Avalanche Industries, Inc. v. Industrial Claim Appeals Office

166 P.3d 147, 2007 WL 851644

• Court: Colorado Court of Appeals
• Decided: August 27, 2007
• Docket: 06CA0716
• Status: Published

Opinions

Opinion by

Judge HAWTHORNE.

In this workers' compensation proceeding, Avalanche Industries, Inc., and its insurers, Great States Insurance Company and Western Guaranty Fund (collectively employer), seek review of a final order of the Industrial Claim Appeals Office (Panel) affirming the order of the administrative law judge (ALJ) that the average weekly wage (AWW) of Gladys Louise Clark (claimant) should be recalculated to reflect her higher earnings from a subsequent employer and to include the cost of her group health insurance. We affirm.

Claimant suffered an industrial injury in July 2000. Shortly thereafter, she was informed by employer that her group health coverage would terminate but that she could receive health and dental insurance benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), 42 U.S.C. § 800bb-1, et seq. (2006), at a cost of $78.90 per week. Claimant declined the available COBRA benefits because she received group health insurance benefits from a subsequent employer.

In March 2001, claimant commenced employment with her most recent employer.

On April 3, 2001, claimant was placed at maximum medical improvement. Following a division-sponsored independent medical examination, claimant received a twelve percent whole person permanent medical impairment rating.

In December 2001, employer filed a final admission of liability (FAL) admitting responsibility for claimant's twelve percent permanent impairment of her lumbar spine and her AWW of $415.68, which was based on claimant's salary at the time she left her employment with employer. Claimant did not contest the FAL, and her claim was closed.

In January 2003, claimant filed a petition to reopen her claim based upon a worsening of her condition. Following an evidentiary hearing, the ALJ found that claimant's condition had worsened between April and September 2001. He therefore granted claimant's petition to reopen, determining she proved that she had suffered an increase in symptoms that was related to her industrial injury. The ALJ awarded claimant temporary total disability (TTD) benefits at the admitted rate of $277.09 for the period February 3 to February 21, 2008. Employer appealed, but the ALJ's findings were upheld both by the Panel and later by another division of this court. Avalanche Indus., Inc. v. Indus. Claim Appeals Office, 2004 WL 2406674 (Colo.App. No. 04CA0N636, Oct. 28, 2004)(not published pursuant to C.A.R. 35(f)).

In April 2005, claimant was taken off work by her authorized treating physician. On May 4, 2005, she was advised by her most recent employer that she was eligible to continue its group health care benefits under COBRA. She was also informed that her initial biweekly cost for the insurance would be $129.19, but that the biweekly cost would increase to $857.51, or $178.76 per week, after she had exhausted her available leave under the Family and Medical Leave Act (FMLA), 29 U.S.C. § 1601, et seq. (2006).

At the time claimant was taken off work, her AWW from her most recent employer was $625.

On June 14, 2005, claimant filed an application for hearing and notice to set, endorsing the sole issue of AWW. A hearing was held on the issue on September 26, 2005. However, no evidence was presented at the hearing, and no witnesses were called. Rather, the parties stipulated to the relevant facts. Each party presented argument at the hearing and submitted position statements and briefs to the ALJ.

Employer argued that claimant was not entitled to raise the issue of AWW because the issue had been closed in 2001 when claimant did not contest employer's FAL and it had not been reopened by the ALJ after the worsening of claimant's condition in 2008. Employer also argued that claimant was not entitled to the higher AWW based on a salary earned five years after she had left employer's employ, and that her AWW should not include the cost of health insurance benefits under COBRA offered by her most recent employer because she had not sought such benefits previously.

The ALJ disagreed with employer and awarded claimant an increase in AWW based on her weekly wage while employed by her most recent employer, including the cost of her most recent employer's group health insurance coverage. Claimant was thus awarded TTD benefits based on an AWW of $689.60 for the period April 18 to July 11, 2005, and $808.76 after July 11, 2005, when she would no longer be eligible for leave under FMLA from her most recent employer.

