New OSHA Guidance for Implementing a COVID-19 Workplace Prevention Program

The Occupational Safety and Health Administration (“OSHA”) has finally published updated guidance on implementing safe workplaces during the COVID-19 pandemic.  On January 29, 2021, the guidance titled  “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace” was published. (U.S. Dept. of Labor – OSHA) “Protecting Workers: Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace.”

It is important to note that this remains only general guidance from OSHA.  The guidelines do not create a standard or regulations that legally obligate employers to comply.  The below guidelines have been issued to assist employers in either continuing to provide or transitioning into a safe COVID-19 workplace.  OSHA has indicated that these guidelines can be used to mitigate the spread of COVID-19 and implement proper protection procedures.  The Guidance provides that the following measures should be taken:

  1. Create a workplace coordinator responsible for COVID-19 issues on the employer’s behalf.
  2. Identify where and how workers might be exposed to COVID-19 at work, including a thorough hazard assessment identifying potential workplace hazards related to COVID-19.
  3. Identify a combination of measures that will limit the spread of COVID-19 in the workplace, in line with the principals of the hierarchy of controls: elimination/substitution, engineering controls, administrative controls and safe work practices.
  4. Consideration of protections for workers at higher risk for severe illness through supportive policies and practices.
  5. Establishment of a system for communicating effectively with employees in a language they understand.
  6. Educating and training workers on the employer’s COVID-19 policies and procedures, which includes having accessible formats and in a language they understand.
  7. Instructing workers who are infected or potentially infected to stay home and isolate or quarantine.
  8. Minimize the negative impact of quarantine and isolation on workers.
  9. Non-discriminatory isolation of workers who show symptoms at work.
  10. If not already, the indoctrination of enhanced cleaning and disinfection after people with suspected or confirmed COVID-19 have been in the facility.
  11. Provision guidance on screening and testing.
  12. Recording and reporting COVID-19 infections and deaths to OSHA.
  13. Implementing protections from retaliation and setting up an anonymous process for workers to voice concerns about COVID-19-related hazards.
  14. Making a COVID-19 vaccine or vaccination series available at no cost to all eligible employees.
  15. Not distinguishing between workers who are vaccinated and those who are not.

If you have any questions about employment or workers’ compensation issues, please contact us!

2020 Workers’ Compensation Rule Updates

The Division of Workers’ Compensation seems to be on a constant mission to tweak various workers’ compensation rules of procedure.  Some of these changes are directed at situations that clearly need attention, while others are less clear.  This year is no different.  There have been several rule changes from the Division of Workers’ Compensation that take effect at the first of the year or have already taken effect.  I will try to break down the rule changes as briefly and clearly as I can.

 

Rule 2: Workers’ Compensation Insurance Premium and Payroll Surcharge EFFECTIVE 7/1/20

As you may or may not be aware, an approved rate reduction in “loss costs” occurred this year.  Loss costs are the average cost of lost wages and medical payments paid to or on behalf of the injured worker.  This is a component of an employer’s premium calculation.  Rule 2 changes do not have anything to do with claim handling and, therefore, do not require coverage.

 

Rule 16: Utilization Standards EFFECTIVE 1/1/21

16-2 Standard Terminology for Rules 16, 17 and 18

Believe it or not some of the terminology throughout the rules did not match.  Here are some housecleaning efforts.

16-2(E): You may not have known this, but a “certified medical interpreter” had a specific definition.  They were individuals with certification from the Certification Commission for Healthcare Interpreters or the National Board of Certification for Medical interpreters.  16-2E struck the definition of a Certified Medical Interpreters.  If you recall, several years ago there were concerns raised that medical conditions referenced by the injured worker were not making it into reports based on language barriers.  This requirement had the unintended consequence of making it hard to find a certified medical interpreter, hence the change.

16-2G: There has been inconsistency throughout the rules in that some rules used “business days” for time measurement while others simply used “days.”   This particular change clarifies that “day” is a calendar day unless otherwise noted.  So now day means day unless the rules says business day, or some other type of day.  This really does clarify things.

16-2H:  If I used the term designated provider list in the workers’ compensation setting what you think it would mean?  If you struggled for an answer other than the doctor list the employer provides to an injured worker join the club.  Well never fear, this change clarifies that “designated provider list” means the physician list as required under Section 8-43-404(5)(A)(1), C.R.S.

16-2N & Q:  This rule change better defines a non-physician provider to include a surgical assistant.  It also defines a “Physician Provider” as someone who is board licensed in their area of practice.  For instance, a physician provider would need to be licensed by the Colorado Medical Board, a dental provider would have to be licensed by the Colorado Dental Board, etc.  It is recommended to simply review this rule if the question is encountered.

