W.C. No. 4-264-218Industrial Claim Appeals Office.
October 31, 1996
FINAL ORDER
The respondent seeks review of an order of Administrative Law Judge Wheelock (ALJ) which determined that the claimant suffered a compensable injury, and ordered them to provide workers’ compensation benefits. We affirm.
The ALJ found that the claimant was hired as a journeyman plumber by Southwest Plumbing Heating (Southwest) on January 13, 1995. On the date of hire the claimant signed several documents, at least one of which listed the employer as GP Leasing Services, Inc. Both Southwest and GP Leasing Services, Inc. are owned by Mark O’Donnell (O’Donnell). The claimant also signed documents purporting to waive workers’ compensation coverage as a corporate officer and shareholder of GP Leasing Services, Inc.
Following a hearing on December 5, 1995, the ALJ rejected the respondent’s argument that the claimant elected to reject the provisions of the Workers’ Compensation Act (Act) in accordance with § 8-41-202 C.R.S. (1996 Cum. Supp.), and thus, excluded himself from coverage under the Act. See § 8-41-301(1)(a) 8-41-401(3), C.R.S. (1996 Cum. Supp.). Furthermore, the ALJ determined that the claimant sustained a back injury arising out of and in the course of his employment on February 7, 1995. Therefore, the ALJ ordered the respondent to pay temporary disability and medical benefits in connection with the February 7, injury.
I.
On appeal, the respondent first contends that the ALJ erred in failing to grant its pre-hearing Motion to Dismiss the claim, which was based upon evidence that the claimant signed a written Rejection of Workers’ Compensation. We perceive no error.
The claimant disputed the respondent’s assertion concerning the execution of the written rejection of workers’ compensation coverage. (Tr. pp. 5-6). Therefore, the ALJ determined that the Motion to Dismiss involved a factual dispute, which could not be resolved without an evidentiary hearing. Under these circumstances, the ALJ did not err in failing to grant the respondent’s Motion Compare Service Supply Co. v. Vallejos, 169 Colo. 14, 452 P.2d 387 (1969) (an evidentiary hearing is not required where the ALJ determines that the alleged facts, even if true, would not present a basis for granting the requested relief). In any event, we do not perceive how the respondent could have been prejudiced by holding a hearing.
Neither are we persuaded that the ALJ erred in finding that the claimant is not excluded from the provisions of the Act. Former § 8-41-202(1), C.R.S. (1994 Cum. Supp.)[amended 1996 Colo. Sess. Laws, ch. 137 at p. 646 effective May 1, 1996], which governs this claim, provides that:
“Notwithstanding any provisions of article 40 to 47 of this title to the contrary, a corporate officer of a corporation or a member
of a limited liability company may elect to reject the provisions of articles 40 to 47 of this title.” (Emphasis added).
Subsection 8-41-202(4)(a) defines “Corporate officer” as the “chairman of the board, president, vice-president, secretary or treasurer who is an owner of at least ten percent of the stock of the corporation.”
Here, the respondent presented evidence that the claimant was issued one hundred shares or ten percent of the stock in GP Leasing Services, Inc., and was elected vice-president of the corporation. However, the ALJ determined as a matter of fact that the claimant was not an “officer,” and “did not act in any function as a corporate officer” for GP Leasing Services, Inc. (Findings of Fact 11, 14).
In so doing, the ALJ expressly found the claimant’s testimony credible. The claimant testified that he was not an officer of either GP Leasing Services, Inc., or Southwest. (Tr. p. 9). He also stated that he did not get notice of any corporate meetings until after his injury. (Tr. p. 9). Because the claimant’s testimony constitutes substantial evidence, we must uphold the ALJ’s finding that the claimant was not a corporate officer of GP Leasing Services, Inc. Section 8-43-301(8), C.R.S. (1996 Cum. Supp.); Durocher v. Industrial Claim Appeals Office, 905 P.2d 4
(Colo.App. 1995) (substantial evidence is that quantum of probative evidence which a rational fact-finder would accept as adequate to support a conclusion, without regard to the existence of conflicting evidence, and if the evidence is subject to conflicting inferences, the ALJ decides the inference to be drawn); see also Apache Corp. v. Industrial Commission, 717 P.2d 1000
(Colo.App. 1986) (claimant’s testimony was substantial evidence that employment caused his heart attack).
