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In re Wilson v. GT Interiors, W.C. No

Industrial Claim Appeals Office
Apr 3, 2006
W.C. No. 4-526-295 (Colo. Ind. App. Apr. 3, 2006)

Opinion

W.C. No. 4-526-295.

April 3, 2006.


FINAL ORDER

The respondents seek review of an order dated October 13, 2005 of Administrative Law Judge Coughlin (ALJ) that imposed a penalty under § 8-43-304, C.R.S. 2005, for wilful violation of the Workers' Compensation Act and Rule XVI of the Division of Workers' Compensation Rules of Procedure. We affirm.

The ALJ's pertinent findings of fact are as follows. The claimant suffered work-related injuries to his leg, hip, spine and pelvis. Postoperative changes in the claimant's anatomy included discrepancy in leg length. This leg length discrepancy affects the claimant's gain, and can cause significant pain and discomfort in the claimant's low back and hip. The claimant was given two prescriptions for specialty shoes to address the claimant's postoperative condition. The claimant had his prescriptions for specialty shoes filled at Pedorthics. On March 11, 2005, the claimant was sent a statement from Pedorthics indicating that medical expenses in the amount of $570.80 were more than 90 days past due. The ALJ drew the inference that the insurer was well aware of the outstanding Pedorthics bills reflected on the March 11, 2005-statement, prior to the issuance of that statement. On August 17, 2005, Pedorthics send a fax to respondents' counsel which stated that they had received payment of $357.52 which they would consider full payment and the balance would be written off but they would require written pre-approval for all future work for the claimant.

The ALJ found that Pedorthics was not timely paid and that no rational argument was advanced to explain the insurer's conduct. The ALJ found that the insurer's conduct was not objectively reasonable under the circumstances. The ALJ noted the respondents seemed to acknowledge that a penalty in the amount of $28.60 under § 8-43-401, C.R.S. 2005 could be imposed. The ALJ determined that a penalty in the amount of $286 per day from April 11, 2005 until August 17, 2005, would be appropriate under § 8-43-304.

On review, the respondents contend the ALJ's findings of fact are not sufficient for review. The respondents argue that the ALJ's inference when the insurer became aware of the outstanding Pedorthics bill reflected on the March 11, 2005-statement is unsupportable because it is based upon inadmissable hearsay contained in the claimant's exhibits. Specific Findings OF Fact, Conclusions of Law and Order at 2, ¶ 9. There was considerable controversy over exhibits offered by the claimant. However, the respondent's exhibits were admitted without objection. Tr. at 9. The March 11, 2005-statement referred to by the ALJ can be found at Respondent's Exhibit A at 2. The Fax from Pedorthics referred to by the ALJ can be found at Respondent's Exhibit D. The respondent's exhibits also contain correspondence between the involved attorneys regarding the medical billings. Exhibits A, B, C. Whatever the effect the ALJ's rulings may have had on the exhibits offered by the claimant, the ALJ was entitled to rely on exhibits offered by the respondent and admitted into evidence without objection. The respondents' exhibits are support for the ALJ's findings of when the insurer became aware of the outstanding Pedorthics bill and when they finally paid it. Because the issue of when the insurer was aware of the outstanding medical bills is factual in nature, we must uphold the ALJ's determination if supported by substantial evidence in the record. § 8-43-201, C.R.S. 2005. This standard of review requires us to consider the evidence in a light most favorable to the prevailing party, and defer to the ALJ's credibility determinations, resolution of conflicts in the evidence, and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.2d 1117 (Colo.App. 2003). We perceive no basis on which to interfere with the ALJ's findings.

The respondents next contend that the ALJ erred in not resolving conflicts in the evidence on when the medical bill was paid. We disagree. Relying on the August 17, 2005 Pedorthics Fax (respondent's exhibit D), the ALJ terminated the penalty period for failing to comply with Rule XVI, on August 17, 2005. The hearing on this matter took place on August 23, 2005 and, as counsel for claimant suggested in his cross examination, the claimant might not have been aware that the insurer had finally paid the bill shortly before the hearing. Tr. at 60-61. However, this does not create an unresolved conflict in the evidence. When considering an order we may note findings which, although not expressly contained in the order, are necessarily implied by it. Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, 5 P.3d 385 (Colo.App. 2000). We have no trouble discerning that the ALJ determined that payment was made to Pedorthics on August 17, 2005 and the record supports the ALJ's finding.

The respondents next argue that the findings of fact made by the ALJ are not supported by substantial evidence. They argue that the ALJ found a 104-day delay in payment of a health club membership and that there is no evidence that the bill was denied. However, as we read the order, the ALJ made no such finding. Rather, the ALJ merely noted that the claimant was asking for various penalties, including $28.60 a day for 104 days for delay in paying for the prescribed health club membership. Specific Findings OF Fact, Conclusions of Law and Order at 6, ¶ b. We find the record amply supports the ALJ's findings.

