W.C. No. 4-412-966Industrial Claim Appeals Office.
February 11, 2003
FINAL ORDER
The respondent-insurer (Travelers) seeks review of an order of Administrative Law Judge Henk (ALJ) imposing penalties for failure to provide taxicab vouchers as a form of medical benefit. Travelers argues the ALJ erroneously imposed penalties under § 8-43-304(1), C.R.S. 2002, rather than § 8-43-401(2)(a), C.R.S. 2002. Travelers also contends that no penalties may be imposed under § 8-43-401(2)(a) because the claimant failed to prove the value of the wrongfully withheld medical benefits. We reverse the award of penalties.
The ALJ’s findings may be summarized as follows. The claimant sustained a compensable ankle injury in March 1999. In May 2000, a treating physician, Dr. Morgan, restricted the claimant (who does not drive) from using public transportation to attend medical appointments. Travelers then began providing taxicab vouchers so the claimant could travel to treatment.
In October 2001, claimant’s counsel advised the adjuster that the claimant was running out of vouchers and needed more. Apparently, the adjuster requested medical documentation of the continuing need for vouchers. On November 8, claimant’s counsel forwarded to the adjuster Dr. Morgan’s medical report dated November 1. In that report Dr. Morgan stated the claimant continued to need vouchers “secondary to reconstruction of her lower extremity.” On November 7, Dr. Morgan noted the claimant was continuing to have problems with the ankle and referred the claimant for treatment of depression.
On November 28, 2001, the claimant applied for a hearing requesting an order requiring Travelers to provide the vouchers, and penalties for “denying care prescribed by treating physicians.” In the order dated April 25, 2002, the ALJ found that from October through December 2001, Travelers was aware of the claimant’s need for transportation to medical treatment; however, it unreasonably and willfully failed to provide the vouchers. The ALJ concluded Travelers “violated the Workers’ Compensation Act” by failing timely to provide medical care and treatment. Thus, citing § 8-43-304(1), the ALJ imposed penalties of $100 per day from December 6, 2001, through March 26, 2002, the date of the hearing.
On review, Travelers first contends the ALJ erred by imposing penalties under § 8-43-304(1). Travelers reasons the ALJ found a violation of the Workers’ Compensation Act (Act). Consequently, Travelers argues, no penalty may be imposed under § 8-43-304(1) because § 8-43-401(2)(a) creates a specific penalty if an insurer willfully stops payment of medical benefits. The claimant replies that when construing § 8-43-304(1), the phrase “for which no penalty has been specifically provided” (qualifying phrase) refers only to the failure to perform a duty lawfully enjoined within the time prescribed, not to violations of the Act. We agree with the respondents.
Section 8-43-304(1) authorizes the imposition of penalties of up to $500 per day on an insurer which:
“violates any provision of articles 40 to 47 of this title, or does any act prohibited thereby, or 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 . . .” (Emphasis added).
Section 8-43-401(2)(a) creates a penalty of eight percent of wrongfully withheld medical benefits in cases where the insurer “willfully delays payment of medical benefits for more than thirty days or willfully stops payments.” The insurer argues this provision constitutes the specific penalty for not providing the vouchers, and that § 8-43-304(1) does not apply because of the exception created by the qualifying phrase.
In Holliday v. Bestop, Inc., 23 P.3d 700 (Colo. 2001), the court stated that § 8-43-304(1) creates four categories of conduct. The court held that the qualifying phrase “for which no penalty has been specifically provided” does not apply to the fourth category of conduct involving violation of an order. The court reasoned that the fourth category appears after the qualifying phrase, and the “General Assembly considered the violation of a statutory provision or an administrative mandate to be a less egregious wrong than disregarding a tribunal’s lawful order.”Id. at 706. The court also held the qualifying phrase necessarily applies to the third category of conduct, failure to perform a duty lawfully enjoined by the Director or panel within the time prescribed.
Because Holliday involved an alleged violation of an order, the court did not address the effect of the qualifying phrase on the first two categories of conduct involving violations of provisions of the Act and the performance of activities prohibited by the Act. Indeed, as the respondents point out, the court in Holliday expressly reserved that question and stated that it expressed “no opinion on this issue.” Id. at 707, n. 6. Thus, any instruction which may be gained from Holliday is, at most, dictum.
In interpreting § 8-43-304(1), we apply the ordinary rules of statutory construction. The purpose of statutory construction is to effect the legislative intent. Because the best indicator of legislative intent is the language of the statute, words and phrases in a statute should be given their plain and ordinary meanings, and phrases should be read in context and construed according to the rules of grammar and common usage. Section 2-4-101, C.R.S. 2002; Weld County School District RE-12 v. Bymer, 955 P.2d 550 (Colo. 1998). However, statutory language should not be construed in a manner which produces an absurd result. Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, 26 P.3d 546 (Colo.App. 2001).
