W.C. No. 4-734-158.Industrial Claim Appeals Office.
March 29, 2010.
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ORDER OF REMAND
The claimant seeks review of an order of Administrative Law Judge Jones (ALJ) dated October 15, 2009 that dismissed the claimant’s claim as a discovery sanction. We set aside the order dismissing the claim and remand for further proceedings.
A hearing was held on the issues of whether the claimant was entitled to permanent partial disability benefits and, if so, based on what impairment rating, and whether the respondents were entitled to penalties. Following the hearing the ALJ entered findings of fact that for the purposes of this order may be summarized as follows. Following the claimant’s work-related accident on August 7, 2007, a hearing was held on the extent of his injuries. The claimant alleged that he sustained injuries to his lungs, nasal passages, neck, shoulders, and upper back; however, ALJ Walsh entered an order that determined that the claimant’s compensable injuries were limited to his right hand and wrist. The ALJ here concluded that that order constituted the law of the case. The ALJ further found that the claimant’s authorized treating physician, Dr. Hall, stated that he reached maximum medical improvement on December 22, 2008, with scheduled impairment of 12 percent of the wrist and hand.
Following Dr. Hall’s report on maximum medical improvement and permanent impairment, the respondents filed an application for hearing on the issue of the extent of permanent impairment sustained by the claimant. The hearing was set for June 4, 2009. The respondents conducted discovery prior to the hearing, specifically by requesting that
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the claimant attend an independent medical examination conducted by Dr. Larson. The claimant conceded at the hearing that he received the respondents’ correspondence informing him of the examination. The claimant failed to attend the IME, although the ALJ found that he was able to drive and could have attended it. The respondents incurred late charges and then filed an application for hearing on the issue of penalties for the claimant’s failure to attend the IME. The respondents also filed a motion to compel the claimant’s attendance at the IME, and scheduled another appointment with Dr. Larson. ALJ Stuber entered an order requiring the claimant to attend the IME. The claimant failed to attend the appointment; however, the ALJ again found that he was able to do so. The June 4, 2009 hearing was then continued.
The ALJ further found that the claimant did not offer any persuasive or credible reasons for his failure to attend the IME. The ALJ rejected as not credible the claimant’s testimony that he could not drive to the appointment or could not afford to do so. The ALJ found that the respondents also served the claimant with interrogatories, which the claimant failed to answer. The respondents moved to compel the claimant to answer them and an ALJ entered an order dated June 16, 2009, requiring answers to the interrogatories within seven days. On June 29th respondents’ counsel sent a letter to the claimant’s attorney reminding him of the order requiring answers to the interrogatories, which the claimant answered on August 3rd. The ALJ found that the claimant failed to provide any credible reasons for his failure to comply with the order compelling interrogatory answers.
Based upon her factual findings the ALJ concluded that sanctions were appropriate for the claimant’s violation of his discovery obligations. The ALJ weighed various possible sanctions and concluded that the appropriate one was dismissal of the claim. Accordingly, she dismissed the claimant’s claim.
The claimant appealed and argues that the ALJ abused her discretion in dismissing the claim. He argues that, by requiring him to pay for his own transportation to the IME, the ALJ’s order effectively required him to “finance” the respondents’ discovery. He contends that this was error and that, in any event, the facts here “do not justify dismissal.” In this regard, he argues that he had warned the respondents that he could not attend the IME without the respondents providing some form of transportation. He argues that the respondents are required to provide transportation to and from IMEs, and that he “should not suffer dismissal of his case for litigating a point which does not seem to have been decided.” We agree that the ALJ abused her discretion in dismissing the entire workers compensation claim.
Here, as noted above, the ALJ dismissed the claimant’s claim as a discovery sanction. The conduct of discovery is a matter committed to the discretion of the ALJ.
