W.C. No. 4-355-715Industrial Claim Appeals Office.
November 27, 2002

The claimant seeks review of an order of Administrative Law Judge Gallegos (ALJ) which denied his claims for permanent total disability benefits and penalties under § 8-43-304(1), C.R.S. 2002. We set aside the order and remand for entry of a new order.

In September 1997 the claimant suffered an admitted injury. Dr. Aylor performed a Division-sponsored independent medical examination (DIME). Dr. Aylor opined the injury caused 5 percent whole person impairment. In an order dated January 4, 1999, ALJ Felter determined the claimant failed to overcome the DIME physician’s medical impairment rating. However, the claimant was granted a change of physician to Dr. Haney and the respondents were ordered to pay for maintenance medical care which was “reasonable, necessary and related” to the industrial injury.

In May 1999 the claimant petitioned to reopen the claim based on a worsening of condition. In an order dated September 23, 1999, ALJ Felter determined there was no worsening of condition and denied the petition to reopen. However, the ALJ concluded the respondents “remain liable” for authorized maintenance medical care which is “reasonable, necessary and causally related” to the industrial injury. The September 23 order was affirmed on appeal.

The claimant subsequently applied for a hearing on the issues of permanent total disability and penalties. The claimant alleged the respondents failed to comply with the January 4, and September 23, 1999, orders awarding medical benefits. Expressly relying on Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997), the ALJ determined the claimant was not entitled to a penalties under § 8-43-304(1) because §8-43-401(2)(a), C.R.S. 2002 creates a specific penalty for the willful failure to provide medical benefits.

On the issue of permanent total disability benefits, the ALJ found the claimant “has not met his burden to prove by clear and convincing evidence that Dr. Aylor’s permanent impairment rating is incorrect and that Claimant is permanently and totally disabled.” The ALJ also determined, “it is not highly probable that Claimant is permanently and totally disabled.” (Conclusions of Law 1).

On review the claimant contends the ALJ misapplied the law in denying the claim for permanent total disability benefits. We agree and, therefore, remand the matter for a new order.

Claims for whole person medical impairment benefits are governed by §8-42-107(8)(c), C.R.S. 2002, which provides that the DIME physician’s medical impairment rating is binding on the parties and the ALJ unless overcome by overcome by “clear and convincing evidence.” Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995). Clear and convincing evidence is evidence which demonstrates that it is “highly probable” the DIME physician’s rating is incorrect. Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979).

We have repeatedly held that the heightened burden of proof required by § 8-42-107(8)(c) is confined to the issues of maximum medical improvement and permanent medical impairment benefits. See Bond v. Penrose Home Care, W.C. No. 4-275-808(April 16, 2001), aff’d., Bond v. Industrial Claim Appeals Office, (Colo.App. No. 01CA0831, November 23, 2001) (not selected for publication); Henderson v. Eastman Kodak, Inc., W.C. No. 4-256-823
(February 24, 2000), aff’d., Henderson v. Industrial Claim Appeals Office, (Colo.App. No. 99CA1532, February 24, 2000) (not selected for publication) (DIME opinion on need for future medical benefits not governed by clear and convincing evidence standard); Blackwell v. Michael Walsh, W.C. No. 4-122-303 (December 17, 1997) aff’d, Michael Walsh v. Industrial Claim Appeals Office, (Colo.App. No. 98CA0031, July 9, 1998) (not selected for publication). More recently in Cordova v. Industrial Claim Appeals Office, __P.3d__ (Colo.App. No. 01CA0852, February 28, 2002, the court observed that “opinions of a DIME physician have only been given presumptive effect when expressly required by the statute.”

Under the applicable law, a claimant is permanently and totally disabled if he is unable “to earn any wages in the same or other employment.” Section 8-4-201(16.5)(a), C.R.S. 2002. Under the statute, the claimant carries the burden of proof to establish permanent total disability. In determining whether the claimant has sustained his burden of proof, the ALJ may consider a number of “human factors.” Christie v. Coors Transportation Co., 933 P.2d 1330 (Colo. 1997). These factors include the claimant’s physical condition, mental ability, age, employment history, education and the “availability of work” the claimant can perfor . Weld County School District RE-12 v. Bymer, 955 P.2d 550
(Colo. 1998). As argued by the claimant, the overall objective of this standard is to determine whether, in view of all of these factors, employment is “reasonably available to the claimant under his or her particular circumstances.” Weld County School District RE-12 v. Bymer, 955 P.2d at 558.

Because permanent total disability is based upon a claimant’s impaired access to the labor market, and not medical impairment, permanent total disability need not be proven by medical evidence. See Baldwin Construction Inc., v. Industrial Claim Appeals Office, 937 P.2d 895
(Colo.App. 1997). It follows that a claimant may prove permanent and total disability without overcoming the DIME physician’s medical impairment rating.

Furthermore, neither § 8-40-201(16.5), nor § 8-42-111 C.R.S. 2002, requires permanent total disability to be proven by “clear and convincing evidence.” Rather, the claimant is required to prove permanent total disability by a preponderance of the evidence. See Younger v. City and County of Denver, 810 P.2d 647 (Colo. 1991); Gonzales-Rivera v. Beacon Hill Investments, Inc., W.C. No. 4-124-250 (September 27, 1994); Ybarra v. Ray Shelton Construction Co., W.C. No. 4-116-741, (November 24, 1993).

