W.C. No. 4-724-017.Industrial Claim Appeals Office.
February 4, 2011.
FINAL ORDER
The respondents seek review of that portion of an order of Administrative Law Judge Henk (ALJ) dated October 12, 2010, that awarded the claimant penalties against the respondents not paying disability benefits in a timely manner. We affirm.
The claimant sustained an industrial injury on January 20, 2007. The respondent insurer admitted liability and paid certain benefits. The ALJ found that although the insurer had paid the temporary total disability (TTD) due and owing for the admitted time period 6/28/08 through 11/20/08, it had not paid the admitted TTD within 30 days of when the benefits were due and so had violated § 8-43-401(2)(a) C.R.S. Section 8-43-401(2)(a) provides that after all appeals have been exhausted or in cases where there have been no appeals, all insurers and self-insured employers shall pay benefits within 30 days after any benefits are due. The ALJ determined that the benefits were paid 424 days late and imposed a $50.00 per day penalty pursuant to § 8-43-304 C.R.S. The ALJ ordered the insurer to pay a penalty of $21,200.00. The respondents bring this appeal.
Section 8-43-304, C.R.S. authorizes an ALJ to impose a penalty for each day a party violates any provision of the Workers’ Compensation Act (Act), fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director, or refuses to obey any lawful order made by the director or the panel. The imposition of penalties under § 8-43-304 is a two-step process, first requiring the ALJ to determine if the respondents’ conduct violated the Act, a rule, or an order. If a violation occurred, the ALJ must determine whether the party’s actions were objectively reasonable Colorado
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Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d (Colo. App. 1995).
Therefore, the ALJ must first determine that the insurer’s conduct constituted a violation of the Act, a rule, or an order. However, the conduct constituting the violation must also have been objectively unreasonable. Therefore, if the ALJ finds that a violation occurred, penalties may only be imposed if the ALJ concludes that the claimant’s conduct was not reasonable under an objective standard. See, e.g., Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo. App. 1995). The reasonableness of the claimant’s actions depends on whether they were predicated on a rational argument based in law or fact. Jiminez v. Industrial Claim Appeals Office, 107 P.3d 965 (Colo. App. 2003).
In reviewing the ALJ’s order imposing penalties, we are bound by her factual findings if they are supported by substantial evidence in the record. § 8-43-304(8), C.R.S.; City of Durango v. Dunagan, 939 P.2d 496 (Colo. App. 1997). Substantial evidence is probative evidence which would warrant a reasonable belief in the existence of facts supporting a particular finding, without regard to the existence of contradictory testimony or contrary inferences See F.R. Orr Construction v. Rinta, 717
P.2d 965 (Colo. App. 1985). 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 is “exceedingly narrow.” Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo. App. 2003). 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).
The respondents first argue that substantial evidence in the record does not support the ALJ award of penalties for violation of § 8-43-401, C.R.S. for the period of December 27, 2008 through February 25, 2010. The ALJ found that the benefits were due on December 27, 2008 and were not finally paid until February 25, 2010 or 424 days late. The respondents argue that one part of her order found that the insurer did pay the claimant for the period 6/28/08 through 11/20/08, but another part of her order found that the claimant was not receiving TTD benefits that the insurer admitted was due and owing. We do not agree with the respondents’ reading of the order.
The respondents admit that they were late in paying the claimant for the remaining period of admitted TTD benefits from 9/22/08 through 11/20/08, but claim that they paid the claimant $3,681.11 on 9/9/09, which covered the period from 9/22/08 through
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11/9/08. Therefore, the respondents argue that the ALJ abused her discretion in awarding penalties for failure to pay these benefits for the period 6/28/08 through 9/21/08.
The ALJ made the following specific findings of fact regarding the payment of TTD for the time period 6/28/08 through 11/20/08. The insurer paid $4,240.14 on 7/12/08 (permanent partial disability converted to TTD). The insurer paid $559.84 on 10/30/08. The insurer paid $1,550.76 on 10/20/08. The total of these payments was $6,350.74. However, the insurer owed $10,781.47 at the admitted rate of $516.92. The TTD benefits were due on 12/27/08 and were paid on 2/25/10 (424 days late). The insurer sent the claimant two checks on 9/9/09 in the amount of $2,645.99 and $1,035.12 for a total of $3,681.11. Even with the two 9/9/09 checks (sent 11 months after the 10/28/08 admission), the insurer still had not paid the claimant the total owed, which was $10,781.47 at the admitted TTD rate. The insurer filed a final admission of liability dated 2/25/10 admitting to TTD from 4/1/07 through 9/1/09 at the rate of $516.92. The 2/25/10 FAL showed the insurer paid the TTD due and owing for the time period 6/28/08 through 11/20/08 at their admitted rate of $516.92 by 2/25/10. However, the insurer had violated 8-34-401(2)(a) by not paying the TTD admitted within 30 days of when the benefits were due (12/27/08). Therefore the ALJ penalized the insurer $50.00 per day between 12/27/08 and 2/25/10 (424 days late).
