Opinion
W.C. No. 4-439-762
December 19, 2003
FINAL ORDER
The Asphalt Paving Company (the employer) and the Colorado Insurance Guaranty Association (collectively the CIGA respondents) seek review of an order of Administrative Law Judge Felter (ALJ) dated April 29, 2003, which assessed penalties for the failure to pay permanent partial disability (PPD) benefits. The claimant and the CIGA respondents also separately seek review of an order of the ALJ dated July 16, 2003, which denied the CIGA respondents' motions for a corrected order and to amend the caption. We affirm the July 16 order and, accordingly, set aside the April 29 order insofar as it purports to assess penalties against CIGA.
This matter has a lengthy procedural history. On May 6, 1998, the claimant suffered work-related injuries. The respondents admitted liability for temporary disability benefits based on an average weekly wage (AWW) of $294.18. In an order dated November 20, 2000, the ALJ awarded PPD benefits based on 25 percent impairment for cervical and mental impairment plus 8 percent for impairment to the thoracic spine for a total of 31 percent whole person impairment. The ALJ also increased the claimant's AWW to $714.25.
On May 8, 2001, the respondent-insurer became insolvent. Consequently, CIGA assumed the respondent-insurer's liability for workers' compensation benefits awarded to the claimant.
On appeal of the November 2000 order, we upheld the ALJ's finding that the claimant suffered 31 percent whole person impairment. However, we set aside the ALJ's determination of the AWW and remanded the matter to the ALJ for a new order on the issue of AWW. On remand, the ALJ issued an order dated March 4, 2002, which determined the AWW to be $421.28. Both parties appealed the determination of the AWW. The respondents also renewed their appeal of the PPD award.
On August 21, 2002, we affirmed the March 4 order. In Mosley v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 02CA1788, September 11, 2003), the court upheld our order with respect to the impairment rating and a mandate was issued on November 12, 2003. However, the court set aside our order with respect to the claimant's request for costs and attorney fees to defend the second appeal of the PPD award and, remanded for consideration of that request.
Prior to August 21, 2002, the claimant requested an order imposing penalties under § 8-43-304(1), C.R.S. 2003, for the failure to pay uncontested PPD benefits. Because we had not yet resolved the appeal of the March 4 order when the penalty claim came before the ALJ, the ALJ determined the November 20 award was not a final award of PPD benefits. Therefore, in an order dated August 14, 2002, the ALJ denied and dismissed the penalty claim. The claimant timely appealed the August 14 order. On review of the August 14 order we set aside the order dismissing the penalty claim and remanded the matter to the ALJ for further findings of fact and the entry of a new order on that issue.
On remand the ALJ issued an order dated April 29, 2003, which required the "respondents" to pay penalties at the rate of $51 per day commencing December 30, 2000, for the failure to pay PPD benefits based on 25 percent whole person impairment. The CIGA respondents appealed the April 29 order.
The CIGA respondents also filed a motion for a corrected order which alleged CIGA is immune from liability for penalties. In addition, the CIGA respondents moved to substitute CIGA for Great States Insurance Company (Great States) in the caption. The claimant opposed the motions.
The ALJ determined there was no evidence CIGA has committed any malfeasance. The ALJ also determined CIGA is liable only to the extent of the insolvent insurance carrier's contractually covered benefit obligations, which excludes penalties. Further, the ALJ determined that CIGA is statutorily liable to fulfill the contractual obligations of Great States regardless of whether CIGA was formally listed in the caption. Therefore, on July 16, 2003, the ALJ denied the motions.
I.
On appeal of the July 16 order the claimant contends the ALJ erred in finding that CIGA is immune from penalties resulting from its failure or the failure of Great States to pay undisputed PPD benefits. The claimant also contends CIGA waived the immunity defense. We disagree.
Waiver is the intentional relinquishment of a known right. A waiver must be made with full knowledge of the relevant facts, and the conduct should be free from ambiguity and clearly manifest the intention not to assert the right. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988); Department of Health v. Donahue, 690 P.2d 243 (Colo. 1984).
In October 2001, the claimant filed an application for hearing on the issue of penalties, On August 13, 2002, the CIGA respondents filed a Motion to Dismiss Claim for Penalties which argued that the penalty issue was not ripe for hearing because there was no final award of PPD. CIGA also asserted it is immune from liability for penalties.
At the hearing on August 14, 2002, the ALJ determined as a "threshold" issue, that the penalty issue was not ripe for adjudication because there was no final award of PPD. Therefore, the ALJ entered summary judgment which dismissed the penalty claim without hearing argument on the immunity defense. Under these circumstances, the record fails to support the claimant's contention that the CIGA respondents waived their immunity argument.
Next, the claimant concedes the April 29, 2003 order purported to impose penalties against CIGA "rather than Great States Insurance Company, which disappeared from the case on May 8, 2001." It follows that resolution of the immunity issue is dependent on CIGA's statutory liability.
CIGA was created to provide a mechanism for the payment of covered claims of insolvent insurers without excessive delay or financial loss to claimants or policyholders. Section 10-4-501 C.R.S. 2003. A "covered claim" is defined as an unpaid claim which arises out of and is within the coverage and not in excess of the applicable limits of the insurance policy issued by an insolvent insurer. Section 10-4-503(4), C.R.S. 2003; Fontenot v. Haight, 764 P.2d 378 (Colo.App. 1988).
Furthermore, § 10-4-517 C.R.S. 2003, provides that:
"There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, or the commissioner or his representative for any action taken by them in the performance of their powers and duties under this part 5." (Emphasis added).
The claimant contends CIGA is an "insurer" or "other person" that is liable for penalties under § 8-43-304(1). Therefore, the claimant contends that § 10-4-517 does not create immunity from penalties which may be imposed under § 8-43-304(1) against an "employer or insurer, or any officer or agent of either, or any employee, or any other person" who "fails, neglects or refuses to obey any lawful order."
