W.C. No. 4-447-502Industrial Claim Appeals Office.
February 24, 2003
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Friend (ALJ) which denied temporary disability benefits and penalties. We reverse and remand the matter for a determination of the amount of penalties to be imposed.
The claimant alleged work-related injuries to her left arm and back in 1999. On June 8, 2001, the respondents filed a general admission of liability for the payment of temporary partial disability benefits commencing December 30, 1999. However, relying on § 8-42-105(2)(c), C.R.S. 2002, the respondents suspended benefits effective August 1, 2001, the date the claimant failed to attend a medical appointment. It is undisputed the claimant attended a rescheduled appointment on August 31, 2001, and the ALJ found the respondents’ knew about the claimant’s attendance by September 20, 2001. However, the respondents never reinstated temporary disability benefits and never filed any further admission of liability.
On conflicting medical evidence, the ALJ found the claimant failed to prove she suffered any compensable injuries. Therefore, in an order dated August 14, 2002, the ALJ granted the respondents’ request for prospective relief from their admissions of liability and denied all claims for additional benefits. Further, the ALJ found that § 8-42-105(2)(c) created no duty to reinstate temporary disability benefits once they had been properly terminated. Therefore, the ALJ determined the respondents’ failure to reinstate temporary disability benefits was not a violation of the Workers’ Compensation Act (Act). In any case, the ALJ determined the respondents failure to reinstate temporary disability benefits was predicated on a rational argument that the claimant was not temporarily disabled from a work-related injury. (Finding of Fact 28). Therefore, the ALJ refused to impose penalties for the respondents’ failure to reinstate temporary disability benefits.
I.
On review the claimant contends the ALJ erroneously failed to award “summary judgment” reinstating the respondents’ liability for temporary partial disability benefits retroactive to August 31, 2001. We agree.
Under C.R.C.P. 56 summary judgment is proper where there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Service Supply Co. v. Vallejos, 169 Colo. 14, 452 P.2d 387 (1969); Nova v. Industrial Claim Appeals Office, 754 P.2d 800
(Colo.App. 1988) (C.R.C.P. apply insofar as not inconsistent with the procedural or statutory provisions of the Act). Thus, where the pertinent facts are undisputed, an ALJ may dispose of an issue without conducting a hearing. See Service Supply Co. v. Vallejos, 169 Colo. 14, 452 P.2d 387
(1969).
Temporary disability benefits are payable if an industrial injury causes a disability and, as a result, the claimant suffers a temporary wage loss. Section 8-42-103(1), C.R.S. 2002. By filing an admission of liability for the payment of temporary disability benefits the insurer admits the claimant established her burden to prove a compensable disability. Furthermore, admitted liability for temporary partial disability payments shall continue until terminated in accordance with the Rules of Procedure, Part IX, 7 Code Colo. Reg. 1101-3 or § 8-42-106
C.R.S. 2002. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 18 P.3d 790 (Colo.App. 2000). Section 8-42-106(2)(a) terminates temporary partial disability benefits when the claimant reaches maximum medical improvement (MMI). Subsection 8-42-106(2)(b) terminates benefits when the claimant refuses a written offer of modified employment.
However, § 8-42-105(2)(c) provides that temporary disability benefits may be “suspended” if the claimant fails to appear at a medical appointment. The statute adds that the suspension continues “until the employee appears at a subsequent rescheduled appointment.” The term “suspend” has been construed to mean a denial of the right to collect benefits subject to reinstatement if the claimant cooperates. Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, 5 P.3d 385
(Colo.App. 2000); Bacon v. Industrial Claim Appeals Office, 746 P.2d 74
(Colo.App. 1987); Dziewior v. Michigan General Corp., 672 P.2d 1026
(Colo.App. 1983).
Applying the principles of statutory construction, we have also concluded that in the context of § 8-42-105(2)(c), the term “suspend” is analogous to the usage contained in the third sentence of § 8-43-404(3), C.R.S. 2002, which permits an ALJ “to suspend the compensation” of a claimant who persists in an injurious practice or refuses to submit to medical treatment reasonably essential to promote recovery but does not permanently bar the collection of benefits unless the claimant fails to submit to examination after being ordered to do so by an ALJ or the Director. See Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, supra; Matthews v. United Parcel Service, W.C. No. 4-325-652
(December 15, 1997); Maryott v. J N Properties, W.C. No. 4-157-363
(April 28, 1997). We adhere to our prior conclusions.
Section 8-42-105(2)(c) does not contain any language which suggests that the claimant’s temporary refusal to attend a medical appointment is a permanent bar to the collection of temporary disability benefits and we may not read non-existent provisions into the statute. See Arenas v. Industrial Claim Appeals Office, 8 P.3d 558 (Colo.App. 2000). Accordingly, we agree with the ALJ insofar as he determined §8-42-105(2)(c) does not create grounds for the termination of temporary disability benefits. (See Findings of Fact, Preliminary Matters p. 2).
