IN MATTER OF REINDEL v. EXEMPLA HEALTHCARE, W.C. No. 4-758-660 (2/2/2010)


IN THE MATTER OF THE CLAIM OF PHYLLIS REINDEL, Claimant, v. EXEMPLA HEALTHCARE, INC., Employer, and EXEMPLA, INC., Insurer, Respondents.

W.C. No. 4-758-660.Industrial Claim Appeals Office.
February 2, 2010.

ORDER OF REMAND
The respondents seek review of an order of Administrative Law Judge Friend (ALJ) dated September 24, 2009 that granted the claimant’s motion for summary judgment and ordered the respondents to pay temporary total disability benefits. The order also denied the respondents’ request to offset “extended illness time” benefits paid by the employer. We set aside that portion of the ALJ’s order denying an offset and remand for further proceedings on that issue.

This matter was resolved on summary judgment and therefore no hearing was held. Based on the motion and the response, the ALJ entered findings of fact that for the purposes of this order may be summarized as follows. The claimant was injured on January 23, 2008, when she was struck by a car while walking from the parking lot to the employer’s facility. She was treated and diagnosed with a lateral tibial plateau fracture and an avulsion fracture of her medial collateral ligament. She underwent surgery on January 30, 2008 and was limited to sedentary work by her surgeon, Dr. Rowland. Her job description as a registered nurse required her to be able to exert 50 to 100 pounds of force occasionally, 25 to 50 pounds frequently, and 10 to 20 pounds constantly. The insurer filed a general admission of liability dated March 25, 2009 admitting for medical benefits and denying temporary total disability benefits. The claimant was examined by Dr. Rowland four times between February 2008 and June 2008, and each time he restricted her to sedentary work. On July 10, 2008 he released her to work with a lifting restriction of 20 pounds, which the ALJ found was not compatible with the claimant’s job requirements. On September 4, 2008 Dr. Rowland released the claimant to full duty with the sole restriction that for up to two weeks she should work shifts of six to eight hours

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rather than her usual 12 hour shifts. Pursuant to a requirement of the employer’s, the claimant was examined by an occupational medicine specialist prior to returning to work. She returned to work on September 17, 2008.

The ALJ further found that the claimant underwent a second surgery in March 2009, and the respondents filed a general admission admitting liability for medical benefits and temporary total disability benefits following the second surgery. The respondents denied temporary total disability from the date of the injury until March 25, 2009, during which the claimant did not receive any temporary total disability benefits. During this period she was paid $5,150.25 in “personal leave time” and $21,585.47 in “extended illness time.” The respondents conceded that they were not entitled to offset the personal leave time. The extended illness time is accrued by employees during each pay period depending upon the number of hours worked, subject to a maximum accrual per pay period and an overall maximum. At the time of her injury the claimant had 526 hours of extended leave time accrued. The ALJ found based on a pay stub submitted by the claimant in support of her summary judgment motion that the employer charged the claimant’s extended illness time account and that it was depleted from 526 hours to fewer than 6 hours by the time she returned to work. The claimant also received $1,428.96 in payments from an insurance policy purchased by the employer, which the claimant conceded was subject to offset by the respondents.

Based upon these facts inferred from the claimant’s motion for summary judgment and the attached materials, the ALJ concluded that the claimant was entitled to temporary total disability benefits from January 23, 2008 to September 16, 2008. The ALJ also concluded that the respondents were not entitled to offset the extended illness time benefits received by the claimant.

The respondents appealed the ALJ’s order and argue that he erred in granting summary judgment on the issue whether the extended illness time benefits should be offset. In this regard, the respondents argue that the extended illness time benefits were paid pursuant to a short term disability plan funded by the employer and that they should be offset pursuant to § 8-42-103(1)(d)(I), C.R.S. 2009. We agree with the respondents’ argument that they are entitled to an evidentiary hearing on the issue of the nature of the extended illness time benefits and whether they may be offset pursuant to § 8-42-103(1)(d)(I).

It is well-established that OACRP Rule 17 allows an ALJ to enter summary judgment where there are no disputed issues of material fact. See Office of Administrative Courts Rule of Procedure (OACRP) 17, 1 Code Colo. Reg. 104-3 at 7. Moreover, to the extent that it does not conflict with OACRP 17, C.R.C.P. 56 also applies in workers’ compensation proceedings. Morphew v. Ridge Crane Service, Inc., 902 P.2d 848

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(Colo. App. 1995); Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo. App. 1988) (the Colorado rules of civil procedure apply insofar as they are not inconsistent with the procedural or statutory provisions of the Act). However, summary judgment is a drastic remedy and is not warranted unless the moving party demonstrates that it is entitled to judgment as a matter of law. Van Alstyne v. Housing Authority of Pueblo, 985 P.2d 97 (Colo. App. 1999). And all doubts as to the existence of disputed facts must be resolved against the moving party, and the party against whom judgment is to be entered is entitled to all favorable inferences that may be drawn from the facts. Kaiser Foundaton Health Plan v. Sharp, 741 P.2d 714 (Colo. App. 1987). However, once the moving party establishes that no material fact is in dispute, the burden of proving the existence of a factual dispute shifts to the opposing party. The failure of the opposing party to satisfy its burden entitles the moving party to summary judgment Gifford v. City of Colorado Springs, 815 P.2d 1008 (Colo. App. 1991).

