FINAL ORDER

The respondents seek review of an order of the Director of the Division of Workers' Compensation (Director) which awarded a lump sum payment of permanent partial disability benefits without granting the respondents full credit for overpaid temporary disability benefits. We modify the Director's order and, as modified, affirm.

In January 1994 the claimant suffered a work-related injury. The respondents admitted liability for temporary total and temporary partial disability benefits commencing in January 1994. In April 1994, the respondents were served with a garnishment order which required them to make payments to the Family Support Registry of Larimer County (Registry) to satisfy the claimant's child support obligation. Between April 6, 1999 and December 23, 1999, the respondents paid the claimant temporary total disability benefits of $11,514.54, of which $7082.01 were paid to the Registry.

On December 23, 1999, the respondents filed a Final Admission of Liability which terminated temporary disability benefits effective April 6, 1999, the date of maximum medical improvement (MMI). The Final Admission also admitted liability for permanent partial disability benefits of $37,389.75. less a claimed credit for overpaid temporary disability benefits in the amount of $11,514.54.

The claimant subsequently requested a lump sum award of permanent partial disability benefits. In an order dated January 26, 2000, the Director required the respondents to make a lump sum payment of $37,389.75 less the overpayment of $11,514.54, and a 4 percent discount as provided by § 8-43-406(1), C.R.S. 2000. The claimant objected to the lump sum award on grounds the order violated § 8-42-124(6), C.R.S. 2000, which prohibits the garnishment of permanent partial disability benefits. See In re Marriage of Hamby, 954 P.2d 635 (Colo.App. 1997); In re Marriage of Snyder, 739 P.2d 923 (Colo.App. 1987).

Based on the claimant's argument the Director determined that the January 26 order "conflicts" with § 8-42-124(6). Therefore, in the order under review, the Director required the lump sum payment of permanent partial disability benefits without granting the respondents credit for overpaid temporary total disability benefits which were paid to the Registry pursuant to the writ of garnishment. Consequently, the Director granted a lump sum award of $31,915.98. The respondents timely appealed.

On review the respondents contend the Director erroneously failed to reduce the lump sum award by the total amount of overpaid temporary disability benefits. We agree and, therefore, we modify the Director's order.

As argued by the respondents, the Director apparently determined that once the claimant reached MMI, any subsequent indemnity payments should be classified as "permanent disability benefits." Because § 8-42-124(6) precludes the garnishment of permanent partial disability benefits, the Director implicitly determined that the claimant's permanent partial disability award could not be reduced by indemnity benefits which were garnished. We conclude the Director erroneously characterized the garnished payments as permanent partial disability benefits. Consequently, the Director erred in refusing to allow a credit for the disputed payments.

It is undisputed the respondents paid temporary disability benefits of $11,514.54 between April 6, 1999 and December 23, 1999. Regardless of the fact that a portion of the claimant's temporary disability benefits were paid to the Registry to satisfy his child support obligation, the claimant received the full benefit of the admitted liability for temporary disability benefits. It follows that the character of the payments as "temporary disability benefits" is not altered by the fact that the respondents were legally obligated to pay a portion of the payments to the Registry on behalf of the claimant.

Furthermore, it is well established that the respondents are entitled to offset overpaid temporary disability benefits against admitted liability for permanent partial disability benefits. The courts have repeatedly held that an insurer may recover overpaid indemnity benefits against its future liability as long as the recovery does not affect "moneys already paid." Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988); Renz v. Larimer County School District Poudre R-1, 924 P.2d 1177 (Colo.App. 1996) ; Donald B. Murphy Contractors, Inc., v. Industrial Claim Appeals Office, 916 P.2d 611 (Colo.App. 1995) ; Louisiana Pacific Corp. v. Smith, 881 P.2d 456 (Colo App. 1994); Buhl v. Industrial Claim Appeals Office, (99CA2161, June 22, 2000) (not selected for publication); DFC Ceramics v. Stevens, (Colo.App. No. 93CA1303, April 28, 1994) (not selected for publication) (court affirms ALJ's order allowing respondents to recoup overpaid benefits by 5 percent reduction of the claimant's weekly permanent total disability benefit). The term "moneys already paid" refers to money which belongs to the claimant and would have to be repaid. Morrison v. Clayton Coal Co., 116 Colo. 501, 181 P.2d 1011 (1947); Kuziel v. Pet Fair, Inc., 948 P.2d 103 (Colo.App. 1997). In addition, the Rules of Procedure, Part IV(G)(2), 7 Code Colo. Reg. 1101-3 at 6, provide that whenever an insurer terminates temporary disability benefits on grounds the claimant has reached MMI and correspondingly admits liability for permanent partial disability benefits, the insurer "shall receive credit against permanent disability benefits for any temporary disability benefits paid beyond the date of maximum medical improvement." See Cornerstone Partners v. Industrial Claim Appeals Office, 830 P.2d 1148 (Colo.App. 1992) (rules of procedure have the force and effect of law even though not equivalent of statute).

