W.C. No. 4-263-037Industrial Claim Appeals Office.
May 28, 1997
FINAL ORDER
The claimant and the respondents petitioned separately for review of an order of Administrative Law Judge Erickson (ALJ) dated November 14, 1996. We affirm.
In an order dated March 12, 1996, the ALJ previously determined that Marvin Thielsen (decedent) died on July 10, 1995, as a result of beryllium disease caused by his work for the respondent-employer between 1955 and 1984, when he retired. The ALJ also determined that the decedent’s average weekly wage at the time of the industrial injury was $532.40. Further, the ALJ determined that the decedent’s only dependent was his wife, Deana Thielsen (claimant). Therefore, the ALJ awarded the claimant death benefits at the rate of $354.93 per week, or $50.70 per day, less applicable offsets. The ALJ also imposed a penalty at the rate of $50.70 per day for each of the 28 days that the respondents failed to admit or deny liability for the decedent’s death as required by §8-43-203(1), C.R.S. (1996 Cum. Supp.). The respondents timely appealed the March 12 order.
On review, we affirmed the ALJ’s finding of a causal connection between the decedent’s death and his occupational disease. However, we concluded that the ALJ misapplied the law in calculating the decedent’s average weekly wage. Specifically, we concluded that the ALJ erroneously interpreted Richards v. Richards Richards, 664 P.2d 254 (Colo.App. 1983), as holding that death benefits must be based upon the decedent’s average weekly wage on the last day the decedent worked for the respondent-employer. Relying upon State Compensation Insurance Authority v. Industrial Commission, 724 P.2d 679 (Colo.App. 1986), and the “rule of independence,” we held that § 8-42-114 C.R.S. (1996 Cum. Supp.) [formerly § 8-50-103 C.R.S. (1986 Repl. Vol. 3B)], requires death benefits to be based upon the decedent’s average weekly wage at the time of death. However, we also noted that § 8-42-102(3), C.R.S. (1996 Cum. Supp.), affords the ALJ wide discretion in calculating the decedent’s average weekly wage.
Consequently, we set aside the ALJ’s determination of the decedent’s average weekly wage, and remanded the matter for a redetermination of the amount of death benefits payable to the claimant. Furthermore, because we set aside the award of death benefits, we also set aside the ALJ’s imposition of penalties based upon a daily death benefit rate of $50.70.
On remand the ALJ issued his order of November 14, 1996, in which found that the decedent was unemployed and earned no wages at the time of his death. However, the ALJ determined that it would be unfair to calculate the award of death benefits based upon an average weekly wage of zero. Therefore, exercising his discretion under § 8-42-102(3), the ALJ calculated the decedent’s average weekly wage as $395.12. In so doing, the ALJ relied upon the fact that the decedent received pension retirement benefits of $691.20 per month and social security retirement benefits of $1021 per month at the time of his death. As a result, the ALJ awarded death benefits of at a rate of $243. 412 per week or $37.63 per day. The ALJ also ordered the respondents to pay a penalty at the rate of $37.63 per day for 28 days.
I.
On review of the November 14 order, the parties reassert many of the arguments which we previously considered and rejected. Specifically, the respondents contend that the record is insufficient to support the ALJ’s finding of a causal connection between the decedent’s death and his occupational disease.
For the reasons stated in our Order of Remand, we decline to reconsider the matter. Therefore, we adhere to our prior conclusions, and uphold the ALJ’s determination that the decedent’s death is compensable.
II. A.
Next, both parties contest the ALJ’s calculation of the decedent’s average weekly wage. The claimant contends that the March 12 order properly awarded death benefits based upon the decedent’s average weekly wage at the time of the injury. Accordingly, the claimant argues that we and the ALJ erred in subsequently awarding benefits based upon a different average weekly wage.
The claimant’s contentions are based upon the same arguments which we previously considered and rejected. Our reasoning is set forth in detail in our Order of Remand, and will not be repeated here. Furthermore, the claimant’s arguments do not persuade us to alter our conclusions. Therefore, we adhere to our prior conclusion that § 8-42-114
requires death benefits be based upon the average weekly wage at the time of death.
B.
As stated by the respondents, § 8-42-114 provides that death benefits shall not:
“[E]xceed a maximum of ninety-one percent of the state’s average weekly wage per week for accidents occurring on or after July 1, 1989, and no less than a minimum of twenty-five percent of the applicable maximum per week.”
Based on this statute, the respondents argue that the ALJ’s undisputed finding that the decedent had “no wages” at the time of his death requires that the claimant receive the minimum death benefit allowed by § 8-42-114. We disagree.
Admittedly, had the ALJ determined that the decedent’s “average weekly wage” was zero, the claimant would be limited to the minimum death benefit prescribed by § 8-42-114. However, the ALJ did not so find, and therefore, the claimant was not limited to the minimum death benefit.
The respondents also contend that the ALJ abused his discretion in considering the decedent’s retirement benefits to calculate the decedent’s average weekly wage. Alternatively, the respondents argue that the ALJ’s findings of fact are insufficient to permit appellate review of their contention that the ALJ abused his discretion. We disagree.
