed a Motion for Summary Judgment. The respondent did not respond to the Motion for Summary Judgment.
Based upon the Affidavit attached to the Division's Motion for Summary Judgment, and the respondent's failure to respond to a Request for Admissions, the ALJ found the respondent was operating a business with employees without carrying workers' compensation insurance. Further, the ALJ found the cost of one year's workers' compensation premium for the respondent is $11,068.14. Therefore, the ALJ ordered the respondent to pay a fine in the amount of $11,068.14 for the failure to carry workers' compensation insurance.
The ALJ also found the respondent willfully failed to respond to the Division's requests for information in violation of § 8-47-201 C.R.S. 2003. As a consequence, the ALJ imposed penalties under § 8-43-304(1), C.R.S. 2003, at the rate of $500 per day for a period of 567 days in a total amount of $283,500. The respondent filed a timely Petition to Review.
The respondent's Petition to Review asserts that the respondent allowed its workers' compensation coverage to lapse effective May 14, 2003, because as of May 1, 2003, it had no employees. The respondent also alleges that it notified the Division of the change and that it provided the Division additional information in response to an inquiry on August 27, 2003.
As we understand the respondent's Petition to Review, the respondent contests the ALJ's imposition of the fine and penalty based upon its assertions that it was not required to carry workers' compensation insurance and did not fail to respond to the Division's requests for information. However, the respondent did not file a brief in support of the petition to review. Consequently, the effectiveness of our review is limited. See Ortiz v. Industrial Commission, 734 P.2d 642 (Colo.App. 1986).
Our authority to review the ALJ's order is defined in § 8-43-301(8), C.R.S. 2003. That statute precludes us from disturbing the ALJ's order unless the ALJ's findings of fact are insufficient to permit appellate review, the ALJ has not resolved conflicts in the evidence, the record does not support the ALJ's findings, the findings do not support the order, or the order is not supported by the applicable law.
Section 8-44-101 C.R.S. 2003, provides that any employer subject to the provisions of the Workers' Compensation Act (Act) shall secure workers' compensation insurance for all employees. Section 8-43-409 C.R.S. 2003, authorizes the ALJ to impose a fine up to $500 per day against any employer who fails to maintain workers' compensation insurance, but the fine may not exceed the annual cost of the insurance premium that would have been charged for such employer.
As a general rule, hearings are required to determine "any controversy concerning any issue arising" under the Act. Section 8-43-207(1), C.R.S. 2003. This is true because where an administrative adjudication turns on issues of fact, the parties are entitled to a hearing at which they may present evidence in support of their positions, confront adverse evidence, and make arguments concerning their respective positions. Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076, (Colo.App. 1990).
However, C.R.C.P. 56 allows an ALJ to enter summary judgment where there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Morphew v. Ridge Crane Service, Inc., 902 P.2d 848 (Colo.App. 1995) ; Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988) (C.R.C.P. apply insofar as not inconsistent with the procedural or statutory provisions of the Act). Accordingly, where the pertinent facts are undisputed, an ALJ may resolve an issue without conducting a hearing. See Service Supply Co. v. Vallejos, 169 Colo. 14, 452 P.2d 387 (1969).
Here, the record contains no evidence the respondent raised any factual dispute before the ALJ concerning whether it was an uninsured employer who failed to respond to the Division's requests for information. Specifically, the record indicates the respondent did not file any response to the Division's Application for Hearing or the Motion for Summary Judgment. Furthermore, the factual assertions in the respondent's Petition to Review may not substitute for the absence of similar assertions before the ALJ. See City of Boulder v. Dinsmore, 902 P.2d 925 (Colo.App. 1995) (review limited to record before ALJ); Colorado Compensation Ins. Authority v. Industrial Claim Appeals Office, 884 P.2d 1131 (Colo.App. 1994) (an issue may not be raised for the first time on appeal); Subsequent Injury Fund v. Gallegos, 746 P.2d 71 (Colo.App. 1987).
Moreover, because the respondent did not respond to the Request for Admissions, the facts asserted in the Request are deemed admitted. See C.R.C.P 36(a); Nova v. Industrial Claim Appeals Office, supra. Therefore, the record contains substantial evidence to support the ALJ's finding that the respondent violated § 8-44-101. However, the record does not support the ALJ's imposition of the maximum fine allowable by law.
Under § 8-43-409 the amount of the fine to be imposed is discretionary and, thus, the statute contemplates that the amount of the fine will be based on the particular facts presented including any mitigating or aggravating factors. The Division's Request for Admissions does not request the respondent admit that a maximum fine is warranted and the respondent did not so admit. To the contrary, the respondent's Petition to Review alleged it was not required to carry insurance after May 1, 2003.
