W.C. No. 4-229-081Industrial Claim Appeals Office.
March 4, 1999.
FINAL ORDER
The respondents seek review of a final order of Administrative Law Judge Wheelock (ALJ) which awarded the claimant permanent total disability benefits. The respondents argue that the claimant is not entitled to permanent total disability benefits because she refused an offer of vocational rehabilitation in violation of § 8-42-111(3), C.R.S. 1998. The respondents further contend that the ALJ erroneously rejected the vocational rehabilitation defense because no offer of rehabilitation was made prior to the commencement of the hearing. We affirm.
The claimant sustained a compensable injury in September 1994. The injury caused reflex sympathetic dystrophy of the left lower extremity, and the claimant also experienced serious depression. The claimant reached maximum medical improvement in August 1996, and was given an impairment rating of 80 percent of the lower extremity, which converts to a 32 percent impairment of the whole person. The claimant presented expert vocational testimony that her injuries render her unable to earn wages in Colorado, or in Arizona where she currently resides.
In December 1996 the claimant filed an application for hearing seeking permanent total disability benefits. A response to the application was filed, but did not raise additional issues or affirmative defenses.
The initial hearing was conducted on August 20, 1997. At that time the respondents did not raise the issue of whether the claimant is ineligible for permanent total disability benefits because of her failure to accept an offer of vocational rehabilitation. After the presentation of some evidence, the August 20 hearing was continued because there was inadequate time to hear all of the testimony. The second hearing was scheduled for December 9, 1997.
On September 23, 1997, respondents’ vocational expert sent a letter to claimant’s counsel stating that respondents’ counsel had requested the expert to “provide direct assistance” to the claimant “in an effort to find her suitable employment” in Arizona. The vocational expert requested permission for the claimant to meet with “personnel from the Arizona State Division of Vocational Rehabilitation,” and stated that he considered these “activities” to be “pre-vocational.”
A series of letters was then exchanged between claimant’s counsel and respondents’ counsel concerning the “pre-vocational activities” of the respondents’ vocational expert. On October 3, 1997, claimant’s counsel characterized the expert’s actions as “case management,” and declined “his kind offer to broker a relationship between” the claimant and the Arizona Division of Vocational Rehabilitation. On October 8, respondents’ counsel replied that he understood the claimant was “refusing our offer of vocational rehabilitation by refusing to work” with the expert. On October 10, claimant’s counsel responded that the claimant was not “refusing your offer vocational rehabilitation,” but declining to accept the expert’s “involvement in this case.”
On October 8, 1997, respondents’ counsel filed a “Motion to Acknowledge and/or Add Defense.” The motion alleged that the letter of the claimant’s counsel dated October 3 represented a refusal to cooperate with vocational rehabilitation, and therefore the respondents were entitled to raise the defense established by § 8-42-111(3). Claimant’s counsel objected that the respondents were not actually offering vocational rehabilitation, but instead seeking to “interpose [the vocational expert] in the relationship between” the claimant and the Arizona rehabilitation department. On October 21, 1997, the ALJ denied the respondents’ motion to add the defense. The respondents renewed their motion on November 3, 1997, and it was again denied on November 17, 1997.
At the commencement of the December 9 hearing the respondents again sought permission to introduce evidence concerning the claimant’s alleged failure to cooperate with vocational rehabilitation. The ALJ again ruled that the respondents would not be permitted to introduce this evidence because the “official hearing started in August” and the respondents “can’t benefit from the time delay.” (Tr. Dec. 9, 1997, pp. 12-13). Nevertheless, the respondents introduced evidence concerning the claimant’s alleged failure to cooperate with vocational rehabilitation, apparently for the purpose of making a “record,” and for the purpose of rebutting the claimant’s testimony concerning her conversations with an Arizona vocational rehabilitation representative. (Tr. Dec. 9, 1997, p. 98).
On April 17, 1998, the ALJ entered the order awarding permanent total disability benefits. Concerning the issue of vocational rehabilitation, the ALJ reiterated that no offer had been made prior to the commencement of the hearing on August 20, 1997, but noted that she allowed “presentation of evidence on the issue” at the December 9 hearing. The ALJ then found that no offer of vocational rehabilitation was made to the claimant at or before the December 9 hearing. Thus, the ALJ concluded that §8-42-111(3) is no bar to the award.
On review, the respondents contest the ALJ’s finding that no offer of vocational rehabilitation was made to the claimant. The respondents contend that an offer vocational rehabilitation is contained in the series of letters which counsel and the expert exchanged in September and October 1997. In any event, the respondents argue that vocational rehabilitation was offered at the December 9 hearing. As a corollary to these arguments, the respondents assert the ALJ erroneously concluded that their failure to offer vocational rehabilitation prior to the August 20 hearing is fatal to their reliance on § 8-42-111(3). Because we conclude that the respondents waived the right to rely on §8-42-111(3), we find no error in the ALJ’s order.
