Opinion
W.C. No. 4-293-203
September 30, 2002
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Felter (ALJ) dated February 12, 2002, which imposed penalties under § 8-43-304(1), C.R.S. 2002. We affirm the penalty through August 21, 2000 and dismiss, without prejudice the remainder of the appeal.
On March 25, 1996, the claimant suffered admitted injuries. In a final order dated November 22, 1999, the ALJ directed the respondents to pay "all medical costs connected with Claimant's medical treatment, the recommended surgeries and the recommended psychiatric care and treatment, as well as the expenses of pre-surgical and pre-preparation and treatment." The order further required the respondents to pay "all of the Claimant's reasonable and necessary psychiatric care and treatment related to the admitted compensable injury of March 22, 1996." In support, the ALJ found it undisputed that Dr. Dhillon, Dr. French and Dr. Price were authorized to treat the injury. The ALJ also found "all of the surgical, medical and psychiatric treatment recommended for the Claimant is reasonable, necessary and causally connected to her admitted compensable injury." No appeal was taken from the 1999 order.
In February 2000, the claimant underwent recommended surgery by Dr. French. Thereafter, the treating physicians recommended one month of home care which the respondents refused to provide. By letter dated January 7, 2000, the claimant's attorney notified respondents' counsel of some outstanding medical bills. In May 2000, the claimant applied for penalties for the respondents failure to provide pay medical expenses and failure to provide psychiatric medical care in violation of the ALJ's order. The Application for Hearing expressly alleged Dr. Price refused to provide further psychiatric treatment due to the unpaid medical bills.
Based upon the evidence presented at a hearing on August 21, 2000, the ALJ issued an order dated August 29, 2000, which determined the respondents willfully failed to comply with the 1999 order for the payment of the medical and psychiatric expenses. However, the ALJ determined the specific penalty provisions currently codified at § 8-43-401(2)(a), C.R.S. 2002, superseded the general penalty provisions of § 8-43-304(1), C.R.S. 2002. Therefore, the ALJ denied penalties under § 8-43-304(1).
The claimant appealed the August 29 order insofar as the ALJ failed to impose penalties under § 8-43-304(1). We affirmed the ALJ's order. However, in Giddings v. Industrial Claim Appeals Office, ___ P.2d __(Colo.App. No. 01CA0077, September 13, 2001), the court concluded the respondents' failure to comply with the order to pay medical expenses may be penalized under § 8-43-401(2)(a) or § 8-43-304(1). Therefore, the court set aside the August 29 order and remanded the matter for the imposition of penalties under either statute.
On remand, the ALJ entered the order dated February 12, 2002, which found Dr. Price's psychiatric treatment bills from 1998 and 1999, in an amount of $412.40, had not been paid by August 21, 2000. In view of the 1999 final order, where the ALJ determined that Dr. Price's treatment was authorized and reasonably necessary, the ALJ reasonably inferred that the respondents failure to pay the claimant's bills was done in direct disobedience to the 1999 order. Furthermore, the ALJ found the respondents offered no persuasive evidence of mitigation for their failure to obey the 1999 order and the claimant's inability to obtain ongoing psychiatric treatment and home care retarded the claimant's recovery, which were aggravating factors in the respondents' disobedience. (Finding of Fact 10). Consequently, the ALJ imposed penalties at the rate of $500 per day for a total of 182 days from February 22, 2000 through August 21, 2000. The ALJ also ordered the respondents to pay continuing penalties at the rate of $500 until they "obey the November 22, 1999" order. The respondents appealed.
I.
Initially, we reject the claimant's contention that the respondents' Petition to Review the February 12 order was not timely filed. Section 8-43-301(2), C.R.S. 2002 provides that a petition to review shall be filed within 20 days from the date of the certificate of mailing of the order. The statute also provides that the petition may be filed by mail provided "the certificate of mailing indicates that the petition to review was mailed to the appropriate" ALJ.
