Opinion
W.C. No. 4-395-163
January 5, 2001
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Gartland (ALJ) which required them to pay penalties under § 8-43-304(1), C.R.S. 2000, and permanent partial disability benefits based upon 25 percent whole person impairment. We affirm.
On July 9, 1998, the claimant suffered an admitted injury. Dr. Hansen placed the claimant at maximum medical improvement (MMI) on January 21, 1999, and issued a 25 percent of the whole person impairment rating. On June 15, 1999, the respondents filed a final admission of liability which admitted liability for permanent partial disability benefits consistent with Dr. Hansen's 25 percent rating. The claimant timely objected.
At the respondents' request, Dr. Hansen performed a "repeat" impairment rating on May 27, 1999. Dr. Hansen again placed the claimant at MMI on January 21, 1999. However, Dr. Hansen opined the claimant's impairment had lessened over time and was 19 percent of the whole person. The respondents filed a new final admission of liability dated August 6, 1999, which admitted liability for permanent partial disability benefits based on the 19 percent rating. As a result the permanent partial disability award was reduced from $24,137.28 to $18,344.33. The claimant timely objected and requested a hearing on the issue of permanent partial disability. The claimant also penalties under § 8-43-304(1), for the respondents' unilateral withdrawal of the June 15 final admission.
The ALJ determined the 25 percent whole person medical impairment rating was Dr. Hansen's medical impairment rating for purposes of § 8-42-107(8)(c), C.R.S. 2000. Therefore, the ALJ ordered the respondents to pay permanent partial disability benefits consistent with their June 15 final admission.
On the issue of penalties, the ALJ determined the filing of the August 6, 1999 final admission, was a violation of the Rules of Procedure, Part IV(N)(5), 7 Code Colo. Reg. 1101-3 at 6.03 and § 8-43-203(2)(d), C.R.S. 2000. Further, the ALJ found the respondents' violation was objectively unreasonable. In support, the ALJ found the respondents did not present evidence relating to the reason for the unilateral withdrawal of the June 15 final admission. The ALJ also relied on a September 13, 1999, letter from the Claims Management Department of the Division of Workers' Compensation, which advised the respondents the August 6 final admission was improper and instructed them to pay permanent partial disability benefits in accordance with the June 15 final admission or request a hearing to withdraw the June 15 admission. Therefore, the ALJ assessed penalties at the rate of $30 per day from August 6, 1999 to June 12, 2000.
I.
On appeal the respondents contend Rule IV(N)(5) authorized them to file an amended admission based upon Dr. Hansen's revised impairment rating. In fact, the respondents rely upon Human Resource Co. v. Industrial Claim Appeals Office, 984 P.2d 1194 (Colo.App. 1999), to argue they were required to file a new final admission of liability upon receipt of Dr. Hansen's revised admission. Therefore, the respondents contend the claimant failed to prove grounds for the imposition of penalties. We disagree.
Initially, we note the respondents do not contend the penalty claim is governed by the provisions of § 8-43-401(2)(a), C.R.S. 2000. Therefore, we do not consider whether the ALJ erred by assessing penalties under § 8-43-304(1) instead of § 8-43-401(2)(a). See Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997) [where the gravamen of the challenged conduct is the insurer's failure to pay medical or permanent disability benefits the penalty claim is governed by § 8-43-401(2)(a)].
The courts have held that the failure to comply with the Rules of Procedure may subject the insurer to penalties under § 8-43-304(1), C.R.S. 2000. Monfort Transportation v. Industrial Claim Appeals Office, 942 P.2d 1358 (Colo.App. 1997). That statute allows an ALJ to impose penalties up to $500 a day. The imposition of penalties under § 8-43-304(1) requires a two step analysis. The ALJ must first determine whether the disputed conduct constituted a violation of any provision of the Workers' Compensation Act or a procedural rule. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). If the ALJ finds a violation, the ALJ must determine whether the respondents' actions which resulted in the violation were objectively reasonable. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). The reasonableness of the respondents' actions depends upon whether the actions were predicated on a rational argument based in law or fact. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997). Determination of whether the respondents' conduct was reasonable is a question of fact and generally dependent on the particular circumstances of the case. See Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). Consequently, we must uphold the ALJ's determinations if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2000.
A.
Section 8-42-107(8)(c), provides that after MMI has been determined, an authorized treating physician shall determine the claimant's medical impairment rating as a percentage of the whole person. Rule IV(N)(5) provides that for injuries which occur on or after July 1, 1991, which are required to be filed with the Division of Workers' Compensation and are subject to § 8-42-107(8), the insurer is required within twenty days of receipt of a determination of medical impairment to file an admission of liability consistent with the physician's rating or request a Division-sponsored independent medical examination (DIME).
