IN THE MATTER OF THE CLAIM OF JOHN BURGESS, Claimant, v. JOHN BURGESS INSURANCE AND INVESTMENT GROUP, and Employer, AMERICAN FAMILY INSURANCE, Insurer, Respondents.

W.C. No. 4-633-192.Industrial Claim Appeals Office.
November 12, 2009.

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FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Jones (ALJ) dated May 26, 2009 that denied his request to increase his average weekly wage (AWW). We affirm.

Several of the ALJ’s findings of fact are summarized as follows. The claimant sustained an admitted injury to his low back on October 30, 2003, while self-employed. His AWW at the time of the accident was $615.39 for an annual salary of about $30,000. According to the respondents’ witnesses, the insurer based the employer’s insurance premiums on the salaries reported by the employer in 2003. The claimant received temporary total disability payments from April to July 2005, but did not request a change in his AWW. The claimant later sold his business. The claimant earned about $99,000 in 2008 and reached maximum medical improvement on July 29, 2008. The ALJ concluded that it was appropriate under the circumstances not to increase the claimant’s AWW and denied his claim for a higher AWW.

We initially note that, on its face, the ALJ’s order may appear to be interlocutory. See, e.g., Steed v. Custom Leasing, Inc., W.C. No. 4-628-575 (September 8, 2008) (dismissing appeal of AWW as interlocutory). However, it appears from the record that the claimant challenged the amount of permanent partial disability benefits in conjunction with his request for a higher AWW. We therefore consider the merits of the claimant’s appeal.

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The ALJ’s findings are not disputed. The parties assert that the ALJ declined to increase the claimant’s AWW based on her finding that the claimant did not demonstrate a diminution in his earning power. They further recognize that the ALJ expressly considered the underwriting practices of the insurer. The parties also refer to the same body of cases in support of their respective positions.

The objective when calculating the AWW is to arrive at a “fair approximation of the claimant’s wage loss and diminished earning capacity.” Campbell v. IBM Corp., 867 P.2d 77, 82 (Colo. App. 1993). Although the ALJ’s authority to determine a fair AWW is discretionary, a court may intervene if failure to exercise such discretion results in a manifest injustice which deprives the claimant of fair compensation. Id.

In Avalanche Industries, Inc. v. Clark, 198 P.3d 589 (Colo. 2008), the Supreme Court of Colorado recently affirmed the ALJ’s exercise of discretion in calculating a claimant’s AWW. The court noted the discretionary exception in § 8-42-102(3) C.R.S. 2008, which provides that the ALJ, in each particular case, may compute the average weekly wage in such a manner and by such method as will, in the opinion of the ALJ, fairly determine the employee’s AWW. The court held that § 8-42-102(2), as the “default provision,” of the statute requires the AWW to be calculated “upon the monthly, weekly, daily, hourly, or other remuneration” received by the injured worker “at the time of the injury.” However, in Avalanche, the court also held that the default provision is expressly subordinated or made subject to the discretionary exception found in § 8-42-102(3).

The claimant asserts that the ALJ erred by not applying the discretionary provision when the claimant was found to earn less at the time of his accident than when he reached maximum medical improvement and his condition worsened. An abuse of discretion exists when the ALJ’s 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, 869 (Colo. App. 2001). However, we may not interfere with the ALJ’s findings of fact if supported by substantial evidence in the record. Section 8-43-301(8), CR.S. 2009. This standard of review requires us to uphold 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).

As noted by the parties the ALJ found no “demonstrable diminution in earning power” and cited the claimant’s tripling of his salary at the time he reached maximum medical improvement. Findings of Fact, Conclusions of Law, and Order (Order) at 4, ¶ 7. Although the claimant asserts that the ALJ should have found his increase in earning power to mandate a higher AWW, we cannot say that the ALJ’s contrary inference constitutes an abuse of discretion. Moreover, as we read the ALJ’s order, the ALJ was not persuaded that applying the default provision was unfair where the claimant did not

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seek an adjustment to his AWW when he was actually disabled and receiving disability benefits. It therefore appears from the order that the ALJ inferred from the claimant’s failure to seek an increase in his AWW during his “brief period” of disability that the claimant’s existing AWW was sufficient under the circumstances. Order at 5, ¶ 6.

The ALJ applied the proper analysis and determined that it was fair under the circumstances to use the claimant’s AWW based on wages received at the time of his injury. We decline the claimant’s invitation to effectively conclude that a claimant found to have increased his earnings after the time of his accident is entitled to an alternative calculation of his AWW as a matter of law.

IT IS THEREFORE ORDERED that the ALJ’s order dated May 26, 2009 is affirmed.

INDUSTRIAL CLAIM APPEALS PANEL

______________________________ John D. Baird

______________________________ Curt Kriksciun

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JOHN BURGESS, LITTLETON, CO, (Claimant).

AMERICAN FAMILY INSURANCE, SCHOFIELD, WI, (Insurer).

THE ELEY LAW FIRM, Attn: CLIFFORD E ELEY, ESQ., DENVER, CO, (For Claimant).

NATHAN, BREMER, DUMM mYERS, PC, Attn: MARK DUMM, ESQ., DENVER, CO, (For Respondents).

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