W.C. No. 4-489-462Industrial Claim Appeals Office.
September 26, 2002
FINAL ORDER
The employer, EZ Building Components (EZ), seeks review of an order of Administrative Law Judge Gartland (ALJ), which determined the insurer, Reliance National Insurance (Reliance), canceled the policy of workers’ compensation insurance before the claimant’s injury. EZ challenges the sufficiency of the evidence and argues the ALJ erroneously determined that Reliance substantially complied with the notice provision of the statute governing cancellation. We affirm.
In the order dated February 20, 2002, the ALJ found the claimant was injured on January 4, 2001, while employed by EZ. The issue was whether Reliance canceled the insurance policy for non-payment of premium effective December 29, 2000.
EZ failed to make a timely premium payment for November 2000 because its check was returned for insufficient funds. Consequently, the ALJ found that on December 15, 2000, Reliance mailed a certified letter to the claimant stating that if the late premium, plus the December premium, were not received by December 29, 2000, the policy would be canceled. The ALJ further found the notice was mailed to EZ’s insurance agent by regular mail and electronically provided to the designated agent of the Division of Workers’ Compensation (Division).
The ALJ found that a general partner for EZ mailed a check to Reliance dated December 29, but the check was not received until after the cancellation date. Consequently, the ALJ ruled the policy was canceled. Moreover, the ALJ ruled that Reliance substantially complied with the provisions of § 8-44-110, C.R.S. 2001 [amended in ways not pertinent in 2002]. The ALJ reasoned there is no indication that failure to notify the Division and agent by certified mail adversely affected the employer’s interests.
I.
EZ first disputes the sufficiency of the evidence to support the finding that Reliance sent the cancellation notice to EZ by certified mail. EZ argues the testimony of the underwriting manager (Peterson) was not credible, and that Reliance failed to produce a signed return receipt. We are not persuaded.
The version of § 8-44-110 in existence at the time of the attempted cancellation was as follows:
Every insurance carrier authorized to transact business in this state, including the Colorado compensation insurance authority, which insures employers against liability for compensation under articles 40 to 47 of this title shall notify the division, any employer insured by the carrier or the authority, and any agent or representative of such employer, if applicable, by certified mail of any cancellation of such employer’s insurance coverage. Such notice shall be sent at least thirty days prior to the effective date of cancellation of the coverage. However, if the cancellation is based on one or more of the following reasons, then such notice may be sent less than thirty days prior to the effective date of the cancellation of the insurance: Fraud; material misrepresentation; nonpayment of premium; or any reason approved by the commissioner of insurance.
Generally, the question of whether notice was mailed is a question of fact. See Campbell v. IBM Corp., 867 P.2d 77 (Colo.App. 1993). Proof of a business practice or custom is sufficient to support a finding that a letter was duly posted. National Motors, Inc. v. Newman, 29 Colo. App. 380, 484 P.2d 125 (Colo.App. 1971).
We must uphold findings of fact if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2002. This standard of review requires us to view the evidence in a light most favorable to the prevailing party, and defer to the ALJ’s resolution of conflicts in the evidence, credibility determinations, and plausible inferences drawn from the record. Metro Moving and Storage Co. v. Gussert, 914 P.2d 411
(Colo.App. 1995). We note that testimony is not incredible as a matter of law simply because it is biased, inconsistent, or in conflict with other evidence. People v. Ramirez, 30 P.3d 807 (Colo.App. 2001). Rather, testimony is incredible as a matter of law only in extreme circumstances where it is rebutted by hard, certain evidence directly contrary to the testimony. Arenas v. Industrial Claim Appeals Office, 8 P.3d 558
(Colo.App. 2000).
Here, the underwriting manager, who provided services to Reliance under contract, testified that the notice of cancellation was sent to EZ on December 15, 2000, and that Reliance retained a copy of the receipt for certified mail reflecting that fact. The manager also testified a copy of the notice was sent to EZ’s insurance agent by regular mail and was electronically transmitted to the Division’s agent. The witness testified to her knowledge of the mailing procedures. (Peterson depo. Pp. 6-7, 33-34). Moreover, Reliance produced a copy of the receipt for certified mail indicating that a letter was mailed to the general partner on December 15, 2000. Finally, the general partner for EZ admitted receiving the notice, although he testified he did not receive it until December 29.
