Opinion
W.C. No. 4-785-525.
May 3, 2010.
FINAL ORDER
The respondent seeks review of an order of Administrative Law Judge Friend (ALJ) dated November 12, 2009, that determined it liable for temporary total disability (TTD) benefits and medical benefits and ordered it to pay a penalty for failure to insure. We affirm.
The claimant entered into an agreement with the respondent MKBS, LLC TLPQC, LLC d/b/a/ Metro Taxi (Metro) on January 28, 2009. The Taxicab Operation Agreement (agreement) acknowledged that the claimant was an independent contractor, free from authority and control of Metro. The agreement further provided that the claimant was not entitled to workers' compensation benefits and that he was obligated to pay federal and state income tax on any monies earned pursuant to the agreement. The claimant was involved in an accident that resulted in serious injury on February 8, 2009. The accident occurred when a driver of a stolen vehicle broadsided the claimant while he was driving a taxi pursuant to the agreement with Metro. Metro provided certain coverage under an insurance policy issued by AIG. The ALJ found that the claimant had established that at the time of the accident Metro was a common carrier and that he was working as a driver with Metro. The ALJ further found that the policy with AIG was not similar to a workers' compensation policy. The ALJ found Metro liable for TTD benefits and ordered it to pay a penalty for failure to insure.
I.
Metro first contends that the ALJ erred in finding that the claimant was not an independent contractor of Metro and therefore his claim was compensable. We are not persuaded that the ALJ erred.
We note initially that this case is essentially identical to one decided by the Panel in 2007 against the same respondent. See Gebrekidan v. MKBS, LLC, W.C. No. 4-678-723 (May 10, 2007). We are not persuaded to depart from the reasoning in Gebrekidan and language from that order has been excerpted here where appropriate.
Section 8-41-301 C.R.S. requires that in order to recover workers' compensation benefits the claimant must be the respondent's "employee" at the time of the injuries. Section 8-40-202(2)(a), C.R.S, provides:
Notwithstanding any other provision of this section, any individual who performs services for pay for another shall be deemed to be an employee, irrespective of whether the common-law relationship of master and servant exists, unless such individual is free from control and direction in the performance of the service, both under the contract for performance of service and in fact and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed.
However, under § 8-40-301(5), C.R.S, a person working as a driver under a lease agreement meeting the requirements set forth in § 40-11.5-102 C.R.S., is excluded from the definition of "employee." Further, a lease agreement which meets the requirements of § 40-11.5-102(4) creates a presumption that the lessee is an independent contractor and that presumption may only be overcome by "clear and convincing evidence."
Section 40-11.5-102(5)(a), provides, however, that a lease agreement that qualifies to exclude a driver from the definition of an "employee" must also "provide for coverage under workers' compensation or a private insurance policy that provides similar coverage." Section 40-11.5012(5)(b), defines the term "similar coverage" as disability insurance for on and off the job injuries, health insurance and life insurance.
In USF Distribution Services, Inc. v. Industrial Claim Appeals Office 111 P.3d 529, (Colo. App. 2004) the issue arose whether the claimant's failure to secure complying coverage changed his status from that of an independent contractor to that of an employee. The court noted that § 8-40-301(5) was enacted simultaneously with § 8-40-301(6) and § 40-11.5-102(5). See Colo. Sess. Laws 1992, ch. 224 at 1798-801. The court determined that the purpose of these amendments was to clarify that drivers working for contract carriers under qualifying lease agreements are to be treated as "independent contractors" for purposes of workers' compensation benefits liability. The court recognized that § 8-40-301(5) evidences a clear legislative intent to exclude leased drivers from the definition of "employee." However, the court also noted that when the statute is viewed in combination with both § 8-40-301(6) and § 40-11.5-102(5) it becomes clear that the exclusion takes effect only when the lease agreement includes complying coverage. The scheme created by these statutes shares the same purpose underlying the statutory employer provision, see § 8-41-401(1)(a), C.R.S, which is to prevent an employer from evading compensation coverage by contracting out work instead of directly hiring the workers.
In USF Distribution Services the court also explained that pursuant to § 8-40-202(2)(c), C.R.S., nothing in § 8-40-202(2)(a) or (b) was intended to conflict with § 8-40-301 or to otherwise relieve any obligation imposed by that statute. The court further reasoned that excepting the driver from the definition of an "employee" under § 8-40-202(2)(a) might conflict with the obligation to provide complying insurance imposed in § 8-40-301(6). Therefore the court concluded that § 8-40-202(2)(a) did not apply to the truck driver in USF Distribution Services. The court further ruled that since the claimant established that the policy negotiated through respondent did not comply with the requirements set forth in § 40-11.5-102(5), the claimant was an employee at the time of his industrial injury.
In our view there is no principled distinction between USF Distribution Services and the facts of this case. In the present case, the ALJ made the following pertinent findings of fact. At the time of the accident, Metro had a policy with AIG that covered the claimant. The policy covered medical expenses with a deductible of $500.00 and a maximum amount of $100,000.00. The AIG policy also provided for indemnity benefits with a maximum amount of $200.00 per week for up to 52 weeks. The policy had an aggregate limit of $250,000.00. No benefits are paid under the policy for permanent impairment or disability. The ALJ concluded that the insurance coverage offered to claimant under the AIG Insurance coverage did not provide similar coverage to a worker's compensation policy.