The interpretation of procedural rules is subject to the usual rules of statutory construction. Consequently, Rule IV(N)(5) rule must be construed to effectuate the legislative intent of the statute it is designed to administer. Popke v. Industrial Claim Appeals Office, 944 P.2d 677 (Colo.App. 1997) ; Gerrity Oil and Gas Corp. v. Magness, 923 P.2d 261 (Colo.App. 1995). In discerning the legislative intent, we must first examine the actual language of the statute. Words and phrases are to be given their plain and ordinary meanings and we may not read non existent provisions into the rule. Sullivan v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 99CA2203, October 12, 2000); Arenas v. Industrial Claim Appeals Office, 8 P.3d 558 (Colo.App. 2000).
Nothing in Rule IV(N)(5) allows an insurer to request a "repeat" medical impairment rating from the authorized treating physician. Further, Rule IV(N)(5) neither allows nor requires the insurer to file an amended final admission of liability based upon a "repeat" medical impairment rating by the treating physician. To the contrary, the respondents have only two choices upon receipt of the authorized treating physician's whole person impairment rating. The respondents must either admit liability consistent with the rating or request a Division-sponsored independent medical examination (DIME).
Here, the record supports the ALJ's determination that the respondents failed to file an admission of liability consistent with Dr. Hansen's 25 percent whole person rating or request a DIME within twenty days of the receipt of Dr. Hansen's January 1999 rating. Furthermore, we agree with the ALJ's determination that the respondents' unilateral withdrawal of the June 15 final admission upon receipt of Dr. Hansen's response to their request for a "revised" rating violated Rule IV(N)(5).
Human Resource Co. v. Industrial Claim Appeals Office, supra, does not compel a contrary conclusion. In Human Resource the insurer was subject to penalties under § 8-43-304(1) for failing to file an amended final admission of liability for permanent partial disability benefits where the initial final admission did not address all compensable components of the injury. Rather, the initial admission admitted liability for a scheduled disability award, but the claimant's permanent mental impairment had not yet been rated. Under these circumstances, the court held the respondents were required to file an amended admission of liability concerning the claimant's mental impairment after that rating was issued.
Here, there is no dispute that Dr. Hansen's January 1999 rating was based on all compensable components of the industrial injury. The revised rating was merely Dr. Hansen's reevaluation of the medical impairment which he considered when he issued the January 1999 rating. Consequently, we agree with the ALJ that this claim is factually distinguishable from the circumstances in Human Resource Co. v. Industrial Claim Appeals Office, supra.
In reaching our conclusions we note that Rule IV(N)(7) at 7, allows an insurer to modify "an existing admission regarding medical impairment." However, Rule IV(N)(7) applies only where the impairment rating is changed pursuant to a binding independent medical examination, a DIME, or an order. None of those circumstances exist here and therefore, Rule IV(N)(7) is inapplicable.
We also recognize that under Rule IV(L)(1) at 6.01, the "director" may allow an insurer to file a revised admission. However, the respondents' August 6 final admission was not filed pursuant to a "request" of the director. In fact, the Claims Management Department explicitly advised the respondents that the August 6 final admission was improper. Thus, the ALJ did not err in rejecting the respondents' contention that the August 6 admission was authorized by the rules of procedure.
B.
We also perceive no err in the ALJ's finding that the respondents violated § 8-43-203(2)(d). That statute provides that: "Hearings may be set to determine any matter, but, if any liability is admitted, payments shall continue according to admitted liability." In HLJ Management Group, Inc. v. Kim, 804 P.2d 250 (Colo.App. 1990), the court interpreted this provision to mean that, "if an admission of liability is contested by either party, the determination of the matter thus placed in issue is subject to determination by the ALJ at the adversary hearing." Furthermore, an insurer may not contest its own final admission. Weber v. Mesa County Sheriff's Department, W.C. No. 3-113-179 (May 28, 1998) ; aff'd., Mesa County Sheriff's Department v. Industrial Claim Appeals Office, (Colo.App. No. 98CA11119, February 25, 1999) (not selected for publication).
Here, the respondents concede that they intended the August 6, 1999 final admission to substitute for the June 15 final admission. Under these circumstances, the ALJ reasonably inferred that the respondents unilaterally reduced the claimant's permanent partial disability award in violation of § 8-43-203(2)(d) by withdrawing the June 15 final admission and filing the August 6, 1999 final admission for a lower permanent partial disability award. Furthermore, even though the respondents continued to pay permanent partial disability benefits in accordance with the August 6 final admission, the August 6 admission reflected their intent not to pay the $24,137.28 award set forth in the June 15 admission. Consequently, the ALJ reasonably inferred that the respondents unilaterally terminated payments contrary to "admitted liability."