16-3A:  This requires that any provider not listed in 16-2 as a “Physician Provider” requires prior authorization to provide services for a work injury.

16-3B, C & D:  This now requires that all providers have a referral from a physician provider managing the claim (or NP/PA working under that physician provider).  It used to be that only non-physician providers had to have a referral from a physician provider, but now it is everybody.

16-6:  This rule deals with a provider’s notification to treat an injured worker.  It basically sets forth the way in which a provider advises a payer of the treatment to get paid for that treatment.  This year’s change requires the payer’s response time to a notification to treat.  It goes from 5 business days to 7 calendar days.  Although this makes the rule more uniform, in certain circumstances, such as determining a holiday that would otherwise not be included as a business day, this could make it difficult to respond to such a request.

16-7:  Prior Authorization issues are always difficult.  This section of Rule 16 changes the payer’s response time from 7 business days to 10 calendar days.  Once again, while making the rule more uniform in certain circumstances, such as determining a holiday that would otherwise not be included as a business day, this could make it difficult to respond to such a request.

16-7-1:  Deals with prior authorization denials – when a denial is made based upon a medical report that predates the request. Under this change, an IME or report from an ATP used to deny a prior authorization request based solely on relatedness to the injury cannot be older than one year from the date of the prior authorization request.  Further, such a report can only be used if there is not an admission of liability filed admitting the relatedness of the requested treatment, or a final order has not been entered finding that the specific medical condition is related to the admitted injury.  Otherwise, the IME report or ATP opinion must be after the prior authorization request.  The thinking behind this rule change is that a stale report cannot be used to deny prior authorization request.  One wonders what happens when the request is for the same treatment over and over.  Can the requests get stale too?

16-7-2:  This section deals with appeals of a prior authorization denial.  Now the requesting party has 10 days from the date of the denial to appeal the denial.  By the same token the payer has 10 days from the date of the appeal to issue a final decision.

16-9A & B: This section deals with required medical record documentation to get paid.  This rule was modified so that a claimant’s functional response to treatment no longer needs to be documented.  There is also no longer a requirement that the documentation reference specifics for a treatment plan.

16-10A:  This section deals with payment requirements for medical bills.  There was a suggested change that would have no longer required bills be submitted by a provider but could be submitted by anybody.  Fortunately, over these suggested changes that would have allowed submission by the attorney or party, the rule remains that the submission must be made by the provider.

16-10-2A:  This section deals with denying payment of billed treatment for non-medical reasons.  This change to this section now allows for denial for non-medical reasons for improper use of a CPT code.

16-10-2C:  When denial for non-medical reasons the payer’s denial does not have to be made within 30 days of receipt of the bill.

16-10-4: this section deals with appealing billed treatment that has been denied.  The billing party has 60 days from the date of the written notice to request reconsideration to appeal.  The appeal now has to have the specific code being appealed.

 

Rule 18 Medical Fee Schedule EFFECTIVE 1/1/21

18-4(I): Telemedicine:  This provides guidelines and requirements for telemedicine.  Telemedicine must comply with requirements found under the Colorado Medical Practices Act and the Colorado Mental Medical Board and the Colorado Board of Psychologist Examiners.  A physician-patient relationship must be established for telemedicine to occur.  The same documentation required of an in-person evaluation is required of telemedicine.

18-9D: App-Based Interventions:  This new subsection allows the provider to write an order for an app-based intervention for the injured worker.  For instance, as part of biofeedback perhaps the apps Hello Mind or Mindspring could be prescribed.  For more physiologic app, perhaps some sort of activity tracker would be prescribed.  Such an order is to have a designated time frame for use and must be payable by invoice and billed directly to the payer the maximum allowable charges $25 a month and the maximum duration is three months per order. Anything over this amount requires prior authorization.

 

If you have any questions about the updated Rules, or any employment or workers’ compensation related question, please contact us.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update Nov 2020

Lee and Brown Partners
Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update
on recent developments within our Firm, as well as in the insurance defense community in
Colorado, Arizona and Utah.
Lee and Brown Denver AttorneysFollow us on LinkedIn

 


In The News

Lee & Brown is happy to announce the opening of our Arizona office located at 4742 N. 24th St., Suite 300, in Phoenix.  Our University of Colorado Law School Graduate, Michael Salazar, who has been clerking on our Arizona cases over the past year has relocated back to his home state of Arizona and is our local presence in Phoenix.  Mr. Salazar will be working closely with our Colorado-based attorneys licensed in Arizona – Joseph Gren, Emily Miller, Timothy Murphy and Jens Omdal.  Together, we are ready to diligently represent you, our clients, in the state of Arizona, just as you have come to depend on us in the state of Colorado.  Through the years, our approach in the practice of law has been quite simple:  provide  aggressive representation and protection of clients’ interests, with a goal of bringing all cases to resolution in the most cost-effective and expeditious manner possible.  We are happy to be able to expand this same philosophy to our employers and insurers who need us in the state of Arizona.


