Opinion
W.C. Nos. 4-274-394, 4-294-620, 4-305-230
May 22, 1998
FINAL ORDER
The Colorado Compensation Insurance Authority (CCIA) and its insured, CZ Courier Ltd. (collectively the respondents), and the claimant petitioned separately for review of an order of Administrative Law Judge Erickson (ALJ), dated June 26, 1997. We affirm the order in part, set aside part of the order and remand.
The claimant suffered a right knee injury on November 17, 1995 arising out of and in the course of his employment for CZ Courier Ltd. The CCIA filed a "Notice of Tentative Contest" but provided medical treatment. On November 28, 1995, CZ Courier Ltd. gave the claimant a written offer of modified employment within his medical restrictions, but the claimant refused the offer.
The claimant then began working for Arvada Hardwood Floor Company (Arvada). On April 6, 1996, the claimant suffered work-related injuries to his back and neck. Arvada and its insurer, Mid Century Insurance Company (collectively the Mid Century respondents) admitted liability for medical benefits and temporary total disability commencing April 7, 1996.
On May 8, 1996, the claimant complained of bilateral hand numbness to Dr. Hattem and was diagnosed with carpal tunnel syndrome (CTS). The claimant subsequently filed a claim against the Mid Century respondents for workers' compensation benefits due to the occupational disease of CTS. However, the ALJ found that the claimant failed to prove a causal connection between the need for treatment of the CTS treatment and his employment at Arvada. Therefore, the ALJ denied the claimant's request for medical benefits from the Mid Century respondents.
The CCIA filed a General Admission of Liability in April 1996, which admitted liability for medical benefits and temporary disability benefits up to the date the claimant failed to begin the offer of modified employment. On July 22, 1996, the claimant received a letter from the CCIA's adjuster, which denied liability for claimant's ongoing right knee problems, based on information that the claimant suffered an intervening knee injury. The claimant argued that the July 22 letter was an attempt to retroactively withdraw the April 1996 General Admission of Liability. Furthermore, the claimant pointed out that there is no statutory authority which allows an insurer to retroactively withdraw an admission of liability, except in the case of fraud. See Kraus v. Artcraft Sign Co., 710 P.2d 480 (Colo. 1985); HLJ Management Group v. Kim, 804 P.2d 250 (Colo.App. 1990). Therefore, the claimant requested an order imposing penalties against the CCIA.
The ALJ was not persuaded that the July 22 letter reflected the CCIA's attempt to withdraw their admission of a compensable knee injury, or the payment of medical benefits reasonably necessary to cure or relieve the effects of the November 17 knee injury. Therefore, the ALJ refused to impose a penalty. However, the ALJ found that there was no intervening knee injury. Consequently, the ALJ ordered the respondents to reinstate benefits.
In a report dated December 18, 1996, Dr. Failinger, who is not Level II accredited, stated that the claimant reached maximum medical improvement (MMI) for the right knee injury on August 15, 1996. The Rules of Procedure, Part IV(N)(4)(a)(I), 7 Code Colo. Reg. 1101-3 at 6.02, provides that within 20 days of an MMI determination by an authorized treating physician who is not level II accredited, that physician shall refer the claimant to a level II accredited physician for a medical impairment rating. The rule also provides that if no timely referral is made by the treating physician "the insurance carrier shall refer the claimant to a level II accredited physician within 40 days after the determination of MMI for a medical impairment rating."
The ALJ found that Dr. Failinger did not refer the claimant to a level II physician for an impairment rating and that the respondents failed to make a referral within forty days of notice of Dr. Failinger's determination of MMI. Therefore, the ALJ found that the CCIA violated Rule IV(N)(4)(a)(I), and assessed penalties pursuant to § 8-43-304(1), C.R.S. 1997, at the rate of $15.00 per day for a total of 87 days.
I.
On review, the respondents contend that the ALJ erroneously assessed a penalty against the CCIA for violating Rule IV(N)(4)(a)(I). We conclude that the ALJ's findings of fact are insufficient to permit appellate review. Therefore, we remand the matter to the ALJ for additional findings and the entry of a new order.
