Opinion
W.C. No. 4-502-555.
November 8, 2011.
FINAL ORDER
The respondents seek review of a corrected order of Administrative Law Judge (ALJ) Walsh dated March 4, 2011, and his order dated February 11, 2011, that ordered them to pay attorney fees to the claimant for pursuing unripe issues at hearing. We affirm. We also decline to award attorney fees to the claimant regarding the respondents' appeal.
The file reflects the following procedural history. The claimant sustained a compensable occupational disease around January 1, 2000. Pursuant to another ALJ's final order, the respondent-insurer was liable for the claimant's authorized and reasonable and necessary medical treatment for her medical condition. In February 2010, the respondents filed an application for hearing listing the issue of medical benefits (reasonably necessary, related to injury). Under "Other issues" the respondents stated the respondent insurer has not insured the respondent employer for the claimant's occupational disease since July 2007. The application indicated that the respondents attempted to resolve with the other parties all issues listed on the application. The respondents' counsel, however, had not conferred with the claimant's attorney regarding the issues it identified for hearing. In March 2010, the respondents filed another application for hearing identifying the same issues and adding the issue of compensability. The respondents deleted the reference to attempting to resolve issues with the other parties. The claimant responded and sought penalties.
The claimant specifically sought penalties based on the respondents' representation that they had attempted to resolve their issues with the other parties. The claimant also sought attorney fees based on § 8-43-211(2)(d), C.R.S., which authorizes the payment of attorney fees and costs incurred in preparing for hearing on issues that are not ripe for adjudication at the time the filing is made. Hearing was set for June 15, 2010.
On June 1, 2010, a prehearing ALJ denied the respondents' motion to continue the hearing and denied their motion to compel the provision of medical releases. Instead, the claimant agreed to provide restricted medical releases within five days of the prehearing ALJ's order. The prehearing ALJ commented that in her opinion medical records were not relevant to the hearing. The matter proceeded to hearing.
The respondents' counsel indicated that the issue of medical benefits related to the issue of whether the respondent insurer was still liable for such benefits. Tr. (6/15/10) at 26. The respondents requested a continuance on the grounds that it did not receive the claimant's medical releases until June 7th and needed medical records to proceed. The respondents' counsel advised the ALJ that she would "not proceed on the issue I have endorsed for hearing" if the continuance was denied. Tr. (6/15/10) at 8. The claimant's counsel objected and argued, among other things, that the medical releases were irrelevant to the issue the respondents endorsed for hearing. The claimant's counsel noted that the respondent insurer had failed to join the current insurer. Tr. (6/15/10) at 10. The respondents' counsel advised the ALJ that she did not stipulate that the respondents' issues were not ripe for hearing, but the issues were "not ready for hearing" under the circumstances. Tr. (6/15/10) at 46-47. The ALJ directed that the matter proceed to hearing. Tr. (6/15/10) at 51. The respondents' previous counsel provided testimony regarding the applications for hearing. She explained the indication on the application for hearing that the parties had conferred was a clerical error. Tr. (6/15/10) at 53.
The hearing continued to August 26, 2010. The claimant's counsel asked "for an order from the bench on the issues that Respondents have endorsed for hearing." Tr. (8/26/10) at 4. The ALJ asked the respondents' counsel what medical records she wanted him to review. The respondents' counsel directed the ALJ to Exhibit E at 23 (progress notes) and prescriptions in Exhibit G, and advised the ALJ that she had nothing further. Tr. (8/26/10) at 5. It does not appear that Exhibit G was formally introduced into the record. The respondents' counsel argued that the respondent insurer was no longer "on the risk" or liable for the claimant's medical benefits for the claimant's occupational disease. Tr. (8/26/10) at 19-20. The ALJ ruled that the evidence was insufficient to establish that another insurance carrier was liable. Tr. (8/26/10) at 21. The ALJ asked for position statements as to whether attorney's fees and costs were appropriate. Tr. (8/26/10) at 29.
The ALJ appears to have issued three written orders. The respondents assert that the ALJ mailed an order to the parties on October 13, 2010. The claimant makes no reference to this order in her brief. The record contains an order not signed by the ALJ that shows a certificate of mailing to the parties on October 13, 2010. The ALJ made various findings as to the procedural history of the case and made legal conclusions regarding penalties, ripeness, and the claimant's entitlement to an award of attorney fees and costs. The order denies the claimant's request for penalties based on the improper marking of the respondents' application for hearing on February 5, 2010. It further denies the respondents' request to determine its future liability on the claim, but orders the respondents to pay the claimant her attorney fees and costs "to be determined by separate order." The order gives the respondents ten working days from the date of service of the order to file any objections to the claimant's attorney's affidavit of fees and costs.