Employer appealed to the Panel, which affirmed the ALJ's determination. The Panel concluded that, contrary to employer's contention, the ALJ's 2008 order granting claimant's petition reopened claimant's entire award, not just issues pertaining to her medical benefits. The Panel also concluded that the ALJ had not abused his discretion in basing claimant's AWW on the salary she earned from her most recent employer, despite the fact that claimant had left her position with employer five years before her claim for an increase in her AWW, because the ALJ had the discretionary authority under § 842-1028), C.R.S.2006, to increase claimant's AWW if equity so demanded. Finally, the Panel also upheld the ALJ's inclusion of the cost of claimant's most recent employer's group health plan, finding that the phrase "employer's group health insurance plan" in § 8-40-201(19)(b), C.R.S.2006, was broad enough to incorporate a claimant's subsequent employers.

L.

Employer first argues that it was denied its rights to equal protection and due process guaranteed by the Colorado Constitution, art. II, § 25. Specifically, employer contends that its right to procedural due process was violated by the ALJ's failure to make adequate findings in his order, and that its right to equal protection was violated because the AWW statutes were applied differently to it than to other similarly situated employers that have not been required to compensate a claimant for AWW based on wages earned from a subsequent employer. We disagree with both arguments.

A.

A party's right to procedural due process is met if the party is provided with notice and an opportunity to be heard. Pub. Utils. Comm'n v. Colo. Motorway, Inc., 165 Colo. 1, 10, 437 P.2d 44, 48 (1968). The essence of procedural due process is fundamental fairness. City & County of Denver v. Eggert, 647 P.2d 216, 224 (Colo.1982).

However, here, employer is not alleging that it was denied proper notice or hearing. Its procedural due process claim rests solely on its contention that the ALJ's order was brief and did not make adequate findings.

It is axiomatic that where significant rights are at issue, the decisionmaker must state the reasons for his or her determination. Mau v. E.P.H. Corp., 638 P.2d 777, 780 (Colo.1981). However, the Due Process Clause of the Colorado Constitution does not guarantee a party an order setting out every finding on which the order is based. Employer cites to no case, and we know of none, imposing an obligation to expound thoroughly on the reasons and findings underlying a decision. Cf. Shafer Commercial Seating, Inc. v. Indus. Claim Appeals Office, 85 P.3d 619, 621 (Colo.App.2003)(@the ALJ is not held to a crystalline standard of findings"). Because the Due Process Clause imposes no such requirement, we decline to impose such a burden on the ALJ.

B.

The right to equal protection guarantees that persons who are similarly situated will receive like treatment under the law. Harris v. The Ark, 810 P.2d 226, 229 (Colo.1991). A statute is unconstitutional "as applied" if it is applied with different degrees of severity to different groups of persons described by some suspect trait. Pace Membership Warehouse v. Axelson, 938 P.2d 504 (Colo.1997). A person alleging an equal protection violation has the burden of showing that the classification arbitrarily subjects similarly situated classes of persons to disparate treatment. Indus. Claim Appeals Office v. Romero, 912 P.2d 62 (Colo.1996).

Employer contends that it is unlawfully singled out by being required to compensate claimant at a rate higher than her AWW when she left employer. However, employer cites to no examples of the pertinent AWW statutes being applied to other employers with a different degree of severity. Nor does employer contend that it is being treated differently from other similarly situated employers because it belongs to a group that is described by some suspect trait.

Employer argues that because neither claimant nor the Panel cites to any published case in which a similarly situated employer has also been required to pay an increased AWW based upon a subsequent employer's wage, no such examples exist. However, employer bears the burden of presenting evidence of disparate treatment; it is not the burden of the opposing party to come forward with examples of similarly treated persons. See Pepper v. Indus. Claim Appeals Office, 131 P.3d 1137, 1140 (Colo.App.2005), aff'd sub nom. City of Florence v. Pepper, 145 P.3d 654 (Colo.2006).

Claimant and the Panel argue that other employers have, in fact, been treated in the same manner as employer by being required to pay a claimant an AWW higher than the claimant earned at the time of the initial injury. In support of their argument, they rely upon Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App.2001), and Campbell v. IBM Corp., 867 P.2d 77 (Colo.App.1993).