If a statute is ambiguous, we may resort to applicable rules of statutory construction. A statute is ambiguous if it is subject to more than one interpretation. Miller v. Industrial Claim Appeals Office, 985 P.2d 94 (Colo.App. 1999). When a statute is ambiguous, we may consider the relationship of the disputed statute to other provisions of the Act, and we should give a consistent, harmonious, and sensible effect to all parts of the statute. Further, we may consider the consequences of alternative constructions. Legislative history may also be relevant Miller v. Industrial Claim Appeals Office, supra; Henderson v. RSI, Inc., 824 P.2d 91 (Colo.App. 1991).
We conclude that § 8-43-304(1) is ambiguous concerning whether or not the qualifying phrase “for which no penalty has been specifically provided” applies only to the third category of conduct (failure timely to perform lawfully enjoined duty), or also applies to the first two categories of conduct (violation of the Act, and performance of conduct prohibited by the Act). The ambiguity arises in part because the qualifying phrase is set off from the third category of conduct by commas. If the General Assembly intended the qualifying phrase to apply solely to the third category, a comma would probably not appear between the words “panel” and “for.” This is true because a restrictive phrase essential to the meaning of a sentence should not be set off by commas.
Conversely, the qualifying phrase appears after three disjunctive categories of conduct, and is separated from all three categories by a comma. The General Assembly has expressly rejected the rule of statutory construction which formerly provided that qualifying words and phrases are construed to refer solely to the last antecedent with which they are closely connected. To the contrary, the relative proximity of a qualifying phrase to an antecedent does not create any presumption of statutory intent. Section 2-4-214, C.R.S. 2002; American Respiratory Care Service v. Manager of Revenue, 835 P.2d 623 (Colo.App. 1992). Thus, the qualifying phrase in § 8-43-304(1) may be construed as modifying all of the preceding categories of conduct, not just the third category.
Reading the qualifying phrase to apply to all three categories of conduct provides a consistent and harmonious interpretation of the entire Act while avoiding an absurd result. As implied by the qualifying phrase of § 8-43-304(1), the Act is replete with statutory provisions which impose duties and prohibitions, and establish specific penalties for violations of the duties and prohibitions. For instance, § 8-43-203(1)(a), C.R.S. 2002, creates a duty on respondents to admit or deny liability, and § 8-43-203(2)(a), C.R.S. 2002, provides that respondents may become liable for up to three hundred sixty-five days of compensation for failure timely to admit or deny liability. Section 8-43-102(1)(a), C.R.S. 2002, creates a duty on claimants to report an injury in writing within four days of its occurrence. The same statute provides claimants may lose up to one day’s compensation for each day they fail to report the injury in accordance with the statute. Other statutes creating duties and imposing penalties include, but are not limited to, the following: § 8-42-112, C.R.S. 2002 (penalties against claimants for willful safety violations and misleading employers); § 8-42-112.5, C.R.S. 2002 (penalties against claimants for use of controlled substances or alcohol resulting in injury); § 8-43-404(3), C.R.S. 2002 (penalties against claimants for failure to submit to medical or vocational examination); § 8-43-408(1), C.R.S. 2002 (penalties against uninsured employers for failure to carry insurance).
If the qualifying phrase of § 8-43-304(1) is not interpreted to apply to violations of the Act and the doing of activities prohibited by the Act, the statutory scheme for penalties becomes essentially subsumed in § 8-43-304(1). In the vast majority of cases, the potential penalties under § 8-43-304(1) would entice the applicant to proceed under that section rather than seek the specific penalties prescribed by the particular penalties prescribed for the violation. In any event, the statute contains no meaningful directions to the ALJ or Director concerning when to apply the specific statutory penalties and when to apply § 8-43-304(1). For these reasons, a harmonious reading of all related provisions of the Act dictates that the qualifying phrase contained in § 8-43-304(1) apply to the first two categories of misconduct as well as the third. It follows from this discussion that we are not persuaded by the claimant’s argument that the qualifying phrase applies solely to the third category of conduct, and therefore, must be construed as limited to that category.
We also note that if the qualifying phrase is construed to apply solely to the third category of conduct, it is difficult to construct a scenario where the qualifying phrase would ever apply. This is true because the third category would govern the failure to perform a duty “lawfully enjoined” by the Director or panel within the time prescribed for which no other penalty is specifically provided. First, the Holliday court defined the term “enjoined” as constituting the action of requiring a party to perform a duty mandated under the Act. Holliday v. Bestop, Inc., 23 P.3d at 706, n. 4. Second, the term “order” has been broadly defined to encompass virtually every type of affirmative mandate or prescription which can be issued by the Director. Section 8-40-201(15), C.R.S. 2002 Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211 (Colo.App. 2001). We are not aware of any authority for the panel to “enjoin” or require any conduct except by way of an order. Sections 8-43-301(8) and (9), C.R.S. 2002. Thus, failure timely to perform any action “enjoined” by the Director or the panel would almost certainly be punishable as a violation of an “order” under the fourth category of conduct. Even if there is a category of conduct which can be “enjoined” other than by order, the claimant has not pointed to any provision of the Act containing a specific penalty for failure to perform such a duty. The claimant’s reading of the statute would render the qualifying clause virtually meaningless, and would not give effect to the statute as a whole.