A Day in the Life of the Partners during COVID

Quarantining during a pandemic can change things.  We thought we would check in with our Lee & Brown Partners to see how each of them are handling their new reality …

 
 

Katherine Lee – Life during a pandemic for anyone presents challenges.  Life during a pandemic as a business owner and parent of two graduating high school seniors in their transition to  college freshmen has provided our family with quite the roller coaster ride … complete with all the twists, turns and inverted corkscrews that may leave even the most resilient of us begging to get off the ride.  Who would’ve guessed 6 months ago the state of our world as it is today?  Not many … perhaps not any.  Yet, here we are.

 

Professionally, our Firm and personnel have successfully transitioned from a very social and personally interactive work environment to a remote office space through which we had to, willing or not, learn new work processes, navigate through a multitude of various video conferencing platforms and find new ways to stay connected.  We couldn’t be prouder of our attorneys and our staff for their commitment and fortitude in meeting the challenge so unexpectedly placed before them.  Our ability to provide the best quality legal representation to our clients has not been even marginally compromised at any time during this unprecedented time of uncertainty.  And most importantly, we have been able to maintain our standard of quality without compromising the physical and mental health and wellness of our employees and their families.

 

Our family story, like many others, has been radically different than was planned prior to this pandemic.  Our sons, Dane and Seth, both graduated from high school this spring, turned 18 this summer and are off to college this fall – all without any of the pomp and circumstance or celebratory traditions that are supposed to appropriately mark their hard-earned accomplishments and milestones.  There has been disappointment.  There has been heartache.  There has even been some anger, bitterness, frustration, and tears – and not just from the adolescents.  Alternatively, there has also been golfing, baking/cooking, hiking numerous fourteeners, golfing, making music, spending time with close friends and family, puzzles, remote learning, golfing, endless (and sometimes it feels endless) passing of the time just being together – without the chaos.  It is refreshing to actually have the time to feel and be present in the moments instead of passing and rushing through them to get on to the next thing.  Hopefully, when we have all moved on to the other side of life with COVID, the passing of time and a return to some form of the lifestyle to which we all knew as “normal”, we will find our memories of the present, although void of the grand celebrations, the travel, vacations and parties, are happy ones.  In the end, I’ve decided that enjoying the ride – no matter the challenges that come along with it – is the WAY better alternative.

 
 

Joshua BrownMy family’s quarantine can be summarized in four words:  “a collection of moments.”  Three boys create many moments that are hard to summarize.  Sure, there are holes in the wall, and a box of 1000 Gold “Phish” crackers showering the kitchen floor.  Let’s not forget the tantrums at the end of screen time.  Wow, cute kids no more!  And yes, broken toys and banisters, stains on the hardwood floors and challenges to our sanity.  But the best is that it brought our family together for new board games, puzzles, morning golf ball hunting adventures and food.  We’ve really got it Simple because we’ve got a band.  I love my band! 

 
 

Karen Gail Treece –  I am loving being at home with my husband, Reno, and our boys, James and Jon, who have been home from college since spring break.  Jon has had very limited leave from the US Naval Academy, so it has been a gift to have them both at home.  Jon has spent his summer at the dining room table studying Calculus III and Military Ethics online.  James has been carefree and built his own computer.  Reno makes lunch for everyone, so we have two meals a day together as a family.  I have been stuffed into a very small corner of Reno’s office, but the commute is stress-free.  It has been amazing to try cases on Google Meets, not so fun to try an 8-hour, 6 witness case on the phone, however.  I’ve come a long way since starting my practice using a typewriter and carbon paper.  I guess you can teach an old dog new tricks!