Metro does not appear to contest these findings of fact. Rather Metro contends that USF Distribution Services, Inc. was wrongly decided. Metro argues that the legislative history demonstrates the intent of the General Assembly is not consistent with the court of appeals' interpretation of the relevant statutes. Metro cites at length from testimony and comments at the Senate Transportation Committee hearings in arguing that USF Distribution Services, Inc. was wrongly decided.
However, we are, of course, bound by the published opinions of the court of appeals. In our opinion, USF Distribution Services, Inc. is controlling and we perceive no error in the ALJ's reliance on it to find that the claimant was an employee at the time of the accident and not an independent contractor.
II.
Metro next contends the ALJ abused his discretion in calculating the claimant's average weekly wage (AWW) at $500. We are not persuaded to interfere with the ALJ's calculation of average weekly wage.
Section 8-42-102(2)(d), C.R.S, sets forth the method for calculating the average weekly wage. The overall purpose of the statutory scheme is to calculate "a fair approximation of the claimant's wage loss and diminished earning capacity." Campbell v. IBM Corp., 867 P.2d 77 (Colo. App. 1993). The ALJ is afforded discretionary authority in calculating the wage. We may not interfere with the ALJ's calculation of the average weekly wage unless an abuse of discretion is shown. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993). An ALJ only abuses his discretion where the order "exceeds the bounds of reason," such as where it is unsupported by the record or is contrary to law. Rosenberg v. Board of Education of School District # 1, 710 P.2d 1095 (Colo. 1985).
The ALJ made the following findings of fact concerning the issue of average weekly wage. The claimant worked for Metro on and off for some years. The claimant did not work for Metro and earned no wages from August 2007 through 2008. The claimant entered in to the agreement with Metro on January 28, 2009. The claimant was injured on February 8, 2009. The claimant and his wife testified as to his gross receipts during the full day and part day that the claimant worked for Metro in February 2008. The two days were Friday and Saturday, which are busier than other days of the week. The gross receipts from those two days did not accurately reflect his average weekly wage. The ALJ reviewed but was unpersuaded to base the claimant's average weekly wage on the claimant's income tax returns in 2005, 2006 and 2007. The claimant's testimony as to his income was not credible or persuasive.
The ALJ considered a PUC report showing the earnings of drivers to be $15 to $25 per hour before expenses, but found it not to be persuasive evidence of taxi drivers' earnings in 2009. A former taxi driver for Metro testified that he made about $100 per day after expenses and worked five days per week. The ALJ found this testimony to be credible and persuasive. The claimant testified that he worked six days per week but the ALJ found that it was more likely that the claimant would work five days per week and earn $100 per day after expenses. The ALJ concluded that the claimant's average weekly was fairly computed to be $500.
On appeal, Metro argues that the tax returns filed by the claimant from 2005 through August 2007 belie his alleged ability to earn $500 per week. While this appears to be true, we note that the ALJ found that the claimant's tax returns showed either a lack of understanding of income and expenses, or a deliberate underreporting of his income to the IRS. In our view, this appears to be a plausible inference drawn from the record and we are therefore bound by it. See Wal-Mart Stores, Inc. v. Industrial Claim Appeals Office, 989 P.2d 251 (Colo. App. 1999). In any event, the ALJ was not compelled to accept the tax returns as the basis for calculation of AWW.
There was conflicting evidence and the ALJ certainly could have reached other reasonable conclusions regarding the claimant's AWW. However, the existence in the record of conflicting testimony or of evidence that would support a contrary result does not provide a basis for setting aside the ALJ's order. See Mountain Meadows Nursing Center v. Industrial Claim Appeals Office, 990 P.2d 1090 (Colo. App. 1999) (the existence of conflicting evidence does not lessen the import of substantial evidence in support of a finding).
III.
Metro finally contends that the ALJ erred in awarding a penalty against it for its failure to insure. Metro again reiterates its argument that it had accident and health insurance with AIG at the time of the claimant's injury and that this policy meets the Division of Insurance's requirements. We again are not persuaded that the ALJ erred in his conclusion that that the policy with AIG was not similar to workers' compensation policy.
Section 8-44-101, C.R.S., provides that any employer subject to the provisions of the Act shall secure workers' compensation insurance for all employees. This section sets forth that the mandatory insurance requirements can be met either by insuring with Pinnacol Assurance, by insuring with a stock or mutual insurance corporation, by procuring a self-insurance permit from the executive director as provided in § 8-44-201, C.R.S. or by a self insurance certificate from the commissioner of insurance as provided in § 8-44-205, C.R.S. In our view, the ALJ did not err in determining that Metro did not carry workers' compensation insurance on the claimant at the time of injury. Therefore, we do not agree with Metro that the ALJ erred in imposing a penalty for failure to insure.
IT IS THEREFORE ORDERED that the ALJ's order dated November 12, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_______________________ Curt Kriksciun
_______________________ Thomas Schrant
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MKBS, LLC TIPQC SERVICES, LLC, Attn: KYLE BROWN, C/O: D/B/A METRO TAXI, DENVER, CO, (Employer).
CHRISTOPHER C FELTON, P.C., Attn: CHRISTOPHER C FELTON, ESQ., LITTLETON, CO, (For Claimant).
CLISHAM, SATRIANA BISCAN, LLC, Attn: PATRICIA J. CLISHAM, ESQ., DENVER, CO, (For Respondents).