W.C. No. 4-214-079.Industrial Claim Appeals Office.
June 25, 2002.
ORDER OF REMAND
The claimant seeks review of an order of Administrative Law Judge Harr (ALJ) which denied and dismissed a claim for penalties based on the respondent- insurer’s failure to obey an order to pay disfigurement benefits. Because we conclude the ALJ exceeded the scope of our Order of Remand dated October 24, 2000, we reverse a portion of the order and remand for a new order.
Our Order of Remand contains a statement of the facts prior to October 24, 2000, and that statement is incorporated herein. In our order we noted the insurer “has not appealed ALJ Harr’s implicit finding that it’s [sic] conduct was unreasonable under an objective standard.” Consequently, we proceeded to consider the claimant’s argument that the ALJ erred in determining the amount of penalties to be awarded because the ALJ improperly considered argument as evidence, and because the penalty was inadequate in light of the insurer’s failure to explain its reason for violating the order to pay disfigurement benefits. (See Claimant’s Brief in Support of Petition to Review dated July 27, 2000).
In the Order of Remand we held the ALJ’s “findings are insufficient to indicate the basis of his decision to assess a penalty of $1 per day.” Specifically, we determined the ALJ may have improperly relied on statements of respondents’ counsel, which were made in closing argument, as “mitigation for delayed payment of the disfigurement benefits.” (Order of Remand at p. 3). We also held the ALJ’s remaining findings were insufficient to support appellate review of the ALJ’s award of penalties of $1 per day. (Order of Remand at p. 4).
Under these circumstances, we remanded the matter with instructions to “reconsider the amount of penalties to be awarded on account of the respondent- insurer’s failure to obey ALJ Schulman’s order.” (Emphasis added). We also directed the ALJ to “reconsider the matter” without regard to “factual representations made by the insurer’s attorney” and to “enter specific findings of fact and conclusions of law” sufficient to support appellate review of the penalty award. Finally, we set aside the ALJ’s order of February 29, 2000, “insofar as it determined the amount of penalties,” and directed the ALJ to enter an “new order concerning this issue.” (Emphasis added).
After our Order of Remand, the ALJ entered a Minute Order Upon Remand dated December 14, 2000. In this order the ALJ noted that we concluded the ALJ “implicitly found respondent-insurer’s conduct was reasonable under an objective standard.” However, the ALJ stated that upon his evaluation of the record he was unable to glean “sufficient facts or findings which might support” the conclusion that the insurer’s conduct was unreasonable. Therefore, the ALJ ordered a hearing to fully address “the issues on remand.”
Over the claimant’s objection, an evidentiary hearing was conducted on October 25, 2001. At this hearing, an attorney for the insurer testified that, in his opinion, the adjuster’s failure to pay the disfigurement award was justified because, at that time, the insurer was claiming an overpayment of benefits attributable to a reduced impairment rating issued by the treating physician.
On November 27, 2001, the ALJ entered the order currently under review. Crediting the testimony of the attorney, the ALJ found it is more probably true than not that the insurer’s delay in paying the ordered disfigurement award “was reasonable in light of its claim to an overpayment.” Thus, the ALJ denied and dismissed the claim for penalties.
On review, the claimant argues, inter alia, that the ALJ exceeded the scope of our remand by conducting another hearing and entering a new order which determined that the respondent insurer did not violate the disfigurement order. We agree.
Generally, the court which enters an order remanding a case is in the best position to determine the scope of the remand. See Halliburton Services v. Miller, 720 P.2d 571 (Colo. 1986). Further, “conclusions of an appellate court on the issues presented to it as well as rulings logically necessary to sustain such conclusions become law of the case,” and such rulings may not be contravened on remand. See Nelson v. Elway, 971 P.2d 245, 249 (Colo.App. 1998). The purpose of the law of the case doctrine is to protect “litigants from the expenditure of time and money involved in the reargument of settled issues and ensures that lower courts follow the decisions of higher courts in subsequent proceedings.”Super Valu Stores, Inc., v. District Court, 906 P.2d 72, 79 (Colo. 1995); Warm v. Safeway (Store 920), W.C. No. 4-465-204 (April 18, 2002).
Here, our remand to reconsider the amount of penalties included a ruling that the ALJ’s first order implicitly determined the insurer violated the order to pay disfigurement benefits, and the failure to obey the order was not based on a reasonable argument based in law and fact. Indeed, such a determination was a prerequisite to the ALJ’s award of penalties in any amount. See Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995) (ALJ’s reference to acts which insurer failed to take to comply with order to pay medical benefits constituted implicit determination that a reasonable insurer would have taken such actions). Moreover, as our order pointed out, the insurer did not petition to review the ALJ’s first order, even though it was an aggrieved party with standing to challenge the order under § 8-43-301(2), C.R.S. 2001. Had the insurer wished to challenge the ALJ’s determination that it is liable for a penalty, it was free to do so. However, it may not now assert, nor was it entitled to argue on remand, that it has a right to reconsideration of an issue which it did not timely and properly raise during the first appeal. See Pacheco v. Roaring Fork Aggregates, 897 P.2d 872 (Colo.App. 1995).