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Section 8-43-207(1)(e), C.R.S. provides that an ALJ may rule on discovery matters and impose the sanctions provided in the rules of civil procedure in the district courts for willful failure to comply with permitted discovery. See also Workers’ Compensation Rule of Procedure 9-1 (“If any party fails to comply with the provisions of this rule [providing for discovery] and any action governed by it, an administrative law judge may impose sanctions upon such party pursuant to statute and rule”). Whether to impose sanctions and the nature of the sanctions to be imposed are matters within the fact finder’s discretion. Shafer Commercial Seating, Inc. v. Industrial Claim Appeals Office 85 P.3d 619 (Colo. App. 2003). The fact finder is given flexibility in choosing the appropriate sanction and should exercise informed discretion in imposing a sanction that is commensurate with the seriousness of the disobedient party’s conduct Shafer Commercial Seating, Inc. v. Industrial Claim Appeals Office supra. In our view, the present case is in the nature of a discovery dispute and therefore we review the matter under the standard of an abuse of discretion.
An ALJ’s exercise of discretion in determining the appropriate discovery sanction is broad, and is binding in the absence of an abuse of discretion. Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d at 869. An abuse of that discretion is only shown where the order “exceeds the bounds of reason,” such as where it is not in accordance with applicable law, or not supported by substantial evidence in the record. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993); Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985). Where a matter is discretionary, the ALJ is empowered to make a decision within a range of permissible decisions. The fact finder only abuses that discretion where the decision rests upon an error of law, the underlying findings of fact are not supported by substantial evidence, or the decision “cannot be located within the range of permissible decisions.”Zervos v. Verizon New York, Inc., 252 F.3d 163, 168 (2d Cir. 2001). See also Wheat v. United States, 486 U.S. 153, 164, 108 S.Ct. 1692 (1988) (discretion implies a range of choice).
Additionally, in connection with our review, we are bound by the ALJ’s factual findings if they are supported by substantial evidence. Section 8-43-301(8), C.R.S. 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 Durocher v. Industrial Claim Appeals Office, 905 P.2d 4 (Colo. App. 1995). Application of this standard requires that we defer to the ALJ’s credibility determinations and her assessment of the sufficiency and probative weight of the evidence.
Dismissal of a workers’ compensation claim is a sanction available to an ALJ who has found that a party willfully violated discovery obligations. See C.R.C.P. 37. Sheid v. Hewlett Packard, 826 P.2d 396
(Colo. App. 1991). In order for a discovery violation to
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be considered “willful” the ALJ must determine that the conduct was deliberate or exhibited “either a flagrant disregard of discovery obligations or constitutes a substantial deviation from reasonable care in complying with discovery obligations.” Reed v. Industrial Claim Appeals Office, 13 P.3d 810, 813 (Colo. App. 2000). Although dismissal is certainly within the range of permissible sanctions that may be imposed for discovery violations, it is “the severest form of sanction” available. Prefer v. PharmNetRx, 18 P.3d 844, 850 (Colo. App. 2000). Moreover, the Colorado Supreme Court has held in the civil context that a “litigation-ending sanction” such as dismissal, may only be imposed where one of three factors is present. Those factors include (1) willfulness or deliberate disobedience of discovery obligations, (2) bad faith conduct which is a flagrant disregard or dereliction of discovery obligations, or (3) culpable conduct which is more than mere inadvertence or simple negligence but rather is gross negligence. Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672 (Colo. 1987). See also Nagy v. District Court of the City and County of Denver, 762 P.2d 158 (Colo. 1988). The supreme court also held that, although the rule provides little guidance in the selection of a sanction, it should be applied “in a manner that effectuates proportionality between the sanction imposed and the culpability of the disobedient party. . . .” Kwik Way Stores, 745 P.2d at 676. Therefore, the sanction should be commensurate with the seriousness of the conduct being sanctioned.
Here, the ALJ entered findings explaining her decision to sanction the claimant by dismissing the claim. The ALJ found that the claimant failed to attend the IME after being requested to do so and then failed again after an order was entered requiring him to do so. The ALJ also found that the claimant failed to respond to the respondents’ interrogatories for approximately three months. The ALJ characterized the claimant’s violations of his discovery obligations as a “flagrant disregard” of those duties. The ALJ also found that the claimant was able to attend the IME, rejecting his testimony to the contrary. Because the ALJ’s factual findings are supported by substantial evidence and reasonable inferences we are bound by them. See Tr. at 57-68 (claimant drove to numerous medical appointments and had the “capability” to drive to the IME). Under these circumstances, we do not disagree with the ALJ that “litigation ending” sanctions were appropriate for the claimant’s discovery violations.
