W.C. No. 4-197-635Industrial Claim Appeals Office.
August 11, 1995
The respondents seek review of a final order of Chief Administrative Law Judge Felter (ALJ) insofar as it awarded temporary total disability benefits and imposed a penalty for the respondents’ improper termination of benefits. The claimant seeks review of the order insofar as it determined the penalty period. We affirm the order in part, set it aside in part, and remand for entry of an additional order.
The claimant sustained the industrial injury in 1993. On October 17, 1994, the claimant’s treating physician released the claimant for limited duty to work four hours per day. The claimant worked through October 28, 1994.
The ALJ found that the respondent-employer terminated the claimant on October 28 because he did not possess a necessary driver’s license. Approximately one week later, the claimant was told that there would be no work available for him even if he obtained a driver’s license.
The respondents did not admit liability for temporary total disability benefits after October 28, 1994. In fact, on November 4, 1994, the respondents filed an admission terminating temporary total disability benefits as of October 16, without any admission for temporary partial benefits. However, as of December 6, 1994, the respondents filed an admission and began paying temporary partial disability benefits retroactive to October 17, 1994. The respondents also filed an admission, dated February 16, 1995, admitting liability for temporary partial disability benefits from October 17, 1994 through January 9, 1995.
The ALJ concluded that the claimant was entitled to temporary total disability benefits from October 29, 1994 to January 10, 1995, when he reached maximum medical improvement. In support of this decision, the ALJ stated that temporary total disability is a “strict wage loss concept.” He also stated that an award was proper because the claimant’s lack of a driver’s license was an “outside problem,” and because no additional employment was offered to the claimant after October 28.
The ALJ also determined that the respondents improperly “elected to terminate temporary total disability after October 28, 1994.” Although the ALJ’s written findings are not explicit, it is apparent from his oral remarks that he considered the respondents’ November 4, 1994 admission to be invalid under the Rules of Procedure, and the same was true of the December 6, 1994 admission. The ALJ also concluded that, under §8-43-304(4), C.R.S. (1994 Cum. Supp.), the penalty period should commence December 2, 1994, the day after the respondents received an application for hearing notifying them that the claimant was seeking a penalty.
On review, the respondents contend that the ALJ erred in awarding temporary total disability benefits subsequent to October 28, 1994. In this regard, the respondents argue that the ALJ erred in failing to determine whether the claimant was at “fault” for his separation from employment on October 28. The respondents assert that, had the ALJ made this determination, he would have concluded that the claimant was not entitled to benefits. We reject this argument.
In PDM Molding Co., Inc. v. Standberg, 898 P.2d 542 (Sup.Ct. 1995), our Supreme Court held that “fault” is a factor to be considered when determining whether loss of post-injury employment has severed the causal connection between an industrial injury and subsequent wage loss. However, the court went on to hold that if the claimant is at fault for loss of post-injury employment, he is nevertheless entitled to temporary total disability benefits if he can establish that the “work-related injury contributed to some degree to his [post-separation] wage loss.” In so doing, the court quoted an Arizona appellate decision which held that, as long as the effects of the industrial injury contribute “to a claimant’s inability to secure employment at pre-injury wage levels, compensation benefits are payable for loss of earning capacity.”
Here, the respondents filed an admission of liability conceding that the claimant was temporarily partially disabled between October 28, 1994 and January 9, 1995. Therefore, they have necessarily conceded that, “to some degree,” the claimant’s post-injury wage loss was attributable to the industrial injury. Therefore, under the Supreme Court’s opinion i Stanberg, their concession establishes that the claimant is entitled to temporary total disability benefits regardless of whether he was at fault for the October 28 separation.
Under these circumstances, there is no basis for setting aside the ALJ’s order on the ground that he failed to address the question of “fault” for the claimant’s October 28 separation. Regardless of whether the claimant was at fault, he is entitled to temporary total disability benefits under PDM Molding Co., Inc. v. Standberg, supra.
Although not completely clear, the respondents also appear to assert that their termination of temporary total disability benefits was proper under § 8-42-105(3)(c), C.R.S. (1994 Cum. Supp.). Specifically, they read Dr. Woodcock’s October 18, 1994 “Injury Status Form” as releasing the claimant to return to work, without restrictions, two weeks subsequent to the date of the report.