Rather, § 8-42-105(2)(c) contemplates the automatic reinstatement of disability benefits once the disqualifying condition is removed. It follows that we disagree with the ALJ insofar as he found that the respondents had no duty to resume temporary disability benefits after August 31. (See Finding of Fact 9). We conclude that because the statute expressly states that the insurer may only suspend benefits “until the employee appears at a subsequent rescheduled appointment,” the ALJ erred insofar as he determined the respondents “properly ended” their liability for temporary disability benefits and the burden of proof shifted to the claimant to reestablish the existence of a temporary disability. To the contrary, § 8-42-105(2)(c) only shifted the burden of proof to the claimant to establish she was cooperating with medical appointments.
At the commencement of the hearing before the ALJ, the claimant moved for summary judgment requiring the respondents to reinstate temporary disability benefits effective August 31. (Tr. June 14, 2002, p. 9). The respondents conceded the claimant attended the August 31 rescheduled appointment and admitted they were aware of the claimant’s attendance by September 2001. (Tr. June 14, 2001, pp. 33, 46). Under these circumstances, the record compels the conclusion that the period of suspension ended on August 31, 2001 and the claimant was entitled to the reinstatement of temporary disability benefits.
Admittedly, the respondents’ duty to reinstate admitted liability for temporary disability benefits was subject to the right to prove grounds for the “termination” of benefits under § 8-42-106. However, evidence the claimant reached MMI on August 31, created a factual dispute concerning whether temporary disability benefits “terminated” August 31 not whether benefits remained “suspended” after August 31. Consequently, this evidence does not establish a disputed issues of material fact relevant to whether the claimant was entitled to summary judgment concerning the reinstatement of temporary disability benefits. Therefore, we reverse the ALJ’s order which failed to reinstate the respondents’ liability for temporary partial disability benefits retroactive to August 31.
In reaching our conclusions we reject the respondents’ contentions that the disputed award results in an overpayment of benefits. Section 8-43-203(2)(d), C.R.S. 2002, provides that: “if any liability is admitted, payments shall continue according to admitted liability.” Unde HLJ Management Group, Inc. v. Kim, 804 P.2d 250 (Colo.App. 1990), whenever an admission is contested by either party, the matter placed in issue is subject to determination by the ALJ and the admission is binding as to admitted liability until the date of the ALJ’s order granting prospective relief. Pacesetter Corporation v. Collett, __ P.3d __ (Colo.App. No. 00CA2099, May 10, 2001); Dalco Industries, Inc. v. Garcia, 867 P.2d 156 (Colo.App. 1993).
Here, the respondents admitted liability for temporary partial disability benefits in the June 8 general admission. The August 1 did not withdraw their June 8 admission that the claimant suffered a compensable injury which caused a temporary disability. Instead, the August 1 general admission merely “suspended” temporary partial disability benefits until the claimant cooperated with a rescheduled medical appointment. The claimant cooperated on August 31 and the respondents did not file any subsequent admission to extend the period of suspension or terminate temporary disability benefits. Neither was there any order relieving them of the duty to pay temporary disability benefits. Compare Buhl v. Industrial Claim Appeals Office (Colo.App. No. 99CA2161, June 22, 2000) (not selected for publication) (benefits payable under incorrect admission not paid per order of the Director so no willful failure to pay) In fact, on December 21, 2001 the respondents’ motion for a stay of its obligation to reinstate temporary disability benefits was denied. Under these circumstances, temporary partial disability benefits due in accordance with the June 8 admission continued to accrue until the August 14 order of the ALJ. See Pacesetter Corporation v. Collett, supra; Snyder v. Industrial Claim Appeals Office, 942 P.2d 1337 (Colo.App. 1997). Consequently, the disputed benefits are not an overpayment and the ALJ’s failure to award temporary disability benefits was not a harmless error. Section 8-43-310 C.R.S. 2002.
II.
The claimant also contends the ALJ erred in failing to impose penalties under § 8-43-304(1), C.R.S. 2002, for the respondents’ failure to comply with § 8-42-105(2)(c). We agree and remand the matter for a new order concerning the amount of penalties to be imposed.
Section 8-43-304(1) requires ALJs to impose penalties up to $500 per day against an insurer that violates any provision of the Act for which no penalty has been specifically provided. 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 any provision of the Act. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). Second, the ALJ must determine whether the violation was objectively reasonable. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). The reasonableness of the violator’s actions depends upon whether their 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).
