Opinion
W.C. No. 4-439-762
March 26, 2003
ORDER OF REMAND
The claimant seeks review of an order of Administrative Law Judge Felter (ALJ) which denied penalties. We set aside the order and remand the matter for additional findings and the entry of a new order.
On May 6, 1998, the claimant suffered compensable injuries. The respondents filed a General Admission of Liability which admitted liability for the payment of temporary disability benefits based on an average weekly wage (AWW) of $294.18.
A Division-sponsored independent medical examination (DIME) physician assigned a 36 percent whole permanent impairment rating. In an order dated November 20, 2000, the ALJ found the respondents overcame the DIME physician's rating. The ALJ awarded permanent partial disability benefits based on 25 percent impairment for cervical and mental impairment plus 8 percent impairment to the thoracic spine which equals a total of 31 percent whole person impairment. The ALJ also increased the claimant's AWW to $714.25. The respondents timely appealed the ALJ's order.
In an Order of Remand dated January 7, 2002, we rejected the respondents' contention that the ALJ erred in awarding benefits for 8 percent thoracic impairment. However, we set aside the ALJ's determination of the AWW wage and remanded the matter to the ALJ for a new order on the issue of AWW.
On remand, the ALJ issued an order dated March 4, 2002, which determined the AWW to be $421.28. Both parties appealed the determination of AWW. The respondents also disputed the 31 percent impairment rating.
On August 21, 2002, we affirmed the March 4 order. Our files reflect that both parties sought review of our order by filing a Notice Of Appeal in the Court of Appeals. The appeal to the court is pending.
Prior to August 21, 2002, the claimant requested an order imposing penalties under § 8-43-304(1), C.R.S. 2002, for the respondents' failure to pay the permanent partial disability benefits awarded on November 20. Because we had not yet resolved the parties' appeal of the March 4 order when the penalty claim came before the ALJ, the ALJ determined the November 20 award was not a final order. Therefore, in an order dated August 14, 2002, the ALJ denied and dismissed the penalty claim. The claimant timely appealed the August order.
On review of the August order the claimant contends the respondents only appealed the November order insofar as the ALJ found the claimant sustained 8 percent impairment to the thoracic spine, and the respondents never contended the claimant's AWW was less than $294.18. Accordingly, the claimant argues that regardless of the pending appeal, the respondents are subject to penalties for failing to pay the unchallenged portion of the medical impairment award based on an AWW of $294.18. We agree.
Section 8-43-304(1) allows an ALJ to impose penalties of up to $500 per day against an insurer who:
"fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director for which no penalty has been specifically provided, or fails, neglects, or refuses to obey any lawful order made by the director or panel."
Holliday v. Bestop Inc., 23 P.3d 700 (Colo. 2001) ; Brodeur v. Industrial Claim Appeals Office (Colo.App. No. 01CA06353, December 6, 2001) (not selected for publication). The term "order" includes an order of an ALJ which resolves an issue in the case. Holliday v. Bestop, Inc., 23 P.3d at 708 ; Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211 (Colo.App. No. 2001).
We do not dispute the respondents' contentions that an ALJ's order which is on appeal is interlocutory or that interlocutory orders are not "lawful orders," for purposes of imposing penalties. This is true because a petition to review serves to stay the obligation to pay an award. See Industrial Commission, v. Spoo, 150 Colo. 581, [ 151 Colo. 581], 380 P.2d 49 (1963); Industrial Commission v. Continental Investment Co., 85 Colo. 475, 277 P. 303 (1929) (penalties may not be imposed for the failure to pay during a good faith appeal from order); Selcer v. Total Plumbing, Inc., W.C. No. 4-374-217 (August 11, 2000). Rather, § 8-43-401(2)(a), C.R.S. 2002 provides that:
"After all appeals have been exhausted or in cases where there have been no appeals, all insurers and self-insured employers shall pay benefits within thirty days of when any benefits are due."
However, it is well established that an order may be partially interlocutory and partially final. Oxford Chemicals Inc., v. Richardson, 782 P.2d 843 (Colo.App. 1986). Further, Professor Larson states that several jurisdictions have concluded that when the employer admits liability for a lessor amount than that claimed, but pays nothing, a penalty is warranted because the "employer should have paid at least the amount for which liability was undisputed." A. Larson, Larson's Workers' Compensation Law, § 135.04 (2002).
The legislative purpose of the Colorado Workers' Compensation Act is to assure the quick and efficient delivery of disability and medical benefits to injured workers "without the necessity of any litigation." Section 8-40-102(1), C.R.S. 2002. For that reason, hearings are reserved for disputed issues, and admitted liability must be paid in accordance with the admission. Section 8-43-203(2)(d), C.R.S. 2002.
Here, the respondents November 29, 2000 Petition to Review the November 20, 2000, award contained only general allegations of error. See § 8-43-301(8), C.R.S. 2002. Further, the respondents' Brief in Support of the Petition to Review contested only the ALJ's finding that the claimant sustained 8 percent impairment to the thoracic spine. Indeed, the Respondents' Brief in Support of the Petition to Review dated September 20, 2001, explicitly stated:
"Claimant's PPD benefits must be determined based upon no more than the 25% whole person rating arrived at by the cervical and psychological impairment ratings that Dr. Gerber assigned to claimant."