In Pizza Hut, supra, a claimant injured while delivering pizzas for his employer was awarded benefits based upon the higher AWW he earned from a subsequent employer. Employer argues that Pigza Hut is distinguishable because the employee worked contemporaneously for both employers for a short time, and, thus, the time between employers was much less in Pizza Hut than the five years here. We are not persuaded that this distinction is significant. In Pizza Hut, as here, the AWW was based upon higher wages earned by the claimant from a subsequent employer.

Moreover, employer's contention that the passage of time renders the imposition of higher, subsequent wages upon it inequitable, is vitiated by Campbell v. IBM Corp., supra. In that case, an employee's initial injury occurred ten years before her deteriorating condition caused her to cease working. Her employer argued that her AWW should be based on the wages she earned at the time of her initial injury, rather than the higher wages she had earned through salary increases and promotions during the intervening years. A division of this court determined that it would be "manifestly unjust to base claimant's disability benefits in 1986 and 1989 on her substantially lower earnings in 1979," and determined that her AWW should be based upon the higher salary earned at the time her deteriorating condition caused her to stop working. Campbell v. IBM Corp., supra, 867 P.2d at 82.

Thus, employer has not met its burden of demonstrating that its right to equal protection under the law has been violated.

IL

Employer next contends that the Panel erred in affirming the ALJ's decision to award claimant an AWW based on the higher wage she earned from her subsequent employer because claimant had not petitioned to reopen the issue of AWW. We do not agree.

A claimant may petition to reopen an award if his or her condition changes or worsens. "At any time within six years after the date of injury, the director or an administrative law judge may, after notice to all parties, review and reopen any award on the ground of fraud, an overpayment, an error, a mistake, or a change in condition...." Section 8-43-303(1), C.R.S.2006 (emphasis added). An award is an "order, whether resulting from an admission, agreement, or a contested hearing, which addresses benefits and which grants or denies a benefit.... After an award becomes final . no further benefits may be awarded unless there is an appropriate order to reopen the proceedings." Burke v. Indus. Claim Appeals Office, 905 P.2d 1, 2 (Colo.App.1994).

To warrant reopening of an award on the ground of a "change in condition," a claimant must demonstrate a change in physical or mental condition, and not merely a change in economic condition. Lucero v. Climax Molybdenum Co., 732 P.2d 642 (Colo.1987).

Whether a party has met its burden of proof regarding a change in condition warranting reopening of an award is a question of fact, Wilson v. Indus. Claim Appeals Office, 81 P.3d 1117, 1118 (Colo.App.2003), and "is solely for the trier of fact to determine." Metro Moving & Storage Co. v. Gussert, 914 P.2d 411, 414 (Colo.App.1995). The reviewing court must uphold the ALJ's factual determinations if the decision is supported by substantial evidence in the record. Christie v. Coors Transp. Co., 919 P.2d 857, 860 (Colo.App.1995), aff'd, 933 P.2d 1330 (Colo.1997).

Here, claimant's award was reopened by the ALJ in 2008 under § 8-48-303(1) based on a change in claimant's physical condition. The award remained reopened when claimant submitted her application for hearing and notice to set on the issue of AWW in 2005.

Employer argues that the order to reopen did not encompass AWW because it was not raised by claimant in her petition and the order addressed only the issues of medical benefits and TTD. The Panel disagreed, finding that onee a petition to reopen is granted, an entire award is reopened, not just specific issues.

We agree with the Panel's reasoning. The express language of the statute provides that an ALJ "may ... review and reopen any award." Section 8-48-808(1). This language is distinct from a later subsection of the statute that expressly addresses the reopening of "medical benefits." Section 8-43-303(2)(b), C.R.S.2006. Because we must give full effect to the statutory language chosen by the General Assembly whenever possible and must assume that no word in a statute is superfluous, we conclude that the difference in terms between the subsections of the reopening statute is not inadvertent. See Spahmer v. Gullette, 118 P.3d 158, 162 (Colo.2005). Under the plain language of the statute, a reopening under § 8-43-808(1) reopens an "award" and not just specific issues raised by a claimant in a petition to reopen.

