Opinion
W.C. No. 4-581-926.
April 1, 2005.
FINAL ORDER
The respondents seek review of a corrected order of Administrative Law Judge Henk (ALJ) awarding temporary disability benefits from June 19, 2003 to July 15, 2004. The respondents contend that by accepting a voluntary layoff the claimant was responsible for his termination and, therefore, not entitled to temporary disability benefits. Alternatively, the respondents argue that the doctrines of collateral estoppel, res judicata, and waiver preclude the claimant from recovering temporary disability benefits before May 26, 2004. We affirm.
The ALJ found that on May 29, 2003 the claimant sustained a compensable injury to his left lower extremity. Seven days earlier he had signed a General Release and Waiver, voluntarily resigning his employment effective June 19, 2003. The ALJ found that the claimant accepted the voluntary layoff because the severance package was the most advantageous arrangement for him, given that he knew that a layoff "was certain to take place at some point in the next year or so." She found that the claimant had a reasonable belief that his employment would be terminated in the near future. Relying upon Goddard v. E.G. G, 888 P.2d 369 (Colo.App. 1994), the ALJ concluded that the claimant was not responsible for his termination. She found persuasive the language in Goddard that an employee who opts for a severance package in lieu of a pending layoff has not voluntarily terminated his or her employment. In Goddard the court held that an employee does not exercise any real choice in resigning when his employment will be terminated in any event.
I.
The respondents argue that, as a matter of law, the claimant's voluntary acceptance of a severance package to avoid a layoff scheduled to occur at the earliest one year in the future renders him "responsible" for his termination. We disagree.
Sections 8-42-105(4), C.R.S. (2004), and 8-42-103(1)(g), C.R.S. 2004, contain identical language stating that in cases "where it is determined that a temporarily disabled employee is responsible for termination of employment the resulting wage loss shall not be attributable to the on-the-job injury." In Colorado Springs Disposal v. Industrial Claim Appeals Office, 58 P.3d 1061 (Colo.App. 2002), the court held that the term "responsible" reintroduced into the Workers' Compensation Act the concept of "fault" applicable prior to the decision in PDM Molding, Inc. v. Stanberg, 898 P.2d 542 (Colo. 1995). Hence the concept of "fault" as it is used in the unemployment insurance context is instructive for purposes of the termination statutes. In that context "fault" requires that the claimant must have performed some volitional act or exercised a degree of control over the circumstances resulting in the termination. Padilla v. Digital Equipment Corp., 902 P.2d 414 (Colo.App. 1995) opinion after remand 908 P.2d 1185 (Colo.App. 1985). That determination must be based upon an examination of the totality of circumstances. Id.
The question whether the claimant acted volitionally or exercised a degree of control over the circumstances of the termination is ordinarily one of fact for the ALJ. Knepfler v. Kenton Manor, W.C. No. 4-557-781 (March 17, 2004). Accordingly, we must uphold the ALJ's findings if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2004; City of Durango v. Dunagan, 939 P.2d 496 (Colo.App. 1997). This standard of review requires us to view the evidence in the light most favorable to the prevailing party, and to accept the ALJ's resolution of conflicts in the evidence as well as plausible inferences which she drew from the evidence. Industrial Commission v. Royal Indemnity Co., 124 Colo. 210, 236 P.2d 293 (1951); Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995).
Here, the import of the ALJ's findings is that the claimant did not act volitionally in resigning from employment because his termination in the "near future" was inevitable. The record is susceptible of conflicting inferences and the ALJ, as was her sole prerogative, resolved those conflicts in favor of the claimant. An employer witness testified that the procedures for voluntary layoffs were established "because we knew that layoffs would be coming at some point." Tr. 38. The claimant testified that it was his understanding of the impending layoffs that it was entirely the employer's decision who to terminate and when they would be terminated. Tr. 64. He further testified that he had no "firm knowledge" of when he would be involuntarily terminated; however, he had been told that layoffs were "impending." Tr. 68, 80. The claimant also testified that, although he and his coworkers were aware that layoffs would occur, the company controlled the work schedules and had incentives to accelerate the inevitable layoffs. Tr. 82, 83.
The ALJ could reasonably infer from this evidence that the claimant's decision to accept a voluntary layoff was not volitional in light of the impending layoffs. In Goddard v. E.G. G. Rocky Flats, supra., the court held that an employee does not exercise any real choice in resigning when his employment will be terminated in any event. Although, as the respondents correctly point out, Goddard contains language referring to an "imminent" layoff, that is not dispositive regarding the question whether the claimant's decision here was volitional. The ALJ's finding that the claimant reasonably believed that he would be laid off in the "near future" is supported by substantial evidence in the record and by reasonable inferences therefrom, and we may not disturb that finding. F.R. Orr Construction v. Rinta, 717 P.2d 955 (Colo.App. 1985).
