Opinion
W.C. No. 4-429-351.
June 10, 2004.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Klein (ALJ) which denied penalties for the respondents' violation of the Rules of Procedure, Part IV(N), 7 Code Colo. Reg. 1101-3 at 8.2. We affirm.
The claimant suffered a compensable right knee injury. On October 10, 2000, Dr. Halbrecht placed the claimant at maximum medical improvement (MMI) and assigned a scheduled disability rating. On November 13, 2000 Dr. VanBuskirk placed the claimant at MMI and assigned a whole person impairment rating. The claimant filed an Application for Hearing on August 21, 2001 which endorsed the issues of medical benefits and penalties for the respondents "failure to admit/deny pursuant to W.C.R.P. IV(N)(5)." Rule IV(N)(5) requires insurers to file a FAL or request a Division-sponsored independent medical examination (DIME) within "30 days after the date of mailing or delivery" of the treating physician's report of impairment.
The respondents filed a Final Admission of Liability (FAL) dated October 10, 2001, which terminated temporary disability benefits (TTD) effective October 10, 2000 and admitted liability for a scheduled disability award consistent with the opinions of Dr. Halbrecht. Thereafter, in a report dated January 29, 2002, a DIME physician placed the claimant at MMI with 26 percent whole person impairment. The respondents filed a FAL on July 11, 2002 consistent with the DIME physician's opinions.
On September 5, 2002, the claimant filed a new Application for Hearing which endorsed the issue of medical benefits. No hearing was set on this Application. Then on February 12, 2003, the claimant filed an Application for Hearing which requested penalties against the respondents for a violation of Rule IV(N), by failing to file correct and timely FALs after "Dr. VanBuskirk's rating report" and the DIME report.
The ALJ found the claimant's request for penalties on account of the respondents' failure to file a timely FAL following Dr. VanBuskirk's November 13, 2000 report was barred by the one-year statute of limitations in § 8-43-304(5), C.R.S. 2003. The ALJ also implicitly determined the respondents cured their failure to file a timely FAL in accordance with the DIME physician's rating before the claimant filed his February 12 Application for Hearing. Further, the ALJ determined the claimant failed to present "clear and convincing" evidence the respondents "knew or reasonably should have known" they were in violation of Rule IV(N)(6). Therefore, the ALJ denied the penalty requests.
I.
On review the claimant contends the ALJ erroneously allowed the respondents to litigate the statute of limitations defense. We disagree.
Section 8-43-304(5), states that a "request for penalties shall be filed with the director or administrative law judge" within one year after a party first knew or reasonably should have known the facts "giving rise to a possible penalty." Because the statute of limitations is an affirmative defense it is waived if not timely raised. Kersting v. Industrial Commission, 39 Colo. App. 297, 567 P.2d 394 (1977). However, an argument of waiver may also be waived. See Lewis v. Scientific Supply Co., 897 P.2d 905 (Colo.App. 1995); Brickell v. Business Machines, Inc., 817 P.2d 536 (Colo.App. 1990).
During the hearing on May 29, 2003, the ALJ reserved ruling on the claimant's objection to litigation of the respondent's statute of limitations defense and directed the parties to file written briefs on the issue. The claimant's June 16, 2003 post-hearing position statement expressly concedes that the respondents' statute of limitations defense be considered by the ALJ. Accordingly, we conclude the claimant waived his objection to litigation of the affirmative defense.
Furthermore, we conclude that the respondents' statute of limitations defense inherently includes their contention that the claimant's August 21 Application for Hearing did not sufficiently notify them that the claimant sought penalties for a violation of Rule IV(N)(5) in connection with Dr. VanBuskirk's impairment rating report. Therefore, we reject the claimant's contention that the notice issue was not timely raised.
Section 8-43-304(4), provides that an application for hearing on penalties "shall state with specificity the grounds on which the penalty is being asserted." We have previously held that the purpose of requiring that an application for hearing on penalties specifically state the grounds on which the penalty is being asserted, is to notify the insurer of the alleged conduct which must be corrected so as to afford an opportunity to cure. Stilwell v. B B Excavating Inc., W.C. No. 4-337-321 (July 28, 1999). We adhere to our previous conclusions. See Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990); Carson v. Academy School District #20, W.C. No. 4-439-660 (April 28, 2003) (due process denied where respondents given inadequate notice of legal basis for alleged penalties).
As found by the ALJ, the claimant's August 9, 2001 Application for Hearing "did not identify either the physician, report, or dates to which the penalty related." (Finding of Fact 2). Under these circumstances, the ALJ reasonably inferred the August 21 Application did not afford the respondents' adequate notice the claimant sought penalties for the respondents' failure to file a new FAL upon receipt of Dr. VanBuskirk's impairment rating. To the contrary, the record supports the ALJ's finding that the claimant did not specifically request penalties for the respondents' failure timely to file a FAL upon receipt of Dr. VanBuskirk's report until the February 13, 2003 application for hearing. ( See Respondents' Hearing Exhibit F).
The ALJ also implicitly found the claimant must have known some of the facts giving rise to the penalty claim the month following his receipt of Dr. VanBuskirk's report. The claimant does not dispute this finding, which is a plausible inference from the record. Accordingly, the ALJ did not err in finding the claimant's February 13, 2003 application for hearing on the issue of penalties was barred by the statute of limitations.
II.
The claimant also contends the ALJ's findings do not support his conclusion that the claimant failed to sustain his burden of proof for the imposition of penalties for a violation of Rule IV(N)(6). We perceive no basis to interfere with the ALJ's order.
Rule IV(N)(6) requires insurers to file a FAL or request a hearing within 30 days "after the date of mailing" of the DIME physician's report. Although the ALJ found a violation of Rule IV(N)(6), he also found the respondents cured the violation prior to the filing of the claimant's February 12, 2003 application for hearing. Under these circumstances, the ALJ determined the claim is governed by the language in § 8-43-304(4), which provides that if the violator cures the violation within such twenty-day period after the filing of an application for hearing on the issue of penalties and:
"the party seeking such penalty fails to prove by clear and convincing evidence that the alleged violator knew or reasonably should have known such person was in violation, no penalty shall be assessed."
We have reviewed the record and we agree with the ALJ's Finding of Fact 10 that there is "no evidence" in the record concerning the date the DIME physician's report was mailed or received. Under these circumstances, we conclude the record is insufficient as a matter of law to support the ALJ's finding that the DIME physician's "report was authored, mailed and received on January 29, 2002." (Conclusion of Law 8). Similarly, the record is legally insufficient to support the ALJ's implicit determination that the respondents' July 11, 2002 FAL was not filed within 30 days of the date the DIME report was mailed. Thus, the ALJ erred insofar as he found the claimant proved a violation of Rule IV(N)(6).
In the absence of a violation there is no basis to impose a penalty. Therefore, regardless of the reason, the ALJ did not err in denying the request for penalties. See Baldwin Construction Inc., v. Industrial Claim Appeals Office, 937 P.2d 895 (Colo.App. 1997); Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997) (panel may affirm ALJ's order when right result reached even if for wrong reason).
IT IS THEREFORE ORDERED that the ALJ's order dated July 23, 2003, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ Kathy E. Dean
______________________________ Robert M. Socolofsky
Michael Parker, Boulder, CO.
Autonation USA Corporation, Boulder, CO.
Autonation USA Corporation, Lauderdale, FL.
Liberty Mutual Fire Insurance, Englewood, CO.
Liberty Mutual Fire Insurance, Irving, TX.
Steven H. Gurwin, Esq., Denver, CO, (For Claimant).
David G. Kroll, Esq., Denver, CO, (For Respondents).