 
 

Joseph Gren – During this time of isolation, I have been taking advantage of running and competing in virtual marathon and half marathon races (the next one being the full San Francisco marathon which was cancelled earlier this year), mountain biking in the Colorado hills, frequently cycling nowhere on the Peloton, reinventing gourmet recipes way too late at night, and expanding my knowledge of old world wines; specifically, of the Rhone Valley in France and of eastern Spain.  I continue my quest to paddle board every lake in the Front Range and have avoided getting a sunburn so far even with my bad habit of not applying enough sunscreen, which I would be doing anyway despite the global pandemic.  Quarantine has also provided an opportunity for creative vacation planning.  In lieu of cancelled trips to Thailand, Costa Rica, and Ireland, we instead camped on remote beaches in the Southeast, which greatly improved my ukulele skills, as well as traveling to interesting wineries across the county in an effort to support their businesses.  In my free time, I listen to others’ opinions on the new Netflix and Amazon shows, as well as hearing from my secretary about the joys of reconciling less vigorous travel expense reports!

 
 

John AbrahamI’ve been working from home and spending time with my family.  Early on, remote learning was very challenging.  We are glad summer came quicker than expected.  There has been a lot of family time spent baking, playing board games and re-visiting old video games from the past.  There have also been many lemonade stands, water balloon fights and a new puppy, Gumbo, to keep everyone occupied during quarantine.  Gumbo keeps us very busy, but the time together and coming up with creative ways to have fun as been nothing short of memorable and special.  I have enjoyed spending lots of time bonding and trading war stories with many adjusters and employers through weekly Zoom conference calls and phone calls through this COVID experience. 

 
 

Fran McCracken – My COVID experience has actually been quite educational.  I’ve learned a lot about toilet paper, face masks and foster dogs.  You might be surprised to learn that when ordering toilet paper from China, it takes as long as twelve weeks to arrive.  When it does show up, it’s in party colors (think lime green, shocking orange and black).  There is also no cardboard place holder.  A case of toilet paper, twelve two-ply rolls, is compressed to the size of a 6-pack of Coke.  Who knew?  As far as face masks – while necessary, I am not a big fan.  However, from now on, I am always going to wear a face mask when going to the grocery store.  I want to be disguised when buying obscene amounts of junk food.  In “stay-at-home” mode, I also decided it would be a great time to foster a dog.  Thirteen dog beds, two comforters, several pillows, a leather couch and one cell phone later, I am pretty sure I know the reason this guy was surrendered to the shelter.  The happy ending is he was adopted to a wonderful family that adores him.  Despite his path of utter destruction, I miss the nut job.  Lesson learned that things are just things.  What matters most now, and always, is that we show kindness, love and support to each other.  We are all struggling to deal with this, in one way or another.  And while our experiences differ, we truly are all in this together.

 
 

 


Colorado recently took steps to increase the salary threshold for employees falling under the “white collar” exemptions.  On January 22, 2020, the Colorado Department of Labor adopted the Colorado Overtime and  Minimum Pay Standards Order #36 (“COMPS Order”), with most of its provisions becoming effective on March 16, 2020.   The new minimum salary thresholds for exemption from overtime began on July 1, 2020.  The COMPS Order makes significant changes for both exempt and non-exempt employees, and further outlines critical Colorado wage rights and responsibilities.  Continue reading the full article.

 
 

Cases You Should Know

Won’t You Be MMI Baby Tonight?: In Destination Maternity v. Burren, 463 P.3d 266 (Colo. 2020),  Claimant sought review of an ALJ’s determination of the date she reached MMI, despite there being no finding of MMI by her ATP or the DIME physician. The ICAO upheld the ALJ’s Order and Claimant petitioned for review. The Colorado Court of Appeals set aside the ALJ’s Order and remanded. The employer and its insurer petitioned for certiorari review to the Colorado Supreme Court, which was granted, and the Supreme Court held that once an ALJ concludes that an employer or an employer’s insurer has overcome a DIME doctor’s MMI opinion, the ALJ may determine the claimant’s MMI status and permanent impairment rating as questions of fact.

 

Moral of the story:  If the DIME is overcome, the ALJ may determine MMI and permanent impairment rating as a question of fact.

 
 

Risky Business – Neutral Risk or Special Hazard?: In Richardson v. Gronedyke Transport, W.C. No. 5-109-865 (May 8, 2020), Respondents sought review of the ALJ’s Order which determined, among other issues, that the claim was compensable. Respondents challenged the ALJ’s finding that Claimant’s injury (which occurred when Claimant reportedly mis-stepped off a curb) sufficiently established the causal connection required by the “arising out of” component of §8-41-301(1), C.R.S. Instead, Respondents argued the injury was idiopathic in nature due to a preexisting condition and that the “special hazard” doctrine therefore applied. Under this doctrine, employees must not only demonstrate that there were specific connections to employment in cases not involving “neutral risks,” but also that he or she was exposed to an additional “special hazard” of employment. The ICAO Panel held that the special hazard doctrine only applied to cases involving an idiopathic condition and that the existing disease of an employee does not disqualify a claim if the employment “aggravates, accelerates, or combines” with the disease to produce the injury. The Panel concluded the ALJ did not err in determining that Claimant’s injury was not idiopathic, and that the special hazard analysis was inapplicable.