Under § 8-43-304(1), penalties may be imposed against an insurer who "violates any provision" of the Workers' Compensation Act (Act) or "fails or refuses to perform any duty lawfully enjoined" for which no specific penalty is specifically provided. Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). An insurer's failure to comply with the Rules of Procedure constitutes the failure to perform a duty lawfully enjoined. See Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997).
However, the determination of whether an insurer is subject to penalties under § 8-43-304(1) requires a two-step analysis. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). First, the ALJ must find a violation of the Act. Second, the ALJ must determine whether the challenged conduct was unreasonable as measured by an objective standard. Pueblo School District No. 70 v. Toth, supra. The reasonableness of the insurer's actions depends upon whether the actions were predicated on a rational argument based on law or fact. Diversified Veterans Corporate Center v. Hewuse, supra.
The respondents contend that the CCIA had no obligation to refer the claimant to a level II accredited physician for a medical impairment rating because Dr. Failinger made a referral to Dr. Kuper, who is level II accredited. However, the ALJ expressly found that Dr. Failinger did not refer the claimant to a level II physician for an impairment rating. Because the ALJ's finding is a plausible inference from Dr. Failinger's medical reports dated July 24, 1996 and December 18, 1996, it must be upheld on review. Section 8-43-301(8), C.R.S. 1997; Ackerman v. Hilton's Mechanical Men, Inc., 914 P.2d 524 (Colo.App. 1996).
Nevertheless, the respondents contend that the ALJ failed to determine whether the CCIA's actions were objectively reasonable. The claimant concedes that the ALJ made no express findings concerning the reasonableness of the respondents' actions. However, the claimant contends that the ALJ implicitly found that the respondents' actions were objectively unreasonable.
The ALJ's order does not discuss the applicable legal standard. Neither does the order contain any specific findings concerning the reasonableness of the CCIA's actions which resulted in the violation. Under these circumstances, we decline to presume that the ALJ implicitly found the CCIA's actions objectively unreasonable.
Furthermore, there is some evidence in the medical records of Dr. Failinger and Dr. Kuper which, if credited, might support a finding that the CCIA reasonably believed Dr. Failinger referred the claimant to Dr. Kuper for a medical impairment rating. However, the evidence does not compel that conclusion. Therefore, we cannot resolve the issue as a matter of law and the matter must be remanded to the ALJ for entry of a new order which resolves the conflict in the evidence.
In view of our remand, it is premature to consider the respondents' contention that the ALJ miscalculated the penalty.
II.
The claimant contends that the ALJ erred in failing to impose penalties against the CCIA for their unilateral withdrawal of the General Admission of Liability. We perceive no error.
A General Admission of Liability for medical benefits is not an admission of liability for all medical treatment the claimant may obtain after the industrial injury. Rather, the insurer is only liable for medical treatment which is reasonably necessary to cure and relieve the effects of the industrial injury. Snyder v. Industrial Claim Appeals Office, 942 P.2d 1337 (Colo.App. 1997). Further, the respondents are free to dispute the reasonableness of a particular treatment and refuse to pay without first obtaining a hearing or filing another admission. Snyder v. Industrial Claim Appeals Office, supra.
Here, the ALJ was not persuaded that the CCIA sought to withdraw their admission that the claimant suffered a compensable knee injury on November 17, 1995. Instead, the ALJ found that the CCIA was merely notifying the claimant that they contested the cause of the claimant's "current" right knee problems. In support, the ALJ noted that the CCIA continued to correspond with Dr. Kuper to determine the claimant's status from the November injury.
Moreover, there is no statutory provision or rule which requires the insurer to admit liability for temporary disability benefits. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995); Gonsalves v. The Aspen Branch Floral Arts, W.C. No. 4-324-403 (May 1, 1998); Butler v. Bridgemaster, Inc., W.C. No. 4-267-417 (March 31, 1998). The insurer is only obligated to pay benefits in accordance with admitted liability. Section 8-43-203(1)(d), C.R.S. 1997.
