24CA1955 Medicinal Wellness v ICAO 04-17-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 24CA1955 Industrial Claim Appeals Office of the State of Colorado DD No. 10584-2024
Medicinal Wellness Center LLC,
Petitioner,
v.
Industrial Claim Appeals Office of the State of Colorado,
Respondent.
ORDER SET ASIDE AND CASE REMANDED WITH DIRECTIONS
Division III Opinion by JUDGE TOW Dunn and Meirink, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced April 17, 2025
Thorburn Law Group, LLC, James D. Thorburn, Greenwood Village, Colorado, for Petitioner
No Appearance for Respondent ¶1 Medicinal Wellness Center LLC (employer) appeals an order of
the Industrial Claim Appeals Office (Panel). The Panel affirmed the
determination of a hearing officer for the Division of Unemployment
Insurance (Division) that employer engaged in a pattern of failing to
timely or adequately respond to requests for information from the
Division during calendar year 2023. We set aside the Panel’s order
and remand the case for the Panel to vacate the hearing officer’s
decision.
I. Background
¶2 It is undisputed that, in 2023, (1) the Division sent employer
at least three requests for job separation information for three
separate employees, and (2) employer responded late to one request
and did not respond at all to two of the requests. In January 2024,
a deputy for the Division sent employer a notice of decision stating
that it had determined that employer engaged in a pattern — as
described in section 8-79-102(5)(a), C.R.S. 2024 — of failing to
timely or adequately respond to the Division’s requests for
information relating to claims for compensation.
¶3 Employer appealed the deputy’s decision to a Division hearing
officer. It argued that the Division had not alleged that benefits
1 were wrongfully paid because of its failure to respond to a request
for information. Therefore, there was no basis upon which the
Division could make the finding that employer engaged in a pattern
of failing to respond to the Division’s requests.
¶4 The hearing officer noted that the issue of whether any
benefits were wrongfully paid was not before him, and he would
only address whether employer established a pattern of failing to
information. After considering the record and the testimony from
employer’s representatives, the hearing officer found that
(1) employer had, in the past, not sent responses back to the
Division if it agreed the former employee should receive
unemployment benefits; (2) employer changed its practice in the
past year to respond to all requests even if it did not contest
benefits; and (3) of the requests for information sent to employer in
calendar year 2023, employer failed to respond to two of them and
responded late to another. Based on these findings, the hearing
officer concluded that employer had engaged in a pattern of failing
to respond to such requests, as described in section 8-79-102(5)(a),
because employer’s three failures to timely respond exceeded the
2 threshold established in the Division’s regulations. Div. of
Unemployment Ins. Reg. 7.4.3.1, 7 Code Colo. Regs. 1101-2.
¶5 Employer appealed the hearing officer’s decision to the Panel.
It argued that whether it engaged in a pattern of not responding to
the Division’s requests for information was not ripe for adjudication.
This was so, employer argued, because the determination of a
pattern of behavior outlined in section 8-79-102(5)(a) does not arise
until there is an allegation that an improper payment was made
because of the employer’s failure to respond to a request for
information.
¶6 The Panel disagreed. Specifically, the Panel found that the
issue of whether employer engaged in a pattern of failing to respond
timely or adequately to requests for information was ripe for review
because, pursuant to Regulation 7.4.3.1, whether an employer has
engaged in such a pattern is determined annually. Further,
because substantial evidence supported the hearing officer’s
decision, the Panel affirmed the hearing officer’s determination that
employer engaged in a pattern of failing to timely respond to the
Division’s requests for information. Consequently, the Panel ruled
that employer “could be subject to charging for improper payment
3 of benefits in instances where it fails to respond timely or
adequately to Division requests for information in calendar year
2024.”1
II. Discussion
¶7 Employer acknowledges that section 8-79-102(5)(a) allows the
Division to determine whether an employer “has established a
pattern of failing to respond timely or adequately” to requests for
information about unemployment claims. Employer contends,
however, that this determination can only be made after an
improper payment has occurred “because the employer . . . was at
fault for failing to respond timely or adequately” to the Division’s
request. We agree.
1 Notably, because the Panel order appears to be limited in its effect
to calendar year 2024, the issue is arguably moot. Although neither party raises this issue, we address it “because it may affect the existence of a justiciable controversy.” Nowak v. Suthers, 2014 CO 14, ¶ 12. We conclude that, given the Division’s apparent view that these determinations are to be made on an annual basis and will remain in effect only for the following year, this issue is capable of repetition yet evading review. See Diehl v. Weiser, 2019 CO 70, ¶ 10 (noting that an appellate court has jurisdiction over an otherwise moot appeal in such cases). Accordingly, we elect to address the merits of employer’s appeal.
4 A. Standard of Review
¶8 As relevant here, we may set aside the Panel’s decision if the
decision is erroneous as a matter of law. See § 8-74-107(6)(d),
C.R.S. 2024; Colo. Div. of Emp. & Training v. Parkview Episcopal
Hosp., 725 P.2d 787, 790 (Colo. 1986).
