Industrial Claim Appeals Office v. Orth

965 P.2d 1246, 1998 Colo. J. C.A.R. 4930, 1998 Colo. LEXIS 623, 1998 WL 643989
CourtSupreme Court of Colorado
DecidedSeptember 14, 1998
Docket97SC671
StatusPublished
Cited by33 cases

This text of 965 P.2d 1246 (Industrial Claim Appeals Office v. Orth) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Industrial Claim Appeals Office v. Orth, 965 P.2d 1246, 1998 Colo. J. C.A.R. 4930, 1998 Colo. LEXIS 623, 1998 WL 643989 (Colo. 1998).

Opinions

Justice MARTINEZ

delivered the Opinion of the Court.

This workers’ compensation action concerns the scope of authority granted to a Prehearing Administrative Law Judge (“PALJ”) by the Workers’ Compensation Act. See §§ 8-40-201 to 8-47-203, 3 C.R.S. (1997). We granted certiorari to determine whether a PALJ may approve a settlement agreement that purports to close a workers’ compensation case pursuant to section 8-43-204, 3 C.R.S. (1997), and whether such approval is a final order subject to review.1 We hold that a PALJ possesses jurisdiction to approve a workers’ compensation settlement agreement, and that such approval is final for purposes of review. Therefore, we reverse the judgment of the court of appeals in Orth v. Industrial Claim Appeals Office, 942 P.2d 1368 (Colo.App.1997), and remand the case with directions to reinstate the order of the Industrial Claim Appeals Office.

I.

Lyndall Orth suffered a compensable injury to her right arm during the course of her employment with the Southland Corporation in January of 1991. A Final Admission of Liability was filed by Southland and its insurer, Kemper National Insurance Company (“Kemper”), on December 20, 1993. Orth petitioned to reopen her claim, in July of 1996, based upon a change in her physical condition. A conference was held in October of that year before a PALJ to discuss settle[1249]*1249ment of Orth’s claim. Attorneys for South-land and Kemper were present in the PALJ’s office. Orth, who was acting pro se, participated via telephone.

A settlement agreement was reached by the parties in which Orth agreed to accept $1500 in consideration for her waiver of all rights to further benefits. As part of this waiver, Orth agreed to relinquish forever the right to petition to reopen her claim, except on the grounds of fraud or mutual mistake of material fact. The settlement agreement also provided that “[t]he Claimant agrees that she will never be able to receive any additional money or benefits even ... if Claimant later feels she made a mistake or error in settling this claim,” and “Claimant is agreeing to this Final Settlement of her own free will, without force, pressure or coercion by anyone.”

The PALJ approved the settlement agreement on October 21, 1996. The PALJ found that Orth had read and signed the settlement agreement, and that she was aware of the benefits which may have been available to her under the Workers’ Compensation Act (the “Act”).

Orth subsequently claimed that the PALJ acted in excess of his authority when he approved the settlement agreement. These allegations were made in a Petition to Review the order of the PALJ, filed on November 12, 1996 through newly retained counsel. Specifically, Orth asserted that: (1) the settlement agreement was contrary to her interests and adverse to her medical rights; (2) she was not adequately advised of the rights she waived in the agreement; (3) the PALJ erred by failing to make a record of the settlement proceedings; (4) the PALJ erred by advocating the interests of the employers and by persuading Orth to enter into the agreement when he knew that she was not represented by counsel; and (5) therefore, the agreement may have been “unconscionable or premature.” By requesting that the PALJ’s order be set aside, Orth sought to nullify the legal significance of the settlement agreement and to allow her claim to remain open.2

The Industrial Claim Appeals Office (the “ICAO”) affirmed the PALJ’s order. First, the ICAO assumed arguendo that an order approving a settlement is reviewable rather than interlocutory. Second, the ICAO determined that, because a PALJ has authority to approve a settlement under section 8-43-207.5, 3 C.R.S. (1997),3 the PALJ did not act in excess of his authority. Third, the ICAO found that the PALJ was under no statutory obligation to make a record of the settlement proceedings, especially in light of the fact that Orth never requested that there be such a record. Finally, the ICAO afforded the PALJ a “presumption of integrity and impartiality” in the conduct of his duties, and found that the PALJ did not abuse his discretion in approving the settlement. The ICAO also found that the order was not “beyond the bounds of reason,” nor was it unsupported by the law or the evidence.

Orth appealed the ICAO’s order to the court of appeals. Rather than reach the issues raised by Orth, however, the court of appeals held that the PALJ’s order was not appealable. See Orth, 942 P.2d at 1369. The court noted that a party to a workers’ compensation case may hot petition for administrative or judicial review of an interlocutory order, and found that section 8-43-207.5 renders all orders issued by a PALJ interlocutory. See id. The court reasoned that “[wjhile it may appear to be a misnomer to refer to an order approving a settlement as interlocutory,” the PALJ’s order was not subject to review. Id.

Additionally, the court held that “insofar as claimant’s assertion that the PALJ exceeded his authority may raise jurisdictional questions, as distinct from a claim of fraud or mutual mistake of fact, those issues may properly be determined in a hearing before an [administrative law judge] pursuant to [1250]*1250§ 8-43-207.” Id. (citations omitted). Accordingly, the court set aside the ICAO’s order and remanded with instructions to dismiss Orth’s Petition to Review without prejudice. See id. at 1370.

The ICAO, Southland and Kemper (collectively, the “Petitioners”) sought certiorari review in this court. The Petitioners contend: (1) a PALJ possesses jurisdiction to approve a settlement; (2) a PALJ’s order approving a settlement is a final order subject to review; and (3) by allowing Orth to challenge a PALJ’s jurisdiction to approve settlements in a hearing before an administrative law judge (“ALJ”), the court of appeals created a procedure for setting aside settlements which is not permitted by the Act.

II.

We first address the authority of a PALJ to approve a settlement agreement.

A.

The Act has permitted settlements of workers’ compensation claims since at least 1919. See Industrial Comm’n v. London Guar. & Accident Co., 66 Colo. 575, 578-79, 185 P. 344, 345 (1919). Currently, the settlement provisions are codified at section 8-43-204, enacted in 1990. See ch. 62, sec. 1, § 8-43-204, 1990 Colo. Sess. Laws 468, 502. Section 8-43-204 provides that “[a]n injured employee may settle all or part of any claim for compensation, benefits, penalties, or interest.” Section 8-43-204 also states that “[t]he settlement shall be reviewed in person with the injured employee and approved in writing by an administrative law judge or the director of the division prior to the finalization of the settlement.” Thus, the settlement itself does not conclude the case; rather, the approval of the settlement by the director or an ALJ is required. See Padilla v. Industrial Comm’n, 696 P.2d 273, 279 (Colo.1985); City Market, Inc. v. Industrial Claim Appeals Office, 800 P.2d 1335, 1337 (Colo.App.1990).

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Bluebook (online)
965 P.2d 1246, 1998 Colo. J. C.A.R. 4930, 1998 Colo. LEXIS 623, 1998 WL 643989, Counsel Stack Legal Research, https://law.counselstack.com/opinion/industrial-claim-appeals-office-v-orth-colo-1998.