The purpose of § 8-42-102 is to “arrive at a fair approximation of the claimant’s wage loss and diminished earning capacity.” Campbell v. IBM Corporation, 867 P.2d 77 (Colo.App. 1993). However, if “for any reason” the general computation methods will not “fairly” compensate the claimant for his wage loss, the ALJ may exercise his authority under §8-42-102(3) and calculate the average weekly wage “in such other manner and by such other method” as “in the opinion of” the ALJ will fairly determine the injured worker’s average weekly wage. See Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993). Accordingly, we may not disturb the ALJ’s consideration of the decedent’s retirement benefits in calculating his average weekly wage in the absence of an abuse of discretion. See Hall v. Home Furniture Co., 724 P.2d 94 (Colo.App. 1986).
The standard for review of an alleged abuse of discretion is whether, under the totality of the circumstances, the ALJ’s order “exceeds the bounds of reason.” Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985). However, where the ALJ’s order is consistent with the applicable law, and is supported by substantial evidence and plausible inferences drawn from the record, the order is not an abuse of discretion. Coates, Reid Waldron v. Vigil supra, 856 P.2d at 858; Louisiana Pacific Corp. v. Smith, 881 P.2d 456
(Colo App. 1994).
Admittedly, the ALJ’s order does not contain extensive findings concerning his calculation of the decedent’s average weekly wage. Nevertheless, the ALJ’s findings of fact are sufficient to ascertain the basis for order, and thus, are sufficient to permit appellate review See Riddle v. Ampex Corp., 839 P.2d 489 (Colo.App. 1992); Boice v. Industrial Claim Appeals Office, 800 P.2d 1339 (Colo.App. 1990); George v. Industrial Commission, 720 P.2d 624 (Colo.App. 1986) (ALJ not held to crystalline standard in articulating findings of fact).
Based upon an uncontested General Admission of Liability the ALJ found that the decedent’s average weekly wage at the time of his industrial injury was $532.40. (Finding of Fact 2). The ALJ also recognized that the decedent had no wages and was unemployed at the time of his death. (Finding of Fact 4). However, the ALJ found that under the particular facts of the claim, a “zero” average weekly wage would not result in a “fair” computation of the wage loss caused by the decedent’s death. (Discussion and Conclusions of Law). Moreover, the ALJ implicitly determined that under the unique facts of this case, the amount of the decedent’s pension retirement from the respondent-employer and the decedent’s social security retirement benefits fairly reflected the decedent’s earning capacity at the time of his death.
The respondents’ arguments notwithstanding, we decline to conclude as a matter of law that the ALJ’s reasoning exceeds the bounds of reason. In so doing, we recognize that § 8-40-201(19)(a), C.R.S. (1996 Cum. Supp.), defines “wages” as “the money rate at which the services rendered are recompensed under the contract of hire in force at the time of the injury.” However, pension benefits are not unrelated to a worker’s rate of remuneration under the contract of hire. To the contrary, as stated by the Court of Appeals in Romero v. Industrial Claim Appeals Office, 902 P.2d 896, 901 (Colo.App. 1995):
“A retirement program is normally based upon the length of the employee’s past service and upon his or her past wage level; as compensation for past
service, the retirement benefits enable the employee voluntarily to cease work.” (Emphasis in original).
Similarly, federal social security old-age benefits are based upon a worker’s contributions from wage deductions. Cf. Industrial Claim Appeals Office v. Romero, 912 P.2d 62 (Colo. 1996). Consequently, retirement and social security payments bear some plausible relationship to a person’s earning capacity.
Moreover, the decedent did not entirely remove himself from the labor force in 1984. Rather, the ALJ found that, the decedent continued to work until 1992, and earned $2,500 a year, or about $48 per week. (Finding of Fact 1). However, the ALJ found that in 1992 the decedent’s respiratory and breathing problems from the beryllium disease progressed to the point that he needed prednisone, which adversely affected his heart disease, diabetes and recurrent renal infections. (Findings of Fact 9, 10).
Under these circumstances, the ALJ could reasonably infer that the decedent’s earnings at the time of his death were artificially depressed due to the fact that he was seriously ill for sometime before his death. Therefore, the ALJ’s determination that the decedent’s earning capacity in 1995 was less than $532.40 but more than $48 per week does not exceed the bounds of reason. See Foster v. Ralph Foster Sons, W.C. No. 3-101-998, March 16, 1993 (no abuse his discretion in calculating death benefits based on the decedent’s average weekly wage at the date of injury, rather than the date of death, where the decedent was not working at the time of death due to a prolonged illness resulting from the industrial injury); cf. El Paso County Department of Social Services v. Donn, 865 P.2d 877 (Colo.App. 1993) (voluntary retirement did not preclude award of further disability benefits where condition worsened subsequent to retirement and reestablished causal link between injury and wage loss).