We also note that although the Affidavit attached to the Motion for Summary Judgement contains evidence concerning the amount of the maximum fine allowable by law and the affiant's "opinion" that the maximum fine should be imposed, it does not establish as a matter of law that the maximum fine should be imposed. Under these circumstances, the amount of the fine remained a question of fact. Consequently, the ALJ erred insofar as he granted summary judgment concerning the amount of the fine to be imposed. See Moses v. Moses, 180 Colo. 397, 505 P.2d 1302 (1973) (summary judgment should not be granted where there is the slightest doubt as to the facts); Jafay v. Board of County Comm'rs of Boulder County, 848 P.2d 892 (Colo. 1993) (where reasonable persons could disagree on pertinent issue summary judgment is not appropriate).
Section 8-43-304(1) allows an ALJ to impose penalties against any employer who violates a provision of the Act. The imposition of penalties under § 8-43-304(1) is a two step process. The ALJ must first determine whether the disputed conduct constituted a violation of the Act. If the ALJ finds a violation, the ALJ may impose penalties if he also finds that the employer's actions were objectively unreasonable. City Market, Inc. v. Industrial Claim Appeals Office, 68 P.3d 601 (Colo.App. 2003). Further, the amount of the penalty is discretionary up to a maximum of $500 per day for each offense.
Section 8-47-201 states that:
"Every employer receiving from the division any blanks with directions to fill out the same or requests for information required for the purposes of articles 40-47 of this tile shall properly fill out the blanks and furnish the information so requested fully and correctly. The director may require that any information requested by the division be verified under oath and may fix the time within which said information shall be returned. (Emphasis added).
The ALJ found the Division's first request for information was made on September 6, 2002 (Finding of Fact 6). We are unable to ascertain the basis for this finding because the Division alleged that its first written request for information was February 19, 2002. ( See Motion for Summary Judgment p. 12). Further, the ALJ determined that 567 days had elapsed since September 6, 2002, ( see Finding of Fact 9), when in fact only 357 days elapsed between September 6, 2002 and the date of the ALJ's August 27, 2003 penalty order. However, 567 days would have elapsed between February 19, 2002 and the evidentiary hearing that was vacated.
In any case, the record does not contain copies of the Division's requests for information and there no evidence of the deadline provided by the written requests. Neither are we able to find any procedural rule or interpretative bulletin which suggests that the Director fixed the time within which requests for information must be returned.
Further, if the Division's requests for information do not specify a response deadline, the general rule provides that the performance is required within a "reasonable time," and what constitutes a "reasonable time" is a determination for the ALJ based upon the particular facts and circumstances presented. Cf. Gould v. Rite-Way Oil and Investment Co., 143 Colo. 65, 351 P.2d 849, 851 (1960); Colorado Womens' College v. Bradford-Robinson Printing, Co., 114 Colo. 237, 157 P.2d 612 (Colo. 1945); Costello v. Cook, 852 P.2d 1330, 1332 (Colo.App. 1993). Under these circumstances, the ALJ's implicit determination that the respondent was immediately required to respond to the Division's request for information is not supported by the record. To the contrary, the existing record compels the conclusion that the date of the respondent's violation of § 8-47-201 is a disputed issue of material fact.
Moreover, the ALJ imposed the maximum daily penalty rate allowed by § 8-43-304(1). However, the respondent was not asked to admit that penalties at the rate of $500 per day were appropriate and neither the Request for Admissions nor the Affidavit establish as a matter of law that a $500 per day penalty is warranted. Indeed, the respondent's Petition to Review asserts there were mitigating circumstances to be considered. Consequently, the ALJ erred in vacating the evidentiary hearing and determining the amount of the penalty by summary judgment. Therefore, we set aside the penalty order and remand the matter for further proceedings which afford the parties an evidentiary hearing.
In remanding the matter we express no opinion on the amount of the fine or penalty to be imposed. However, we note that in Northern Telecom Inc. v. Industrial Claim Appeals Office, (Colo.App. No. 02CA2052, December 24, 2003) (not selected for publication), a division of the court set aside our order in Giddings v. Northern Telecom Inc., W.C. No. 4-293-203 (September 30, 2002), which upheld a $91,000 penalty under § 8-43-304(1) for the failure to pay an authorized medical bill. The court held that a penalty may be unconstitutionally excessive, and thus an abuse of discretion if it is "grossly disproportionate" to the challenged conduct. Slip. op. p. 6.
IT IS THEREFORE ORDERED that the ALJ's order dated August 27, 2003, is set aside and the matter is remanded for further proceedings concerning the amount of the fine and penalty to be imposed. In all other respects the ALJ's order is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. DeanCopies of this order were mailed to the parties at the addresses shown below on January 8, 2004 by A. Hurtado.
Christine L. Silva, Silva Floor Solutions, 6239 Reed St., Arvada, CO 80003-4818
Coverage Enforcement Unit, Tower 2, #620, Division of Workers' Compensation — Interagency Mail
Eric Rothaus, Esq., State Services Section, 1525 Sherman St., 5th floor, Denver, CO 80203 (For Division)