Accordingly, we reject the respondents' contention that they never conceded the claimant's entitlement to permanent partial disability benefits based on 25 percent whole person impairment.
Moreover, insofar as the respondents contend that they contested the entire 31 percent rating on appeal of the ALJ's March 4 order, that argument was waived because the respondents' failed to raise it on appeal of the November order. Johnson v. Industrial Commission, supra; Department of Health v. Donahue, 690 P.2d 243 (Colo. 1984) (waiver may be explicit, or it may be implied where a party engages, "in conduct which manifests an intent to relinquish the right or privilege or acts inconsistently with its assertion). Consequently, we did not consider that argument on our review of the March 4 order.
We also note that the amount of a permanent partial disability award is determined by multiplying the medical impairment rating by the claimant's age factor, which is multiplied by 400 weeks and calculated at the claimant's temporary disability rate. Section 8-42-107(8)(d), C.R.S. 2002. Under § 8-42-105(1), C.R.S. 2002, a claimant's temporary disability rate is sixty-six and two-thirds percent of the claimant's AWW up to the maximum rate allowed by law.
The respondents admitted liability for an AWW of $294.18. Although the issue of AWW was put before the ALJ for adjudication, there is no evidence in the record the respondents ever sought to rescind the admission. To the contrary, the respondents merely disputed the AWW was greater than $294.18. Furthermore, our January 7 Order of Remand only set aside the November award insofar as the ALJ required the respondents to pay permanent partial disability benefits based on an AWW of $714.25. Cf. Halliburton Services v. Miller, 720 P.2d 571 (Colo. 1986) (we are in the best position to determine scope of order of remand).
In reaching this result, we recognize that in HLJ Management Group v. Kim, 804 P.2d 250 (Colo.App. 1990), the court held that "if an admission of liability is contested by either party, the determination of the matter thus placed is subject to determination by the ALJ at the adversary hearing." Thus, under HLJ, the admission is "binding only until the controverted issue is determined at hearing." Here, unlike the facts in HLJ, the respondents made no attempt to "controvert" their admission of liability insofar as it admitted an AWW of $294.18. Instead, the "controverted" issue concerned an increase in the AWW.
It follows that unlike the facts in Industrial Commission, v. Spoo, supra, there were issues resolved by the ALJ's November 20 order which were not appealed. Consequently, this is factually distinguishable from Industrial Commission v. Spoo, supra, where the order on appeal was interlocutory and not a "lawful order" to be enforced. See Rules of Procedure IV(E)(1), 7 Code Colo. Reg. 1101-3 at 5, (When petition to review is filed benefits "for those issues under review" are due on date order becomes final).
Because the respondents chose not appeal the claimant's entitlement to permanent partial disability benefits based on at least 25 percent impairment and the respondents did not deny such benefits should be calculated based on an AWW of at least $294.18, the respondents violated the ALJ's order by failing to pay the undisputed portion of the ALJ's order within thirty days of the date of the order. Section 8-43-401(2)(a). Consequently, the ALJ erred insofar as he determined the claimant failed to prove a violation of a lawful order.
However, § 8-43-304(1) does not hold the insurer to a strict liability standard. City Market, Inc. v. Industrial Claim Appeals Office, __ P.3d __ (Colo.App. No. 02CA1437, March 13, 2003). Rather, an insurer is only subject to penalties unless the insurer's actions which resulted in the violation were objectively unreasonable as measured by the actions a reasonable insurer would take under similar circumstances. City Market, Inc. v. Industrial Claim Appeals Office, supra. This is generally a factual determination for the ALJ. City Market, Inc. v. Industrial Claim Appeals Office, supra. Because the ALJ found no violation he did not determine whether the failure to pay undisputed permanent partial disability benefits was unreasonable. Consequently, the matter must be remanded to the ALJ for further findings of fact and the entry of a new order on the claim for penalties.
IT IS THEREFORE ORDERED that the ALJ's order dated August 14, 2002, is set aside and the matter is remanded to the ALJ for additional findings and the entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
Copies of this decision were mailed March 26, 2003 to the following parties:
Sherry L. Mosley, 9201 Oberon Rd., Apt. 321, Arvada, CO 80004
Sherry L. Mosley, 9496 W. 64th Way, Arvada, CO 80004
Asphalt Paving Company, 14802 W. 44th Ave., Golden, CO 80403
Great States Insurance Company, c/o Western Guaranty Fund Services, 1720 S. Bellaire St., #408, Denver, CO 80222-4329
Ralph Ogden, Esq., 1750 Gilpin St., Denver, CO 80218 (For Claimant)
Larry D. Lee, Esq., 1790 38th St., #205, Boulder, CO 80301 (For Claimant)
Harvey D. Flewelling, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents)
BY: A. Hurtado