Opinion
W.C. Nos. 4-734-913 4-734-795.
March 4, 2010.
FINAL ORDER
The claimants seek review of an order of Administrative Law Judge Jones (ALJ) dated July 7, 2009 to the extent that the ALJ determined the respondent insurer notified the respondent employer of the cancellation of insurance coverage, thereby resulting in the employer being uninsured at the time of the claimants' injuries. We affirm.
The ALJ initially determined that the insurer failed to provide proper notice of policy cancellation to the employer. However, we remanded the matter for a new determination of that issue. On remand the ALJ found that the insurer had provided the employer with proper notice of cancellation. The ALJ therefore determined that the employer was not insured at the time of the claimants' injuries and increased the awards of temporary total disability benefits by 50 percent as provided by statute.
We note initially that the respondent insurer challenges the claimants' standing to challenge the ALJ's determination that the employer was uninsured by virtue of having proper notice that its policy was cancelled by the insurer. Standing is a jurisdictional requirement that must be shown as a threshold matter. See Wimberly v. Ettenberg, 194 Colo. 163, 570 P.2d 535 (1977). A party has standing if it has "both an injury in fact and a cognizable legal right." Bradley v. Industrial Claim Appeals Office, 841 P.2d 1071 (Colo. App. 1992). The ALJ ordered the uninsured employer to either deposit lump sums or post bonds to secure payment of the benefits owed to the claimants. See § 8-47-105, C.R.S. 2009 (authorizing amount equal to present value of unpaid compensation to be paid to division and held in trust). The ALJ therefore recognized that the uninsured status of the employer could have a substantial impact on the claimants' ability to collect the benefits from the employer. Moreover, the claimant has an interest in the relationship between the employer and its insurer. See Scott Wetzel Service, Inc. v. Johnson, 821 P.2d 804, 810 (Colo. 1991) (employee viewed either as an insured as a third party beneficiary with right to sue on insurance contract); cf. Chevron Oil Co. v. Industrial Comm'n, 169 Colo. 336, 456 P.2d 735 1969) (rule requiring notice to division of insurance cancellation served purpose of protecting claimant entitled to compensation and insurer not properly a party to complain of noncompliance). We conclude that the claimant has standing to challenge the ALJ's determination that the employer was without insurance at the time of his injury.
I.
The claimants assert that there is substantial evidence in the record to support the determination that the insurer failed to properly notify the employer that its workers' compensation insurance policy was cancelled. However, the mere fact that the evidence might have supported contrary findings and conclusions affords no basis for relief on appeal. May D F v. Industrial Claim Appeals Office, 752 P.2d 589 (Colo. App. 1988).
In any event, we conclude that the ALJ's findings regarding notice to the employer that its policy was cancelled is supported by substantial evidence. We are bound by the ALJ's determinations that are supported by substantial evidence in the record. § 8-43-301(8), C.R.S. 2008; City of Durango v. Dunagan, 939 P.2d 496 (Colo. App. 1997). Substantial evidence means "that quantum of probative evidence which a rational fact-finder would accept as adequate to support a conclusion, without regard to the existence of conflicting evidence." Metro Moving Storage Co. v. Gussert, 914 P.2d 411, 414 (Colo. App. 2003). The substantial evidence standard requires that we view evidence in the light most favorable to the prevailing party, and defer to the ALJ's assessment of the sufficiency and probative weight of the evidence. Thus, the scope of our review under the substantial evidence standard is "exceedingly narrow." Id. at 415. This narrow standard of review also requires that we defer to the ALJ's resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo. App. 2003).
Evidence that the ALJ found persuasive as to the proper cancellation of the employer's insurance policy includes the following. The insurer generated a notice of intent to cancel on February 2, 2006 and mailed it the following business day. Tr. at 120-123; Exhibit L. The notice was sent by certified mail. Tr. at 121; Exhibit L. Section 8-44-110, C.R.S. 2009 requires the insurer to send notice of cancellation to the employer by certified mail. This evidence alone is sufficient to uphold the ALJ's dispositive finding.