The respondents’ argument notwithstanding, we do not believe the ALJ was compelled to read the report in this way. In one section, the form indicates that the claimant is limited to four hours per day “x 2 weeks then full time.” However, the report also indicates that the “estimated length of restrictions” is two weeks. Thus, the ALJ could conclude that the October 18, 1994 report constitutes a mere prediction, not an actual release to return to regular employment. See Burns v. Robinson Dairy Inc., 911 P.2d 661 (Colo.App. 1995) (unless record contains conflicting opinions from attending physicians regarding a claimant’s release to work, the ALJ is not at liberty to disregard the attending physician’s opinion). This conclusion is particularly compelling since, on January 18, 1995, Dr. Woodcock imposed substantial permanent restrictions on the claimant.
The respondents next contention is that the ALJ erred in assessing a penalty based upon their improper termination of temporary total disability benefits. The respondents assert that their initial termination of temporary total disability benefits, by admission on November 4, 1994, was proper under Rule of Procedure IX(C)(I)(c), 7 Code Colo. Reg. 1101-3 at 34. Further, they allege that their failure to reinstate temporary total disability benefits after October 28 was based on a “good faith” argument that the claimant was not entitled to benefits due to his separation for fault. We disagree with these arguments.
We have previously held that violation of a rule of procedure is subject to a penalty under § 8-43-304(1), C.R.S. (1994 Cum. Supp.), because disobedience of a rule constitutes failure or refusal to perform a duty lawfully enjoined by the Director of the Division of Workers’ Compensation (Director). See O’Grady v. Denver Public School District,
W.C. No. 4-151-533, November 18, 1994. We have also held that the word “fails,” as used in the statute, connotes a negligence standard. Hence, a party may be penalized for failure to obey a rule if the action is not objectively reasonable. Brown v. Gosney and Sons, Inc., W.C. No. 3-104-140, August 30, 1994; see also, Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. No. 94CA1105, April 27, 1995). An action is objectively reasonable if it is predicated on a rational argument based in law or evidence. Brown v. Gosney and Sons, Inc., supra.
Here, the respondents’ arguments notwithstanding, the admission dated November 4, 1994, did not comply with Rule of Procedure IX(C)(I)(c). The employer’s report, which was submitted with the admission, did not contain the required statement “setting forth the wages paid for the work to which the claimant has returned.” Consequently, the November 4 admission did not comply with Rule IX(C)(I)(c), and the respondents have not advanced any good faith argument for their failure to attach a complying report.
Moreover, we are unpersuaded by the argument that their December 6, 1994 admission [see also admission dated December 12, 1994], which reinstated temporary partial disability benefits, constitutes good faith compliance with Rule IX. The December admission was predicated on the theory that the claimant was responsible for the wage loss because he was at fault for the October 28 separation.
However, an alleged separation for fault is not the type of defense to temporary total disability which may be asserted by way of an admission of liability. Consequently, to the extent the respondents desired to terminate temporary disability benefits based on this theory, they were required to file a motion to suspend or modify benefits in accordance with Rule of Procedure IX(D)(1), 7 Code Colo. Reg. 1101-3 at 35. However, respondents did not proceed in this fashion, and advanced no rational argument, based on law or fact, which would excuse them from complying with Rule IX(D).
The respondents’ final argument is that the ALJ abused his discretion in imposing a penalty of $500 per day for their violations of the rules. We reject this argument.
An abuse of discretion occurs when an ALJ’s order is beyond the bounds of reason, as where it is unsupported by the law or the facts. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993). Here, the ALJ considered the adverse financial effects on the claimant caused by the respondents’ delay in the payment of temporary disability benefits. We consider this to be a proper inquiry since it tends to indicate the overall impact of the violation on the claimant. This information, taken with the nature of the respondents’ violations, persuades us there was no abuse of discretion.
The claimant seeks review of the ALJ’s order with respect to the number of days that the respondents were held liable for penalties. In this regard, the ALJ concluded that § 8-43-304(4) must be interpreted “to mean that a penalty cannot commence until the violating party has received a hearing application claiming the alleged violation.” Consequently, the ALJ concluded that, although the violations began on October 29, 1994, the penalty would not commence until December 2, 1994, the day after the respondents received the claimant’s application for hearing on the issue of penalties. We agree with the claimant that the ALJ erred in applying §8-43-304(4) in calculating the penalty period.