The ALJ also found that the respondent’s corporate secretary admitted that the claimant did not become a “shareholder” in GP Leasing Services, Inc. until one month after he was hired. (Tr. p. 83; Finding of Fact 10). It follows that, as of February 7, 1995, the claimant did not own “at least ten percent of the stock” in GP Leasing Services, Inc. as required by the definition of “corporate officer” under § 8-41-202(4)(a).
In any case, the ALJ determined that the claimant was employed by Southwest, and that GP Leasing Services, Inc., is a business organization established for the purpose of avoiding the statutory requirement to provide workers’ compensation insurance. (Finding of Fact 18). This is plausible inference from the record. See Claimant’s Exhibit G.
Furthermore, there is no assertion, finding or evidence that the claimant was a corporate officer or that he owned at least ten percent of the Southwest stock. Consequently, the ALJ’s findings support a conclusion that the claimant was not a corporate officer of a corporation within the meaning of § 8-41-202(4)(a).
Similarly, a “limited liability company” is defined as a company “organized and existing” under the provisions of §7-80-101. Section 7-80-102(7), C.R.S. (1996 Cum. Supp.). Section 7-80-201(1), C.R.S. (1996 Cum. Supp.) states that the words “limited liability company,” or the abbreviation “LLC” shall be included in the name of every limited liability company formed under § 7-80-101.
Neither “Southwest Plumbing Heating” nor “GP Leasing Services, Inc.” is consistent with the requirements of §7-80-201(1). Nor is there any assertion, evidence or finding that the respondent is a “limited liability company.” Consequently, the claimant could not have been a “member” of a limited liability company within the meaning of § 8-41-202.
In view of these findings, we must conclude that the claimant did not have the option of waiving workers’ compensation coverage under § 8-41-202. Consequently, the ALJ did not err in finding that the claimant is not excluded from the provisions of the Act Compare Kelly v. Mile Hi Single Ply, Inc., 890 P.2d 1161 (Colo. 1995) (claimant, who was president and sole shareholder of corporation, exercised right to reject workers’ compensation coverage).
As a result of our conclusion, we do not consider the respondent’s remaining arguments concerning the application of §8-41-202.
II.
Next, the respondent contends that the ALJ abused her discretion in failing to continue the hearing so as to allow the respondent to take the claimant’s deposition. In support, the respondent asserts that it sent the claimant a set of written interrogatories on October 31, 1995, which the claimant did not answer until November 28, 1995, eight days beyond the time provided by the Rules of Procedure, Part VIII(E), 7 Code Colo. Reg. 1101-3 at 22-24. The respondent also contends that the answers were insufficient because they were signed by the claimant’s attorney instead of the claimant, and the claimant did not answer the questions concerning whether he had an alias, any prior work-related injuries, or any criminal convictions. Under these circumstances, the respondent argues that due process required the ALJ to continue the hearing and allow further discovery. We disagree.
Whether to grant a motion to continue is within the sound discretion of the ALJ and, absent a clear showing of an abuse of discretion, we may not interfere with the ALJ’s exercise of discretion. Cherry Creek School District No. 5 v. Voelker, 859 P.2d 805 (Colo. 1993); Cisar v. John Gandomcar, W.C. No. 3-947-019, April 24, 1995, aff’d. John Gandomcar v. Industrial Claim Appeals Office (Colo.App. No. 95CA0824, December 14, 1995) (not selected for publication). The appellate standard for an alleged abuse of discretion is whether the ALJ’s decision “exceeds the bounds of reason.” Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985).
In determining whether to grant a continuance, the ALJ should consider the circumstances of the particular case, weighing the rights of the requesting party to a fair hearing against the prejudice that may result from delay. Cherry Creek School District No. 5 v. Voelker, supra. The ALJ may also consider the prejudice to the claimant where the employer has denied liability and the claimant is not receiving workers’ compensation benefits. Cisar v. John Gandomcar, supra.