Consequently, the ALJ erred in imposing penalties under § 8-43-301(4) because Travelers stopped paying for the vouchers. The ALJ explicitly found this conduct was a violation of the employer’s duty under the Act to provide medical treatment. (Conclusion of Law 2). Although the ALJ did not cite a specific provision of the statute, the order was presumably premised on § 8-42-101(1)(a), C.R.S. 2002. However, because §8-43-401(2)(a) creates a specific penalty for an insurer’s willful conduct in stopping payment for medical benefits, the qualifying phrase of § 8-43-304(1) prohibits penalizing the insurer’s conduct under the general penalty provision.
The claimant argues, based on legislative history attached to her brief, that § 8-43-401(2)(a) was enacted to aid claimant’s in collecting medical benefits from recalcitrant insurers; therefore, the claimant reasons the statute should not be construed as limiting rights under §8-43-304(1). However, § 8-43-401(2)(a) plainly establishes a penalty for willful stoppage of medical benefits. Therefore, there is no need to look behind the plain meaning of the statute to ascertain what the General Assembly intended with respect to § 8-43-304(1). See Colorado Springs Disposal v. Industrial Claim Appeals Office, 58 P.3d 1061 (Colo.App. 2002).
In any event, the statutory history is not so decisive as the claimant argues. Senator Norton recommended the penalty under § 8-43-401(2)(a) be based on willful failure to pay medical expenses. In contrast, §8-43-304(1) contemplates penalties based on a mere negligence standard Diversified Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997). The willful standard recommended by Senator Norton was incorporated in § 8-43-401(2)(a). Hence, we cannot say that if the General Assembly had squarely considered the issue it would it would have endorsed penalties under § 8-43-304(1) for the insurer’s negligent failure to pay medical benefits.
The claimant argues the ALJ’s order may be upheld because the evidence supports the legal conclusion that Travelers violated an “order.” Specifically, the claimant argues Travelers’ admission for medical benefits is equivalent to an “order.” Further, the claimant argues Travelers violated rules of procedure concerning preauthorization for medical treatment, and violation of such rules is equivalent to a violation of an order.
However, we need not consider these assertions. The claimant’s application for hearing contained no specific allegations that Travelers violated an order, as is required by § 8-43-304(4), C.R.S. 2002. Moreover, at the commencement of the hearing, claimant’s counsel advised the ALJ that the claimant was seeking a penalty based on Travelers’ failure to follow “statutory procedure” concerning the provision of medical treatment. (Tr. P. 5). Indeed, the ALJ’s order reflects her understanding that the basis of the claim for penalties was violation of the Act, not violation of an order. Hence, we agree with Travelers that the claimant did not raise these arguments to the ALJ, and may not do so for the first time on appeal. Kuziel v. Pet Fair, Inc., 948 P.2d 103
(Colo.App. 1997).
We also agree with the respondents that the claimant failed to prove entitlement to a penalty under § 8-43-401(2)(a). The ALJ explicitly found the claimant produced no evidence concerning the value of the taxicab vouchers. Hence, there is no basis for determining the amount of the penalty which could otherwise be awarded under the statute.
In light of our conclusions, we need not consider Travelers’ constitutional argument.
IT IS THEREFORE ORDERED that the ALJ’s order dated April 25, 2002, is reversed insofar as it assessed penalties against Travelers under §8-43-304(1).
INDUSTRIAL CLAIM APPEALS PANEL
___________________________________
David Cain
___________________________________
Dona Halsey
NOTICE
This Order is final unless an action to modify or vacate this Order iscommenced 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 thepetition upon all other parties, including the Industrial Claim AppealsOffice, which may be served by mail at 1515 Arapahoe Street, Tower 3,Suite 350, Denver, CO 80202.
Copies of this decision were mailed _______February 11, 2003 to the following parties:
Susan Pena, 1234 Clarkson St., #102, Denver, CO 80218
Family Dollar Stores, Inc., Workers’ Compensation Manager, 1515 W. 48th Ave., Denver, CO 80221-1503
Suzanne Liening, Travelers Insurance Company, P.O. Box 650753, Dallas, TX 75265
Special Funds Unit, Tower 2, #630, Division of Workers’ Compensation — Interagency Mail
Ralph Ogden, Esq., 1750 Gilpin St., Denver, CO 80218 (For Claimant)
Marc F. Bendinelli, Esq., Plaza North, #10, 11184 Huron St., Northglenn, CO 80234 (For Claimant)
Douglas A. Thomas, Esq., 1625 Broadway, #2300, Denver, CO 80202 (For Respondents)
Trecia L. Sigle, Esq., P.O. Box 5148, Denver, CO 80217-5148 (For Respondents)
By: ________A. Hurtado_____________