¶9 We review de novo the Panel’s legal conclusions, including its
interpretation of a statute. See Cath. Health Initiatives Colo. v.
Indus. Claim Appeals Off., 2021 COA 48, ¶ 14. We interpret a
statute to give effect to the intent of the General Assembly by
applying the plain and ordinary meanings of the words used
therein. See Ortega v. Indus. Claim Appeals Off., 207 P.3d 895, 898
(Colo. App. 2009).
¶ 10 Although our review is de novo, “we generally accept an
agency’s statutory interpretation if it has been charged with the
statute’s administration and the interpretation has a reasonable
basis in the law, and is warranted by the record.” Table Servs., LTD
v. Hickenlooper, 257 P.3d 1210, 1217 (Colo. App. 2011). We will set
aside an agency’s interpretation, however, “if it is inconsistent with
the clear language of the statute or with the legislative intent.”
5 Support, Inc. v. Indus. Claim Appeals Off., 968 P.2d 174, 175 (Colo.
App. 1998).
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24CA1955 Medicinal Wellness v ICAO 04-17-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 24CA1955 Industrial Claim Appeals Office of the State of Colorado DD No. 10584-2024
Medicinal Wellness Center LLC,
Petitioner,
v.
Industrial Claim Appeals Office of the State of Colorado,
Respondent.
ORDER SET ASIDE AND CASE REMANDED WITH DIRECTIONS
Division III Opinion by JUDGE TOW Dunn and Meirink, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced April 17, 2025
Thorburn Law Group, LLC, James D. Thorburn, Greenwood Village, Colorado, for Petitioner
No Appearance for Respondent ¶1 Medicinal Wellness Center LLC (employer) appeals an order of
the Industrial Claim Appeals Office (Panel). The Panel affirmed the
determination of a hearing officer for the Division of Unemployment
Insurance (Division) that employer engaged in a pattern of failing to
timely or adequately respond to requests for information from the
Division during calendar year 2023. We set aside the Panel’s order
and remand the case for the Panel to vacate the hearing officer’s
decision.
I. Background
¶2 It is undisputed that, in 2023, (1) the Division sent employer
at least three requests for job separation information for three
separate employees, and (2) employer responded late to one request
and did not respond at all to two of the requests. In January 2024,
a deputy for the Division sent employer a notice of decision stating
that it had determined that employer engaged in a pattern — as
described in section 8-79-102(5)(a), C.R.S. 2024 — of failing to
timely or adequately respond to the Division’s requests for
information relating to claims for compensation.
¶3 Employer appealed the deputy’s decision to a Division hearing
officer. It argued that the Division had not alleged that benefits
1 were wrongfully paid because of its failure to respond to a request
for information. Therefore, there was no basis upon which the
Division could make the finding that employer engaged in a pattern
of failing to respond to the Division’s requests.
¶4 The hearing officer noted that the issue of whether any
benefits were wrongfully paid was not before him, and he would
only address whether employer established a pattern of failing to
information. After considering the record and the testimony from
employer’s representatives, the hearing officer found that
(1) employer had, in the past, not sent responses back to the
Division if it agreed the former employee should receive
unemployment benefits; (2) employer changed its practice in the
past year to respond to all requests even if it did not contest
benefits; and (3) of the requests for information sent to employer in
calendar year 2023, employer failed to respond to two of them and
responded late to another. Based on these findings, the hearing
officer concluded that employer had engaged in a pattern of failing
to respond to such requests, as described in section 8-79-102(5)(a),
because employer’s three failures to timely respond exceeded the
2 threshold established in the Division’s regulations. Div. of
Unemployment Ins. Reg. 7.4.3.1, 7 Code Colo. Regs. 1101-2.
¶5 Employer appealed the hearing officer’s decision to the Panel.
It argued that whether it engaged in a pattern of not responding to
the Division’s requests for information was not ripe for adjudication.
This was so, employer argued, because the determination of a
pattern of behavior outlined in section 8-79-102(5)(a) does not arise
until there is an allegation that an improper payment was made
because of the employer’s failure to respond to a request for
information.
¶6 The Panel disagreed. Specifically, the Panel found that the
issue of whether employer engaged in a pattern of failing to respond
timely or adequately to requests for information was ripe for review
because, pursuant to Regulation 7.4.3.1, whether an employer has
engaged in such a pattern is determined annually. Further,
because substantial evidence supported the hearing officer’s
decision, the Panel affirmed the hearing officer’s determination that
employer engaged in a pattern of failing to timely respond to the
Division’s requests for information. Consequently, the Panel ruled
that employer “could be subject to charging for improper payment
3 of benefits in instances where it fails to respond timely or
adequately to Division requests for information in calendar year
2024.”1
II. Discussion
¶7 Employer acknowledges that section 8-79-102(5)(a) allows the
Division to determine whether an employer “has established a
pattern of failing to respond timely or adequately” to requests for
information about unemployment claims. Employer contends,
however, that this determination can only be made after an
improper payment has occurred “because the employer . . . was at
fault for failing to respond timely or adequately” to the Division’s
request. We agree.
