Opinion
W.C. No. 4-481-926
April 29, 2002
FINAL ORDER
The claimant and the respondents separately petition for review of a Corrected Order of Administrative Law Judge Gartland (ALJ) dated November 23, 2001. We affirm the order in part, and set aside part of the order.
The claimant suffered work-related injuries on March 11, 1998, while working for the respondent-employer in Algeria. In an order dated October 25, 2001, the ALJ found the injuries were compensable under the Colorado Workers' Compensation Act (Act). Further, the ALJ determined the employer was insured for workers' compensation by American Home Assurance Company (Assurance).
On November 23, 2001, the ALJ issued the Corrected Order on review. The Corrected Order directed the respondents to "provide benefits due the claimant under the provisions" of the Act. The ALJ also ordered the employer to pay a penalty of $9,780 for the failure timely to admit or deny liability for the injuries. However, the ALJ denied the claimant's request for a penalty under § 8-43-408(1), C.R.S. 2001 (concerning penalties for failure to insure).
Initially, we note that the respondents' Designation of Record includes the "complete official files of the Division of Workers' Compensation" (DOWC) and the "Division of Administrative Hearings." The record transmitted to us on appeal apparently does not include the complete DOWC file. However, our review is limited to the evidentiary record before the ALJ, and there is no evidence in the record which tends to suggest the respondents requested the ALJ to consider the entire DOWC file as part of the evidentiary record for the hearing. See City of Boulder v. Dinsmore, 902 P.2d 925 (Colo.App. 1995); Rules of Procedure, Part VIII(A)(6), 7 Code Colo. Reg. 1101-3 at 22. Consequently, we have not obtained or considered the DOWC file, but restricted our review to the record made at the hearing.
I.
Section 8-44-101 (1), C.R.S. 2001 [formerly § 8-44-101 C.R.S. 1973], requires that any employer subject to the Act shall secure compensation for its employees by either maintaining self-insurance, or purchasing insurance. Where the employer secures private insurance, the statute requires the employer to file a notice of the insurance with the DOWC on a form prescribed by the DOWC.
Section 8-43-408(1), C.R.S. 2001, [formally 8-44-107 C.R.S. 1973], provides:
In any case where the employer is subject to the provisions of [the Act] and at the time of an injury has not complied with the insurance provisions of said articles, or has allowed the required insurance to terminate, or has not effected a renewal thereof, . . . .the amounts of compensation or benefits provided in said articles shall be increased fifty percent." (Emphasis added)."
The claimant contends that regardless of the respondents' retrospective decision to provide workers' compensation benefits, the respondents failed to prove they complied with the insurance requirements of § 8-44-101(1). In particular, the claimant contends there is no evidence the respondents had workers' compensation insurance which was "certified by" the DOWC. Therefore, the claimant contends the ALJ erroneously refused to impose penalties under § 8-43-408(1). We disagree.
We agree with the claimant that once he established a compensable injury, the burden shifted to the employer to establish a limitation of its liability by proof it had workers' compensation insurance. Cowin Co. v. Medina, 860 P.2d 535 (Colo.App. 1992) ; Abeyta v. Ulibarri Construction, W.C. No. 3-938-106 (September 14, 1990). However, insofar as the claimant sought penalties, it was the claimant's burden to prove the respondents were subject to penalties. See Valley Tree Service v. Jiminez, 787 P.2d 658, 660 (Colo.App. 1990) (burden of proof rests upon the party who asserts the affirmative of an issue). Therefore, we reject the claimant's contention that the ALJ erroneously required the claimant to prove that the failure to comply with § 8-44-101(1) supports the imposition of penalties under § 8-43-408(1).
In United States Fidelity and Guaranty, Inc. v. Kourlis, 868 P.2d 1158, 1161 (Colo.App. 1994), the court concluded that in determining whether penalties should be imposed under former § 8-44-107(1), "the only issue to be decided is whether there is appropriate insurance in effect for the benefits due the injured employee." In Kourlis, an ALJ found the employer did not carry Colorado workers' compensation insurance. However, the employer caused the claim for workers' compensation benefits to be filed in Wyoming and thereby secured compensation for the claimant through the Wyoming workers' compensation system. Under these circumstances, the Kourlis court rejected the claimant's argument that the employer failed to comply with the insurance provisions of the Act.
In reaching its conclusions, the Kourlis court cited Anderson v. Dutch Maid Bakeries, 102 P.2d 740, 711 (Colo. 1940). The facts in Anderson involved the sale of a bakery. At the time of the sale, the seller had workers' compensation coverage for the bakery. The purchaser paid the seller the amount of the unearned premium on the policy, but did not notify the insurer of the change of ownership and thus, did not effect an assignment of the policy. When an employee of the purchaser suffered a work related injury, the insurer denied liability. The court concluded the only issue was whether the employer had insurance. Because the purchaser did not make sure it had actual coverage for its injured employee, the court held that penalties under former § 8-44-107(1) were proper.