The respondents, on appeal, do not dispute that they owed TTD from 6/28/08 through 11/20/08 at the rate of $516.92, nor do they dispute that the total amount owed for this period was $10,781.47. Rather, the respondents argue that the payment found by the ALJ to have been paid the claimant on 9/9/09 in the amount of $3,681.11 covered the period of 9/22/08 through 11/9/08 because only $3,618.44 was due. However, the ALJ found that the insurer owed a total of $10,781.47 and even with the payment of TTD by the two 9/9/09 checks, the insurer still had not paid the claimant the total owed.
To summarize, as we read the ALJ’s order, she found that the insurer had paid a total of $6,350.74 by the 10/20/08 admission and then 11 months after the 10/20/08 admission sent the claimant two checks on 9/9/09 for a total of $3,681.11. The sum of $6,350.74 and $3,681.11 is $10,031.85. Thus, the payment made by the insurer of $10,031.85 was less than the total amount of $10,781.47 found by the ALJ to be owed to the claimant. We note that the TTD rate of $516.92 translates to a daily rate of $73.85 and there are 146 days in the period 6/28/08 through 11/20/08. Therefore, except for some rounding differences we agree with the ALJ on the total amount due. In any event the respondents on appeal have not contested the total amount due for the admitted period of TTD. In our view there is substantial evidence supporting the ALJ’s findings. Exhibit 2 at 6. Consequently, the insurer had not paid the claimant the total amount owed pursuant to their admitted TTD rate.
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The ALJ found that the respondents had filed a FAL dated 2/25/10, which showed that the insurer had paid the TTD due and owing for the time period 6/28/08 through 11/20/08 at their admitted rate of $516.92 by 2/25/10. The respondents argue that the 10/2/09 FAL admitted to the same periods of temporary and permanent partial disability benefits as the same rates as those reflected in the 2/25/10 admission and that the 10/2/09 admission shows that the insurer had paid the TTD benefits due and owing for the period from 6/28/08 through 11/20/08 at the admitted rate by 10/2/09. Thus, the respondents argue that the ALJ abused her discretion in awarding penalties because all of the TTD had been paid by 10/2/09.
Even if we were to assume that all of the TTD had been paid by 10/2/09 it would have been late because the ALJ found, and the respondents have not contested, that these benefits were due on December 27, 2008. Further, we are not persuaded that the ALJ was compelled to accept the 10/2/09 admission as conclusive evidence on when the payments were made, but rather, the ALJ could look to the underlying payment records as outlined above. Exhibit 2 at 6. The existence in the record of conflicting evidence that would support a contrary result does not provide a basis for setting aside the ALJ’s order. See Mountain Meadows Nursing Center v. Industrial Claim Appeals Office, 990 P.2d 1090 (Colo. App. 1999) (the existence of conflicting evidence does not lessen the import of substantial evidence in support of a finding). In our view, there is substantial evidence in the record to support the ALJ’s determination to impose penalties.
IT IS THEREFORE ORDERED that the ALJ’s order dated October 12, 2010 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ John D. Baird
____________________________________ Thomas Schrant
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RENEE C GONZALES, 415 EAST 76TH AVENUE, DENVER, CO, 80221 (Claimant).
ACE AMERICAN INSURANCE COMPANY, Attn: EVELYN RADMACHER, C/O: ESIS PORTLAND — WC CLAIM NO: 780 C 3752034, P O BOX 31082, TAMPA, FL, 33631-3082 (Insurer).
CLIFTON, MUELLER BOVARNICK, PC, Attn: HOLLY M. BARRETT, ESQ., 789 SHERMAN STREET, SUITE 500, DENVER, CO, 80203 (For Respondents).
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