By failing to resume temporary disability benefits when the claimant’s disqualifying conduct ended on August 31 the respondents effectuated the unilateral termination of otherwise payable temporary disability benefits. However, to terminate disability benefits unilaterally the respondents were required to adhere to the requirements of the Rules of Procedure, Part IX(C)(1), which govern this 1999 injury claim. This is true because Rule IX(C)(1) is an exception to the statutory requirement that benefits must be paid in accordance with admitted liability. Section 8-43-203(2)(d); Insurance Authority v. Industrial Claim Appeals Office supra; Monfort Transportation v. Industrial Claim Appeals Office, 942 P.2d 1358 (Colo.App. 1997). The rule attempts to ensure that where respondents desire to terminate benefits without a hearing, they are able to make an evidentiary showing which demonstrates a high degree of probability that they will succeed when the issue is tried on the merits See Childers v. Noah’s Ark Whitewater Rafting, W.C. No. 4-392-209 (April 7, 1999); Jyrkinen v. Peakload, Inc., W.C. No. 4-139-096 (June 15, 1994). If the respondents are unable to meet the requirements for unilateral termination under Rule IX(C)(1), the respondents must file a petition to suspend and continue to pay temporary disability benefits until a hearing is held to determine whether there is sufficient evidence to permit the termination of benefits under the statute. Snyder v. Industrial Claim Appeals Office, 942 P.2d 1337 (Colo.App. 1997). In that way the claimant is not deprived of periodic indemnity benefits in the event the respondents are unable to prove grounds for the termination of benefits. Rule IX(C)(1) provides that an insurer may terminate temporary disability benefits without a hearing by filing an admission of liability form which is accompanied by the information required by one of the subsections in (a) through (f).
It is undisputed the respondents did not purport to file an admission of liability after August 1, 2001. Accordingly we need not consider whether there is evidence which might satisfy the requirements of subsections (a) through (e). Neither did the respondents file a petition to suspend temporary disability benefits.
In any case, nothing in Rule IX(C)(1)(a)-(f) allows an insurer unilaterally to terminate temporary disability benefits based on a theory that a previous admission of liability was improvidently filed. Cf Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, supra (return to school not ground for unilateral termination of temporary disability benefits under Rule IX). To the contrary, the respondents’ theory the claimant did not sustain a work-related injury created a factual question which could only be resolved by an ALJ after an evidentiary hearing. See A R Concrete Construction v. Lightner, 759 P.2d 831 (Colo.App. 1988). Thus, the ALJ’s finding that the respondents terminated temporary disability benefits because they questioned the compensability of the claimant’s alleged injuries does not support a legal conclusion the respondents had a rational argument that they could unilaterally terminate temporary disability benefits instead of reinstating benefits as required by § 8-42-105(2)(c).
In reaching our conclusions, we acknowledge that the respondents requested a Division-sponsored independent medical examination (DIME) upon receipt of the medical report from the claimant’s August 31 appointment. This action arguably fulfilled the respondents’ obligation under Rule IV(N)(5). However, under Rule IV(N)(5) requesting a DIME does not authorize the termination of temporary disability benefits. Cf Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, supra. (respondents may not admit for a closed period of temporary disability benefits). Thus, evidence the respondents’ requested a DIME instead of filing an admission of liability does not establish they had a rational argument for failing to reinstate benefits.
Finally, the imposition of penalties under § 8-43-304(1) is mandatory
if there has been a violation of the Act and the violation was not reasonable under an objective standard. Rael v. Debourgh Manufacturing Co., W.C. No. 4-115-551 (February 27, 1998); Marple v. Saint Joseph Hospital, W.C. No. 3-966-344 (September 15, 1995). However, the amount of any daily penalty, between one cent and five hundred dollars per day, is within the discretion of the ALJ. Consequently, it is necessary to remand the matter to the ALJ do determine the amount of the penalty to be imposed against the respondents in view of any aggravating or mitigating factors concerning he respondents’ violation. See Martinez v. Flying J. Inc., W.C. No. 4-374-856 (June 22, 2000) (evidence violation was harmless may be relevant in determining the amount of penalties to be imposed).
IT IS THEREFORE ORDERED that the ALJ’s order dated August 14, 2002, is reversed. The respondents are responsible for temporary partial disability benefits in accordance with their June 8 admission for the period August 31, 2001 to August 14, 2002.
IT IS FURTHER ORDERED that the matter is remanded to the ALJ for the imposition of penalties consistent with the views expressed herein.
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. 2002. 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 _________ February 24, 2003 _____to the following parties:
Barbara Armbruster, 8580 N. Alkire St., Arvada, CO 80005
Rocky Mountain Cardiology, 2505 4th St., Boulder, CO 80304
Rhonda Norris, State Farm Insurance Companies, P.O. Box 266004, Littleton, CO 80163-6004
IME Unit Coordinator, Tower 2, #640, Division of Workers’ Compensation, Interagency Mail
Mark D. Elliott, Esq., 7884 Ralston Rd., Arvada, CO 80002-2434 (For Claimant)
Clyde E. Hook, Esq. and Harvey D. Flewelling, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents)
BY: __________A. Hurtado__________