Under these circumstances, the only issue submitted to us for review was the amount of the penalties to be assessed for the established violation, and our Order of Remand expressly limited the ALJ’s duty to consideration of that issue. The Order of Remand was not a general remand in which we invited the ALJ to conduct “further proceedings,” including a new hearing. Rather our order was specific in directing the ALJ to enter a new order containing specific findings of fact determining the amount of the penalty, but without regard to counsel’s factual assertions made in the closing argument. See Musgrave v. Industrial Claim Appeals Office, 762 P.2d 686 (Colo.App. 1988) (where appellate court remands case with instructions to enter a particular judgment or pursue a prescribed course, trial court has no discretion except to comply).
It follows that the ALJ exceeded the scope of our remand by conducting a new hearing and considering an issue which was not submitted to him in our Order of Remand. Consequently, the ALJ’s order dated November 27, 2001, must be reversed to the extent it determined the insurer did not violate the order to pay disfigurement benefits. That issue was resolved against the insurer by the ALJ’s first order, by the insurer’s failure to appeal the first order, and our Order of Remand which limited the issue to the amount of penalties. The determination that the insurer violated the order has become law of the case.
The cases cited by the respondents, including Hall v. Hot Springs Pool Lodge, Inc., W.C. No. 4-334-474 (September 29, 1998), and Vallot v. Kirsche Construction Co., W.C. No. 4-246-341 (July 20, 1998), do not persuade us to reach a different conclusion. Hall merely held that an ALJ may not discredit a factual assertion pertaining to a motion for a continuance without conducting a hearing. Vallot concerned an ALJ’s failure to give reasons for not permitting the presentation of additional evidence after the apparent conclusion of the hearing, and our remand expressly stated the ALJ was free to hold a new hearing to resolve disputed issues of fact concerning whether or not there was newly discovered evidence.
The matter must again be remanded to determine the amount of penalties based on the evidence submitted at the first hearing. We recognize the ALJ’s concern regarding the paucity of the evidence, presented at the first hearing, bearing on the amount of penalties to be assessed. In this regard, we note that we have interpreted § 8-43-304(1), C.R.S. 2001, as requiring the ALJ to impose at least a minimal penalty of one cent per day if the claimant establishes a violation. This is true because the statute states a violation “shall” be punished by a penalty of not more than $500 per day. Marple v. Saint Joseph Hospital,
W.C. No. 3-966-344 (September 15, 1995). However, beyond a minimal penalty, the ALJ enjoys wide discretion to determine the amount of the penalties. The discretion to assess the penalties includes the power to weigh the evidence and impose a minimal penalty if the ALJ is not persuaded there are grounds to impose a more severe sanction. Moreover, we note the record from the first hearing contains evidence on such relevant issues as the type of violation, the duration of the violation, and the fact that the claimant called the insurer’s attention to the violation by way of a letter. Ultimately, the ALJ must determine the amount of penalties, and we should not be understood as expressing any views on that issue.
In light of this conclusion, we need not reach the other issues raised by the claimant.
IT IS THEREFORE ORDERED that the ALJ’s order dated November 21, 2001, is reversed insofar as it determined the claimant failed to prove the respondent insurer violated the order to pay disfigurement benefits. The matter is remanded to the ALJ to enter an order determining the amount of the penalties to be assessed based on the evidence presented at the first hearing, and without regard to the evidence presented at the second hearing. No additional evidentiary proceedings are authorized by this order.
INDUSTRIAL CLAIM APPEALS PANEL
___________________________________ David Cain
___________________________________ Robert M. Socolofsky
Copies of this decision were mailed June 25, 2002 to the following parties:
Maxie Jiminez, 1263 Lipan Dr., Denver, CO 80221
Amax Henderson Project, — Art Davis, Safety Director, P. O. Box 68, Empire, CO 80438
Bob Klingler, Esq., Subsequent Injury Fund, Tower 2, #630, Division of Workers’
Compensation — Interagency Mail
Legal Department, Pinnacol Assurance — Interagency Mail
Roger Fraley, Jr., Esq., 517 E. 16th Ave., Denver, CO 80203 (For Claimant)
Merrily S. Archer, Esq., and Douglas A. Thomas, Esq., 600 17th St., #1600N, Denver, CO 80202 (For Respondents)
By: A. Hurtado