The ALJ issued an order dated and mailed on February 11, 2011. The ALJ reiterated his previous findings, conclusions, and list of issues. The ALJ also indicates that he received an affidavit of fees from the claimant's counsel and that the respondents failed to timely object. The ALJ struck the respondents' untimely objection and ordered the respondents to pay to the claimant's counsel $15,120 for fees and $793.08 for costs, for a total of $15,923.08. The order reserved all other issues for future determination.
The ALJ issued a corrected order on March 4, 2011, in which he clarified that the only issue remaining at the time of his February 2011 order was the amount of attorney fees and costs to award. The ALJ again recited his previous findings and conclusions and ordered the respondents to pay specific amounts of attorney fees and costs. The respondents appealed the ALJ's orders issued in February and March, 2011. The claimant filed corresponding petitions for the purpose of preserving her request for attorney fees on appeal.
The respondents argue that their case may have lacked evidence to establish any entitlement to relief on the merits of their claim, but that the issues they identified for hearing were ripe. The respondents refer to repealed legislation regarding attorney fees for issues lacking merit and suggest that attorney fees are no longer available for their conduct. See 219, § . 32, § 9-43-216(3), 1991 Colo. Sess. Laws 1321 (creating sanctions for frivolous claims for compensation and repeal of section effective March 1, 1996). We disagree. A claim may be meritless, but still ripe for adjudication. See Ferry v. City Glass Co., Inc., W.C. Nos. 4-699-837 4-741-385 (May 7, 2010) (lack of specificity in seeking penalties did not constitute legal impediment; claim was meritless, but ripe). At the time they applied for a hearing, the respondents lacked any factual basis to indicate an actual controversy capable of adjudication. In other words, by the respondents' own admission, they sought a hearing on a matter that was not ready to be heard. Tr. (6/15/10) at 46-47 (respondents' counsel states issues "not ready for hearing").
Pursuant to § 8-43-211(2)(d), C.R.S., a party that "requests a hearing or files a notice to set a hearing on issues which are not ripe for adjudication at the time such request or filing is made . . . shall be assessed the reasonable attorney fees and costs of the opposing party in preparing for such hearing or setting." Although the statute does not define "ripe for adjudication," the Colorado Court of Appeals made the following observations concerning ripeness of issues: "Generally, ripeness tests whether an issue is real, immediate, and fit for adjudication. Under that doctrine, adjudication should be withheld for uncertain or contingent future matters that suppose a speculative injury which may never occur." Olivas — Soto v. Industrial Claim Appeals Office, 143 P.3d 1178, 1180 (Colo. App. 2006).
The court referred to the opinion of the Colorado Supreme Court in Bd. of Directors, Metro Wastewater Reclamation District v. Nat'l Union Fire Ins. Co., 105 P.3d 653 (Colo. 2005). Id. In Nat'l Union, the supreme court noted that judicial review generally requires "actual controversies based on real facts" and that "[r]ipeness tests whether the issue is real, immediate, and fit for adjudication." The court reiterated that "[c]ourts should refuse to consider uncertain or contingent future matters that suppose speculative injury that may never occur." Nat'l Union, 105 P.3d at 656. Principles of judicial restraint such as ripeness are no less applicable to quasi-judicial proceedings and § 8-43-211(2)(d), C.R.S. requires the imposition of attorney fees and costs when a party identifies for hearing issues that are "not ripe for adjudication at the time such request or filing is made."
In this case, the respondents filed an application for hearing in March 2010. They identified as issues to be considered at hearing medical benefits (reasonably necessary and related to injury) and compensability. As an additional issue, the respondents stated that the respondent insurer had not insured the employer "for this occupational disease since July 2007." Exhibit 16. As it turned out, the respondents did not dispute any particular medical benefit or generally contest compensability. Instead, the respondents sought an order relieving them of liability for the claimant's medical treatment on the ground that a subsequent insurer should be liable. At the time of applying for the hearing the respondents had no factual basis to support their claims and failed to produce evidence at the hearing to support their assertions.
