Opinion
W.C. No. 4-332-063
August 11, 2000
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Rumler (ALJ) which assessed penalties for their failure to comply with the Rules of Procedure, Part XI(B)(2), 7 Code Colo. Reg. 1101-3 at 39. We affirm.
In 1996, the claimant suffered a compensable right radius fracture. In June 1997 Dr. Tramutt reported the fracture was fully healed. In January 1998 the claimant refractured the right radius. The respondents denied liability on grounds the refracture was unrelated to the 1996 injury. In support, the respondents obtained a medical record review by Dr. Hrutkay. In a report dated November 2, 1998, Dr. Hrutkay opined that the 1996 fracture was "incompletely healed." In response to the respondents' request for clarification, Dr. Hrutkay issued a letter dated November 16, 1998, in which he opined that the 1996 injury caused the 1998 refracture.
Based upon the evidence presented at a hearing on January 20, 1999, ALJ Connick found a causal relationship between the industrial injury and the refracture. Therefore, in a final order dated March 12, 1999, ALJ Connick held the respondents liable for the 1998 refracture.
In April 1999, the claimant filed an Application for Hearing and requested penalties for the respondents failure to provide Dr. Hrutkay's November 16 report within fifteen days of receipt as required by Rule XI(B)(2). The ALJ found the respondents' attorney received the November 16 letter on November 19, 1998. However, the respondents did not provide Dr. Hrutkay's letter to the claimant's counsel until December 30, 1998, when claimant's attorney made a written request for Dr. Hrutkay's reports. Under these circumstances, the ALJ found the respondents violated Rule XI(B)(2). In so doing, the ALJ rejected the respondents' argument that their actions were based on a rational argument Dr. Hrutkay's November 16 letter was a "physician's report" rather than a "medical report" within the meaning of Rule XI(B)(2) because Dr. Hrutkay was not a treating physician. The ALJ reasoned that Rule XI(B)(2) does create an exception for medical reports generated from a "record review." Furthermore, the ALJ found the claimant presented "clear and convincing evidence" the respondents knew or should have known that they were in violation of Rule XI(B)(2). Therefore, the ALJ imposed penalties at the rate of $300 per day for 19 days.
I.
On review the respondents renew their contention that the November 16 letter is not a "medical report" because that term refers to a report rooted in "medical treatment," and Dr. Hrutkay never examined or treated the claimant. Consequently, the respondents argue they did not violate Rule XI(B)(2). Alternatively, they argue that their actions were predicated on a rational argument that Dr. Hrutkay's letter is a "physician's report" not required to be disclosed under C.R.C.P. 26(b)(4)(B). In support, the respondents rely on evidence Dr. Hrutkay was only retained as a consultant and was not endorsed as a witness for the January hearing. Therefore, they contend the ALJ erred in imposing penalties. We reject these arguments.
Rule XI(B)(2) states that, " A copy of every medical report not filed with the Division shall be exchanged with all parties within fifteen (15) working days of receipt." Rule XI(G) states that the violation of rule XI may subject the violator to the imposition of penalties under the statutory language currently codified at § 8-43-304 C.R.S. 1999. Section 8-43-304(1) provides for the imposition of penalties of up to $500 per day where the insurer "fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director." The violation of a procedural rule constitutes the failure or refusal to perform a duty lawfully enjoined by the Director of the Division of Workers' Compensation (Director's). See Adkinson v. National Rooter, W.C. No. 4-197-635, (August 11, 1995); O'Grady v. Denver Public School District, W.C. No. 4-151-533, (November 18, 1994). In order to impose penalties under § 8-43-304(1), the ALJ must first determine that the disputed conduct constituted a violation of an express duty or prohibition established by the Workers' Compensation Act (Act) or rule of procedure. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). Further, if the ALJ finds a violation of the Act, or rule, penalties may be imposed only if the ALJ concludes the insurer's actions were not reasonable under an objective standard. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). The reasonableness of the insurer's actions depends upon whether the actions were predicated on a rational argument based in law or fact. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997) [imposing penalty for violation of Rule XI(B)(2)]. Determination of whether the insurer's conduct was reasonable is generally an issue of fact for resolution by the ALJ. Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). Consequently, we are bound by the ALJ's determination if supported by substantial evidence in the record, and the ALJ's plausible inferences drawn therefrom. Section 8-43-301(8), C.R.S. 1999.
