Opinion
W.C. No. 4-190-449
April 20, 1999.
ORDER OF REMAND
The respondent seeks review of an order of Administrative Law Judge Gandy (ALJ) insofar as it denied a petition to reopen designed to correct the rate of permanent total disability benefits and obtain an offset for Social Security disability (SSDI) benefits. The respondent contends the ALJ erroneously concluded that failure to appeal a final order precludes reopening to correct the rate of permanent total disability benefits. The respondent further argues that the ALJ erroneously held that he lacked authority to award the SSDI offset. We set the order aside and remand for entry of a new order.
The claimant sustained a compensable injury in June 1993. The parties agree that on the date of injury the maximum rate payable for temporary total and permanent total disability benefits was $414.05 per week. Nevertheless, the respondent admitted liability for temporary total disability benefits at the rate of $432.25 per week.
In July 1997, the matter proceeded to hearing on the issues of permanent total disability, medical benefits, disfigurement, and offsets. In an order dated August 5, 1997, the ALJ found the claimant was permanently and totally disabled and awarded benefits at the rate of $432.25 per week commencing October 19, 1995. The order also noted that the claimant was entitled to SSDI benefits of $1,190 per month, and stated the respondent was entitled to "offset 50% of Social Security Disability benefits, pursuant to statute."
Although the claimant appealed the ALJ's August 5 order, the respondent did not. We subsequently affirmed the ALJ's order on December 30, 1997, and no further appeal was taken. In February 1998, the claimant obtained a lump sum award of permanent total disability benefits in the amount of $37,560.
In July 1998, the respondent filed a Petition to Reopen Claim, alleging that the ALJ's August 5 order was erroneous because it ordered payment of permanent total disability benefits at a rate in excess of the applicable statutory maximum. The petition also alleged mistake in the SSDI offset because the respondent was not given credit for SSDI benefits prior to the date of the order. The respondent also filed a Petition to Modify, Terminate or Suspend Compensation on July 31, 1998. The respondent alleged that the total "overpayment" resulting from these events is $17,211, as of November 12, 1998.
However, in an order dated December 30, 1998, the ALJ denied the respondent's petition to reopen, except he permitted the respondent to begin taking the SSDI offset commencing July 31, 1998. With respect to the incorrect permanent total disability rate, the ALJ noted that the respondent failed to raise the issue by "direct appeal" of our December 30, 1997 order. Under these circumstances, the ALJ concluded that respondent "failed to prove that the rate of permanent total disability benefits previously ordered justifies reopening." The ALJ also stated that the respondent "cannot correct legal errors through the back door of a petition to reopen."
The ALJ further held that the respondent is not entitled to "retroactive payment of the Social Security disability benefits due to" its failure properly to claim the offset. Specifically, the ALJ stated that ordering "repayment" of the SSDI benefits paid prior to July 31, 1998, would vitiate § 8-43-303(1), C.R.S. 1998, because the order would affect an award "as to moneys already paid."
I.
The respondent first contends the ALJ erred in concluding that he lacked authority to correct the permanent total disability rate because the respondent failed to the appeal our December 30 order. The respondent argues that its failure to appeal is only one factor which the ALJ may consider in determining whether to grant a petition to reopen. Because the ALJ may have misapplied the law, we remand for entry of a new order.
Section 8-43-303(1) [significantly amended for injuries on or after July 1, 1997] provides an ALJ may reopen "any award" on the grounds of error, mistake, or a change in condition. Under this statute the ALJ has the authority to correct any error or mistake of law or fact. State Compensation Insurance Fund v. Industrial Commission, 80 Colo. 130, 249 P. 653 (1926); Renz v. Larimer County School District Poudre R-1, 924 P.2d 1177 (Colo.App. 1996). The power to reopen is "permissive," and therefore, we may not interfere with the ALJ's order unless it constitutes an abuse of discretion. Renz v. Larimer County School District Poudre R-1, supra; Osborne v. Industrial Commission, 725 P.2d 63 (Colo.App. 1986). An abuse of discretion is shown if the ALJ has misapplied the law. Coates, Reid Waldron, 856 P.2d 850 (Colo. 1993).
When a party alleges that a prior award is based on mistake, the ALJ must determine whether a mistake was made, and if so, whether it is the type of mistake which justifies reopening the case. Travelers Insurance Co. v. Industrial Commission, 646 P.2d 399 (Colo.App. 1981). In determining whether a particular mistake of fact or law justifies reopening, the ALJ may consider whether the mistake could have been avoided if the party seeking reopening timely exercised procedural or appellate rights prior to entry of the initial award. Industrial Commission v. Cutshall, 164 Colo. 240, 433 P.2d 765 (1967); Klosterman v. Industrial Commission, 694 P.2d 873 (Colo.App. 1984). However, the failure to exercise procedural rights is not dispositive, and an ALJ may, in the exercise of his discretion, conclude that reopening is appropriate even though a party failed to exercise appellate rights. See Standard Metals Corp. v. Gallegos, 781 P.2d 142 (Colo.App. 1989). Indeed, one of the purposes of reopening is to permit equitable adjustments in the amount compensation, and the ALJ may weigh this factor in deciding whether to reopen. Ward v. Azotea Contractors, 748 P.2d 338 (Colo. 1987) ; Kuziel v. Pet Fair, Inc., 940 P.2d 403 (Colo.App. 1997); Koch Industries, Inc. v. Pena, 910 P.2d 77 (Colo.App. 1995).