The respondents refer to the lack of any legal impediment to their claims. See Olivas — Soto, 143 P.3d at 1180 (no legal impediment to determining permanent total disability issue where claimant placed at maximum medical improvement). According to the respondents, there was no legal impediment or pre-condition barring the ALJ's consideration of whether the respondent insurer remained on the risk for the claimant's medical benefits. See BCW Enterprises, Ltd. V. Industrial Claim Appeals Office, 964 P.2d 533, 538 (Colo. App. 1997) (issues of bad faith appeal and penalties not ripe pending outcome of appeal). It may be that no legal prerequisites obstructed a determination of the respondent insurer's issue of whether it was still liable for the claimant's medical benefits. It still remains the case, however, that at the time the respondents filed their application for hearing, they had no factual basis for asserting that they should not continue to be liable for the claimant's benefits. Thus, they presented no real and immediate controversy. At best, the respondents identified an issue that was uncertain and speculative.
The respondents argue that the ALJ's determination that its evidence was insufficient to support its position is inconsistent with the ALJ's determination that the issue of the respondent insurer's continued liability was not ripe. The ALJ discussed the lack of evidence in the context of what the ALJ described as a directed verdict. As noted above, the claimant's counsel sought a bench order on the issues. The ALJ noted the lack of evidence to support the respondent insurer's assertions, including insufficient evidence that medical care was denied or unrelated or that there was a lack of compensability. The ALJ found no basis for relieving the respondent insurer from future liability. The ALJ went on to discuss ripeness. Taken as a whole, the ALJ's discussion of the lack of evidence compliments his determination that the respondents presented unripe issues for hearing.
The respondents object to the ALJ's characterization of their claims as a request for declaratory relief. The ALJ's order, however, is sufficient for review. See § 8-43-301(8), C.R.S. (providing bases upon which panel may correct, set aside, or remand an order). The gist of the ALJ's discussion of the respondents' claims in the context of declaratory relief is that the respondents sought to be relieved of liability based not on actual facts, but on speculation. Thus, the ALJ concluded that the respondents presented unripe issues for hearing.
The respondents assert that the lack of challenge to a specific medical bill or treatment did not preclude its challenge to the insurer's continued responsibility for medical treatment. Even so, the respondents identified whether medical benefits were reasonably necessary or related to the injury as issues to be considered at the hearing. There were no such issues actually litigated. It therefore follows that the issues regarding medical benefits as indicated on the respondents' application for hearing, standing alone, support the award of attorney fees for listing an unripe issue. See Youngs v. White Moving Storage, Inc., W.C. No. 4-648-693 (May 28, 2009) (attorney fees and costs warranted if any of several issues not ripe) (currently pending review before the Colorado Court of Appeals, Case No. 11CA1259).
The respondents further assert that its statement in its hearing application concerning the respondent insurer no longer insuring the respondent employer was sufficient to notify the claimant of the issue pertaining to its continuing liability for medical benefits. In addition, the respondents argue that it designated appropriate issues for hearing given the limitations of the check boxes on the application form. The claimant has not appealed any portion of the ALJ's decision, but merely seeks to preserve its request for attorney fees on appeal. We therefore do not reach the issue of whether the claimant had proper notice of the issues for hearing. As to the limitations imposed by the hearing application form, the form provides parties the opportunity to identify and explain other issues at hearing. On that part of the form the respondents merely noted that the respondent insurer has not insured the respondent employer since July 2007. Exhibit 16. In any event, assuming that the respondents adequately identified for hearing the issue of whether the respondent insurer remained liable for medical benefits, attorney fees and costs were properly assessed on the ground that the respondents identified an issue or issues not ripe for adjudication.
The claimant seeks attorney fees related to the respondents' appeal. Section 8-43-301(14), C.R.S. indicates that attorney fees and costs 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. Although we do not agree with the respondents' arguments, we do not consider the petition to review and appellate brief to be so lacking in merit that they it may be classified as not well grounded in fact or law. Therefore, we decline to award attorney fees. See BCW Enterprises, Ltd. v. Industrial Claim Appeals Office, supra; 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 corrected order dated March 4, 2011, and order dated February 11, 2011, are affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
________________________ John D. Baird
________________________ Brandee DeFalco-Galvin
LINDA SILVEIRA, 16410 LEATHER CHAPS DRIVE, COLORADO SPRINGS, CO, (Claimant).
AMERICAN COMPENSATION INSURANCE COMPANY, Attn: KIM SCICLUNA, C/O: RTW, INC., MINNEAPOLIS, MN, (Insurer).
STEVEN U. MULLENS, P.C., Attn: STEVEN U. MULLENS, ESQ., COLORADO SPRINGS, CO, (For Claimant).
THOMAS, POLLART MILLER LLC, Attn: STACY J. TARLER, ESQ./MARGARET KECK, ESQ., SUITE 220-A, GREENWOOD VILLAGE, CO, (For Respondents).