Here, the ALJ found that the claimant was in the hospital having surgery for the industrial back injury during the time that his answers to the written interrogatories were due. Furthermore, the ALJ found that the claimant’s hospitalization was good cause for the claimant’s delay in answering the interrogatories. (Tr. p. 7).
In addition, we note that the respondent denied liability for the claimant’s injury, and the matter was set on an expedited docket. Rule VIII(E)(5) allows the ALJ to “limit discovery” for good cause shown, and states that the “setting of a formal hearing on an expedited schedule shall constitute good cause.”
Further, the respondent’s discovery request was untimely. The claim for workers’ compensation was filed by August 29, 1995, however the respondent did not serve the request for interrogatories until October 31, 1995. Rule VIII(E)(4), provides that, except for evidentiary depositions, discovery is to be completed no later than twenty days before the hearing. Consequently, even if the claimant had answered the October 31 interrogatories within twenty days, or by November 20, 1995, the discovery would not have been completed more than twenty days before the hearing on December 5, 1995.
Insofar as the respondent complains that the interrogatory answers were not signed by the claimant, the claimant testified under oath at the hearing, that the answers signed by his attorney accurately reflected his answers. (Tr. p. 21). However, the October 31 interrogatories do not indicate that the claimant was asked about criminal convictions. Therefore, the respondent’s argument on this issue is without merit.
Regardless, the respondent was not precluded from asking the claimant on cross examination whether he had any criminal convictions. Neither was the respondent precluded from asking the claimant whether he used an alias and had any prior workers’ compensation injuries. However, the claimant indicated that he did not. (Tr. p. 36, 59).
The respondent’s further argument that the claimant’s timely response to the interrogatories would have altered the evidence it presented to defend the claim is based upon pure conjecture. In addition, the respondent has not offered evidence that the claimant’s answers at the hearing were untruthful, or that the claimant’s answers would have been any different in a deposition. Consequently, the respondent has failed to demonstrate any real prejudice from the ALJ’s denial of the motion for a continuance. Under these circumstances we cannot say that the ALJ’s failure to grant a continuance exceeds the bounds of reason. Rosenberg v. Board of Education of School District #1, supra.
III.
Lastly, the respondent contends that the ALJ failed to resolve conflicts between the claimant’s testimony and the testimony of the respondent’s witnesses concerning the date of injury, the date the claimant reported the injury to the employer and the date the claimant was last able to work. We disagree.
The ALJ resolved the conflicts by crediting the claimant’s testimony that he experienced the onset of back pain on February 7, 1995, while using a jackhammer, and that the injury was aggravated by similar work activities on February 8 and February 9. The ALJ also credited the claimant’s testimony that he reported the injury to the respondent’s secretary on February 10, 1995. (Tr. pp. 10, 12).
Similarly, the ALJ explicitly recognized the conflict between the stipulated testimony of O’Donnell and the claimant concerning the events of February 10. (Finding of Fact 15). However, the ALJ implicitly resolved the conflict against the respondent. To the extent that the claimant’s testimony contained internal inconsistencies, that was a matter for the ALJ to resolve as the fact finder, and did not preclude the ALJ from crediting the claimant’s testimony. See Colorado Springs Motors, Ltd. v. Industrial Commission, 165 Colo. 504, 441 P.2d 21 (1968).
IT IS THEREFORE ORDERED that the ALJ’s order dated April 8, 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 October 31, 1996 to the following parties:
Robert Tschida, 5150 Airport Road, #C131, Colorado Springs, CO 80916
Kathy Johns, Southwest Plumbing Heating, 735 Dale, Fountain, CO 80817
London Guaranty Acc. Co. of NY, 25 Independence Blvd., Warren, NJ 07059
H. Clifford Potter, Esq., 115 E. Vermijo, Ste. 101, Colorado Springs, CO 80903 (For the Claimant)
Robert M. McConnell, Esq., 128 S. Tejon, Ste. 410, Colorado Springs, CO 80903-5124 (For the Respondents)
BY: _______________________