1 Notably, because the Panel order appears to be limited in its effect
to calendar year 2024, the issue is arguably moot. Although neither party raises this issue, we address it “because it may affect the existence of a justiciable controversy.” Nowak v. Suthers, 2014 CO 14, ¶ 12. We conclude that, given the Division’s apparent view that these determinations are to be made on an annual basis and will remain in effect only for the following year, this issue is capable of repetition yet evading review. See Diehl v. Weiser, 2019 CO 70, ¶ 10 (noting that an appellate court has jurisdiction over an otherwise moot appeal in such cases). Accordingly, we elect to address the merits of employer’s appeal.
4 A. Standard of Review
¶8 As relevant here, we may set aside the Panel’s decision if the
decision is erroneous as a matter of law. See § 8-74-107(6)(d),
C.R.S. 2024; Colo. Div. of Emp. & Training v. Parkview Episcopal
Hosp., 725 P.2d 787, 790 (Colo. 1986).
¶9 We review de novo the Panel’s legal conclusions, including its
interpretation of a statute. See Cath. Health Initiatives Colo. v.
Indus. Claim Appeals Off., 2021 COA 48, ¶ 14. We interpret a
statute to give effect to the intent of the General Assembly by
applying the plain and ordinary meanings of the words used
therein. See Ortega v. Indus. Claim Appeals Off., 207 P.3d 895, 898
(Colo. App. 2009).
¶ 10 Although our review is de novo, “we generally accept an
agency’s statutory interpretation if it has been charged with the
statute’s administration and the interpretation has a reasonable
basis in the law, and is warranted by the record.” Table Servs., LTD
v. Hickenlooper, 257 P.3d 1210, 1217 (Colo. App. 2011). We will set
aside an agency’s interpretation, however, “if it is inconsistent with
the clear language of the statute or with the legislative intent.”
5 Support, Inc. v. Indus. Claim Appeals Off., 968 P.2d 174, 175 (Colo.
App. 1998).
B. Analysis
¶ 11 The Panel determined that section 8-79-102(5)(a) and
Regulation 7.4.3 allow the Division to make an annual
determination that an employer has engaged in a pattern of failing
to respond to requests from the Division for information about
unemployment claims, regardless of whether any such nonresponse
has led to an improper payment of benefits. We conclude that the
Panel misreads section 8-79-102(5)(a).
¶ 12 Regulation 7.4.3 defines what constitutes a “pattern of failing
to respond timely or adequately” and Regulation 7.4.3.1 precludes a
finding that an employer engaged in a “pattern of failing to respond
timely or adequately” if the employer’s failures to respond in the
preceding calendar year were less than three or less than three
percent of such requests, whichever is greater. We note initially
that Regulation 7.4.3.1 does not, by its terms, require that the
Division make an annual determination regarding an employer’s
pattern of not responding. Rather, it requires that once
section 8-79-102(5)(a) has been invoked, the determination of
6 whether an employer engaged in a pattern of failing to respond is
based on the employer’s actions in the prior year.
¶ 13 Section 8-79-102(5)(a) requires that the Division charge an
employer’s account for improper payments from the unemployment
compensation fund if two separate conditions are met: (1) the
payment was made because the employer failed to timely respond to
the Division’s request for information, and (2) the employer engaged
in a pattern of failing to respond to such requests. By its plain
language, section 8-79-102(5)(a) is only triggered when an improper
payment has been made from the unemployment compensation
fund. Thus, the pattern criterion is not relevant until there has
been an improper payment that was caused by the employer’s
failure to respond to the Division’s request for information.
¶ 14 Consequently, contrary to both the hearing officer’s decision
and the Panel’s order, the statute does not provide an independent
mechanism for the Division to determine that an employer engaged
in a pattern of failing to respond to its requests in the absence of a
determination that there was an improper payment caused by the
employer’s failure to respond. Because the statute authorizes the
Division to charge the employer’s account for wrongfully paid claims
7 only upon the occurrence of those two conditions, it is unclear what
effect an order finding that the employer engaged in such a pattern
would have when it is untethered to an allegation of a wrongful
payment.
¶ 15 Here, while it is undisputed that employer failed to adequately
respond to at least three of the Division’s requests for information
about unemployment claims in 2023, the Division never alleged
that an improper payment was made because of employer’s failure
to respond. While we recognize that the Division would want to
incentivize employers to promptly and accurately respond to its
requests for information so that it does not improperly pay claims,
section 8-79-102(5)(a) does not apply in the absence of some
allegation that an improper payment was made.
¶ 16 We conclude that the hearing officer erred by entering an order
declaring that the employer engaged in a pattern of failing to
respond to the Division’s requests for information under section 8-
79-102(5)(a) without a corresponding allegation that an improper
payment was made because of employer’s failures to respond.
Therefore, because the Panel affirmed the hearing officer’s decision
8 based on a misapplication of section 8-79-102(5)(a), we set aside
the Panel’s order. See Support, Inc., 968 P.2d at 175.
III. Disposition
¶ 17 We set aside the Panel’s order and remand the case for the
Panel to vacate the hearing officer’s decision.
JUDGE DUNN and JUDGE MEIRINK concur.