W.C. No. 4-219-360Industrial Claim Appeals Office.
February 4, 1997
FINAL ORDER
The claimant seeks review of a final order of Administrative Law Judge Erickson (ALJ), which denied her claim for temporary disability benefits and “declined” to impose penalties against the respondents. We affirm the order in part, set it aside in part, and remand the matter for entry of a new order.
The ALJ found that the claimant sustained a compensable injury on July 28, 1994. The authorized treating physician, Dr. Schmeh, examined the claimant on July 29, 1994, and indicated that she was unable to return to her regular duties. On August 1, 1994, Dr. Schmeh reexamined the claimant and indicated that she would be unable to return to regular employment until August 5, 1994.
However, on August 2, 1994, the employer contacted Dr. Schmeh and indicated that it was willing to offer light duty to the claimant provided Dr. Schmeh approved the offer as being within the claimant’s restrictions. Dr. Schmeh approved the proposed employment in writing, and orally advised the claimant of his approval when he spoke to her on August 2, 1994.
On August 2, 1994, the employer sent a letter to the claimant offering the light duty employment. The letter contained the following paragraph:
“You are requested to report for your duty at 7:00 am at the Broadway store on Wednesday, August 3, 1994, as expressed to you by telephone on Tuesday, August 2, 1994 by Peggy Salazar. You will be working from 12:45 pm to close (approximately 9:15 pm) on Tuesday and Wednesday (beginning 8/9/94), and 7:00 am to 3:30 pm on Thursday through Saturday, with a 45 minute lunch break and one additional 15 minute break at your normal wage of $416.00 per week. The normal no call/no show rule applies if you fail to report to work as requested.”
The claimant received the employer’s written offer of employment on the afternoon of August 3, 1994. However, the claimant did not report to work on August 4, August 5, or August 6, 1994. On August 8, 1994 the claimant was terminated for failing to appear for work or call in pursuant to the employer’s policy.
Concerning penalties, the ALJ found that the adjuster for the respondent-insurer failed to admit liability for any temporary disability benefits because he “believed the claim was a non-lost-time claim.” The ALJ attributed the adjuster’s belief to the “fact that he had knowledge of the employer’s certified letter offering the claimant modified employment beginning August 3, 1994.” The ALJ also found that the adjuster did not attach a medical report to the Final Admission of Liability which the insurer filed on August 9, 1994.
Under these circumstances, the ALJ concluded that the claimant was entitled to temporary total disability benefits on August 3, 1994, the fourth working day after the injury. The ALJ reasoned that the respondents were not entitled to terminate the claimant’s temporary disability benefits by virtue of the offer of modified employment until August 4, the first day on which the claimant had an opportunity to accept the employer’s offer by reporting to work. The ALJ also determined that the claimant was not entitled to the reinstatement of temporary disability benefits after she was terminated from employment. In support of this determination, the ALJ found that the claimant was at fault for the termination, and stated that the “totality of the circumstances” indicates that the claimant’s post-separation wage loss was not due to the industrial injury.
Finally, the ALJ “declined” to impose penalties based on the respondent-insurer’s failure to admit liability for temporary total disability benefits on August 3, and based on the adjuster’s failure to attach a medical report to the final admission of liability.
I.
On review, the claimant first contends that the employer’s letter of August 2, 1994 was insufficient to terminate her entitlement to temporary disability benefits on August 4, 1994. The claimant reasons that, because the letter did not reach her until the afternoon of Wednesday August 3, it was impossible to accept the offer to commence work at 7:00 a.m. on August 3. Therefore, the claimant reasons that the letter constituted a legal “nullity,” and affords no basis for termination of benefits under § 8-42-105(3)(d), C.R.S. (1996 Cum. Supp.). The claimant also argues that the next date authorized for a return to work was August 9, 1994, and the evidence establishes that she reported on that date. We are not persuaded by these arguments.
Generally, the question of whether the August 2 letter constituted an offer of continuing employment from August 3 through August 8, 1994, requires an examination of the document itself. However, to the extent the letter is ambiguous, it is appropriate to resort to extrinsic evidence, including the conduct of the parties. See Kuta v. Joint Dist. No. 50(J), 799 P.2d 379 (Colo. 1990).