In the context of summary judgment, we review the ALJ’s legal conclusions de novo. See AC. Excavating v. Yacht Club II Homeowners Association, 114 P.3d 862 (Colo. 2005). Pursuant to § 8-43-301(8), C.R.S. 2009, we have authority to set aside an ALJ’s order where the findings of fact are not sufficient to permit appellate review, conflicts in the evidence are not resolved, the findings of fact are not supported by the evidence, the findings of fact do not support the order, or the award or denial of benefits is not supported by applicable law.

Here, we agree with the respondents’ argument that they are entitled to an evidentiary hearing to attempt to show that the extended illness time benefits were paid pursuant to a “short term disability” plan, which would then be subject to offset pursuant to § 8-42-103(1)(d)(I). Whether the scheme under which the employer paid the claimant extended illness time benefits is a “plan” within the meaning of § 8-42-103(1)(d)(I) is, in our view, largely a question of fact. It is also a factual matter that remains in dispute. That factual question should be determined following an evidentiary hearing at which the respondents have a full opportunity to adduce evidence of the “disability plan.”

In this regard, we note that the respondents’ recital of facts is somewhat sparse tending to show that the extended illness time benefits are paid pursuant to a disability plan. However, in our view, given the respondents’ argument we cannot state as a matter of law that the claimant is entitled to judgment, and the argument raises a matter of disputed facts. Further, as noted previously, we must resolve all doubts regarding the existence of disputed facts against the moving party.

Whether the employer’s extended illness time program is a “disability plan” will be determined by a number of factors, all essentially factual in nature. For example, as a “plan” we presume that it is covered by the Employee Retirement Income Security Act (ERISA),

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which “is a comprehensive statute that regulates pension and welfare plans providing employees with fringe benefits.” Celebrity Custom Builders v. Industrial Claim Appeals Office, 916 P.2d 539, 542 (Colo. App. 1995). ERISA “sets various uniform standards, including rules concerning reporting, disclosure, and fiduciary responsibility . . . for welfare plans.” Id, 916 P.2d at 542. A “plan,” of course, for purposes of ERISA and its preemption of state law, is distinguished from “employe benefits” because only a “`plan’ embodies administrative practices vulnerable to employer abuse and justifies the burden that would be imposed by a patchwork scheme of regulation.” Id., 916 P.2d at 542. In this regard, ERISA requires certain mandatory features to be incorporated in every “plan.” These include such things as procedures for handling claims by participants or beneficiaries, a written instrument providing for control and management of the plan by fiduciaries, a procedure for maintaining funding, procedures for allocating the responsibility for plan operation and administration, a procedure for amending the plan, specifications of the basis on which payments are made, a requirement that the plan assets be held in trust, and a requirement that plan assets be held exclusively for participants and beneficiaries. See 29 U.S.C. § 1102(a) and (b). See e.g., Tyler v. Livonia Public Schools, 561 N.W.2d 390 (Mich. Ct. App. 1996) affd. 590 N.W.2d 560 (Mich. 1998) (disability benefits received by a workers’ compensation claimant under the Public School Employees Retirement Act were not payable under a “plan” and were not subject to offset); Kosakow v. New Rochelle Radiology Associates, 274 F.3d 706 (2d Cir. 2001) (a program that simply pays a onetime lump sum benefit triggered by a single event requires no administrative scheme to meet the employer’s obligation and is not a “plan” within the meaning of ERISA); Nadworny v. Shaw Supermarkets, Inc., 405 F.Supp.2d 124 (D. Mass 2005) (employee benefit may be considered a “plan” for purposes of ERISA only if it involves the undertaking of continuing administrative and financial obligations); Curtiss v. Union Cent. Life Ins. Co., 823 F.Supp. 851 (D. Colo. 1993) (“plan” under ERISA implicates existence of benefits whose provision by nature requires ongoing administration). In any event, we merely note these as illustrative of features that might distinguish a “plan” from mere employee benefits, and we do not now rule that these features are exhaustive or definitive, or that they are all necessary characteristics of a “plan.” We merely hold here that the respondents should be provided an opportunity to adduce such evidence as well as any other relevant evidence in support of their argument.

Because there is a factual dispute regarding the nature of the extended illness time benefits, the respondents are entitled to an evidentiary hearing regarding that issue. Therefore, summary judgment was not appropriate on that issue and we set aside the order insofar as it denied the offset. We note that the respondents did not appeal the ALJ’s order insofar as it awarded temporary total disability benefits for the disputed period. Therefore, the factual issues on remand are limited to whether the extended

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illness time benefits may be offset and the related issues raised by the respondents concerning reinstatement of the benefits.

IT IS THEREFORE ORDERED that the ALJ’s order dated September 24, 2009, is set aside insofar as it denied the respondents an offset for extended illness time benefits.

IT IS FURTHER ORDERED that the matter is remanded for an evidentiary hearing on that issue.

INDUSTRIAL CLAIM APPEALS PANEL

____________________________________ John D. Baird

____________________________________ Curt Kriksciun

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EXEMPLA, INC., Attn: JASON HOUSTON, C/O: SEDGWICK CMS, INC., LEXINGTON, KY, (Insurer).

DARLING MILLIGAN SMITH LESCH, PC, Attn: RICHARD J LESCH, ESQ., DENVER, CO, (For Claimant).

THOMAS POLLART MILLER, LLC, Attn: BRAD J MILLER, ESQ., GREENWOOD VILLAGE, CO, (For Respondents).

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