However, here the sanction of dismissal of the workers’ compensation claim was more than merely “litigation ending.” The “litigation” that the claimant obstructed by his actions derived from the respondents’ application for hearing on the issue of permanent partial disability benefits. Rather than merely ending that “litigation,” the sanction of dismissal precluded any further action the claimant might otherwise have taken to seek medical treatment for his injury. We conclude that dismissal of the claimant’s claim is not commensurate with the seriousness of his conduct. Although the ALJ found that the claimant’s actions in failing to attend the IME and to timely answer the interrogatories
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were deliberate, his conduct did not obstruct the respondents’ ability to defend compensability. Rather, the claim is indisputably compensable and the only issue the claimant obstructed was the extent of his permanent partial disability. In this regard, a number of sanctions were available to the ALJ that were, in our opinion, proportional to the claimant’s offense. These include a “default” judgment that precluded the claimant from interposing defenses to the respondents’ challenge of the impairment rating. This sanction would have had the effect of essentially “dismissing” the claimant’s claim for further permanent partial disability without dismissing the entire claim. See Kwik Way Stores, 745 P.2d at 677 (sanctions under C.R.C.P. 37 include an order designating facts as established, an order prohibiting the disobedient party from establishing a claim or defense, the entry of a default judgment against the disobedient party). See also Nagy, 762 P.2d at 161 (permissible sanctions include an award of costs, striking of pleadings, prohibiting the introduction of evidence on particular points, deeming disputed issues determined adversely to non-complying party). By dismissing the workers’ compensation claim entirely, however, the ALJ has presumably precluded the claimant from ever obtaining further medical treatment, either as maintenance care or in the event of a worsening of his condition. In our view, his obstinacy in refusing to attend the IME should not finally preclude his ability to seek further medical treatment in the event it becomes reasonable and necessary. Because we view the dismissal of his claim as disproportionate to his conduct violating his discovery obligations, we consider the sanction an abuse of discretion.
On remand the ALJ should enter another order imposing such sanctions or penalties as she deems warranted within the exercise of her discretion. We note in this respect that the ALJ stated in her order that she considered the imposition of statutory penalties under § 8-43-304, C.R.S. to be “moot” given her dismissal of the claim. In light of our resolution of this matter we consider it within the ALJ’s discretion to impose those statutory penalties on remand should she consider them appropriate.
As we read the ALJ’s order, she also considered the claimant’s arguments regarding permanent partial disability benefits to be moot. In that regard, the claimant argued that the respondents were compelled to admit for all the impairment ratings assigned by the authorized treating physician, regardless of the prior adjudication that the injury was confined to the hand and wrist. We note that, depending upon the sanctions imposed on remand, it may or may not remain the case that the claimant’s arguments are moot. If the sanctions on remand do not render the claimant’s arguments moot, the ALJ should address them as she deems appropriate. Of course, nothing in this order should be construed as dictating any particular result. We merely hold that it was an abuse of discretion to dismiss the entire claim outright.
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IT IS THEREFORE ORDERED that the ALJ’s order dated October 15, 2009, is set aside and the matter is remanded for further proceedings consistent with the foregoing.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Curt Kriksciun
____________________________________ Thomas Schrant
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JIMMIE GARRETT, 3626 BRADY BLVD, COLORADO SPRINGS, CO, (Claimant).
McNELLY CONSTRUCTION COMPANY, INC., Attn: MS DANNIELLE HINTZ, COLORADO SPRINGS, CO, (Employer).
AMERICAN COMPENSATION INSURANCE CO., Attn: MR SHANE CORNELL, C/O: RTW, INC., MINNEAPOLIS, MN, (Insurer).
LAW OFFICE OF WILLIAM ALEXANDER, JR., PC, Attn: WILLIAM A ALEXANDER JR., ESQ., COLORADO SPRINGS, CO, (For Claimant).
THOMAS POLLART MILLER LLC, Attn: DOUGLAS A THOMAS, ESQ/KAREN A LINDEMAN, ESQ, GREENWOOD VILLAGE, CO, (For Respondents).
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