The respondents contend the ALJ's order, awarding the claim for penalties based on failure to comply with Rule XVI (K) and imposing penalties under the general penalty provision of § 8-43-304, rather then under § 8-43-401, is contrary to law. In Holliday v. Bestop, Inc., 23 P.3d 700, 706-707 (Colo. 2001), the court held that § 8-43-304(1) divides conduct subject to penalties into four categories, and that the fourth category, failing, neglecting, or refusing to obey a lawful order, is subject to penalties under § 8-43-304(1) "even though penalties for such conduct are elsewhere specifically provided in the Workers' Compensation Act." The court's holding was based on its determination that the limiting phrase "for which no penalty has been specifically provided" applies to the third category of conduct [failing or refusing to perform any duty lawfully enjoined], but clearly does not apply to the fourth category. The court further observed that the structure of § 8-43-304 (1) reflects that the General Assembly "considered the violation of a statutory provision or an administrative mandate to be a less egregious wrong than disregarding a tribunal's lawful order." Holliday, 23 P.3d at 706.

The Holliday decision overruled the so-called "gravamen test" exemplified by Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997). The gravamen test held that penalties are available under § 8-43-304(1) only when the Act does not create a specific penalty for the violation. Further, the gravamen test held that underlying acts or omissions which lead to a violation for which a specific penalty is imposed must be treated as encompassed within that violation. However, after Holliday, the gravamen test has been overruled "to the extent that it held that penalties under § 8-43-304(1) for failing, neglecting, or refusing to obey an order may not be imposed where the specific penalty in § 8-43-401(2)(a) is available." Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211, 1215 (Colo.App. 2001). Further, where there is a violation of an order to pay medical benefits, the ALJ has discretion to impose penalties under § 8-43-304(1) or § 8-43-401(2)(a). Giddings, 39 P.3d at 1213.

We agree with the claimant that the ALJ's order reflects a proper application of the law. Section 8-40-201(15), C.R.S. 2005, defines the word "order" to include a "rule" or "regulation" arrived at by the Director of the Division of Workers' Compensation (Director). See Spracklin v. Industrial Claim Appeals Office, 66 P.3d 176 (Colo.App. 2002); Giddings, 39 P.3d at 1214. Because the statute defines the term "order" to include a rule or regulation issued by the Director, violation of a rule of procedure is subject to penalties under § 8-43-304(1) regardless of whether the violation might also be punished under a statutory provision imposing a specific penalty. Holliday v. Industrial Claim Appeals Office, supra; Briscoe v. Denver Post, W.C. No. 4-217-926 (February 7, 2000), set aside and remanded, Briscoe v. Industrial Claim Appeals Office, (Colo.App. No. 00CA414, July 19, 2001) (not select for publication) (violation of Rule XVI (I) and (J) may warrant imposition of penalties under § 8-43-304).

The respondents rely on Pena v. Industrial Claim Appeals Office 2004 WL 2609568 (Col. App.) as authority for their contention that the ALJ erred in awarding penalties under § 8-43-304. We note the Court of Appeals modified its decision on Denial of Rehearing May 26, 2005. Pena v. Industrial Claim Appeals Office, 117 P.3d 84(Colo.App. 2004). In our view, the respondents' reliance on Pena is misplaced. In Pena, the Court of Appeals approved imposition of penalties under § 8-43-304 where the insurer failed to provide medical care and treatment. We have reviewed the respondent's additional arguments and they do not alter our conclusions. We perceive no error in the ALJ's imposition of penalties under § 8-43-304.

IT IS THEREFORE ORDERED that the ALJ's order dated October 13, 2005, is affirmed.

INDUSTRIAL CLAIM APPEALS PANEL

____________________________________ John D. Baird

____________________________________ Thomas Schrant

David Wilson, Aurora, CO, GT Interiors, Denver, CO, Nancy Burchett, TIG Insurance, Irving, TX, Ligita S. Bardulis, Esq., Littleton, CO, (For Claimant).

Erica A. Weber, Esq., Denver, CO, (For Respondents).


Summaries of

In re Wilson v. GT Interiors, W.C. No

Industrial Claim Appeals Office
Apr 3, 2006
W.C. No. 4-526-295 (Colo. Ind. App. Apr. 3, 2006)
Case details for

In re Wilson v. GT Interiors, W.C. No

Case Details

Full title:IN THE MATTER OF THE CLAIM OF DAVID WILSON, Claimant, v. GT INTERIORS…

Court:Industrial Claim Appeals Office

Date published: Apr 3, 2006

Citations

W.C. No. 4-526-295 (Colo. Ind. App. Apr. 3, 2006)