Here, we agree with the ALJ that the August 2 letter is best interpreted as an offer of continuing employment commencing August 3, 1994. The claimant’s arguments notwithstanding, the letter’s references to dates after August 3 appear to advise the claimant of her anticipated work schedule, and cannot plausibly be interpreted as restricting her to appearing for employment only on August 3 or August 9. This conclusion is also supported by the letter’s reference to the “no call/no show” rule. Moreover, our conclusion is consistent with the extrinsic evidence indicating that the claimant’s usual pre-injury work schedule was Tuesday through Saturday. (Tr. p. 21). Viewed in light of the parties’ usual practice, it is unlikely that either party understood the offer to be as restrictive as the claimant now argues it was.
It follows that we reject the claimant’s argument that the written offer of employment is a “nullity.” To the contrary, the ALJ’s interpretation of the letter is correct as a matter of law, and supported by substantial evidence.
We also reject the claimant’s assertion that there was an “open” offer of employment which the claimant accepted by returning to work on August 9, 1994. To the contrary, the ALJ expressly found that the offer was revoked because the claimant was “terminated” from employment on August 8, 1994.
II.
Relying on PDM Molding, Inc. v. Stanberg, 898 P.2d 542
(Colo. 1995), the claimant next contends that the ALJ erred by failing to consider evidence that her post-separation wage loss was causally connected to the industrial injury. In support of this contention, the claimant cites her testimony that restrictions resulting from the injury affected her ability to obtain post-separation employment. (Tr. p. 30). In contrast, the respondents argue that the ALJ need not have considered th PDM Molding analysis because the claimant’s right to temporary disability benefits had already been terminated by virtue of § 8-42-105(3)(d). We conclude that the ALJ’s findings of fact are insufficient to permit appellate review, and therefore, remand for entry of a new order on this issue.
In Sanchez v. Porter Industries Inc.,
W.C. No. 4-208-433, April 4, 1996, aff’d., Porter Industries, Inc. v. Sanchez, (Colo.App. No. 96CA0745, December 27, 1996) (not selected for publication), we held that a termination of temporary disability benefits under § 8-42- 105(3)(d) does not constitute a permanent bar to a claimant’s right to receive temporary disability benefits. Instead, we concluded that PDM Molding, Inc. v. Stanberg, supra, stands for the proposition that a temporarily disabled claimant who is terminated from modified employment may receive temporary disability benefits if the subsequent wage loss is “to some degree” caused by the industrial injury. In affirming our decision, the court of appeals stated the following:
“Contrary to respondents’ contention, we do not agree that PDM Molding applies only if there is a finding that a claimant was at fault for the termination. Instead, in our view, the rationale applies in any case in which the employer relies upon § 8-42-105(3) as the basis for terminating TTD benefits.”
Thus, we disagree with the respondents’ assertion tha PDM Molding is irrelevant because the ALJ found that the claimant’s benefits were terminated under § 8-42-105(3)(d) when she failed to begin work. The issue then becomes whether the ALJ properly determined that the claimant’s post-separation wage loss was not to some degree causally connected to her industrial injury.
In this regard, we may set aside an ALJ’s order if the findings of fact are insufficient to permit appellate review. Section 8-43-301(8), C.R.S. (1996 Cum. Supp.). Findings of fact are inadequate unless they are specific, and reveal what evidence the ALJ found to be determinative of the legal issues involved. Section 8-43-215, C.R.S. (1996 Cum. Supp.); Womack v. Industrial Commission; 168 Colo. 364, 451 P.2d 761 (1969).
In this case, the ALJ determined that the claimant was at fault for her termination from the employer. Under such circumstances, the claimant carried the burden of proof to establish that her subsequent wage loss was at least partially the result of the industrial injury. PDM Molding, Inc. v. Stanberg, supra. In an attempt to satisfy this burden of proof, the claimant presented her own testimony. (Tr. p. 30).
However, the ALJ made no specific findings of fact concerning the claimant’s testimony, or the effects of her continuing restrictions on her ability to find work. Instead, the ALJ merely stated that his “consideration of the totality of the circumstances” caused him to conclude that the post-separation wage loss was not due to the injury. The ALJ did not indicate what “circumstances” he considered relevant to this determination, nor did he indicate whether or not he considered the claimant’s testimony credible. Under these circumstances, the findings of fact are insufficient to permit appellate review, and the matter must be remanded for entry of a new order, containing specific findings of fact, resolving whether or not the claimant’s post-separation wage loss was “to some degree” the result of her injury. In reaching this result, we should not be understood as expressing any opinion concerning the weight of the evidence or the credibility of the claimant’s testimony.