The ALJ therefore properly determined that claimant's entire award had been reopened and that claimant was entitled to seek an increase in her AWW.

IIL

Employer next contends that the Panel erred in affirming the ALJ's award of benefits based on claimant's AWW earned from her most recent employer because the AWW must be calculated based only upon claimant's wages at the time of the injury. Again, we disagree.

Compensation benefits are calculated based upon an injured employee's AWW. Section 8-42-102(1), C.R.S.2006. The term "wages" is defined by the Workers' Compensation Act (the Act) as "the money rate at which the services rendered are recompensed under the contract of hire in force at the time of the injury." Section 8-40-201(19)(a), C.R.S8.2006.

However, ALJs are granted broad discretion in determining "whether the circumstances of a particular case require [an ALJ] to employ an alternative method of computing compensation benefits based upon the employee's [AWW]." Coates, Reid & Waldron v. Vigil, 856 P.2d 850, 855 (Colo.1993). Indeed, the Act provides that "in each particular case, [the ALJ] may compute the [AWW] of said employee in such other manner and by such other method as will, in the opinion of [the ALJ] based upon the facts presented, fairly determine such employee's [AWW]." Section 8-42-102(8), C.R.S.2006.

The entire objective of wage calculation [under the Act] is to arrive at a fair approximation of the claimant's wage loss and diminished earning capacity. Although [AWW] generally is determined from the employee's wage at the time of injury, if for any reason this general method will not render a fair computation of wages, the administrative tribunal has long been vested with discretionary authority to use an alternative method in determining a fair wage.

Campbell v. IBM Corp., supra, 867 P.2d at 82 (citation omitted).

Wage calculations are reviewed under an abuse of discretion standard. To be set aside, the ALJ's wage calculation must be shown to exceed the bounds of reason. Coates, Reid & Waldron v. Vigil, supra, 856 P.2d at 856 (citing Rosenberg v. Bd. of Educ., 710 P.2d 1095, 1098-99 (Colo.1985)). In resolving whether a wage calculation exceeds the bounds of reason, reviewing courts "may specifically consider whether an award is supported by the applicable law." Coates, Reid & Waldron v. Vigil, supra, 856 P.2d at 856.

Here, the ALJ did not abuse his discretion in determining that claimant's AWW should be calculated based upon her wages nearly five years after she initially sustained her injury. While the ALJ's wage calculation substantially increased claimant's AWW, it reflected an increase in wages that claimant would have continued to receive if not for the industrial injury she sustained while working for employer. In our view, the ALJ's wage calculation was a fair approximation of claimant's wage loss. See Campbell v. IBM Corp., supra, 867 P.2d at 82.

Moreover, we disagree with employer's contention that the factual differences between claimant's situation and the situation in Pizza Hut v. Industrial Claim Appeals Office, supra, render that decision inapplicable. Both here and in Pizza Hut, the claimant's AWW calculation was based on wages earned from a subsequent employer for which the claimant worked after the initial injury. Although the claimant in Pizza Hut concurrently held his positions for a short period, the principle permitting wages to be calculated based on earnings from a subsequent employer, and not upon wages earned at the time of injury, applies here. See Pizza Hut v. Indus. Claim Appeals Office, supra, 18 P.3d at 869; see also Campbell v. IBM Corp., supra, 867 P.2d at 82 (upholding the calculation of AWW based upon a claimant's higher earnings at the time her condition worsened and she ceased working, which was ten years after her initial injury).

We therefore cannot say that the Panel erred or that the ALJ abused his discretion in awarding claimant benefits based upon her AWW from her most recent employer.

IV.

Finally, employer contends that the Panel erred in affirming the ALJ's order including claimant's cost of COBRA benefits in the AWW calculation. We are not persuaded.