Our interpretation of Rule XI(B)(2) is subject to the ordinary rules of statutory construction. Gerrity Oil Gas Corp. v. Magness, 923 P.2d 261 (Colo.App. 1995) We are obliged to construe the rule in a manner which furthers the Director's intent. Arkansas Valley Seeds, Inc., v. Industrial Claim Appeals Office, 972 P.2d 695 (Colo.App. 1998). In this regard, we must first consider the language of the rule, and give the words their plain and ordinary meanings unless the result is absurd. Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 99CA1380, June 8, 2000). A forced, subtle or strained construction of the statute should be avoided if the language is simple and the meaning is clear. Snyder Oil Co. v. Embree, 862 P.2d 259 (Colo. 1993); Grogan v. Lutheran Medical Center, Inc., 950 P.2d 690 (Colo.App. 1997). Further, the rule should be construed in a manner consistent with the underlying statute which authorizes it. See Wal-Mart Stores, Inc. v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 99CA0963, March 2, 2000) ; City of Englewood v. Industrial Claim Appeals Office, 954 P.2d 640 (Colo.App. 1998).
Rule XI(B)(1) requires that every document filed with the Division of Workers' Compensation (Division) shall be provided to the opposing parties. In the case of "medical reports," Rule XI(B)(2) requires the parties exchange the documents within fifteen days of receipt. The clear intent of this rule is to require the prompt and full disclosure of any medical documents which might be relevant to the claim. This is conclusion is buttressed by Rule IX(B)(2)(a) which provides that for claims not required to be reported to the Division, the parties shall exchange all "medical information" immediately upon request by an interested party.
Rule XI does not define the term "medical report." However , Webster's II New College Dictionary (1995) defines the term "medical" as "relating to the study or practice of medicine." Webster's defines the term "report" as the "detailed account," or "formal account" of proceedings. Thus, in the context of Rule XI(B)(2), the plain and ordinary meaning of the term "medical report" refers to the formal accounting of proceedings related to the study or practice of medicine. This meaning is clear and creates no ambiguity and no distinction can be ascertained based on the status of the person generating the "medical report." Therefore, we need not consider the other rules of statutory construction.
Dr. Hrutkay's letter dated November 16, 1998, was a written response to the respondents request for clarification of the doctor's November 2, 1998 "report." In the November 16 letter Dr. Hrutkay explained the physiological and functional relationship between the bones of the right radius and ulna. Dr. Hrutkay also rendered his opinion on the medical causation of the refracture. He explained the potential for refracture where there is a fibrous union but no true bony union of the radius. Under these circumstances, we agree with the ALJ's implicit determination that Dr. Hrutkay's letter is inherently a formal account of his opinions based upon his expertise in the practice of medicine. Therefore, the ALJ did not err in finding that Dr. Hrutkay's report is a "medical report" within the meaning of Rule XI(2).
The respondents further arguments have been considered and do not alter our conclusions. Neither Webster's dictionary, nor Rule XI(B)(2), limits the term "medical report" to formal, medical accountings of authorized treating physicians, treating physicians, independent medical examiners or medical providers endorsed as witnesses, and we should not read nonexistent terms or limits into the rule. Compton v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 99CA2336, July 20, 2000). Thus, we reject the respondents' attempt to narrow the definition of the term "medical report" to exclude the report of a nontreating physician generated from a review of the claimant's medical history.
Our conclusion is buttressed by Ackerman v. Hilton's Mechanical Men, Inc., 914 P.2d 524 (Colo.App. 1996), where the court concluded that the term "report" as used in § 8-43-210 C.R.S. 1999, refers to a "formal statement or account of the results of an investigation." 914 P.2d at 526. In Ackerman the respondents sought the admission of a physician's letter which contained the physician's opinion about the claimant's blood/alcohol level at the time of a work-related accident. The court concluded that the physician's letter, which was based upon the results of toxicology tests, constituted a physician's "report," under the statute. In so doing, the court rejected an argument that only reports generated after treatment are admissible "physician's reports" under § 8-43-210.
