Opinion
W.C. No. 4-739-748.
December 31, 2008.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Stuber (ALJ) dated July 31, 2008, that awarded permanent disability benefits based on the entire impairment rating given by the authorized treating physician. The ALJ further awarded bodily disfigurement benefits and penalties against the insurer. We affirm.
The claimant sustained an admitted industrial injury on October 22, 2007. The claimant suffered a laceration of his forehead and a fracture of his right wrist. The treating physician determined the claimant was at maximum medical improvement and measured 13 percent impairment of the upper extremity due to the wrist injury. The treating physician after rating the claimant's wrist condition found that an additional impairment of five percent of the whole person was appropriate for scarring of the claimant's face. The insurer filed a final admission of liability for permanent partial disability benefits based only upon 13 percent of the upper extremity. The insurer did not admit for permanent partial disability benefits based upon the five percent whole person impairment for the facial disfigurement. The insurer did not request a Division-sponsored independent medical examination (DIME).
The ALJ determined the insurer failed to provide any reasonable basis for the failure to admit for the five percent whole person rating or request a DIME after receipt of the rating by the treating physician. The ALJ imposed penalties under § 8-43-304, C.R.S. 2008. The ALJ ordered the insurer to pay the claimant additional permanent partial disability benefits based upon five percent whole person. In addition the ALJ considered the size, location and general appearance of the claimant's facial disfigurement and award $4,000 pursuant to § 8-42-108(1) C.R.S. 2008.
I.
On appeal, the respondents contend that the ALJ erred in awarding penalties because the respondents' actions were objectively reasonable in not admitting for a disability rating that the respondents argue by its own terms was not permanent. We are not persuaded that the ALJ erred in imposing penalties.
Penalties may be imposed against an employer who "(1) violates any provision of the Act; (2) does any act prohibited by the Act; (3) fails or refuses to perform any duty lawfully mandated within the time prescribed by the director or the Panel; or (4) fails, neglects, or refuses to obey any lawful order of the director or the Panel." Pena v. Indus. Claim Appeals Office, 117 P.3d 84, 87 (Colo.App. 2004); see also § 8-43-304(1), C.R.S. 2008. The failure to comply with a procedural rule is a failure to obey an "order" within the meaning of § 8-43-304(1). Pioneers Hosp. v. Indus. Claim Appeals Office, 114 P.3d 97, 98 (Colo.App. 2005). An employer or insurer fails to obey an order if it fails to take the action that a reasonable insurer would take to comply with the order. The employer's or insurer's action is therefore "measured by an objective standard of reasonableness." Jiminez v. Indus. Claim Appeals Office, 107 P.3d 965, 967 (Colo.App. 2003). The reasonableness of an employer's or insurer's action depends on whether the action was predicated on a rational argument based in law or fact. Jiminez v. Indus. Claim Appeals Office, supra, 107 P.3d at 967.
The respondents argue that the ALJ erred in finding that they were required to either admit for the entire whole person rating estimated by the treating physician or request a DIME. The respondents argue the facts here present a unique situation where the treating physician rated a scar for medical impairment and opined at the same time that the scar would probably improve over time. The respondents argue that they correctly admitted for the identified permanent partial disability related to the claimant's wrist but did not admit the "non-permanent partial disability" related to a facial scar. Therefore, the respondents argue that the disfigurement was not permanent and they were not required to admit for it.
Here the treating physician in his report opined that the claimant had 13 percent impairment of the upper extremity, which translated to seven percent of the whole person. The treating physician opined the claimant had an additional five percent whole person impairment for scarring of the face. Exhibit D. The respondents admitted for only 13 percent of the upper extremity but nothing for the facial scar. Exhibit B The ALJ found the claimant suffered five percent whole person impairment in addition to the 13 percent impairment of the upper extremity.