The ALJ's order contains a certificate of mailing dated February 13, 2002. Consequently, the respondents' Petition to Review had to be filed on or before March 5, 2002. The respondents' Petition to Review contains a certificate of mailing which states a copy of the Petition was mailed to the ALJ on March 4, 2002. Thus, the record supports the conclusion the Petition was timely filed, and it is immaterial the Petition contains a date stamp indicating the Division of Administrative Hearings received the Petition on "Jun 21, 2002." Consequently, we have jurisdiction to review the ALJ's order.
II.
On review of the February 12 order the respondents contend the imposition of a $91,000 penalty for the failure to pay a $412.40 medical bill for 182 days is excessive and violates due process protections guaranteed by the federal and state constitutions. The respondents also contend the penalties violate the excessive fines clause contained in the Eighth Amendment to the United States Constitution. Further, the respondents' contend we must conduct a de novo review of the ALJ's order in accordance with the test announced in Cooper Industries Inc., v. Leatherman Tool Group, 532 U.S. 424, 121 S.Ct., 1678, 149 2d 674 (2001). We reject these arguments.
Cooper Industries v. Leatherman Tool Group, supra, involved a jury's award of compensatory and punitive damages for violations of the Trademark Act of 1946. The Supreme Court held that when a constitutional issue is raised, the Federal Court of Appeals must apply the standards announced in BMW of North America, Inc., v. Gore, 517 U.S. 559, 116 S.Ct., 1589, 134 L.Ed.2d 809 (1996), and conduct a de novo review of a jury's punitive damage award. However, the court noted that the "abuse of discretion" standard is generally applied to review of legislatively enacted penalty guidelines.
In Choice Casing Service, Inc., v. Industrial Claim Appeals Office, (Colo.App. No. 96CA0664, January 16, 1997) (not selected for publication) , the court rejected an argument that the standard of appellate review discussed in BMW of North America, Inc., v. Gore, supra, governed review of penalties imposed under § 8-43-304(1). We are persuaded by Choice that Cooper does not govern our review of the ALJ's order.
Moreover, we have previously held we lack jurisdiction to assess the constitutionality of penalties imposed under the Act. See Celebrity Custom Builders v. Industrial Claim Appeals Office, 916 P.2d 539 (Colo.App. 1995); Edmonds v. Snyder Service, Inc., W.C. No. 3-760-978 (April 28, 1997); cf. Selvage v. Colorado Department of Highways, W.C. No. 3-632-483 (July 28, 1995) ("facial" and "as applied" challenges to the penalty statutes are so intertwined that we cannot consider the "as applied" challenge without addressing the "facial" constitutionality of the statute). What we can decide is whether the penalty imposed was an abuse of discretion within the authority established by the legislature. We cannot decide whether the imposition of a penalty within the authority granted exceeds the limitations established by the Colorado and United States constitutions.
Under § 8-43-304(1), C.R.S. 2001, the ALJ may impose penalties of up to five hundred dollars per day when an employer fails, neglects or refuses to obey any lawful order made by the panel or director. Holliday v. Bestop Inc. 23 P.3d 700 (Colo. 2001). Because the ALJ's authority is discretionary, we may not disturb the ALJ's determination of the amount of the penalty to be imposed in the absence of fraud or an abuse of discretion. See Hall v. Home Furniture Co., 724 P.2d 94 (Colo.App. 1986); Brunetti v. Industrial Commission, 670 P.2d 1246 (Colo.App. 1983). There is no assertion of fraud in this case. Further, the legal standard for review of an alleged abuse of discretion is whether, under the totality of the factual circumstances at the time of the ALJ's determination, the ALJ's order "exceeds the bounds of reason." Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985). The application of this standard includes consideration of whether the ALJ's determination is supported by substantial evidence and the applicable law. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993).
The respondents contend there is no evidence to support the ALJ's finding that the claimant "recently" tried to call Dr. Price and Dr. Price did not return her calls. (Finding of Fact 10). We agree, however, the record supports the ALJ's determination that as a result of the unpaid expenses, Dr. Price suspended treatment for the industrial injury. ( See Tr. August 21, 2000 p. 22; claimant's hearing exhibit 2). Moreover, this evidence supports the ALJ's inference that Dr. Price would have been "more available" and would "probably" have provided additional psychiatric treatment if the bills for his previous treatment had been paid. ( See Findings of Fact 18). Consequently, we perceive no reversible error in the ALJ"s determination that the respondents' violation of the order harmed the claimant.