Here, the respondents offered the testimony of John Russo (Russo), who works for American International Underwriters, the parent company of Assurance. Russo testified that the employer's workers' compensation insurance policy with Assurance covered the claimant's industrial injuries. (Russo depo. pp. 3, 12, 15, 16, 21, 22, 26). Crediting Russo's testimony, the ALJ found the employer sustained its burden to prove it had actual coverage for the claimant's industrial injuries. See Regional Transportation District v. Jackson, 805 P.2d 1190 (Colo.App. 1991) (ALJ's credibility determinations adequately informs reviewing court how ALJ resolved conflicts in the evidence). Furthermore, the finding supports the conclusion the claimant failed to prove the respondents are subject to penalties for failing to comply with § 8-44-101(1). United States Fidelity and Guaranty, Inc. v. Kourlis, supra. Therefore, the ALJ did not err in denying the request for penalties under § 8-43-408(1).
II.
The respondents contend the ALJ erroneously ordered the employer to pay a penalty for failing timely to admit or deny liability for the injuries. The respondents contend § 8-43- 203(2)(a) does not allow the imposition of penalties against an insured employer. We set aside the penalty order, although for different reasons.
Section 8-43-203(1), C.R.S. 2001, provides that the employer or, if insured, the employer's insurance carrier must notify the DOWC within 20 days of knowledge of a disabling injury or an injury which results in permanent impairment. Section 8-43-203(2)(a) provides that if the notice required by § 8-43-203(1) 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).
A claimant is "successful" on a claim if he establishes the respondents' "liability" for compensation. Smith v. Myron Stratton Home, 676 P.2d 1196, 1201 (Colo. 1984). 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 permanent disability. Bryne v. City of Colorado Springs, W.C. No. 3-863-711, (April 7, 1989). We adhere to our prior conclusion.
In this case, no disability benefits have been paid or awarded to the claimant. Nor has there been a determination that the claimant has sustained any 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 23 imposition of penalties. Consequently, we set aside the order imposing penalties.
III.
We reject the respondents' contention that the ALJ erred in awarding "non-specific" benefits under the Act when no benefits were subject to adjudication, and the parties expressly reserved the issues of temporary disability and medical benefits. The ALJ expressly recognized that the claimant's entitlement to specific benefits was reserved for future determination ( see Specific Findings of Fact October 25, 2001). Instead, the order requiring the respondents to provide benefits "due the claimant" under the Act merely reflects the ALJ's determination that the claimant sustained his burden to prove his injuries are compensable, and that the respondents are liable for any workers' compensation benefits the claimant later proves to be due as a result of the injuries. ( see Specific Findings of Fact, October 25, 2001, #1). Moreover, since no specific benefits have been awarded, the ALJ's order is not final in that respect. Director of the Division of Labor v. Smith, 725 P.2d 1161 (Colo.App. 1986).
IT IS THEREFORE ORDERED that the ALJ's Corrected Order dated November 23, 2001, is set aside insofar as it required the respondent-employer to pay a penalty of $9,780. In all other respects, the Corrected Order is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ Kathy E. Dean
________________________________ Dona Halsey
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. 2001. 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 April 29, 2002 to the following parties:
Michael B. McManus, P. O. Box 23193, Glade Park, CO 81523
Oiltools Limited (PTE), John Russo, Assistant Vice President, 70 Pine St., New York, N Y 10270
Human Resources Department, Weatherford International, Inc., 515 Post Oak Blvd., #600 Houston, TX 77027
John Russo, Assistant Vice President, American Home Assurance Co., American International Underwriters, 70 Pine St., New York, N Y 10270
Insurance Company of the State of Pennsylvania, AIG Claim Services, P. O. Box 32130, Phoenix, AZ 85016
Kathleen Pennucci, Special Funds Unit, Tower 2, #630, Division of Workers' Compensation — Interagency Mail
J. Keith Killian, Esq. and Joanna C. Jensen, Esq., P. O. Box 4859, Grand Junction, CO 81504 (For Claimant)
W. Berkeley Mann, Jr., Esq., P. O. Box 22833, Denver, CO 80222 (For Respondents Oiltools Limited (PTE) and American Home Assurance Co.)
James B. Fairbanks, Esq., 999 18th St., #1600, Denver, CO 80202-2416 (For Respondents Weatherford International, Inc. and Insurance Company of the State of Pennsylvania)
BY: A. Hurtado