The issue is one of first impression in Colorado. However, caselaw involving similar statutes in other states reflects that the immunity afforded such insurance funds is broadly construed to exclude liability for penalties. See Bills v. Arizona Property and Cas. Ins. Guar. Fund (Ariz.App. 1999) (fund immune from common law tort damages in handing of covered claim); Howell v. State, 868 P.2d 568 (Mont 1994) (attorney fees not a covered claim); Beau v. Klein 572 So.2d 656 (La.App. 1990).
Moreover, the claimant's construction renders § 8-43-304(1) inconsistent with § 10-4-501. Under such circumstances, the rules of statutory construction direct that the specific statute supersedes the general statute, unless the general statute was enacted after the specific statutory language and the General Assembly manifested a clear intent that the general statute should prevail. Section 2-4-205, C.R.S. 2003; Freemeyer v. Industrial Claim Appeals Office, 32 P.3d 564 (Colo.App. 2000). The statutory language which renders insurers and "any other person" subject to penalties for the failure to obey a lawful order was enacted in 1919 and has remained unchanged. See Dworkin, Chambers Williams, P.C. v. Provo, ___ P.3d ___, slip. op. at 14, n. 10 (Colo. No. 02SC792, December 1, 2003). CIGA and the accompanying immunity provisions were not enacted until 1971. 1971 Colo. Sess. Laws, Ch. 205 at 756-763. Therefore, we conclude that CIGA is statutorily immune from liability for penalties based on its action in failing to pay PPD benefits ordered on November 20, 2000.
Instead, CIGA is only liable for covered claims. Section 10-4-503(4). It follows that to the extent the ALJ purported to require CIGA to pay penalties based Great States' failure to pay PPD benefits, CIGA has no statutory liability for such penalties unless they "arise out of" and are "within the coverage" of the insurance policy issued by Great States to the employer.
The record does not contain a copy of the workers' compensation insurance policy issued by Great States to the employer. Nor is there any testimony concerning the coverage provisions of the policy. Consequently, the record is legally insufficient to support a conclusion that CIGA is financially responsible for penalties imposed as a result of malfeasance by Great States in failing to pay undisputed PPD benefits. Moreover, it is certainly difficult to imagine that the policy of insurance required the insured to purchase "coverage" for acts of malfeasance committed by the insurer in administering the claim. Such "coverage" would seem unnecessary since the insurer is directly responsible for its actions under § 8-43-304(1). Accordingly, the ALJ did not err in finding that CIGA is immune from liability for the penalties imposed on April 29, 2003.
Because we uphold the ALJ's finding that CIGA is immune from penalties, we set aside the April 29, 2003, penalty order insofar as it purports to require CIGA to pay penalties.
As a result, the other arguments raised in the CIGA respondents' petition to review the April 29 and July 16 orders are moot.
II.
The claimant also contends the CIGA respondents' motion to amend the caption was "well founded" and, therefore, asserts the ALJ erred in failing to amend the caption to substitute CIGA for Great States as the respondent — insurer.
The claimant did not take this position before the ALJ. To the contrary, the claimant contested the motion for a corrected order and the motion to amend the caption. Under these circumstances, the claimant cannot now complain of the alleged error he invited the ALJ to make. Dalco Industries, Inc. v. Garcia, 867 P.2d 156 (Colo.App. 1993); Jacobs v. Commonwealth Highland Theatres, Inc., 738 P.2d 6 (Colo.App. 1986); see also Schlage Lock v. Lahr, 870 P.2d 615 (Colo.App. 1993) (counsel may not take one position before ALJ and argue a contrary position on appeal).
III.
Finally, the respondents contend the claimant's petition to review the July 16 order is frivolous because the claimant did not challenge the ALJ's finding that CIGA committed no malfeasance that would support the imposition of penalties. Therefore, CIGA requests an award of attorney fees and costs incurred in responding to the claimant's appeal.
Section 8-43-301(14), C.R.S. 2003, 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." Contrary to CIGA's contentions the claimant contested the ALJ's finding that CIGA committed no malfeasance. The claimant explicitly argued that CIGA made all the decisions after May 8, 2001, concerning the nonpayment of PPD. Therefore, the claimant's petition to review is not frivolous and we decline to award attorney fees. See BCW Enterprises, Ltd. v. Industrial Claim Appeals Office, 964 P.2d 533 (Colo.App. 1997); Brandon v. Sterling Colorado Beef Co., 827 P.2d 559 (Colo.App. 1991) (resort to judicial review is not considered frivolous or in bad faith as long as there is a reasonable basis for party to challenge the ALJ's order).
IT IS THEREFORE ORDERED that the ALJ's order dated July 16, 2003, is affirmed and April 29, 2003 order is set aside insofar as it requires CIGA to pay penalties for the failure to pay PPD benefits.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. DeanNOTICE
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. 2003. 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 order were mailed to the parties at the addresses shown below on December 19, 2003 by A. Hurtado.
Sherry L. Mosley, 9201 Oberon Rd., Apt. 321, Arvada, CO 80004
Asphalt Paving Company, 14802 W. 44th Ave., Golden, CO 80403
Great Lakes Insurance Company, c/o Western Guaranty Fund Services, 1720 S. Bellaire St., #408, Denver, CO 80222-4320
Ralph Ogden, Esq., 1750 Gilpin St., Denver, CO 80218 (For Claimant)
Larry D. Lee, Esq., 1790 38th St., #205, Boulder, CO 80301 (For Claimant)
Harvey D. Flewelling, Esq., 5353 W. Dartmouth Ave., #400, Denver, CO 80227 (For Respondents)