Furthermore, insofar as the respondents argue that the maximum death benefit available to the claimant was $451.24, the ALJ’s award of death benefits at the rate of $263.41 is greater than the minimum but less than the maximum benefit allowed by statute. Thus, the ALJ’s award is not contrary to the applicable law.
However, the respondents argue that considering the amount of retirement benefits the decedent received in determining the decedent’s average weekly wage is inconsistent with the statutory offset for employer financed pension benefits and federal old-age benefits allowed by § 8-42-103 C.R.S. (1996 Cum. Supp.). The respondents argue that these statutory offsets are meaningless if the injured worker’s average weekly wage is based on the same income which is subject to the offset. We disagree.
We do not read § 8-42-102 and § 8-42-103 as interrelated in the manner suggested by the respondents. Section 8-42-102 prescribes an equitable method for calculating the average weekly wage. That determination is the basis for computing the rate of disability or death benefits. However, the average weekly wage is not subject to the offset. Rather, it is the temporary disability, permanent disability or death benefit which is subject to the offset.
Furthermore, we note that the statutory offsets prescribed by §8-42-103 are not applicable to death benefits. Rather, the statutory offset for death benefits is set forth in § 8-42-114, and that statute does not include an offset for employer-financed pension benefits or federal retirement benefits. Rather, § 8-42-114 only entitles the insurer to an offset against the claimant’s receipt of periodic death benefits paid by the federal government or the workers’ compensation act of another state. See Rosa v. Industrial Claim Appeals Office, 885 P.2d 331 (Colo.App. 1994). Even then, the offset is not a dollar for dollar reduction of death benefits, but only fifty percent of the periodic death benefit. Therefore, we are not persuaded that the ALJ’s calculations are inconsistent with the applicable law concerning statutory offsets.
III.
Lastly, the respondents contest the ALJ’s order insofar as it requires them to pay a penalty equal to “one day’s compensation,” for each of the 28 days that they failed to comply with § 8-43-203(1). The respondents assert that the claimant abandoned or “waived” the penalty claim by failing to address the issue in her post-hearing position statement.
As we stated in our Order of Remand, the respondents waived their “waiver” argument by failing to raise it before the ALJ. See Lewis v. Scientific Supply Co., 897 P.2d 905 (Colo.App. 1995) (defense of waiver may be waived if not raised before ALJ and will not be considered for the first time on appeal). Moreover, the respondents’ post-hearing “Position Statement” expressly argues the penalty issue, and thus, is inconsistent with their assertion that the claimant voluntarily waived her right to penalties. See Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988) (“waiver” is the intentional relinquishment of a known right). Therefore, we restate our prior conclusion that the ALJ did not exceed his authority in considering the penalty issue.
However, the respondents also contend that the ALJ abused his discretion by imposing a penalty at the rate of “one day’s compensation.” We perceive no abuse of discretion.
Initially, we reject the respondents’ contention that the ALJ’s findings of fact are insufficient to resolve their appellate argument. The ALJ found that they were 28 days late in denying liability for the decedent’s death. Furthermore, the ALJ’s order reflects that he did not find any mitigating factors in the respondents’ failure to comply with §8-43-203(1), and thus, the ALJ determined that the maximum penalty allowed by the statute was warranted. Consequently, we have no difficulty ascertaining the basis for the ALJ’s imposition of penalties at the rate of “one day’s compensation.” See Nevarez v. LML Services, W.C. No. 4-248-318, February 27, 1997; cf. George v. Industrial Commission, supra.
The respondents do not dispute the ALJ’s factual determinations. In fact, on appeal, the respondents concede their violation of § 8-43-203(1). We also note that in their Position Statement to the ALJ they conceded that the imposition of penalties should be based upon a 29 day violation of § 8-43-203(1). Therefore, the ALJ’s order is supported by the record.
Further, the statute allows for the imposition of a penalty equal to one day’s compensation, and the ALJ’s order does not exceed the maximum penalty allowed by the statute. Under these circumstances, we cannot say that the ALJ’s penalty order constitutes an abuse of discretion.
IT IS THEREFORE ORDERED that the ALJ’s order dated November 14, 1996, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. Dean
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, 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 this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. (1996 Cum. Supp.).
Copies of this decision were mailed May 28, 1997 to the following parties:
Deana Thielsen, 5416 West 66th, Arvada, CO 80003
Dow Chemical/Rockwell International, Workers’ Compensation, 2020 W. H. Dow Center, Midland, MI 48674
Kaiser Hill Co., Attn: Al Jerman, P.O. Box 464, Golden, CO 80402-0464
Travelers Ins. Co., Attn: Karen Gilmore, P.O. Box 17360, Denver, CO 80217-0360
Scott Busser, Esq., 300 S. Jackson St., #570, Denver, CO 80209 (For the Respondents)
Joseph M. Goldhammer, Esq., 1563 Gaylord St., Denver, CO 80206 (For the Claimant)
Office of Attorney General, Subsequent Injury Fund, 1525 Sherman St., 5th Flr., Denver, CO 80203
Specials Funds Unit, Attn: Barbara Carter (Interagency Mail)
BY: _______________________