In Pueblo School District No. 70 v. Toth, supra, the court upheld an ALJ's order for the imposition of penalties where ALJ found the insurer's "repeated and stubborn refusal to respond" to requests for the payment of medical benefits justified penalties at the rate of $500 per day. In Choice Casing Service, Inc., v. Industrial Claim Appeals Office, supra, the court affirmed a $63,000 penalty for an insurer's 126 day delay in filing an admission of liability where the respondents presented no reasonable mitigating actions for the delay, and the ALJ was not persuaded the delay was harmless. Further in Halbritter v. Colorado Professional Counseling Services P.C., W.C. No. 4-160-869 (August 3, 1995) aff'd., Colorado Professional Counseling Services P.C. v. Halbritter (Colo.App. No. 95CA1356, June 6, 1996) (not selected for publication), the court agreed with our conclusion that an ALJ did not abuse his discretion by imposing a penalty of $94,500, calculated at the rate of $500 per day, for an insurer's wrongful termination of temporary disability benefits on two occasions.
Here, the respondents presented no evidence to explain their failure to pay the claimant's medical expenses, and the factual assertions contained in the respondents' appellate brief may not substitute for evidence not found in the record. See Subsequent Injury Fund v. Gallegos, 746 P.2d 71 (Colo.App. 1987). Accordingly, the ALJ could reasonably determine that the respondents' refusal to comply with the 1999 order was at least as egregious as the wrongful termination of temporary disability benefits in Halbritter. Consequently, even though the amount of the penalty vastly exceeds the amount of the unpaid medical expenses, the ALJ's finding that the respondents' disobedience warranted penalties at the rate of $500 per day does not exceed the bounds of reason. See Pueblo School District No. 70 v. Toth, supra, (court upheld penalty in excess of $6000 for the insurer's failure to pay a medical bill which was less than $20).
III.
Next, the respondents contend the ALJ's imposition of penalties under § 8-43-304(1) was an illegal exercise of contempt powers prohibited by § 8-43-207(1)(p), C.R.S. 2002. Instead, they contend the ALJ's order could only be enforced under § 8-43-401(1). Again, we disagree.
Section 8-43-207(1)(p), authorizes the ALJ to impose sanctions provided by the Colorado Rules of Civil Procedure, except the sanctions provided by C.R.C.P. 107. Rule 107 allows the imposition of a an unconditional fine, fixed sentence of imprisonment, or both to punish contempt.
The rules of statutory construction require that statutes be construed to further their legislative intent. Humane Society of the Pikes Peak Region v. Industrial Claim Appeals Office, 26 P.3d 546 (Colo.App. 2001). In determining the legislative intent, words and phrases in the statute must be given their plain and ordinary meaning unless it produces an absurd result. Anheuser Busch Inc. v. Industrial Claim Appeals Office, 28 P.3d 969 (Colo.App. 2001). Further where two statutes address a similar issue they should be construed in a manner that gives a consistent, harmonious, and sensible effect to both statutes. Kinder v. Industrial Claim Appeals Office, 976 P.2d 295 (Colo.App. 1999); Monfort Transportation v. Industrial Claim Appeals Office, 942 P.2d 1358 (Colo.App. 1997).
The court has held that the Rules of Civil Procedure apply insofar as they are not inconsistent with the procedural or statutory provisions of the Act. Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988). By its plain meaning, § 8-43-207(1)(p) explicitly holds that Rule 107 is inconsistent and, thus, inapplicable to workers' compensation claims. Consequently, § 8-43-207(1)(p) precludes an ALJ from imposing fines or sentencing a party to a term of imprisonment.
However, our Supreme Courts has held that the Act contains its own sanctions for the violation of a lawful order of an ALJ. In Holliday v. Bestop Inc. 23 P.3d 700 (Colo. 2001) , the court held that failure to comply with an ALJ's order may be punished under § 8-43-304(1) and § 8-43-401(2). See also Brodeur v. Industrial Claim Appeals Office (Colo.App. No. 01CA06353, December 6, 2001) (not selected for publication); Briscoe v. Industrial Claim Appeals Office (Colo.App. No. 00CA041, July 19, 2001) (not selected for publication). Moreover, in remanding this case for a new order, the court cited Holliday for the proposition that the respondents' violation of the ALJ's 1999 order could be punished by the imposition of penalties under § 8-43-304(1). Slip op. p. 7.
