W.C. No. 4-293-203.Industrial Claim Appeals Office.
November 29, 2004.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Felter (ALJ) dated July 16, 2004, which imposed a penalty of $3,822 for the respondents’ failure timely to pay medical benefits. We affirm.
This claim has a long procedural history. The claimant suffered admitted compensable injuries on March 25, 1996. In a final order dated November 22, 1999, the ALJ directed the respondents to pay “all medical costs connected with Claimant’s medical treatment, the recommended surgeries and the recommended psychiatric care and treatment, as well as the expenses of pre-surgical and pre-preparation and treatment.”
On August 29, 2000, the ALJ determined the respondents willfully failed to comply with the 1999 order for the payment of the medical and psychiatric expenses by delaying the payment of some bills and denying payment of other bills. The ALJ also found that $412.40 remained unpaid as of the date of the hearing on August 21, 2000. The ALJ imposed penalties under § 8-43-401(2)(a), but denied the claimant’s request for penalties under § 8-43-304(1), C.R.S. 2004, which allows the imposition of a penalty up to $500 per day for the violation of an order. See Holliday v. Bestop Inc., 23 P.3d 700 (Colo. 2001).
We affirmed the August 29 order on appeal. However, in Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211 (Colo.App. No. 2001), the court concluded the respondents’ failure to comply with the 1999 order could be penalized under § 8-43-304(1). Therefore, the court set aside the August 29 order and remanded the matter for the imposition of penalties under § 8-43-304(1) or § 8-43-401, C.R.S. 2004.
Pursuant to that remand, the ALJ entered an order dated March 12, 2002, which imposed penalties at the rate of $500 per day from February 22 through August 21, 2000, in the aggregate amount of $91,000, and continuing thereafter at the same rate until the medical bills were paid. Pursuant to § 8-43-304(1), the ALJ ordered 75 percent of the penalty payable to the claimant and 25 percent payable to the Subsequent Injury Fund (SIF). We affirmed that order.
The respondents appealed, and in Northern Telecom, Inc. v. Industrial Claim Appeals Office, Colo. App. No. 02CA2052, December 24, 2003 (not selected for publication), the Court of Appeals concluded the aggregate penalty was “unconstitutionally excessive” under an abuse of discretion standard due to the “gross disparity” between the amount owed by employer and the aggregate penalty. Slip op. p. 7. Consequently, the court set aside the penalty and remanded the matter with directions to enter a new penalty proportionate to the respondents’ conduct.
The claimant then petitioned for certiorari review. The claimant alleged, inter alia, that the Court of Appeals lacked jurisdiction to review the ALJ’s March 12 order because the respondents failed to join the SIF as an indispensable party. On June 7, 2004, the Supreme Court denied the Petition for Writ of Certiorari and the respondents’ cross-petition.
Pursuant to the court’s remand, the ALJ issued an order dated July 16, 2004, which incorporated his previous findings of fact. The order then assessed a penalty at the rate of $21 per day from February 22 through August 21, 2000, in the aggregate amount of $3,822.
The claimant appealed the July 16 order. The claimant renews her contention that the Court of Appeals lacked jurisdiction to review the $91,000 penalty because the respondents failed to join the SIF as an indispensable party. The claimant also contends that Northern Telecom, Inc. v. Industrial Claim Appeals Office, supra, was wrongly decided and that the court’s decision constitutes special legislation against the claimant which violates due process and equal protection guarantees of the constitution.
We lack authority to determine whether the Court of Appeals had jurisdiction to review the March 12 order. See § 8-43-301(8), C.R.S. 2004. Further, the holding of the court in Northern Telecom, Inc. v. Industrial Claim Appeals Office, supra, is binding on both the ALJ and the Industrial Claim Appeals Panel. Mining Equipment Inc., v. Leadville Corp., 856 P.2d 81 (Colo.App. 1993). Therefore, the claimant’s arguments do not establish grounds for us to disturb the court’s remand order.
The claimant also contends the penalty imposed by the ALJ is disproportionate to the respondents’ misconduct, and thus constitutes an abuse of discretion, because the ALJ failed to consider the value of denied psychiatric and in-home treatment resulting from the respondents’ misconduct and the claimant’s pain and suffering. We perceive no reversible error.
We have previously construed Northern Telecom, Inc. v. Industrial Claim Appeals Office, supra, to require that we review the amount of a penalty awarded under § 8-43-304(1) under an abuse of discretion standard. McOmer v. Associated Business Products, W.C. No. 4-257-682 (October 25, 2004). We adhere to our prior conclusions.
An abuse of discretion exists if an order is “beyond the bounds of reason,” as where it is unsupported by the evidence or contrary to law Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App. 2001). However, there is no precise mathematical formula to predict when a penalty will be deemed an abuse of discretion as either inadequate or excessive.
Here, the ALJ determined the pertinent question was what penalty was adequate to deter the respondents from similar misconduct, and address the egregious effects of the respondents’ misconduct while comporting with due process requirements. Contrary to the claimant’s contention, the ALJ expressly recognized that the respondents’ willful and wanton misconduct caused non-economic harm to the claimant including the discontinuation of psychiatric treatment which delayed her recovery. However, the ALJ determined it was difficult to impossible to place a monetary value on these harms.
Further, upon consideration of the Supreme Court’s conclusions in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L. Ed. 2n 585 (2004), and BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996), the ALJ determined it was appropriate to impose a penalty no greater than 9 times the amount of the unpaid medical bills to comport with Eighth Amendment prohibition against excessive fines.
The claimant is obviously dissatisfied that the ALJ did not give greater consideration to the egregious effects of the respondents’ conduct on the claimant. However, the ALJ’s order falls within the statutory parameters for the imposition of penalties under § 8-43-304(1), C.R.S. 2004. We cannot say the daily penalty rate of $21 or the aggregate penalty of $3,822 exceeds the bounds of reason.
Moreover, we reject the claimant’s contention that the ALJ implicitly found the outstanding medical bills were paid by August 22, 2000, and thus, denied all penalties after that date. To the contrary, the ALJ expressly reserved for future determination all issues not specifically addressed by the order. Consequently, the ALJ did not purport to determine whether the respondents were subject to any penalty after August 21, 2000.
Finally, the ALJ only imposed penalties for the respondents’ failure timely to pay medical benefits. Therefore, the claimant’s contention the respondents are subject to penalties for wrongfully attempting to dictate medical treatment in violation of § 8-43-503(3), C.R.S. 2004, is not properly before us on this review.
IT IS THEREFORE ORDERED that the ALJ’s order dated July 16, 2004, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Kathy E. Dean
____________________________________ Bill Whitacre
Linda Giddings, Mossyrock, WA, Northern Telecom, Richardson, TX, Mary Anders, Liberty Mutual Insurance Company, Irving, TX, Kat Pennucci, Subsequent Injury Fund, Division of Workers’ Compensation — Interagency Mail, Jack Kintzele, Esq., Denver, CO (For Claimant).
David G. Kroll, Esq., Denver, CO, (For Respondents).