II.
The respondents argue in the alternative that the claimant is only entitled to temporary disability benefits after May 26, 2004, the date on which a hearing on temporary disability benefits was scheduled and then cancelled by the claimant. The respondents assert that the doctrines of res judicata, collateral estoppel, and waiver operate to bar the claimant's receipt of benefits before that date. We disagree.
Following a hearing held on November 4, 2003, the ALJ entered an order denying temporary disability benefits on the ground that the claimant failed to prove that he was temporarily disabled. In response to a "Letter of Appeal" with accompanying medical reports filed by the claimant the ALJ issued a procedural order granting the parties the opportunity to submit written argument regarding whether the matter should be reopened for consideration of the new evidence. She then issued an order dated March 17, 2004, vacating her previous order of November 4, 2003 and ordering the matter set for hearing. A hearing was apparently then set for May 26, 2004, but was vacated at the claimant's request. The claimant's attorney explained at the hearing that the previous hearing set for May 2004 had been cancelled because she entered her appearance five days before that date and was not prepared to proceed. Tr. 5. An application for hearing was then filed by the claimant's attorney on May 27, 2004.
The doctrine of res judicata, or claim preclusion, bars relitigation in a second action of claims actually decided, or which could have been decided in the first action. Ferris v. Bakery Confectionary and Tobacco Union, Local 26, 867 P.2d 38 (Colo.App. 1993). Collateral estoppel, or issue preclusion, is applicable when a party seeks to relitigate an issue of fact or law determined in a prior proceeding. Sunny Acres Villa Inc. v. Cooper, 25 P.3d 44 (Colo. 2001). However, application of either doctrine requires that there have been a final judgment resulting from the prior action. S.O.V. v. People, 914 P.2d 355 (Colo.App. 1996).
Contrary to the respondents' argument, the ALJ's prior denial of temporary disability benefits did not become "final" on the date the claimant cancelled the hearing set on the issue of the new medical evidence. Rather, the ALJ's supplemental order of March 17, 2004 vacated the previous order dated November 18, 2003, and ordered the matter set for hearing. Orders in the workers' compensation context are not final unless they dispose of an issue by awarding or denying a benefit or penalty. Section 8-43-301(2), C.R.S. 2004. When the ALJ vacated the previous order, it no longer had the effect of denying temporary disabilty benefits for any period. Therefore, there was no "final judgment" required for the application of the principles of res judicata and collateral estoppel.
The respondents also argue that by vacating the hearing set for May 26, 2004, the claimant waived the right to assert entitlement to temporary disability benefits prior to the date of the hearing. The respondents point to the language of Rule VIII(K) stating that "[t]he parties may stipulate that the cancellation [of a hearing] will not result in a waiver of any issues." The claimant argues in response, first, that the respondents waived that argument by not raising it until the petition to review was filed and, second, in any event, the cancellation of a hearing does not automatically result in a waiver of the issues set. We agree with the claimant.
The issue of waiver is an affirmative defense that must be pleaded and proved and that may itself be waived. Lewis v. Scientific Supply Co., 867 P.2d 905 (Colo.App. 1995). In the present case the respondents' attorney argued at the hearing for the application of res judicata and collateral estoppel. However, the issue of waiver was not mentioned and we conclude that the respondents waived that argument.
In any event, absent the waiver we would not reach a different result. Rule VIII(K) does not compel the conclusion that the claimant in this case waived the right to seek temporary disability benefits by vacating the hearing. We have previously noted that Rule VIII(K) does not require that a cancellation of a hearing be treated as a waiver of the right to litigate issues, and we see no reason to depart from that reasoning. Gerchman v. Wal-Mart Stores, Inc., W.C. No. 4-525-960 (July 23, 2004).
Moreover, a waiver is the intentional relinquishment of a known right, and must be the product of deliberate, knowing, and intelligent action. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988). A waiver may be explicit or implicit, and may be established by conduct that evidences a party's intent to relinquish a known right. Id. The record, however, must demonstrate a clear intent not to assert the disputed right. Department of Health v. Donohue, 690 P.2d 243 (Colo. 1984). Here, the record does not demonstrate that intent. There is nothing in this record from which we can infer the intent to waive the substantive right to seek temporary disability benefits prior to the date of the cancelled hearing.
IT IS THEREFORE ORDERED that the ALJ's order dated November 23, 2004 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________ David Cain
____________________ Curt Kriksciun
Larry Hankins, Arvada, CO, Albert A. Jerman, Golden, CO, Legal Department, Pinnacol Assurance — Interagency Mail, Lorraine M. Weissman, Esq. and Rod Gloria, Esq., Denver, CO, (For Claimant).
Benjamin E. Tracy, Esq., Denver, CO, (For Respondents).