Opinion
W.C. No. 4-573-910.
December 15, 2005.
FINAL ORDER
The claimant seeks review of an order dated August 5, 2005, of Administrative Law Judge Matoon (ALJ) that imposed the statutory cap, under Section 8-42-107.5, C.R.S. 2005, even when the employer is uninsured, although the cap is increased by a fifty percent penalty pursuant to Section 8-43-408(1), C.R.S. 2005. We affirm.
Here, the essential facts are undisputed. The claimant sustained a compensable industrial injury on March 3, 2003. The employer was uninsured for workers' compensation on the date of the claimant's injury and has stipulated that it is subject to a fifty percent penalty for non-insurance.
The parties stipulated to a twenty percent whole person permanent impairment rating. This has a value of $99,638.34, including the fifty percent penalty for non-insurance. The employer has already paid $49,044.95 in temporary total disability (TTD) benefits, as well as $11,003.32 in permanent partial disability (PPD) benefits. This is a total of $60,048.27 in benefits.
Subtracting the amount of PPD benefits already paid from the stipulated value of the admitted PPD rating of twenty percent of the whole person leaves PPD benefits owed of $88,635.02. The claimant requests an order for the full amount of $88,635.02, while the employer requested that the entire case be capped at $90,000.00. This would leave $29,951.73 in PPD benefits still to be paid.
Section 8-42-107.5(1) ("the statutory cap") provides that no claimant whose impairment rating is twenty-five percent or less may receive more than sixty thousand dollars from combined TTD and PPD payments.
Section 8-43-408(1) provides that if at the time of the injury the employer is uninsured for workers' compensation "the amounts of compensation or benefits provided in said articles shall be increased fifty percent." In this context, the term "compensation" refers to disability benefits. Jacobson v. Doan 136 Colo. 496, 319 P.2d 975 (1957); Industrial Commission v. Hammond, 77 Colo. 414, 236 P. 1006 (1925).
The ALJ cited Merchant Oil, Inc. v. Andersen, 897 P.2d 895 (Colo.App. 1995); and Cavallo v. Aurit, W.C. No. 4-345-998 (April 16, 1999), and determined that the statutory language requires the imposition of a statutory cap, under § 8-42-107.5 even when the employer is uninsured, although the cap is increased by fifty percent pursuant to § 8-43-408(1).
The claimant argues that the ALJ erred in limiting the award to the statutory cap plus the fifty percent penalty. The claimant contends that when the employer failed to have insurance, it forfeited the right to take advantage of any cap to limit its exposure to benefits owed to the claimant. We disagree.
In Merchant Oil, Inc., v. Anderson, 897 P.2d 895 (Colo.App. 1995), the court upheld an order for a maximum PPD award increased fifty percent under § 8-43-408(1). The facts in Merchants Oil involved a claimant who suffered a twenty-one percent working unit disability which entitled him to PPD benefits of $37, 560, the maximum amount allowed at the time for PPD under former § 8-42-110 C.R.S. (1990 Cum. Supp.). Because the employer did not comply with the mandatory insurance requirements of the Act, the court held that the ALJ properly increased the claimant's PPD award to $56,340.
Section 8-43-408(1) is designed to encourage cooperation with the mandatory insurance requirements of the Act and provide additional compensation above the amounts already provided where the employer fails to carry insurance. Eachus v. Cooper, 738 P.2d 383 (Colo.App. 1986). In Merchants Oil the court concluded that statutory limitations on PPD benefits do not preclude a fifty percent increase of PPD benefits where the employer has failed to obtain workers' compensation insurance.
In Merchants Oil the court expressly rejected an argument that the maximum amount allowed for PPD under former § 8-42-110 (1990 Cum Supp.) and § 8-43-408(1) are irreconcilable. Applying the principles of statutory construction, the court held that implicit in the plain language of § 8-43-408(1) is the "recognition that there are statutory limitations on various types of workers' compensation," including temporary total disability benefits. The court concluded that § 8-43-408(1) is a provision for "additional compensation, above the amounts already provided" by the Act. Merchants Oil. Accordingly, the court found no irreconcilable conflict between the statutes. Rather, the court concluded that former § 8-42-110(1) limited PPD benefits where the employer has complied with the mandatory insurance requirements of the Act and § 8-43-408(1) establishes the benefit limit where the employer has not complied with the mandatory insurance requirements.
We are persuaded by the court's reasoning in Merchants' Oil, supra, that § 8-43-408(1) and the statutory cap provided for in § 8-42-107.5 are reconcilable. Section 8-42-107.5 limits the liability to the statutory cap where the employer has complied with the mandatory insurance requirements of the Act and § 8-43-408(1) establishes the statutory cap where the employer is uninsured. Thus, the statutes can be harmoniously construed.
IT IS THEREFORE ORDERED that the ALJ's order dated August 5, 2005, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Tom Schrant
____________________________________ Robert M. Socolofsky
Shawn Shier, Colorado Springs, CO, Sue Sobolik, Division of Workers' Compensation — Interagency Mail, H. Clifford Potter, Esq., Colorado Springs, CO, (For Claimant).
Joan A. Goldsmith, Esq., Colorado Springs, CO, (For Respondent).