Opinion
W.C. Nos. 4-655-387 4-749-187.
May 27, 2009.
FINAL ORDER
The respondents seek review of a supplemental order of Administrative Law Judge Jones (ALJ) dated January 15, 2009 that assessed penalties against the respondents. We reverse the penalties assessed against the insurer, set aside the penalties assessed against the employer, and remand this matter for additional findings regarding the imposition of penalties against the employer. We otherwise affirm the supplemental order.
This matter proceeded to hearing to determine if the claimant sustained a compensable injury and to identify the employer. The ALJ also considered whether the claim was time-barred or whether the claimant was entitled to disability compensation and medical benefits, as well as penalties against the respondents. The ALJ issued a summary order finding that the claimant sustained a compensable injury on April 1, 2005 while working for the respondent employer and awarded disability payments and medical benefits. She rejected the respondents' assertion that the claim was time-barred and found good cause for the claimant filing his claim within three years of the date of his injury. The ALJ found that the respondents were subject to penalties for failing to file a first report of injury and for failing to timely file a notice of contest denying the claim.
The respondents requested specific findings of fact and conclusions of law. They sought clarification about the claimant's average weekly wage, which they represented the parties to have stipulated to be in the amount of $600. The respondents also asked for clarification as to the statutory basis for penalties, for more specificity as to who was responsible for the penalties, and for clarification as to various dates. The ALJ entered detailed findings of fact and conclusions of law, which the respondents appealed. The ALJ then issued the supplemental order that is the subject of this review.
The ALJ's findings are summarized as follows. The claimant filed a claim for compensation on June 29, 2005 regarding his injury on April 1, 2005. He named Sapphire Custom Homes, Inc. as the employer, but identified Jesse Sanders Construction Company as another name for the employer. After learning that Sanders Construction was insured, the claimant filed another claim against the respondent employer on January 28, 2008. The respondents filed a notice of contest on February 21, 2008. Regarding the respondents' assertion that the claim was time-barred, the ALJ found that the claim was filed within three years of his injury based on the claimant's reasonable reliance on records of the Division of Workers' Compensation that the employer, Sanders Construction, was uninsured. She also found that the statute of limitations was tolled by the claimant's oral report of his injury to the owner of the employer on the date of his injury.
The ALJ found that the owner of the employer was aware of the seriousness of the claimant's condition as a result of his injuries from falling off a roof and that it would cause permanent impairment and lost time from work for three work shifts. Moreover, on April 1, 2005 the employer had actual notice of the claimant's injury and knew by April 6, 2005 that it would cause lost time from work and permanent impairment. However, the employer failed to file a first report of injury.
The ALJ imposed a penalty against the employer under § 8-43-304, C.R.S. 2008 in the amount of $2.00 a day from April 16, 2005 through the date of the hearing for not filing a first report of injury. The ALJ assessed a penalty of three days' compensation against the respondent insurer for filing its notice of contest three days late. The ALJ also ordered the respondents to pay medical benefits and temporary total disability payments.
On appeal, the respondents challenge the imposition of penalties against them. We conclude that the penalty imposed against the insurer must be set aside as being unsupported by applicable law. We set aside the imposition of penalties against the employer and remand this matter for additional findings and a corresponding determination of whether such penalties are time-barred.
I.
The respondents assert that the ALJ erred by imposing penalties against the insurer for failing to timely admit or deny the claim. We agree under the particular circumstances of this case that the ALJ erred in assessing penalties against the insurer. The ALJ determined that the insurer violated § 8-43-203, C.R.S. 2008 by filing a notice of contest more than ten days after the claimant filed his claim for workers' compensation. Section 8-43-203(1)(a) includes the following language:
The employer or, if insured, the employer's insurance carrier shall notify in writing the division and the injured employee . . . within twenty days after a report is, or should have been filed with the division pursuant to section 8-43-101, whether liability is admitted or contested; except that, for the purpose of this section, any knowledge on the part of the employer, if insured, is not knowledge on the part of the insurance carrier.
Section 8-43-101, C.R.S. 2008, in turn, requires every employer to report injuries for lost time or injuries resulting in permanent physical impairment to the Division within ten days after notice or knowledge of the same.
