Opinion
W.C. No. 4-439-006
May 8, 2002
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Martinez (ALJ) which imposed penalties for their failure timely to admit or deny liability. We set aside the order.
A brief procedural history is necessary to understand our resolution of the issue on appeal. On October 11, 1999, the claimant suffered injuries during a fight with a co-worker. In a prior order the ALJ found the injuries were not compensable and, therefore, denied the claims for temporary disability benefits, medical benefits and penalties.
On review, we concluded the ALJ erred in finding the injuries were not compensable. Therefore, we reversed the order dismissing the claim. However, we affirmed the denial of temporary disability benefits and remanded the matter for further proceedings on the issue of penalties. The respondents appealed to the court.
The court of appeals agreed with our conclusions on the issue of compensability. Furthermore, in view of our remand, the court held our order was not final and reviewable on the issue of penalties. Therefore, the court did not address the respondents' contention they were not subject to penalties for the failure timely to admit liability for the injury.
On remand, the ALJ found the respondents failed to comply with § 8-43-203(1)(a), C.R.S. 2001, which requires the insurer to admit or deny liability within 20 days of knowledge of a disabling injury. Therefore, on November 26, 2001, the ALJ ordered the respondent-insurer to pay a penalty of one day's compensation for each of the 81 days between November 3, 1999 and January 24, 2000.
On review of the November 26 order, the respondents contend the ALJ's findings of fact are insufficient to support the imposition of penalties. They also contend the claimant is not entitled to penalties because the claimant has failed to establish his entitlement to indemnity benefits. We agree with the second argument and therefore, do not address the respondents' first contention.
Section 8-43-203(2)(a), C.R.S. 2001, provides that if the notice required by § 8-43-203(1)(a) is not timely filed, "the employer or if insured, the employer's insurance carrier may become liable to the claimant, if the claimant is successful on the claim for compensation, for up to one day's compensation for each day's failure to so notify." (Emphasis added).
In Smith v. Myron Stratton Home, 676 P.2d 1196, 1201 (Colo. 1984), the court held that a claimant is "successful" on a claim if he establishes the respondents' liability for compensation. Further, in Racon Construction Co., v. Industrial Claim Appeals Office, 775 P.2d 61 (Colo.App. 1989), the court concluded that medical benefits are not a form of "compensation" within the meaning of the predecessor statute. Rather, the Racon court held that the phrase "successful on the claim for compensation" means that the claimant has established the respondents' liability for disability benefits.
Based upon Racon Construction Co. v. Industrial Claim Appeals Office, supra, we have previously concluded that the imposition of penalties for the insurer's failure timely to admit or deny liability is premature where no temporary disability benefits have been paid or awarded, and there has been no determination of the claimant's entitlement to permanent disability benefits. McManus v. Oil Tools Limited, W.C. No. 4-481-926 (April 29, 2002) ; Bryne v. City of Colorado Springs, W.C. No. 3-863-711, (April 7, 1989). We adhere to our prior conclusions.
In this case, the claimant's request for temporary disability benefits was denied. Further, there has been no determination the claimant sustained permanent disability. Therefore, the ALJ erroneously imposed penalties under § 8-43-203(2)(a) at this time. However, we do not consider the claimant's entitlement to penalties if he subsequently establishes entitlement to disability benefits on account of the industrial injuries. We hold only that this record does not support the November 26 imposition of penalties. Consequently, we set aside the order imposing penalties.
IT IS FURTHER ORDERED that the ALJ's order dated November 26, 2001, is set aside.
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 May 8, 2002 to the following parties:
Chet Hamby, J. Keith Killian, Esq., P. O. Box 4859, Grand Junction, CO 81502
Bob Bacon Drywall, Inc., P.O. Box 1315, Carbondale, CO 81623-1315
Valiant, Zurich Insurance Company, P.O. Box 20048, Kansas City, MO 64195
J. Keith Killian, Esq., B. Beecher Threatt, Esq., and Amy K. Eaton, Esq., P. O. Box 4859, Grand Junction, CO 81502 (For Claimant)
Raymond A. Melton, Esq., 1801 Broadway, #1500, Denver, CO 80202 (For Respondents)
BY: A. Hurtado