Rule 107 and § 8-43-304(1) serve different goals, consequently, § 8-43-207(1)(p) and § 8-43-304(1) are not inconsistent. The purpose of a imposing a fine under Rule 107 is to punish behavior which is offensive to the authority and dignity of the court. In re the People in the Interest of Murley, 239 P.2d 706 (Colo. 1951). Consequently, fines imposed under Rule 107 are payable to the court. In contrast, seventy-five percent of a penalty imposed under § 8-43-304(1) is payable to the aggrieved party. This suggests that penalties imposed under that statute are primarily intended achieve compliance with orders which benefit another party by requiring the violator to make an additional payment to the aggrieved party for its failure to comply. Consequently, we are not persuaded the ALJ exceeded his authority by imposing penalties under § 8-43-304(1).
Moreover, § 8-43-401(1), C.R.S. 2002, provides that "upon the request of the director or the industrial claims appeals office (ICAP) the attorney general, the district attorney of any district or an attorney employed by the Division of Labor shall prosecute the enforcement of an ALJ's order or defend the order in any proceeding brought against the director, an ALJ or ICAP. However, the statute does not preclude a party from seeking penalties for the failure to comply with an order and the respondents do not cite any authority in support of their contention that § 8-43-401(1) is the exclusive remedy for an insurer's failure to comply with a lawful order.
IV.
The respondents also contend the imposition of penalties after August 21, 2000, violates due process protections. We conclude this portion of the ALJ's order is not currently reviewable.
We may only review final orders. An order which does not require the payment of benefits or penalties, or deny the claimant benefits or penalties is interlocutory and not subject to review. Natkin Co. v. Eubanks, 775 P.2d 88 (Colo.App. 1989). Furthermore, an order may be partially final and partially interlocutory. Oxford Chemicals Inc., v. Richardson, 782 P.2d 843 (Colo.App. 1986).
Here, the ALJ imposed penalties at the rate of $500 per day effective August 22, 2000, "until Respondents obey" the 1999 order. However, there is no determination of whether the respondents disobeyed the order after August 21, 2000. It follows that this portion of the ALJ's order does not require the payment of a specific penalty. Consequently, this portion of the order is interlocutory and not currently reviewable.
V.
Finally, the claimant contends the respondents' appeal is frivolous and requests an award of attorney fees and costs.
Section 8-43-301(14), C.R.S. 2001, states that attorney fees may be awarded against an attorney who submits a petition to review or brief in support of a petition "which is not well grounded in fact and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law." We do not consider the respondents' appeal to be lacking in merit. Therefore, we decline to award attorney fees. See BCW Enterprises, Ltd. v. Industrial Claim Appeals Office, 964 P.2d 533 (Colo.App. 1997).
IT IS THEREFORE ORDERED that the ALJ's order dated March 12, 2002, is affirmed insofar as it imposes penalties at the rate of $500 per day from February 22, 2000 through August 21, 2000.
IT IS FURTHER ORDERED that the respondents' Petition to Review the remainder of the ALJ's order is dismissed without prejudice.
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, 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 September 30, 2002 to the following parties:
Linda Giddings, P. O. Box 748, Mossyrock, WA 98564
Northern Telecom, 2221 Lakeside Blvd., Richardson, TX 75082
Northern Telecom, 200 Athens Way, Nashville, TN 37228-1308
Frank Boissoneau, Liberty Mutual Insurance Company, P. O. Box 3539, Englewood, CO. 80155
Mary Anders, Liberty Mutual Insurance Company, P. O. Box 168208, Irving, TX 75016
Jack Kintzele, Esq., 1317 Delaware St., Denver, CO. 80204 (For Claimant)
David G. Kroll, Esq., 1120 Lincoln St., #1606, Denver, CO. 80203 (For Respondents)
BY: A. Hurtado