W.C. No. 4-400-162Industrial Claim Appeals Office.
November 3, 2000
FINAL ORDER
The respondents seek review of an order of the Director of Workers’ Compensation (Director) which imposed penalties under §8-43-304(1), C.R.S. 2000, for the respondents wrongful termination of temporary disability benefits. We affirm.
The claimant suffered a work-related injury on November 6, 1998. The insurer filed a Final Admission of Liability dated August 14, 1999, which admitted liability for temporary disability benefits from November 7, 1998 to January 3, 1999, February 15, 1999 to March 28, 1999, and April 19, 1999 to May 16, 1999. Attached to the Admission was a medical report showing the claimant was released to return to regular employment and placed at maximum medical improvement on July 28, 1999.
The Director requested the insurer file an amended admission with documentation supporting the unilateral termination of temporary disability benefits on January 3, 1999, March 28, 1999, and May 16, 1999. However, no amended admission was filed.
On January 24, 2000, the Director ordered the insurer to pay temporary disability benefits at the admitted rate for the entire period between November 11, 1998 and July 28, 1999, plus interest on all unpaid benefits. The Director also ordered the insurer to “show good and sufficient cause” within twenty days of the date of the mailing of the order, “why penalties of up to $500 per day should not be assessed for their failure to comply with §8-42-105(3) and § 8-43-218(3), C.R.S. 2000, and with the Rules of Procedure Part IV(N)(2) and IX(C), 7 Code Colo. Reg. 1101-3. In the alternative, the order granted the respondents leave to apply for a prehearing conference or hearing on the issue of penalties within 20 days of the date of the mailing of the order. The respondents timely appealed the Director’s order insofar as it required the payment of temporary disability benefits. In an order dated May 8, 2000, we affirmed the disputed portion of the Director’s order. No further appeal was taken.
On February 16, 2000, the claimant moved for an order imposing penalties. On June 30, 2000, the Director entered the order on review. The Director found the respondents’ unilateral termination of temporary disability benefits violated §8-42-105(3) and § 8-42-106(2), and imposed penalties for 1208 days under § 8-43-304(1). The respondents timely appealed the June order.
I.
On review, the respondents contend the Director erred by imposing penalties without affording them an evidentiary hearing. Further, they contend they were denied due process of law. We disagree.
As argued by the respondents, the imposition of penalties under § 8-43-304(1), requires a two step analysis. The ALJ must first determine whether the disputed conduct constituted a violation of an express duty or prohibition established by the Workers’ Compensation Act (Act) or a procedural rule. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). If the ALJ finds a violation of the Act or a rule, penalties may be imposed only if the ALJ finds the respondents’ actions were not objectively reasonable. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676
(Colo.App. 1995). The reasonableness of the respondents’ actions depends upon whether the actions were predicated on a rational argument based in law or fact. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997). Determination of whether the respondents’ conduct was reasonable is generally dependent on the particular facts of the case. See Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996).
Due process requires that parties receive adequate notice of a critical administrative determination and the consequences of their failure to act. Hall v. Home Furniture Co., 724 P.2d 94
(Colo.App. 1986). Where the administrative adjudication turns on issues of fact, due processrequires that the parties be afforded a reasonable opportunity in which to confront adverse witnesses and present evidence and argument in support of their position Delaney v. Industrial Claim Appeals Office ___ P.2d __(Colo.App. No. 00CA0081, September 14, 2000); Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990). However, no hearing is required where there is no disputed issue of material fact and the movant is entitled to judgment as a matter of law See Service Supply Co. v. Vallejos, 169 Colo. 14, 452 P.2d 387
(1969); Morphew v. Ridge Crane Service, Inc., 902 P.2d 848
(Colo.App. 1995).
Moreover, parties may “waive” procedural due process rights Colorado AFL-CIO v. Donlon, 914 P.2d 396 (Colo.App. 1995). “Waiver” exists when there has been the intentional relinquishment of a known right. A waiver may be explicit or implicit, but must be voluntary, knowing and intelligent. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988). A party may implicitly waive the right to procedural due process by engaging in conduct which manifests an intent to relinquish such right, or if it acts inconsistently with the claimed right. Johnson v. Industrial Commission, supra. Finally, a party’s failure to avail itself of “an existing process does not equate to a lack of due process.”Cramer v. Industrial Claim Appeals Office, 885 P.2d 318
(Colo.App. 1994).