In fact, there is no dispute these respondents are entitled to offset their liability for permanent partial disability benefits by the amount of overpaid temporary disability benefits. The Director granted the respondents a credit against the claimant's permanent partial disability award equal to the amount of temporary disability benefits which were paid directly to the claimant, and the claimant has not contested that credit.

We perceive no basis to distinguish the garnished temporary disability payments from temporary disability benefits which were paid directly to the claimant and, therefore, we conclude that the respondents are entitled to offset their liability for permanent disability benefits by the amount of the disputed overpayments.

Section § 8-42-124(6) reflects the General Assembly's conclusion that the injured workers' obligation to pay child support takes precedence over the injured workers' right to receive the full sum of admitted liability for temporary disability benefits. Further, the legislature determined that child support is so critical that the timely payment of child support must be guaranteed by requiring the employer make child support payments from the claimant's temporary disability benefits. Cf. Freemeyer v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 00CA0814, December 7, 2000)

However, we find no authority, and the claimant cites none which identifies a public policy requiring employers to assume the financial burden of the injured workers' child support obligation. Section 8-42-124(6) merely requires the employer to serve as a bookkeeper by making the child support payments on behalf of the injured worker and, thereby reducing the amount of temporary disability benefits paid directly to the claimant.

Nevertheless, the Director's order effectively required the respondents to assume liability for the claimant's child support obligation between April 6, 1999 and December 23, 1999. We are not persuaded the General Assembly intended this result and, therefore, we conclude the Director erred in refusing to grant the respondents full credit for all overpaid temporary disability benefits. See In re Marriage of Hamby, 954 P.2d at 637 (statutory construction presumes General Assembly intended "fair and reasonable result" and construction that leads to "an absurd result" will not be followed).

We also note that C.R.C.P. 103, Section 12(a) states that:

"A judgment against a garnishee shall release and discharge such garnishee from all claims or demands of the judgment debtor or defendant in attachment to the extent of all sums paid or property delivered by the garnishee pursuant to such judgment."

In this case, the respondents admitted liability for temporary disability benefits, and the law required the respondents to continue paying temporary disability payments until an order or the rules of procedure permitted them to stop. Sections 8-42-105(3)(a), 8-43-203(2)(d), C.R.S. 2000; Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 99CA1624, June 22, 2000). The respondents were also required to make child support payments on behalf of the claimant in accordance with a lawful writ of garnishment. Thus, the disputed overpayment was the result of the respondents compliance with the law. However, the Director's order has the effect of converting the garnished funds, which were in effect paid as temporary benefits, into permanent disability benefits for purposes of § 8-42-124(6).

Such a result is inconsistent with the general policy against double recovery. The policy is intended to prevent the claimant from receiving a double recovery for the same disability. Circle K. Corp. v. Industrial Claim Appeals Office, 809 P.2d 1116 (Colo.App. 1991). Without a full credit for all temporary disability benefits the claimant received between April 6, 1999 and December 23, 1999, the Director's order awards the claimant both temporary disability and permanent disability benefits for the same period of disability.

Finally, nothing in Hamby is inconsistent with this result. Hamby involved the question of whether a permanent disability award could be garnished to satisfy an injured workers' child support obligation. In Hamby there was no overpayment of temporary disability benefits. Therefore, the Hamby court was not required to address the issue presented here.

IT IS THEREFORE ORDERED that the Director's order dated July 6, 2000, is modified to allow the respondents to a credit of $11,514.54 for overpaid temporary disability benefits.

INDUSTRIAL CLAIM APPEALS PANEL

____________________________________ David Cain

____________________________________ Kathy E. Dean

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. 2000. 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, Tower 3, Suite 350, Denver, CO 80202.

Copies of this decision were mailed December 14, 2000 to the following parties:

Gary Allen Kemper, 525 E. Drake Rd., #106B, Ft. Collins, CO 80525

Ed Valencia, LPR Construction Miller Safety Consulting, 1171 Des Moines Ave., Loveland, CO 80537

Michael J. Steiner, Esq. and Curt Kriksciun, Esq., Pinnacol Assurance — Interagency Mail

Connie Thompson, Claim Dept., Box 469011, Denver, CO 80246-9011

BY A. Pendroy