Nevertheless, we do not dispute that Dr. Hrutkay's November 16 report may also be considered a "physician's report" insofar as the term refers to a formal accounting by a "physician." However, we consider a "physician's report" to be a subcategory of "medical report" and, therefore, the respondents' characterization of Dr. Hrutkay's report as a "physician's report" is not inconsistent with the ALJ's finding that Rule XI(B)(2) required the respondents timely to provide the "medical report" to claimant's counsel.
Similarly, we are not persuaded by the respondents' argument that the Act creates a distinction between the disclosure of "medical reports" and "physician's reports." Section 8-43-210 allows the admission of "medical and hospital records" and "physician's reports" without formal identification. To ensure that all parties have adequate notice of these records, Rules XI and VIII(I)(1) require that these reports be timely disclosed to opposing parties.
Admittedly, the Ackerman court concluded that there is a distinction between "records" and "reports." However, the court did not expressly find a distinction between "physician's reports" and "medical reports." To the contrary, the court concluded that because the contested medical statement was admissible as a "physician's report" it was unnecessary to determine whether the physician's letter also constituted a "medical record." We decline to read the court's exercise of judicial economy as establishing such a distinction.
We also note that the respondents' characterization of Dr. Hrutkay's letter as a "physician's report" is inconsistent with their assertion that their actions were predicated on C.R.C.P. 26(b)(4)(b). That rule does not expressly refer to the disclosure of "physician's reports." Rather, the rule provides that the opinion of an "expert" retained in anticipation of litigation who is not expected to be called as a witness at trial must only be disclosed upon a show of "exceptional circumstances." Thus, the rule does not focus any distinction between the disclosure of a "medical report" and a "physician's report."
Moreover, it is well established that the rules of civil procedure apply to workers' compensation claims only insofar as not inconsistent with the procedural or statutory provisions of the Act. Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988). The Act and the procedural rules contain specific requirements for the disclosure of "medical reports" which are inconsistent with C.R.C.P. 26. Therefore, C.R.C.P. 26 is not applicable and the respondent's reliance on C.R.C.P. 26 does not establish a rational argument in law that the respondents were not required to disclose Dr. Hrutkay's letter. See Reed v. Hewlett Packard, W.C. No. 3-843-951 (January 12, 1999), aff'd on other issues, Reed v. Industrial Claim Appeals Office, ___ P.2d ___ (Colo.App. No. 99CA004, January 20, 2000).
Furthermore, evidence there was no formal request for the November 16 letter until December 30 may be a mitigating factor considered by the ALJ in determining the amount of penalties to be imposed. However, this evidence did not preclude the ALJ from finding that the respondents violated Rule XI(B)(2).
II.
Alternatively, the respondents contend that the violation was "cured" prior to the filing of the claimant's application for hearing. Therefore, they argue that no penalties were appropriate.
We note the respondents do not argue that § 8-43-304(1) is not the proper remedy for their violation of Rule XI. Therefore, we do not consider that issue.
Section 8-43-304(4) states that "if the violator cures the violation" within twenty days of the mailing of the Application for Hearing on the issue of penalties, penalties may not be imposed unless the party seeking a penalty presents clear and convincing evidence that the "violator knew or reasonably should have known" of the violation. The cure statute presumes that a violation has occurred prior to the filing of an application for penalties, and precludes imposition of a penalty only if the violator "cures" the violation. We have previously concluded that the plain language of the statute does not purport to preclude imposition of a penalty for violations occurring prior to the time the violator received notice of the claim for a penalty. Adkinson v. National Rooter, supra. We adhere to our previous conclusions. Consequently, the mere fact the respondents' cured the violation prior to the date the claimant applied for a hearing on the issue of penalties did not preclude the ALJ from assessing a penalty.