Here, the issue of permanent partial disability was not endorsed for adjudication. Neither was there any challenge to the DIME physician’s rating under § 8-42-107(8)(c). Accordingly, the ALJ’s misapplied the law in requiring the claimant to prove it was “highly probable” he is permanently and totally disabled.

We cannot say that the ALJ’s error was harmless. To the contrary, it is unclear how the ALJ would have assessed the sufficiency and probative weight of the evidence had she recognized the claimant was only required to prove it is more likely than not that he is unable to earn any wages. Therefore, the order must be set aside and the matter remanded to the ALJ for the entry of a new order which reflects his resolution of the pertinent issues under the applicable legal standard.

We also agree the ALJ misapplied the law in denying the claim for penalties. Section 8-43-304(1) allows ALJs to impose penalties up to $500 per day for each day the insurer:

” . . . fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, for which no penalty has been specifically provided, or fails, neglects, or refuses to obey any lawful order made by the director or panel. . . .”
Section 8-43-401(2)(a), provides that:
“If any insurer or self-insured employer willfully delays payment of medical benefits for more than thirty days or willfully stops payments such insurer or self-insured employer shall pay a penalty to the division of eight percent of the amount of withheld benefits.”

In Sears v. Penrose Hospital, supra, the Court of Appeals held that the specific penalty provisions of § 8-43-401(2)(a) supersede the general penalty provisions of § 8-43-304(1) where the “gravamen” of the disputed conduct is the insurer’s failure to pay medical benefits. In so doing, the court rejected the notion that the General Assembly intended to create two penalties for the late payment of medical expenses.

However, in Holliday v. Bestop Inc., 23 P.3d 700 (Colo. 2001), the Supreme Court concluded penalties may be imposed under § 8-43-304(1) where the penalty claim is based on the insurer’s failure to comply with a lawful order for the payment of medical benefits. This is true without regard to whether the order imposes a duty for which “no penalty has been specifically provided.” Accordingly, the Supreme Court overruled Sears
insofar as Sears held that § 8-43-401(2)(a), is the exclusive remedy for penalties where the “gravamen” of the misconduct is the failure to pay medical benefits. It follows the ALJ erroneously concluded no penalties may be imposed under § 8-43-304(1) for an insurer’s failure to comply with the orders awarding medical benefits and the matter must be remanded for a new order consistent with Holliday v. Bestop Inc., supra.

In remanding the matter we note the respondents’ contention that the record is legally insufficient to support the imposition of penalties under § 8-43-304(1) because the January 3 and September 23 orders contained general awards of medical benefits which preserved their right to dispute the reasonableness of specific treatment. The respondents also contend they did not pay Dr. Haney’s bills because Dr. Haney failed to respond to their request for chart notes and medical records substantiating the charges.

As argued by the respondents the failure to comply with a lawful order does not support the imposition of penalties if the actions which resulted in the violation were 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 the 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); Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996).

Admittedly, the January 4 and September 23 orders were general awards of future medical benefits. See Grover v. Industrial Commission, 759 P.2d 705 (Colo. 1988). However, the question of whether the respondents presented a rational argument for contesting the reasonableness of Dr. Haney’s treatment is a question of fact for resolution by the ALJ. See Pueblo School District No. 70 v. Toth, supra.

The record contains some evidence the respondents received Dr. Haney’s medical treatment bills. Further, the respondents’ presented no testimony to explain why they failed to pay Dr. Haney’s bills. Under these circumstances, we cannot say there is no evidence from which the ALJ could plausibly infer that the respondents’ failure to pay for maintenance medical treatment was objectively unreasonable. Human Resource Company v. Industrial Claim Appeals Office, 984 P.2d 1194
(Colo.App. 1999) (insurer’s failure to prove an adequate explanation for its actions supports a finding the insurer’s actions were objectively unreasonable).

IT IS THEREFORE ORDERED that the ALJ’s order dated April 26, 2001, is set aside and the matter is remanded for the entry of a new order on the issues of permanent total disability and penalties consistent with the views expressed herein.



David Cain


Kathy E. Dean

Copies of this decision were mailed __________November 27, 2002 ________to the following parties:

Ronald Calvert, 364 S. Ironton St., #417, Aurora, CO 80012

Roadway Express, Incorporated, 14700 Smith Rd., Aurora, CO 80011-2417

Old Republic Insurance Company, c/o Grace Kolb, Gallagher Bassett Services, P. O. Box 70003, Anaheim, CA 92825

Protective Insurance Co., 1099 N. Meridian St., Indianapolis, IN 46204

Helmsman Management Services, Inc., 13111 E. Briarwood Ave., #100, Englewood, CO 80112

Brad Irwin, Esq. and Chris L. Ingold, Esq., 501 S. Cherry St., #500, Denver, CO 80246 (For Claimant)

John Lebsack, Esq., 950 17th St., 21st floor, Denver, CO 80202 (For Respondents)

BY: A. Hurtado