Here, it is unclear whether the ALJ correctly applied the law of reopening. The ALJ's order could be read to mean that the permanent total disability benefits were based on a mistaken compensation rate, but the ALJ concluded that the mistake does not justify reopening because of the respondent's failure to seek appellate review. Alternatively, the ALJ's order could be read as holding that the respondent's failure to seek appellate review of our December 30 order precludes reopening. If the latter reading is correct, the ALJ abused his discretion by refusing to exercise it and decide whether the completing equities warrant reopening. See Gregorich v. Industrial Commission, 117 Colo. 423, 188 P.2d 886 (1948) (refusal to exercise discretion is an abuse). On remand, the ALJ shall clarify his findings and apply the law in accordance with this order.
II.
The respondent next contends the ALJ erroneously held that he could not allow the respondent to recover any of overpayment caused by the incorrect permanent total disability rate because § 8-43-303(1) prevents a reopening from affecting an "earlier award as to moneys already paid." The respondent argues that the statute does not preclude recovery of an overpayment by diminishing future benefits. The claimant argues that the respondent is collaterally estopped from raising the issue because the amount of permanent total disability benefits was addressed in the August 5 order. The claimant further argues that allowing recovery of the overpayment would permit the respondent retroactively to withdraw an admission of liability concerning the claimant's rate of disability benefits. We agree with the respondent.
In Cody v. Industrial Claim Appeals Office, 940 P.2d 1042 (Colo.App. 1996), the Court of Appeals held that, in cases of reopening, § 8-43-303(1) does not preclude recoupment of overpayments by the mechanism of reducing future benefits. Rather, the statute precludes the ALJ from ordering the claimant "actually to pay back moneys from his initial award." Id. at 1043. This conclusion is consistent with the statutory objective of reopening to permit equitable adjustments in a previous award of benefits. See Kuziel v. Pet Fair, Inc., supra. Consequently, the ALJ erroneously concluded that he lacked authority to diminish the claimant's future permanent total disability benefits as a method for recovery of the alleged overpayment.
We reject the claimant's argument that the doctrine of collateral estoppel precludes reopening to adjust the award of benefits. To the contrary, an award of workers' compensation benefits is final only to the extent it has not been reopened under the applicable statutory criteria. Consequently, the mere fact that an issue was previously adjudicated does not prevent reopening under appropriate circumstances. See Renz v. Larimer County School District Poudre R-1, supra, (rejecting argument that res judicata precluded reopening based on a legal mistake in a prior award).
Neither would reopening of this case violate the principle that once liability is admitted "payment shall continue according to admitted liability." Section 8-43-203 (2)(d), C.R.S. 1998. It is true that in HLJ Management Group, Inc. v. Kim, 804 P.2d 250 (Colo.App. 1990), the Court of Appeals held that the respondents were not entitled to retroactive relief from an admission of liability for an average weekly wage greater than that to which the claimant was actually entitled. The court relied on the predecessor to § 8-43-203(2)(d) as authority for prohibiting the retroactive withdrawal of an admission of liability.
However, the HLJ case was not postured as a petition to reopen. Our courts have held that even a final admission may constitute an "award" subject to reopening under § 8-43-303(1). See Safeway, Inc. v. Industrial Claim Appeals Office, 968 P.2d 162 (Colo.App. 1998); Lewis v. Scientific Supply Co. Inc., 897 P.2d 905 (Colo.App. 1995); Brown Root, Inc. v. Industrial Claim Appeals Office, 833 P.2d 780 (Colo.App. 1991). These decisions are fully consistent with § 8-43-203(2)(d), which provides that issues closed by final admissions may be reopened "pursuant to section 8-43-303."
It follows that the respondent's admissions of liability for a disability rate in excess of that required by law do not preclude the ALJ from reopening the case to correct the alleged error. Reopening after the opportunity for a hearing does not result in the unilateral abrogation of an admission of liability in violation of § 8-43-203(2)(d) and HLJ Management Group, Inc. v. Kim, supra.
III.
The respondent makes essentially the same arguments concerning the ALJ's refusal to reopen the claim to adjust the claimant's permanent total disability benefits based on the retroactive award of SSDI benefits. Because the issues are the same as those involving the rate of permanent total disability benefits, we conclude that the matter must be remanded to the ALJ to determine whether the matter should the reopened to permit adjustment of the claimant's benefits on account of the retroactive SSDI award. In reaching this result, we should not be understood as expressing an opinion that the ALJ is required to reopen the claim. That question is within the ALJ's discretion after consideration of the particular facts of the case. Further, we express no opinion concerning the correct amount of any offset in the event the ALJ reopens the claim. In light of this disposition, we need not consider the remaining arguments.
IT IS THEREFORE ORDERED that the ALJ's order dated December 30, 1998, is set aside, and the matter is remanded for entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain ______________________________ Dona Halsey
Copies of this decision were mailed April 20, 1999 the following parties:
Dewey Dean Nelson, 2061 17th Ave., Greeley, CO 80631
Payless Drug Stores, Inc., 4800 Baseline Rd., Boulder, CO 80303-2643
K-Mart Corp., d/b/a Payless Drug Stores, Inc., c/o McMillan Claim Service, attn. Kathy Genoff, 2785 N. Speer Blvd., Denver, CO 80211
Katherine E. Allen, Esq., 705 14th St., Greeley, CO 80631 (For Claimant)
Michael W. Sutherland, Esq., Michael J. Decker, Esq., 1660 S. Albion St., # 425, Denver, CO 80222-4043 (For Respondents)
BY: AP