Furthermore, we perceive no grounds to disturb the ALJ's determination that the claimant proved a penalty is warranted. On review the issue is whether there is substantial evidence to support the ALJ's finding that the claimant presented "clear and convincing" evidence the respondents knew or should have known of the violation. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, supra. "Clear and convincing evidence" is evidence that is stronger than a preponderance, and is unmistakable and free from serious or substantial doubt. DiLeo v. Koltnow, 200 Colo. 119, 613 P.2d 318 (1980). Consequently, to sustain his burden of proof the claimant was required to establish that it was "highly probable" and free from serious doubt that the respondents knew or should have known that failing to disclose Dr. Hrutkay's report was a violation of the rule of procedure.
There was no testimony presented at the hearing on July 27, 1999. Consequently, the claimant did not introduce any specific evidence concerning the respondents' "knowledge" of the procedural rule. However, parties to a workers' compensation claim are presumed to know the applicable law. Midget Consol. Gold Mining Co. v. Industrial Commission, 64 Colo. 218, 193 P. 493 (Colo. 1920); Paul v. Industrial Commission, 632 P.2d 638 (Colo.App. 1981). This presumption aids a party in meeting its burden of proof. Union Ins. Co. v. RCA Corp., 724 P.2d 80 (Colo.App. 1986). Furthermore, C.R.E. 301 provides that the party against whom the presumption is directed must come forward with evidence to rebut the presumption.
Although the respondents "argued" that there actions were predicated on a belief Dr. Hrutkay's letter did not fall within the requirements of Rule XI(B)(2), they did not present any testimony in support of that position. See Subsequent Injury Fund v. Gallegos, 746 P.2d 71 (Colo.App. 1987) (argument by counsel may not substitute for evidence which is not in the record). In the absence of specific evidence to the contrary, the ALJ was required to presume that the respondents knew the requirements of Rule XI(B)(2). Because the respondents knew the rule and the ALJ was not persuaded the respondents had any rational argument their actions did not violate the rule, the record compels the conclusion that the respondents knew or should have known of their violation. See Schrieber v. Brown Root, Inc., 888 P.2d 274 (Colo.App. 1993) (where undisputed facts lead to only one conclusion the issue is a question of law); Rogan v. United Parcel Service, Inc., W.C. No. 4-314-848 (March 2, 1999).
The ALJ's determination is further supported by evidence that the respondents submitted Dr. Hrutkay's reports to the claimant as soon as the claimant made a written request for the reports and did not assert any right or privilege to withhold the letter. The respondents then notified the claimant that the reports were submitted pursuant to the requirements of Rule VIII(I)(1), 7 Code Colo. Reg. 1101-3 at 26 which provides that all medical reports to be submitted as evidence must be provided to opposing counsel at least 20 days prior to the hearing. In addition, the respondents presented no evidence to support their assertion that the did not intend to rely on Dr. Hrutkay's medical reports at the January 20 hearing on compensability until after they provided the claimant with copies of the reports and that they retained Dr. Hrutkay without the intent to submit his findings to ALJ Connick. We may not substitute our judgment for that of the ALJ concerning the sufficiency and probative weight of this evidence. See Rockwell International v. Turnbull, 802 P.2d 1182 (Colo.App. 1990). Therefore, we may not disturb the ALJ's finding that the claimant sustained his burden to prove the respondents knew or should have known of the violation.
IT IS THEREFORE ORDERED that the ALJ's order dated September 16, 1999, is affirmed.
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. 1999. 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 August 11, 2000 to the following parties:
John Kelly, 9650 Huron St., #5, Thornton, CO 80221
Albert Jerman, Kaiser-Hill Company, L.L.C., RFETS, Building 850, 10808 Highway 93, Unit B, Golden, CO 80403-8200
Kaiser-Hill Company, L.L.C., P.O. Box 464, Golden, CO 80402-0464
National Union Fire Insurance Company, Tina Gustafson, Adjuster, AIG Claim Services, 2201 E. Camelback, 4th floor, P. O. Box 32130, Phoenix, AZ 85064
Joseph M. Goldhammer, Esq., 1563 Gaylord St., Denver, CO 80206 (For Claimant)
W. Berkeley Mann, Jr., Esq. and Margaret R. Curry, Esq., P. O. Box 22833, Denver, CO 80222 (For Respondents)
BY: L. Epperson