W.C. No. 4-270-668Industrial Claim Appeals Office.
March 17, 1997
FINAL ORDER
The uninsured respondent, George Williams d/b/a Williams Masonry (Williams), seeks review of a final order of Administrative Law Judge Martinez (ALJ), which imposed a penalty under § 8-43-304(1), C.R.S. (1996 Cum. Supp.), based on Williams’ failure to carry workers’ compensation insurance. We reverse.
Our Order of Remand dated September 25, 1996, contains a complete statement of the facts, and that statement is incorporated here. In an order dated April 8, 1996, the ALJ ruled that Williams’ failure to carry insurance is not subject to a penalty under § 8-43-304(1), because the “additional compensation” provided under § 8-43-408(1), C.R.S. (1996 Cum. Supp.), is the only penalty which may be imposed for failure to carry insurance. In our Order of Remand, we held that because § 8-43-408(1) provides for additional “compensation” and is not punitive in nature, failure to insure is subject to a penalty under § 8-43-304(1). We reasoned that § 8-43-304(1) permits imposition of a penalty because no other penalty is “specifically provided” for failure to insure. Thus, we remanded the matter to the ALJ to determine whether and to what extent a penalty should be imposed on Williams.
In an order dated November 12, 1996, the ALJ found that Williams knowingly failed to carry workers’ compensation insurance at the time of the claimant’s injury. Under these circumstances, the ALJ determined that § 8-43-304(1) justifies penalizing Williams $250 per day from July 25, 1995 through October 25, 1995.
On review, Williams argues that he timely “cured” the violation, for purposes of § 8-43-304(4), C.R.S. (1996 Cum. Supp.), by purchasing insurance. In any event, Williams argues that his conduct is not the “type of knowing conduct that would justify a penalty of $22,500.” We agree that the circumstances do not support the penalty, but for reasons different than those stated by the claimant.
As we noted previously, § 8-43-304(1) permits the imposition of a penalty of five hundred dollars per day, but only if the Act does not prescribe a specific penalty for the conduct in question. See Sears v. Penrose Hospital, ___ P.2d ___ (Colo.App. No. 96CA0909, February 20, 1997). Although never cited by the ALJ or the parties, we now note that §8-43-409(4), C.R.S. (1996 Cum. Supp.), provides as follows:
“The issuance of an order to cease and desist or the issuance of an order for injunctive relief against an employer for failure to insure or to keep insurance in force as required by articles 40 to 47 of this title shall be the penalty for such failure within the meaning of § 8-43-304(1) and such penalty shall be in addition to the increase in benefits that § 8-43-408 requires.” (Emphasis added).
Section 8-43-410(4) became effective June 6, 1993, and therefore, applies to this claim for a 1995 injury. 1993 Colo. Sess Laws, ch. 245 at 1280. Because the statute expressly provides that issuance of an order to cease and desist, or the issuance of an order for injunctive relief, constitutes “the penalty” for failure to obtain insurance, and because the statute expressly refers to § 8-43-304(1), it is apparent that the General Assembly did not intend to permit the imposition of a monetary penalty against an employer who fails to obtain or maintain insurance. To the contrary, the “penalty” for failure to insure is an order compelling the cessation of business operations during the period of the default.
It follows that the circumstances present in this case do not justify the imposition of a penalty under § 8-43-304(1), and we erred previously in holding to the contrary. Therefore, the ALJ’s order dated November 12, 1996, must be reversed because § 8-43-304(1) does not render Williams liable for penalties. In light of this disposition, we need not consider the other arguments raised by the parties.
IT IS THEREFORE ORDERED that the ALJ’s order dated November 12, 1996, is reversed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Bill Whitacre
NOTICE
This Order is final unless an action to modify or vacatethe Order is commenced in the Colorado Court of Appeals, 2 East14th Avenue, Denver, Colorado 80203, by filing a petition toreview with the court, with service of a copy of the petitionupon the Industrial Claim Appeals Office and all other parties,within twenty (20) days after the date the Order was mailed,pursuant to §§ 8-43-301(10) and 307, C. R. S. (1996 Cum.Supp.).
Copies of this decision were mailed March 17, 1997 to the following parties:
Paul D. Beach, P.O. Box 1407, Montrose, CO 81401
George Williams d/b/a Williams Masonry, P.O. Box 713, Olathe, CO 81425
Quadri Construction Co., 70605 Buckhorn Rd., Montrose, CO 81401-8706
Hawkeye-Security Ins. Co., Attn: Al Koeneke, P.O. Box 5150, Denver, CO 80217
Special Funds Unit, Attn: Barbara Carter (Interagency Mail)
Employer Compliance Unit, Attn: Rebecca Greben (Interagency Mail)
James H. Delman, Esq., 1047 S. 1st St., P.O. Box 196, Montrose, CO 81402 (For the Respondent Williams)
Douglas E. Briggs, Esq., 743 Horizon Court, Ste 200, Grand Junction, CO 81502 (For the Quadri Respondents)
Timoteo Gallegos, Esq., P.O. Box 847, Delta, CO 81416 (For the Claimant)
By: _______________________________