Utilizing the American Medical Association Guidelines to the Evaluation of Permanent Impairment, Third Edition, Revised (AMA Guides), the treating physician determined that additional impairment was appropriate for the scarring on the claimant's face. In the report upon which the admission was based the treating physician stated that:
There is no functional loss or abnormality in regards to the scar and the scar will probably improve over time. However, an additional 5% impairment is attributed to the scarring under chapter 13-6 impairment.
Exhibit D.
A party who disputes the treating physician's impairment rating must request a DIME within the time period established by § 8-42-107.2 C.R.S. 2008 and the ALJ is precluded from determining permanent impairment until completion of the DIME. Further, Workers' Compensation Rule of Procedure 5-5(E), 7 Code Colo. Reg. 1101-3 at 15, requires that within 30 days of a treating physician's determination of medical impairment, the insurer shall file a final admission consistent with the physician's rating or request a DIME.
We note that this is not a situation where the respondents contended there was a factual dispute concerning an ambiguous treating physician's report of permanent impairment. The respondents here did not seek resolution of some ambiguity in a medical report before they were required to file an admission or resort to a DIME. Rather, the respondents unilaterally disregarded the treating physician's expressed opinion on the extent of the claimant's medical impairment. See Blue Mesa Forest v. Lopez, 928 P.2d 831 (Colo.App. 1996); Cavillo v. Intermountain Wood, W. C. No. 4-62-927(September 24, 2002). Therefore, we are not persuaded to disturb the ALJ's award of penalties. In our view, there is substantial evidence to support the ALJ's determination that the respondents violated § 8-42-107.2 and Rule of Procedure 5-5(E) by failing to file an admission for the treating physician's determination of medical impairment within 30 days or requesting a DIME.
The respondents further argue that the claimant suffered no financial loss at the time of the hearing, because the respondents had elected to pay the admitted permanent partial disability benefits in a lump sum rather than pay the benefits out incrementally. Although this might be a legitimate consideration regarding the amount of the penalty to be imposed, it does not excuse the respondents from the violation for which they were penalized. Here the penalty was correctly imposed for failure to perform a lawful duty enjoined within the time prescribed. The imposition of penalties under § 8-43-304(1) is mandatory if there has been a violation of the Act and the violation was not reasonable under an objective standard. Rael v. Debourgh Manufacturing Co., W.C. No. 4-115-551 (February 27, 1998); Marple v. Saint Joseph Hospital, W.C. No. 3-966-344 (September 15, 1995). Moreover, we note that the ALJ found that the insurer's violation of the statute and rule caused the claimant the delay and expense of proceeding to hearing to recover his additional permanent partial disability benefits.
II.
The respondents contend that the lack of a DIME presented a jurisdictional bar to the ALJ's adjudication of the issue of the permanent partial disability. We are not persuaded that under the circumstances of this case that the ALJ was without jurisdiction to resolve the dispute between the parties.
We are aware that the Colorado Supreme Court has determined that the DIME procedure is the only way for an injured worker to challenge the treating physician's finding on the degree of non-scheduled impairments. Whiteside v. Smith, 67 P.3d 1240, 1246 (Colo. 2003). However, here the claimant did not seek to challenge the treating physician's opinion on permanent impairment; rather the claimant sought to enforce the treating physician's determination and sought penalties for the respondents' failure to file an admission based on that determination. We know of no authority, nor have the respondents pointed to any, which would require a claimant to resort to a DIME in order to enforce the opinion of the treating physician.
Here, the ALJ found with record support that the treating physician opined that he did not anticipate any significant change relating to the scar on the claimant's face. Maisel Dep. at 9. Because the issue of whether the claimant's facial scar is permanent is factual in nature, we must uphold the ALJ's determination if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2008. In our opinion, there is substantial evidence, which supports the ALJ's award of the additional five percent whole person impairment for the facial disfigurement beyond the amount admitted to by the respondents. Therefore, the ALJ had jurisdiction to order payment of the additional five percent whole person impairment.
III.