Section 8-42-111(3) provides that a claimant who refuses an offer of vocational rehabilitation paid for by the employer may not be awarded permanent total disability benefits. We have previously ruled that this statute creates an affirmative defense on which the respondents bear the burden of proof. Pacheco v. Environmental Chemical Corp., W.C. No. 4-287-884 (October 9, 1998); Seymour v. Pillow Kingdom, Inc., W.C. No. 3-925-175 (March 14, 1996); see also, Drywall Products v. Constuble, 832 P.2d 957
(Colo.App. 1991). Because the statute constitutes an affirmative defense the respondents must raise it in their response to the application for hearing if they wish to have it considered by the ALJ. Otherwise, the claimant would be denied a fair opportunity to meet and oppose the defense. Kersting v. Industrial Commission, 39 Colo. App. 297, 567 P.2d 394 (1977); Duran v. The Greeley Elevator Co., W.C. No. 3-980-537 (February 11, 1994) (with regard to former § 8-42-110(3), it was a denial of due process for the ALJ to permit the respondents to offer reemployment at the hearing without affording the claimant a continuance to determine whether the proffered employment was within the claimant’s physical restrictions).
Further, Rule of Procedure VIII (A) (5), 7 Code Colo. Reg., 1101-3 at 21, provides that a party may not “add . . . an issue after the filing of the application or response except upon agreement of all parties, or approval of an administrative law judge for good cause shown.” The ALJ has wide discretion in controlling the course of proceedings, and in determining whether good cause has been shown to add an issue. IPMC Transportation Co. v. Industrial Claim Appeals Office, 753 P.2d 803 (Colo.App. 1988). An abuse of discretion is not shown unless the ALJ’s order is beyond the bounds of reason as where it is unsupported by the evidence or is contrary to law. See Coates Reid Walsron Vigil, 856 P.2d 850 (Colo. 1993); One Hour Cleaners v. Industrial Claim Appeals Office, 914 P.2d 501 (Colo.App. 1995).
The respondents’ argument notwithstanding, the ALJ did not abuse her discretion in refusing to permit the respondents to amend their response to the application for hearing by adding the defense of refusal to accept vocational rehabilitation. As the ALJ recognized throughout the proceedings, if any offer of rehabilitation was made to the claimant it was not made until after the commencement of the August 20 hearing. Further, no concrete plan for vocational rehabilitation was even suggested until the respondents’ expert testified at the December 9 hearing. The record reflects that the parties strenuously disagreed concerning whether or not the respondents’ proposal even constituted an offer vocational rehabilitation. Considering the fact that the claimant filed an application seeking permanent total disability benefits in December 1996, we cannot say the ALJ abused her discretion in refusing to permit the respondents to amend their pleadings to include the vocational rehabilitation defense some ten months later, and after the initial hearing on the merits. Permitting such an amendment could have prejudiced the claimant’s right to rebut the vocational rehabilitation defense, or might have necessitated further delay in the proceedings.
It follows that we disagree with the respondents’ assertion that they may automatically raise the vocational rehabilitation defense at any point in the proceedings. The respondents’ right to raise the vocational rehabilitation defense is subject to the statute and rules governing hearings. The ALJ does not abuse her discretion in refusing to permit a statutory defense where it was not raised in a timely fashion. Kersting v. Industrial Commission, supra.
Insofar as the respondents suggest that they were entitled to raise the defense simply because the claimant and her vocational rehabilitation expert testified about the claimant’s discussions with the Arizona rehabilitation department, we disagree. The claimant’s discussions concerning rehabilitation were relevant to the general issue of whether the claimant has the capacity to earn any wages. Therefore, the mere fact that she mentioned rehabilitation in her testimony does not constitute a waiver of her right to object to the amendment of the respondents’ pleadings. In fact, the record reflects that the claimant repeatedly objected to any amendment which would permit the respondents to raise the vocational rehabilitation defense.
In light of this disposition, we need not consider whether the evidence supports the ALJ’s alternative ruling. Thus, we express no opinion concerning whether the evidence supports the ALJ’s conclusion that the respondents never offered vocational rehabilitation to the claimant.
IT IS THEREFORE ORDERED that the ALJ’s order dated April 17, 1998, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ David Cain
________________________________ Bill Whitacre
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. 1998.
Copies of this decision were mailed MARCH 4, 1999
the following parties:
Brenda Stapleton, 3187 Robin, Mescal Lakes, Benson, AZ 85602
Melissa McQueen, Industrial Indemnity Company, PO Box 8127, Boise, ID 83707
Sandra L. King, 3773 Cherry Creek N Drive, Suite 940 W. Denver, CO 80209
Renee Ozer, Esq., 25 N. Cascade Avenue, #215, Colorado Springs, CO 80903 (For Claimant)
David J. Dworkin, Esq., Melissa J. Loman, Esq., 3900 E. Mexico, Suite 1300, Denver, CO 80210 (For Respondents)
BY: ______________