Initially we reject the respondents’ contention that the Director did not provide them the opportunity for an evidentiary hearing. The order afforded the respondents 20 days from the date the order was mailed to show good cause why penalties should not be imposed, apply for a prehearing conference on the penalty issue, or apply for an evidentiary hearing. Thus, the Director’s order to show cause complied with the requirements of Rule of Procedure VIII(N)(2), 7 Code Colo. Reg. 1101-3 at 29 and Rule VIII(O)(1) at 30.
Concerning the adequacy of the notice, the Director’s order to show cause advised the respondents that the Director might impose penalties under § 8-43-304(1) for the wrongful termination of temporary disability benefits. The order further stated that: “Failure to timely respond may result in assessment of the maximum penalty.” The Director’s order contains a certificate of mailing dated January 24, 2000. Consequently, if the respondents requested a hearing, they were required to file an application for hearing no later than Monday, February 14, 2000.
The respondents do not deny timely receipt of the Director’s order to show cause. Neither do they allege that they were precluded from timely responding to the order. In fact the respondents filed a timely petition to review the Director’s order with respect to the payment of temporary disability benefits. (See Respondents’ Opening Brief in Support of Petition to Review, March 8, 2000). On February 16, 2000, two days after the deadline for responding to the order, the respondents filed an objection to the imposition of penalties and requested a pre-hearing conference. However, the record contains no evidence the respondents timely applied for an evidentiary hearing on the claim for penalties. Furthermore, the respondents did not file a response to the show cause order until February 21, 2000. Under these circumstances, we conclude the respondents implicitly conceded there was no material issue of fact on the issue of penalties and waived the right to an evidentiary hearing. Cramer v. Industrial Claim Appeals Office, supra.(if provider timely availed himself of appeals process he would have received hearing he sought on appeal).
Accordingly, respondents also waived the right to present evidence that they “cured” the statutory violations and are only subject to penalties for 289 days. City of Durango v. Dunagan, 939 P.2d 496 (Colo.App. 1997); Colorado Compensation Ins. Authority v. Industrial Claim Appeals Office, 884 P.2d 1131
(Colo.App. 1994). Under these circumstances, the Director did not err in assessing penalties without an evidentiary hearing. See Service Supply Co. v. Vallejos, supra.
Similarly, we reject the respondents’ contention the Director should have recused herself from adjudicating the penalty issue because she is the administrator of the Subsequent Injury Fund. The respondents did not timely raise this argument to the Director, and thus, they waived the right to request a disqualification of the Director. Aaberg v. District Court of Seventh Judicial District, 136 Colo. 525, 319 P.2d 491 (Colo. 1957) (request for disqualification of judge waived when not asserted prior to litigation before judge); Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988).
II.
In any case, the respondents contend the Director exceeded her authority by adjudicating the penalty issue. The respondents contend the Director has no authority to determine whether they violated the Act or impose penalties. We disagree.
Section 8-47-101(2), C.R.S. 2000, provides that the Director “shall enforce and administer” the provisions of the Act. Section 8-43-201 C.R.S. 2000, expressly affords the Director original jurisdiction to “hear and decide all matters” arising under the Act. Cornerstone Partners v. Industrial Claim Appeals Office, 830 P.2d 1148 (Colo.App. 1992). Further, Rule of Procedure, Part XI(G)(1), 7 Code Colo. Reg. 1101-3 at 42, authorizes the Director to impose penalties under § 8-43-304 for the violation of a procedural rule. Insofar as the respondents may be understood as arguing that the Director’s statutory authority to assess penalties is an unconstitutional violation of the separation of powers doctrine, we have no authority to resolve that argument See Celebrity Custom Builders v. Industrial Claim Appeals Office, 916 P.2d 539 (Colo.App. 1995).
Finally, the Director did not impose penalties for the respondents’ refusal to cooperate with the claims manager in violation of § 8-43-218(3), C.R.S. 2000. Therefore, we need not consider the respondents’ further argument that the Director lacks authority to impose penalties for a violation of § 8-43-218(3).
The respondents’ remaining arguments have been considered and are without merit.
IT IS THEREFORE ORDERED that the Director’s order dated June 30, 2000, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
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, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 1999. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed November 3, 2000 to the following parties:
Elizabeth Shepherd, 2725 Canossa Dr., Broomfield, CO 80020
Costco Wholesale, 6400 W. 92nd Ave., Westminster, CO 80030
Joe Tracy, Supervisor, Cambridge Integrated Services Group, Inc., P. O. Box 52106, Phoenix, AZ 85072
Roger Fraley, Jr., Esq., 517 E. 16th Ave., Denver, CO 80203 (For Claimant)
Kathleen Mowry North, Esq., 999 18th St., #1600, Denver, CO 80202 (For Respondents)
BY: A. Pendroy