The respondents also contend that the ALJ erred by ordering a duplicative benefit not allowed under Colorado Workers' Compensation Act (Act). The respondents argue that because the ALJ ordered payment of a disfigurement award and at the same time awarded the claimant a medical impairment award under the AMA Guides based on disfigurement that the claimant received a double payment. In our view, the ALJ committed no error.
Disfigurement benefits are provided for in § 8-42-108 C.R.S., 2008. Section 8-42-108(1) permits an ALJ to award disfigurement benefits up to a maximum of $4,000 if the claimant is "seriously, permanently disfigured about the head, face or part of the body normally exposed to public view." Here the ALJ awarded $4,000 for disfigurement.
Section 8-42-108 affords the ALJ great discretion in determining the amount of compensation to be awarded for disfigurement. We may not interfere with the ALJ's determination regarding the amount of the disfigurement award in the absence of an abuse of discretion. An ALJ only abuses his discretion if the order "exceeds the bounds of reason." Rosenberg v. Board of Education of School District # 1, 710 P.2d 1095 (Colo. 1985). The ALJ viewed the claimant and his order reflects consideration of relevant factors. Consequently, we cannot say his order exceeds the bounds of reason.
The respondents concede that Gonzales v. Advanced Component Sys., 949 P.2d 569, 574 (Colo. 1997) held that a claimant may receive a disfigurement award pursuant to § 8-42-108 as well as a permanent partial disability award based upon facial disfigurement. However, the respondents argue that the 2007 amendments to the disfigurement provisions of the Act would allow duplicative benefit award if Gonzales is applied to the new version of the disfigurement statute. Therefore, the respondents contend that ALJ's reliance on Gonzales constitutes legal error.
Section 8-42-108(2) was amended in 2007 to permit an ALJ to award disfigurement benefits up to a maximum of $4,000, from the previous limitation of $2,000, if the claimant is "seriously, permanently disfigured about the head, face or part of the body normally exposed to public view." Colo. Sess. Laws 2007, chap 174 at 640-641, § 8-42-108 C.R.S., 2008. That is what the ALJ found here. The date of the claimant's admitted industrial accident was October 22, 2007 and the changes in the act were effective July 1, 2007 and apply to injuries occurring on and after that date. In 2007, two new sections were added to § 8-42-108, which provide as follows:
(2)If an employee sustains any of the following disfigurements, the director may allow up to eight thousand dollars as compensation to the employee in addition to all other compensation benefits provided in this article other than compensation allowed under subsection (1) of this section:
(a) Extensive facial scars or facial burn scars;
(b) Extensive body scars or burn scars; or
(c) Stumps due to loss or partial loss of limbs.
(3) The director shall adjust the limits on the amount of compensation for disfigurement specified in this section on July 1, 2008, and each July 1 thereafter by the percentage of adjustment made by the director to the state average weekly wage pursuant to section 8-47-106.
The respondents contend that the new disfigurement statute is now tied to the annual benefit rate of adjustments under § 8-47-106, C.R.S. 2008. Under § 8-47-106 the state average weekly wage forms the basis for establishing maximum benefits for such things as temporary and permanent disability benefits under the Act. The state average weekly wage is determined annually by the Director of the Division of Workers' Compensation.
The respondents note that under the ALJ's order the claimant received both an award under the AMA Guides for medical impairment caused by the disfigurement and disfigurement benefits under the Act, both of which are adjusted annually through the average weekly wage multiplier under § 8-47-106. Therefore, the respondents contend this is a duplicative award now allowed under the Act. However, we are not persuaded that the ALJ erred in relying on Gonzales and awarding both a disfigurement award pursuant to § 8-42-108 as well as a permanent partial disability award based upon medical impairment for facial disfigurement.
In interpreting these changes in the statute, we apply the ordinary rules of statutory construction. The purpose of statutory construction is to effect the legislative intent. Because the best indicator of legislative intent is the language of the statute, words and phrases in a statute should be given their plain and ordinary meanings, and phrases should be read in context and construed according to the rules of grammar and common usage. Section 2-4-101, C.R.S. 2008; Weld County School District RE-12 v. Bymer, 955 P.2d 550 (Colo. 1998).