The claimants further assert that the insurer was required to provide at least 30 days prior notice of the cancellation because the employer paid estimated premiums. The claimants cite Victory v. Del's Masonry, Inc., W.C. No. 4-309-177 (September 8, 1999) as support for the contention that payments based on estimated premiums, rather than actual premiums, required 30 days notice of cancellation. However, as we noted in our earlier order of remand, in that case, the ALJ had made alternate conclusions of law, one of which was that nonpayment of estimated premiums did not constitute nonpayment of premiums for purposes of the cancellation statute. However, the Panel disposed of the appeal on an alternate basis regarding estoppel and, therefore, did not reach the issue of cancellation based on estimated premiums. We therefore reject the contention that a cancellation based on the nonpayment of an estimated premium requires 30 days notice under the statute for the reasons we previously stated.
II.
The claimants also challenge the ALJ's admission of email correspondence between the insurer and the employer. The insurer apparently introduced the correspondence on the basis that it constituted business records of the insurer. Tr. at 146-55; Exhibit M. Records kept in the course of a regularly conducted business activity are an exception to the hearsay rule. CRE 803(6). There are five requirements for a hearsay document to be admissible under CRE 803(6): (1) the document must have been made at or near the time of the matters recorded in it; (2) the document must have been prepared by, or from information transmitted by, a person with knowledge of the matters recorded; (3) the person or persons who prepared the document must have done so as part of a `regularly conducted business activity; (4) it must have been the regular practice of that business activity to make such documents; and (5) the document must have been retained and kept in the course of that, or some other, regularly conducted business activity. Schmutz v. Bolles, 800 P.2d 1307 (Colo. 1990). The business records exception includes records prepared by another source that are adopted and integrated into the business report sought to be introduced which, itself is prepared in the regular course of established business procedures. Teac Corp. of America v. Bauer, 678 P.2d 3 (Colo. App. 1984). The business record exception also applies to computer records and insurance investigation reports. Beanham v Pryke 703 P. 2d 644 (Colo. App. 1985) rev'd on other grounds, 744 P.2d 67; Downing v. Overhead Door Corp., 707 P.2d 1027 (Colo. App. 1985) (insurance adjuster's investigation report which was based, in part, on a conversation with the manager of an overhead door distributor was admissible under CRE 803(6) in product liability claim against overhead door manufacturer).
The ALJ has broad discretion in the conduct of evidentiary proceedings. IMPC Transportation Co. v. Industrial Claim Appeals Office, 753 P.2d 803 (Colo. App. 1988). We therefore review the ALJ's ruling in this instance under the abuse of discretion standard. See Rennaissance Salon v. Industrial Claim Appeals Office, 994 P.2d 447 (Colo. App. 1999) (reviews of orders concerning the conduct of administrative hearings are subject to the abuse of discretion standard). An abuse of discretion does not occur unless the ALJ's order is beyond the bounds of reason, as where it is unsupported by the record or contrary to the law. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. App. 1993). An adjuster for the insurer testified to the relevant factors in support of admitting the exhibit as a business record. Tr. at 146-50. In addition, the correspondence from the employer's agent appears to constitute an admission against interest. See Rossen v. Access to Winter Park, W.C. Nos. 3-735-341 3-773-850 (September 28, 1987) (letter from potential employer indicating no insurance was an admission against interest). Moreover, we note that the ALJ's finding that the employer had actual knowledge that the workers' compensation insurance had been cancelled is further supported by a letter from the employer's controller admitted into evidence without objection. Tr. at 25-28; Exhibit H. We find no reversible error under the circumstances.
IT IS THEREFORE ORDERED that the ALJ's order dated July 7, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ John D. Baird
______________________________ Thomas Schrant
RUBEN PEREZ, 816 CLIFFROSE WAY, WINDSOR, CO, 80550-2944 (Claimant).
LAGS EXPLORATION DBA WATERBOYZ INT'L, LLC, FORT MYERS, FL, (Employer).
PINNACOL ASSURANCE, Attn: HARVEY D FLEWELLING, ESQ., DENVER, CO, (Insurer).
RING ASSOCIATES, PC, Attn: JESS M PEREZ, ESQ./BOB L RING, ESQ., FORT COLLINS, CO, (For Claimant).
RITSEMA LYON — FORT COLLINS, Attn: RONDA K. CORDOVA, ESQ., FORT COLLINS, CO, (For Respondents).