The respondents present different arguments based on the current and prior versions of the statute. See Colo. Sess. Laws 2005, ch. 49, § 4 at 200-01 (amending language of subsection (1)(a)). However, we conclude that the penalty against the insurer is not warranted based upon the consistent language in § 8-43-203 to the effect that an insured employer's knowledge about an injury does not constitute corresponding knowledge on behalf of the insurer.
In this case, the ALJ found that the employer failed to file a report of injury with the Division. Nonetheless, the ALJ determined that, for the purposes of § 8-43-203, the insurer was obligated to file a notice of contest within 20 days after the claimant filed his claim for compensation on January 28, 2008. Having filed its notice of contest three days past that date, the ALJ imposed a penalty in the amount of three days' compensation, as provided by § 8-43-203(2)(a). However, under the circumstances the filing of a claim for benefits by the claimant did not trigger an obligation by the insurer to file a notice of contest. The ALJ found that the employer had knowledge of the claimant's lost-time injury, but made no such finding regarding the insurer. Under the plain language of the statute, the employer's knowledge is not imputed to the insurer. Therefore, the insurer is not subject to a penalty under § 8-43-203. See Ruggio v. Lofing d/b/a City Café, W.C. No. 4-337-428 (November 29, 1999) (obligation to admit or deny liability arose not when claim filed, but when respondent obtained knowledge leading to belief claimant had permanently impairing injury). Moreover, the record does not indicate that the claimant sought a penalty based on the administrative requirement to admit or contest liability within 20 days of the Division mailing the Workers' Claim for Compensation. See W.C. Rule of Procedure 5-2(D), 7 Code Colo. Reg. 1101-3; Ruggio v. Lofing d/b/a City Café, supra. (no penalty sought under predecessor rule).
II.
The respondents also appeal the imposition of penalties against the employer. The ALJ assessed penalties under § 8-43-304 based on the employer's failure to file a first report of injury as required by § 8-43-101(1). In support of their contentions, the respondents assert that the ALJ failed to consider whether the claimant's request for penalties was time-barred under subsection (5) of § 8-43-304, which requires that the requesting party seek penalties within one year after he first knew or should have known the facts giving rise to a possible penalty. It appears from the record that the respondents timely raised the issue of the statute of limitations in their response to the claimant's application for hearing and maintained at the hearing that the claimant's request for penalties was time-barred. Tr. at 10. Moreover, the respondents raised the statute of limitations in their petition to review the previous full order; however, the ALJ did not determine whether the claimant's request for penalties against the employer were barred by § 8-43-304(5). The duty to file the request for penalties commences when the party first becomes aware of circumstances constituting a violation, even in cases where the violation is continuing. Spracklin v. Industrial Claim Appeals Office, 66 P.3d 176 (Colo.App. 2003). The determination of whether circumstances trigger the running of the statute of limitations is generally one of fact for the ALJ. Saxton v. King Soopers, Inc., W.C. No. 4-200-777 (March 11, 1997). It is therefore necessary to remand this issue to the ALJ for additional findings and a determination as to whether the claimant's request for penalties against the employer is barred pursuant to § 8-43-304(5).
IT IS THEREFORE ORDERED that the imposition of penalties against the insurer is reversed and the imposition of penalties against the employer is set aside and the matter is remanded to the ALJ for additional findings and a determination of whether such penalties against the employer are time-barred by operation of § 8-43-304(5). The ALJ's supplemental order dated January 15, 2009 is, otherwise, affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ John D. Baird
______________________________ Thomas Schrant
JOSE MENDOZA, GREELEY, CO, (Claimant).
SAPPHIRE CUSTOM HOMES, INC., Attn: JESSE SANDERS, C/O: SANDERS CONSTRUCTION, INC., LOVELAND, CO, (Employer).
PINNACOL ASSURANCE, Attn: HARVEY D. FLEWELLING, ESQ., DENVER, CO, (Insurer).
RING ASSOCIATES, PC, Attn: BOB L RING, ESQ., FORT COLLINS, CO, (For Claimant).
RUEGSEGGER SIMONS SMITH STERN, Attn: VITO A RACANELLI, ESQ., DENVER, CO, (For Respondents).
RITSEMA LYON, Attn: DOUGLAS STRATTON, ESQ., FT COLLINS, CO, (Other Party).
PINNACOL ASSURANCE, Attn: COURT EMMONS, DENVER, CO, (Other Party 2).