W.C. No. 3-106-663Industrial Claim Appeals Office.
April 24, 1998
ORDER OF REMAND
The claimant seeks review of a final order of Administrative Law Judge Gandy (ALJ), which denied his claim for penalties pursuant to § 8-43-304(1), C.R.S. 1997. We set the order aside and remand for entry of a new order.
The claimant sustained a back injury in November 1992. Ultimately, the treating physician placed him at maximum medical improvement (MMI) in April 1995, and assessed a twenty-one percent whole person impairment. The respondents continued to pay the claimant disability benefits until January 13, 1996, when they unilaterally terminated benefits without filing an admission of liability. The basis of this termination was the respondents’ determination that the total payments to the claimant exceeded the $60,000 benefits cap set forth in § 8-42-107.5, C.R.S. 1997.
Subsequently, the claimant’s treating physician referred the claimant for a psychological evaluation, and psychological treatment was then provided by Dr. Alexander. In January 1997, the claimant was assessed as having a twenty-two percent permanent psychological impairment. However, on February 21, 1997, the respondents reinstated temporary total and temporary partial disability benefits retroactive to January 14, 1996.
In March 1997, the claimant filed an application for hearing, listing the issue as penalties under § 8-43-304 “for terminating TTD” in violation of Rule IV (N) (3). At the commencement of the hearing on July 3, 1997, the claimant presented the ALJ with a position statement urging the ALJ to impose penalties from June 25, 1996 through February 20, 1997. The thrust of the position statement was that by June 25 the respondents were aware that claimant was not at MMI due to his psychological problems. Therefore, the respondents’ reliance on the $60,000 cap afforded no legal basis for refusing to pay temporary disability benefits after that date. The position statement also mentions “Rule 9 [sic],” but only for the purpose of asserting that no offset of permanent partial disability benefits should be given.
When the hearing began, the ALJ sought to clarify the issues. Counsel for the claimant then advised the ALJ that the issue concerned imposition of penalties for termination of temporary total disability benefits in violation of Rule IX. (Tr. p. 5). Following counsel’s identification of the issue, the ALJ directed that the matter proceed “off the record.” When the ALJ returned on the record he stated that there had been an “extensive conversation with counsel regarding the status of this matter.” (Tr. pp. 5-6). However, the ALJ failed to set forth the exact nature of this conversation, nor did he elaborate on his understanding of the issues for determination.
After the hearing, the respondents submitted a position statement in which they argued there was no evidence presented of a violation of any provision of the Workers’ Compensation Act. In effect, the respondents asserted that once they terminated the claimant’s benefits for exceeding the cap, they had no statutory duty to reinstate benefits when the claimant’s psychological condition worsened. The respondents asserted that they reinstated benefits as soon as they were satisfied the condition had worsened and the $60,000 cap no longer applied.
The claimant then filed a “reply” to the respondents’ position statement. In this reply, the claimant argued that the respondents’ initial termination of temporary disability benefits was in violation of Rule IV (N) (3) and Rule IX (C). The claimant also took issue with the respondents’ argument concerning reinstatement of benefits.
The respondents then wrote a letter to the ALJ in which they argued that the claimant never raised the issue of penalties for an improper termination of benefits. Rather, the respondents argued the “claimant’s attorney has completely changed his position” and was now seeking penalties based on “two separate violations of the Rules of Procedure.” The respondents objected to the ALJ awarding penalties based on any violation of the Rules of Procedure.
On August 11, 1997, the ALJ entered an order denying the claim for penalties. The ALJ found that the claimant was requesting penalties under § 8-43-304 on the theory that his “benefits should have continued after the $60,000 cap was reached.” However, the ALJ held that the respondents had no legal obligation to pay temporary disability benefits once the claimant’s benefits exceeded the cap, and that Murphy Contractors, Inc. v. Industrial Claim Appeals Office, 916 P.2d 611 (Colo. 1995), imposed no duty on the respondents to reinstate temporary disability benefits once they were terminated. Thus, the ALJ concluded that the respondents had not violated any rule or statute.
On review, the claimant argues the ALJ erred in denying his claim for penalties based on the allegedly improper termination of temporary disability benefits in January 1996. The claimant argues that the termination was improper under former Rules of Procedure IV (G) (1), Rule IV (N) (3), and Rule IX (C) (1). For their part, the respondents assert the claimant waived consideration of these arguments, and that the ALJ’s order was correct on the issue before him. We conclude that the ALJ’s findings of fact and conclusions of law are insufficient to support appellate review, and remand for entry of a new order. Section 8-43-301(8), C.R.S. 1997.
As a general matter, parties are entitled to notice of the issues to be considered in order that they have an opportunity to confront adverse witnesses and present evidence and argument in support of their positions. Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990). Of course, a party may waive the right to have an issue considered, but waiver must be intentional and made with full knowledge of all the relevant facts. See Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988).
Here, we are unable to ascertain the basis of the ALJ’s failure to consider whether the claimant is entitled to penalties based on the allegedly improper termination of temporary disability benefits. The claimant appears to have raised this issue in the application for hearing, as well as orally at the commencement of the hearing. Nevertheless, the ALJ made no findings or conclusions on this question.
The respondents contend that the claimant waived consideration of this issue considering the contents of the position statement. However, the ALJ made no express ruling to this effect, and we are unwilling to infer that the ALJ found a waiver in the absence of any express statement, particularly in light of the claimant’s application for hearing and his counsel’s remarks at the hearing.
Perhaps, the ALJ clarified the scope of the issue during the “off the record” conference. However, since there is no transcript of that conference, and the ALJ made no findings concerning it, we are unable to determine why the ALJ failed to address the issue of penalties for an improper termination of disability benefits. Consequently, on remand, the ALJ shall make express findings of fact and conclusions of law determining whether or not the claimant raised the issue of penalties for an improper termination of benefits.
If the ALJ finds the claimant did not waive the right to consideration of the issue of penalties for an improper termination, he shall then address the issue. In this regard, we note that, under some circumstances, failure to adhere to the rules of procedure applicable to termination of temporary disability benefits may result in imposition of a penalties under § 8-43-304(1). See, O’Grady v. Denver Public School District, W.C. No. 4-151-533 (November 18, 1994); Jyrkinen v. Peakload, Inc., W.C. No. 4-138-096 (June 15, 1994).
In light of this disposition, it is premature to consider whether the ALJ’s order was otherwise correct. We have considered the claimant’s reply brief.
IT IS THEREFORE ORDERED that the ALJ’s order dated August 11, 1997, is set aside, and the matter is remanded for entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL ________________________________ David Cain ________________________________ Bill Whitacre
Copies of this decision were mailed April 24, 1998 to the following parties:
Peter D. Unrein, Rt. 1 Box 177, Morrill, NB 69358
New Pipeline Installations, Inc., P.O. Box 5840, Avon, CO 81620-5840
Continental Divide Insurance, Attn: Terry Stevens, 9290 W. Dodge Rd., #300, Omaha, NE 68114-3363
John Hoyman, Esq. Bob Ring, Esq., 1115 11th Ave., Greeley, CO 80631 (For the Claimant)
Anne Smith Myers, Esq. Karen R. Wells, Esq., 3900 E. Mexico, #1000, Denver, CO 80210 (For the Respondents)
By: __________________________________________________