The CCIA's General Admission admitted liability for temporary disability benefits from November 22, 1995 to November 29, 1995, when the claimant refused the offer of modified employment and returned to work for Arvada. Section 8-42-105(3)(d), C.R.S. 1997. Because the CCIA did not admit for ongoing temporary disability benefits, their July letter does not constitute a unilateral termination of temporary disability benefits.
We also note that the July 22 letter did not reflect a request for reimbursement of the previously paid temporary disability benefits. Under these circumstances, we perceive no error in the ALJ's finding that the CCIA's July 22 letter did not violate any statutory or procedural rule. Therefore, the ALJ did not err in denying the claimant's request for the imposition of a penalty, and the claimant's additional arguments are not persuasive. Allison v. Industrial Claim Appeals Office, supra.
III.
Lastly, the claimant contends that the ALJ applied the wrong legal standard in denying his request for medical benefits to treat his occupational CTS. The claimant testified that his occupational disease of CTS arose out of employment in 1991, and therefore argues that the Mid Century respondents' liability for the CTS is governed by the "last injurious exposure rule." (Tr. p. 51). We disagree.
In Royal Globe Insurance Co. Collins, 723 P.2d 731 (Colo. 1986), the court held that the "last injurious exposure rule" does not determine liability for medical benefits in the case of an occupational disease. Rather, the insurance carrier "on the risk" at the time the medical expenses are incurred is liable for the payment of those expenses. 723 P.2d at 736. We have held that the insurer "on the risk" when medical expenses are incurred is the insurer which insured the employer whose conditions caused the need for treatment. See Rigdon v. Doubletree Hotels, W.C. Nos. 4-175-649 et. al, (March 18, 1996).
In cases such as Rigdon, we have previously concluded that liability for medical benefits in the case of an occupational disease must be determined under the usual rules governing liability for workers' compensation benefits. Martinez v Storage Tech, W.C. No. 4-175-875 (August 31, 1995). We adhere to our prior conclusions. Accordingly, to impose liability for medical benefits on a particular employer or insurer, the claimant must demonstrate that the employment caused, aggravated, or accelerated the claimant's disease. Further, the claimant must show that the need for the medical treatment was caused by the disease, acceleration or aggravation in question. See H H Warehouse v. Vicory, 805 P.2d 1167 (Colo.App. 1990); F.R. Orr Construction v. Rinta, 717 P.2d 965 (Colo.App. 1985).
Here, the ALJ found that the claimant failed to establish that his employment for Arvada "caused, aggravated or accelerated his occupational disease." (Discussion and Conclusions of Law). As found by the ALJ, this determination is supported by evidence that the claimant did complain of CTS symptoms until he had been off work for over a month. (Tr. pp. 53, 110). Moreover, the ALJ's determination supports his conclusion that the claimant failed to prove a causal connection between his employment at Arvada and his need for medical treatment of the CTS. Therefore, the ALJ did not err in dismissing the CTS claim against the Mid Century respondents.
IT IS THEREFORE ORDERED that the ALJ's order is set aside insofar as it orders the CCIA to pay penalties for the violation of Rule IV(N)(4)(a)(I), and the matter is remanded to the ALJ for the entry of a new order on this penalty issue consistent with the views expressed herein. In all other respects the ALJ's order is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL ____________________________________ David Cain ____________________________________ Kathy E. DeanNOTICE 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, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. 1997.
Copies of this decision were mailed May 22, 1998 to the following parties:
Jeffrey J. Woods, 6087 Birchpoint Rd., Blaine, Washington 98230
CZ Courier Ltd., 4400 Fox St., Denver, CO 80216
Arvada Hardwood Floor Co., 11095 E. 45th Ave., Denver, CO 80239-3003
Colorado Compensation Insurance Authority, Attn: Curt Kriksciun, Esq. (Interagency Mail)
Mid-Century Ins. Co., P.O. Box 378230, Denver, CO 80237-8230
Art M. Lee, Esq., 777 E. Speer Blvd., Ste. 210, Denver, CO 80203 (For the Claimant)
Michael Perales, Esq., 999 18th St., Ste. 3100, Denver, CO 80202 (For the Respondents)
BY: _______________________