C.
Next, we reject the respondents' contention the evidence is insufficient to support the ALJ's finding that filing of the August 6 final admission was objectively unreasonable. The record contains substantial evidence to support the ALJ's determination the respondents actions were objectively unreasonable. As stated above, nothing in Rule IV(N)(5) authorized the respondents to request the authorized treating physician conduct a repeat medical impairment rating. Furthermore, the ALJ reasonably inferred the respondents unreasonably relied on Human Resource Co. v. Industrial Claim Appeals Office, supra, as legal authority for the filing of a new admission based upon the revised rating they requested from Dr. Hansen.
Nevertheless, the respondents content the ALJ's erroneously relied on September 13, 1999, letter from the Claims Management Unit which advised the respondents that the August 6 final admission was improper. The respondents contend the letter is merely an "improper legal opinion by a Division employee" which has "no force or effect." Again we disagree.
The probative weight of the September letter was a matter within the sole discretion of the ALJ. Delta Drywall v. Industrial Claim Appeals Office, 868 P.2d 1155 (Colo.App. 1993). However, the letter is some evidence the respondents were on notice the August 6 was improper, and the ALJ could infer that upon receipt of the letter a reasonable insurer would have withdrawn the August 6 final admission or requested a DIME. Indeed administrative interpretation of statutes and regulations by officials charged with their administration is entitled to some deference. See Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, 5 P.3d 385 (Colo.App. 2000).
II.
In any case, the respondents contend the ALJ exceeded his authority by ordering them to pay permanent partial disability benefits based upon Dr. Hansen's January 1999 rating. The respondents argue that the ALJ's order deprived the claimant of the right to a DIME.
Section 8-42-107(8)(c) provides that when a party disputes the authorized treating physician's medical impairment rating, the issue of permanent partial disability shall not be adjudicated until the claimant has undergone a DIME. Delaney v. Industrial Claim Appeals Office ___ P.2d ___ (Colo.App. No. 00CA0081, September 14, 2000). However, the parties may waive their right to a DIME. Colorado AFL-CIO v. Donlon, 914 P.2d 396 (Colo.App. 1995) ; cf. Carroll v. Cunningham Construction Co., W.C. No. 3-113-816, May 14, 1986 , aff'd., Cunningham Construction v. Carroll (Colo.App. No. 96CA1008, December 12, 1996) (not selected for publication) (IME request on the sole issue of permanent disability was waiver of IME on the issue of maximum medical improvement). Waiver may be established by conduct which evidences a party's intent to relinquish a know right. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988). Furthermore, where no DIME is timely requested, ( see § 8-42-107.2 C.R.S. 20000), the authorized treating physician's rating is binding on the parties and the ALJ. Egan v. Industrial Claim Appeals Office, 971 P.2d 664 (Colo.App. 1998); Postlewait v. Midwest Barricade, 905 P.2d 21 (Colo.App. 1995).
The respondents have not requested a DIME. Further, at the conclusion of the hearing the ALJ requested the parties present written closing arguments. (Tr. p. 28). In his "Post-Hearing Position Statement" the claimant requested an order awarding permanent partial disability benefits based upon Dr. Hansen's 25 percent impairment rating. (June 6, 2000, p. 3). Thus, the claimant implicitly waived his right to a DIME to dispute the accuracy of Dr. Hansen's 25 percent whole person impairment rating. Consequently, the record supports the ALJ's implicit determination that the issue of permanent partial disability was ripe for adjudication.
IT IS THEREFORE ORDERED that the ALJ's order dated June 12, 2000, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
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. 2000. 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 5, 2001 to the following parties:
Rosanne M. Exum, 601 S. Madison, Cortez, CO 81321
Jan Gardner, Southwest Memorial Hospital, 1311 N. Mildred Rd., Cortez, CO 81327
Colorado Hospital Association Trust, Sharon Thompson, Support Services, Inc., P. O. Box 3513, Englewood, CO 80155-3513
Barbara Carter, Special Funds Unit, Division of Workers' Compensation — Interagency Mail
JoAnne Ibarra, Carrier Practices Unit, Division of Workers' Compensation — Interagency Mail
Elizabeth E. Salkind, Esq., 572 E. 3rd Ave., Durango, CO 81301 (For Claimant)
Clyde E. Hook, Esq. and Harvey D. Flewelling, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents)
BY: A. Pendroy