In enacting the 2007 changes to the disfigurement provision of the Act, the legislative intent is set forth in the legislative declaration as follows:
The general assembly hereby finds and determines that the limitation on the amount of compensation allowed to an injured worker who has been disfigured due to a workplace injury has not been increased for more than thirty years. Because workers' compensation is the exclusive remedy available to workers injured on the job, the amount allowed for an award for disfigurement suffered due to a workplace injury should be increased on an annual basis to better compensate the injured worker.
Colo. Sess. Laws 2007, chap 174 at 641.
The respondents are correct that if the state average weekly wage increases over time, greater amounts will be awarded for disfigurement award pursuant to § 8-42-108 as well as a permanent partial disability award based upon facial disfigurement. However, the plain langue of the statute indicates a legislative intent that benefits should be increased on an annual basis to better compensate the injured worker.
Moreover, the legislature is presumed to be aware of the judicial precedent in an area of law when it legislates in that area. See Vaughan v. McMinn 945 P.2d 404 (Colo. 1997); Resolution Trust Corp. v. Heiserman, 898 P.2d 1049, 1054 (Colo. 1995). In addition, the legislature is presumed to adopt the construction which prior judicial decisions have placed on particular language, when such language is employed in subsequent legislation. See Vaughan v. McMinn supra; People v. Cooke, 150 Colo. 52, 62, 370 P.2d 896, 901 (1962). Therefore, the general assembly here was presumably aware of the court's interpretation in Gonzales v. Advanced Component Sys., supra., that a claimant may be awarded for disfigurement award pursuant to § 8-42-108 as well as a permanent partial disability award based upon facial disfigurement. The General Assembly in 2007 chose to increase the benefits that could be received for disfigurement without placing any corresponding restrictions on permanent partial disability awards based upon facial disfigurement. Therefore, we see no error in the ALJ's reliance on Gonzales v. Advanced Component Sys., supra.
IV.
The respondents next argue that the ALJ erred by not limiting the claimant's permanent partial disability award based on disfigurement to 12 weeks under § 8-41-301(2)(b) C.R.S. 2008. Section 8-41-301(2)(b) provides that "where a claim is by reason of mental impairment, the claimant shall be limited to twelve weeks of medical impairment benefits," which is "inclusive of any temporary disability benefits."
We first note that the respondents did not admit for any medical impairment based on mental impairment. Therefore, even if the respondents were correct that permanent partial disability should be limited by the mental impairment section of the Act they would nevertheless still be liable for penalties.
Moreover, we decline to address the respondents' argument, raised for the first time on appeal, that the claimant's permanent partial disability award based on disfigurement is limited to 12 weeks under § 8-41-301(2)(b). (See Respondents' Post-Hearing Position Statement). The respondents failed to raise this argument before the ALJ and it has therefore not been preserved for our review. Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988); Robbolino v. Fischer-White Contractors, 738 P.2d 70 (Colo.App. 1987); Colorado Compensation Ins. Authority v. Industrial Claim Appeals Office, 884 P.2d 1131 (Colo.App. 1994). IT IS THEREFORE ORDERED that the ALJ's order issued July 31, 2008 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_______________________ Curt Kriksciun
_______________________ Thomas Schrant
CARLOS CASTRO, COLORADO SPRINGS, CO, (Claimant).
FBG SERVICE CORPORATION, Attn: MS KAY GLOUNER, COLORADO SPRINGS, CO, (Employer).
TRAVELERS CASUALTY SURETY COMPANY, Attn: ANNETTE HENSON, DENVER, CO, (Insurer).
HEUSER HEUSER, LLP, Attn: GORDON J HEUSER, ESQ., COLORADO SPRINGS, CO, (For Claimant).
WEINBERGER CAVANAUGH, PC, Attn: FRANK CAVANAUGH, ESQ., DENVER, CO, (For Respondents).