Under these circumstances, the record contains ample evidence the notice of cancellation was sent to EZ by certified mail on December 15, 2000, and received in a timely fashion. The alleged inconsistences in the underwriting manager’s testimony went to the weight of the testimony, and concern inferences to be drawn about the mailing date. The inconsistencies certainly did not require the ALJ to find her testimony incredible as a matter of law, and this is especially true since the documentary evidence partially corroborates the manager’s testimony. The failure of the insurer to produce a signed receipt for certified mail was relevant, but did not compel the ALJ to conclude there was no mailing. Finally, the ALJ implicitly rejected the testimony of the general partner which conflicted with the findings. See Magnetic Engineering v. Industrial Claim Appeals Office, 5 P.3d 385 (Colo.App. 2000).
II.
EZ next contends the ALJ erred in determining there was substantial compliance with § 8-44-110. EZ argues the failure to notify the insurance agent and the Division by certified mail renders the cancellation ineffective. We disagree.
As Reliance argues, the Court of Appeals has recently held that a statute requiring notice by certified mail need not be strictly enforced if actual notice was received and the statute does not treat the method of notice as jurisdictional. Feldwerth v. Joint School District 28-J, 3 P.3d 467 (Colo.App. 1999) (failure to provide teacher with notice of intent to dismiss by certified mail, as required by statute, not fatal where teacher’s attorney admitted teacher received actual notice in timely fashion). Similarly, the court has held that a cover letter constituted substantial compliance with § 8-43-301(2), C.R.S. 2001, requiring that a petition to review filed by mail be accompanied by a “certificate of mailing” indicating “the petition to review was mailed to the appropriate administrative law judge or to the director, if appropriate.” Rendon v. United Airlines, 881 P.2d 482 (Colo.App. 1994).
Here, EZ does not dispute that the agent and the Division received actual notice of the cancellation, and we have already held the evidence supports the finding that EZ did receive notice by certified mail. Under these circumstances, we agree with the ALJ there was substantial compliance with the statute, and the rights of EZ were not affected by the method of notice to the agent and the Division.
Moreover, § 8-44-110 does not state that notice by certified mail to all interested parties is a jurisdictional requirement. Consequently, we decline to interpret the statute as creating such a requirement Feldwerth v. Joint School District 28-J, supra. In reaching this result, we have reviewed our prior decisions cited by EZ. Although those cases impose a strict interpretation of the statute , they did so in the context of a complete failure to notify one of the parties mentioned in the statute. Hence, the issue was different, and we do not find those cases persuasive here. Eg. Davidovich v. Team Builders Inc.,
W.C. 4-468-801 (October 5, 2001) (failure to provide any notice of cancellation to insured rendered cancellation ineffective).
We note that EZ sought review of an order setting the bond in this case. However, the appeal was rendered moot by a corrected order entered by ALJ Martinez on July 12, 2002.
IT IS THEREFORE ORDERED that the ALJ’s order dated February 20, 2002, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ David Cain ________________________________ Dona Halsey
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced 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. 2001. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe Street, Tower 3, Suite 350, Denver, CO. 80202.
Copies of this decision were mailed September 26, 2002 to the following parties:
Robert A. Summers, P. O. Box 33, Dove Creek, CO. 81324
EZ Building Components Mfg., LLC, P. O. Box 1048, Cortez, CO 81321-1048
Reliance National Insurance Co., c/o Judy Rollins, Cambridge Integrated Services Group, Inc., P. O. Box 52106, Phoenix, AZ. 85072-2106
Patrick J. Sheeran, Esq. and Timothy J. Tuthill, Esq., 15 N. Chestnut, Cortez, CO. 81321 (For Claimant)
Stacy J. Tarler, Esq., 1720 S. Bellaire St., #310, Denver, CO 80222-4316 (For Respondent EZ Building Components Mfg., LLC)
Margaret Keck, Esq., and Derek Regensburger, Esq., 999 18th St., #1600, Denver, CO. 80202 (For Respondent Reliance National Insurance Company)
By: A. Hurtado