Employer initially argues that claimant must have actually purchased COBRA insurance for that cost to be included in her AWW and the record contains no evidence that claimant purchased COBRA insurance from any employer. We are not persuaded.

The Act's definition of wages expressly includes "the employee's cost of continuing the employer's group health insurance plan and, upon termination of the continuation, the employee's cost of conversion to a similar or lesser insurance plan." Section 8-40-201(19)(b). "Continuation," on the one hand, refers to the employee's "right to continue the existing coverage upon termination or other qualifying reasons for a period of eighteen months at the group rate"; "conversion," on the other hand, refers to an employee's ability "to obtain a policy from the employer's insurer following the expiration of the continued coverage." Midboe v. Indus. Claim Appeals Office, 88 P.3d 643, 645 (Colo.App.2003), overruled in part by Indus. Claim Appeals Office v. Ray, 145 P.3d 661 (Colo.2006).

Employer did not have the benefit of Industrial Claim Appeals Office v. Ray, supra, when it submitted its briefs in this case. In Ray, the supreme court held that "the actual purchase of health insurance is not required in order for the cost of such benefits to be included in the calculation of a claimant's [AWW]." Indus. Claim Appeals Office v. Ray, supra, 145 P.3d at 662. The court's conclusion is based upon its reading of the plain language of § 8-40-201(19)(b). Indus. Claim Appeals Office v. Ray, supra, 145 P.3d at 668 (plain language of statute says nothing to require purchase of health insurance for cost of insurance to be included in AWW).

We conclude that the ALJ correctly determined that claimant's cost of continuing health insurance coverage should be included in her AWW despite her decision not to purchase continuing coverage from employer.

Employer further argues that even if the ALJ correctly included the cost of claimant's COBRA coverage in her AWW, the cost should have been based on such coverage from employer rather than from claimant's most recent employer.

To support its contention, employer relies on Sears Roebuck & Co. v. Industrial Claim Appeals Office, 140 P.3d 336 (Colo.App.2006). That case held the definition of "wage" in the Act, which permits the inclusion of "the employee's cost of continuing the employer's group health insurance plan" in the calculation of an employee's AWW, "clearly refers to the employer at the time of the industrial injury." Sears Roebuck & Co. v. Indus. Claim Appeals Office, supra, 140 P.3d at 338. Based on this holding, employer contends that claimant's cost of continuing health insurance coverage must be limited to her cost at the time she ceased working for employer, which cost was significantly less than when she was taken off work in 2005.

The Panel determined that the statutory term "employer" is broad enough to encompass subsequent employers. In light of the definition in Sears Roebuck, we agree that the Panel's interpretation of "employer" is overly broad.

However, we do not agree that the ALJ's outcome need be set aside. As we note above, an ALJ is granted broad discretion in caleu-lating a claimant's AWW, and that discretion will not be disturbed absent a showing that the calculation exceeds the bounds of reason and is not supported by the applicable law. Coates, Reid & Waldron v. Vigil, supra, 856 P.2d at 856. If calculation of an employee's wages at the time of injury does not provide a fair approximation of an employee's wage loss and diminished earning capacity, the ALJ is vested with the discretionary authority to use an alternative method to determine a fair wage. Campbell v. IBM Corp., supra, 867 P.2d at 82.

For the reasons stated in part III above, we do not perceive the inclusion of claimant's subsequent cost of COBRA benefits to be an abuse of discretion or a misapplication of the law in this case. Claimant was able to work for five years after sustaining her industrial injury. Within that time, the higher COBRA rate reflects an increase in insurance premiums. To base claimant's AWW on the higher wage she earned with her most recent employer, but disregard the increase in her insurance cost, would not result in a fair approximation of claimant's wage loss and diminished earning capacity and would cause her to incur an expense she would not have incurred but for the industrial injury she sustained while working for employer.

Thus, we cannot conclude that the Panel erred or the ALJ abused his discretion in awarding claimant benefits based upon the inclusion of the cost of continuing her most recent employer's group health insurance plan.

The order is affirmed.

Judge CASEBOLT concurs. Judge BERNARD concurs in part and dissents in part. .