III.
The claimant next contends that the ALJ erred in failing to assess penalties against the respondent-insurer for the failure to admit liability for temporary disability benefits on August 3, 1994, and for failing to attach a medical report to the Final Admission of Liability. Again, we conclude that the ALJ’s findings of fact are insufficient to permit appellate review.
Section 8-43-304(1), C.R.S. (1996 Cum. Supp.), permits imposition of a penalty for a violation of the Workers’ Compensation Act (Act), or the failure to perform any duty lawfully enjoined. Thus, penalties may be imposed if an insurer violates a Rule of Procedure. Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). In order to assess a penalty, it must be established that an insurer’s actions were unreasonable under an objective standard. However, it need not be established that the insurer had actual knowledge that its conduct was unreasonable. Diversified Veterans Corporate Center v. Hewuse, ___ P.2d ___ (Colo.App. No. 96CA0583, January 9, 1997); Pueblo School District No. 70 v. Toth, supra.
If it is established that the insurer engaged in conduct subject to a penalty, § 8-43-304(1) provides that the insurer “shall also be punished by a fine of not more than five hundred dollars per day for each such offense.” We have previously held that use of the word “shall” demonstrates that imposition of a penalty is mandatory where a violation is proven Eg., Marple v. Saint Joseph Hospital,
W.C. No. 3-966-344, September 15, 1995; see also, Burns v. Robinson Dairy, 911 P.2d 661 (Colo.App. 1995) (use of word “shall” in a statute is presumed to indicate a mandatory requirement).
Here, it was unclear from the ALJ’s order whether he has found that any violation of the statute or the Rules of Procedure occurred. Moreover, to the extent the ALJ found that a violation occurred, it is unclear whether the ALJ found that the insurer’s conduct was reasonable under an objective standard. The mere fact that the adjuster may have believed that the claimant missed only three days of work does not necessarily establish that that belief was reasonable when examined under the objective standard.
Finally, we are unable to ascertain whether the ALJ found that the respondent-insurer engaged in conduct which is subject to a penalty under § 8-43-304(1), but concluded that he possessed discretion to “decline” to impose a penalty. To the extent the ALJ reached this conclusion, he erred. Marple v. Saint Joseph Hospital, supra.
Under these circumstances, the matter must be remanded for entry of a new order concerning whether or not the respondent-insurer is subject to penalties. The ALJ shall enter specific findings of fact and conclusions of law determining whether or not the respondent-insurer violated any provision of the Act or Rules of Procedure, and if so, whether or not the violation was unreasonable under an objective standard. If the ALJ determines that there was a violation which is subject to a penalty, he is obliged to impose a penalty from one cent to five hundred dollars per day for each violation. The precise amount of the penalty is, of course, discretionary with the ALJ. See Gregory v. Ball Aerospace, W.C. No. 4-176-123, August 31, 1995.
IT IS THEREFORE ORDERED that the ALJ’s order dated April 18, 1995, is affirmed insofar as it denied temporary disability benefits from August 4, 1994 until August 8, 1994.
IT IS FURTHER ORDERED that the ALJ’s order is set aside insofar as it denied temporary disability benefits commencing August 8, 1994, and the matter is remanded for entry of a new order consistent with the views expressed herein.
IT IS FURTHER ORDERED that the ALJ’s order is set aside insofar as it denied the claimant’s request for penalties against the respondent-insurer, and the matter is remanded for entry of a new order 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 the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon 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 February 4, 1997 to the following parties:
Teresa Meraz, 1851 West 35th, Denver, CO 80211
Metropolitan Association for Retarded, 1515 S. Broadway, Denver, CO 80210-2607
Colorado Compensation Insurance Authority, Attn: Marjorie J. Long, Esq. (Interagency Mail)
Roger Fraley, Jr., Esq., 3113 E. Third Ave., Ste. 200, Denver, CO 80206 (For the Claimant)
By: ________________________________________________