Initially, we conclude that § 8-43-304(4) does not apply to this claim. In Wells v. Town of Breckenridge, W.C. No. 4-129-859, May 18, 1995, we held that the “right to cure” provisions of § 8-43-304(4) are generally “substantive” in nature. See Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, supra (imposition of penalty is substantive right and liability). The following language from the Wells
decision is pertinent:
“Subsection 8-43-304(4) . . . was enacted in 1994 as part of Senate Bill 94-139. 1994 Colo. Sess. Laws, ch. 309 at 1878-1879. Although portions of Senate Bill 94-139 involve procedural changes, subsection 4 is substantive. Subsection (4) modifies pre-existing liability for penalties by establishing a “right to cure” prior to the imposition of liability for violation of a rule. After proof of “cure,” the party seeking the penalty must prove that the violator had actual or constructive knowledge of the violation. No such requirements existed at the time of claimant’s injury, and we decline to apply these requirements to the claim because the injury occurred prior to the effective date of SB 94-139.”
Here, the claimant’s injury occurred in 1993. Application of §8-43-304(4), in the manner employed by the ALJ, would substantively alter the claimant’s right to a penalty by reducing the period of time for which a penalty would otherwise be imposed. Thus, § 8-43-304(4) can have no application to this case. Compare Neodata Services v. Industrial Claim Appeals Office, 805 P.2d 1180 (Colo.App. 1991).
However, even if we were to conclude that § 8-43-304(4) does apply to this claim, we agree with the claimant that the ALJ misapplied the provision. Statutes are to be interpreted to further the legislative intent. Where statutory language is clear and unambiguous, we must give the words their plain and ordinary meaning, and we need not resort to interpretive rules of statutory construction. Snyder Oil Co. v. Embree, 862 P.2d 259 (Colo. 1993). Insofar as some ambiguity exists, we should attempt to construe the entire statutory scheme in a manner that gives consistent, harmonious, and sensible effect to all its parts. Henderson v. RSI, Inc., 824 P.2d 91 (Colo.App. 1991).
The plain language of § 8-43-304(4) indicates that it does not require notice to an alleged violator prior to the time the penalty period commences. The statute states that “if the violator cures the violation within such twenty-day period,” the burden of proof shifts to the party seeking a penalty to show the “violator knew or reasonably should have known” of the violation. Thus, the statute presumes that a violation has occurred prior to any notice, and precludes imposition of a penalty only if the violator “cures” the violation. The plain language of the statute does not purport to preclude imposition of a penalty for violations occurring prior to the time the violator received notice of the claim for a penalty.
Further, the ALJ’s reading of § 8-43-304(4) is inconsistent with other portions of the statute. Section 8-43-305, C.R.S. (1994 Cum. Supp.), states that “every day during which any employer or insurer” disobeys an order or fails to perform a lawful duty “shall constitute a separate and distinct violation” of the Act. Thus, it is § 8-43-305 which defines when a violation has occurred for purposes of the Act. Section 8-43-304(4) modifies § 8-43-305 by permitting a “cure,” but not to the extent that it defines all pre-notice violations as exempt from penalties.
It follows that the ALJ erred in determining that the penalty period was limited to December 2, 1994 through January 9, 1995. Rather, the penalty period shall commence on October 29, 1994 and run through January 9, 1995. Of course, the amount of the penalty for these additional violations is subject to the ALJ’s discretion, and the matter must be remanded to the ALJ to determine the amount of the penalty for each daily violation.
IT IS THEREFORE ORDERED that the ALJ’s order, dated March 13, 1995, is affirmed insofar as it awarded temporary total disability benefits from October 29, 1994 through January 9, 1995, inclusive.
IT IS FURTHER ORDERED that the ALJ’s order is affirmed insofar it awarded a penalty at $500 per day for the period of December 2, 1994 through January 9, 1995.
IT IS FURTHER ORDERED that the ALJ’s order is set aside insofar as it denied the claim for a penalty for the period of October 29, 1994 through December 1, 1994. On this issue, the matter is remanded for entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
___________________________________ David Cain
___________________________________ Bill Whitacre
This Order is final unless an action to modify or vacate the Order iscommenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver,Colorado 80203, by filing a petition to review with the court, withservice of a copy of the petition upon the Industrial Claim Appeals Officeand all other parties, within twenty (20) days after the date the Orderwas mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. (1995 Cum.Supp.).
Copies of this decision were mailed August 11, 1995 to the following parties:
Kenneth R. Adkinson, 917-D S. Ivory Circle, Aurora, CO 80017
Tom Papatheodore, National Rooter Co., 11861 E. 33rd Ave., Unit 8, Aurora, CO 80010
State Farm Fire Casualty Co., Attn: Dan Dobbins, 4380 S. Syracuse St., #200, Denver, CO 80237
Mark A. Sares, Esq., 9191 Sheridan Blvd., #310, Westminster, CO 80030
(For the Respondents)
Thomas J. Roberts, Esq., 1650 Emerson St., Denver, CO 80218
(For the Claimant)