 

Moral of the story: If an employee’s injury/disability was not idiopathic, the “special hazard” doctrine cannot apply because a claimant may still seek benefits if his/her employment compounded or exacerbated a preexisting condition.

 
 

Health is Wealth: AWW and Health Insurance: In Varela v. Umbrella Roofing, W.C. No. 5-090-272 (May 8, 2020), Claimant sought review of an ALJ’s Order that denied his request to increase his AWW by the cost of health insurance premiums paid by Claimant and his employer. Claimant opted out of the health insurance coverage offered by the employer when he could no longer afford to pay his portion of the premiums while on TTD benefits. Claimant argued that his AWW should be increased by the cost of the contributions to his health insurance made by the employer and Claimant.

 

The ALJ relied upon Plute v. Home Depot, which held that that the cost of continuing health insurance benefits is not included in the AWW if a claimant has not been terminated. In this case, Claimant continued to be eligible for health insurance because he was not terminated by the employer. Additionally, §8-40-201(19)(b), C.R.S., excludes the cost of health insurance from the AWW calculation if the employer continues to pay its portion of the health insurance premium after the injury. The ICAO affirmed the ALJ’s Order, holding Claimant failed to prove an entitlement to an increase in AWW. This case stands to uphold many years of preceding cases, all of which conclude that health insurance costs are not factored into the AWW calculation so long as a claimant is still employed, and can continue to engage in the employer’s group health plan.

 

Moral of the story: The cost of continuing health insurance is not added to the AWW calculation if the claimant remains employed and the health insurance continues to be available through the employer.

 
 

To Be or Not To Be… The Story of an Independent Contractor: In Holsinger Drywall Inc. v. ICAO, 19CA1013 (Colo. App. 2020), the Court of Appeals remanded the decision of the ALJ to apply Pella Windows & Doors, Inc v. ICAO, 2020 COA9. Claimant was injured while installing drywall for employer and sought workers’ compensation benefits. The ALJ determined that because Claimant was an independent contractor, he was not entitled to benefits. Upon appeal, the ICAO set aside the ALJ’s  Order and decided that the claim was compensable.

 

The ICAO focused on three questions based on ICAO v. Softrock Geological Services, Inc., 2014 CO 30. First, did the employer use Claimant as a member of its work force similar to an individual employee? Second, did Claimant work the number of hours for the employer characteristic of a full-time job? Third, did Claimant ever look for work from another employer? The first two questions were answered in the affirmative, and the last question was answered in the negative. The ICAO found that the answers to these questions suggest that Claimant was not an independent contractor. In Pella Windows & Doors, the Panel held that the factors articulated in the Softrock case, apply to workers’ compensation cases. The Appellate Court concluded that the ICAO did not err in applying the Softrock factors and analysis to the issue of whether Claimant was an independent contractor. The case was remanded by the Panel to the ALJ for additional findings of fact consistent with Pella Windows. A worker status as an independent contractor is a factual determination for the ALJ.

 

Moral of the story: The decision in Pella Windows effectively applies Softrock to workers’ compensation cases expanding the analysis for determining whether a worker is an employee or an independent contractor beyond the factors enumerated in §8-70-115(1)(c), C.R.S.  The determination is a question of fact for the ALJ.

 
 

Weakened Condition and Subsequent Injury Cause and Effect: In City of Colorado Springs v. ICAO, (nsfp), the City of Colorado Springs sought review of an Order from the ICAO upholding an award of benefits to Claimant. An ALJ determined that Claimant’s spinal infection and resulting paralysis were related to his work injury and compensable. The appellate court affirmed, finding that substantial evidence existed to support the ALJ’s determination. Claimant initially sustained a muscle and tendon strain of the thorax while carrying equipment for work. Claimant required hospitalization for severe back pain and lower extremity swelling, which resulted in an infection of the disc in between the vertebrae and paraplegia in his lower extremities. The City argued that the infection and paraplegia were caused by an intervening event and were not compensable. The ALJ rejected this argument and awarded Claimant medical and TTD benefits. The Court of Appeals highlighted the chain of causation analysis, whereby symptoms that develop later may also be compensable. This analysis is reserved for cases in which the industrial injury leaves the body in a weakened condition, which plays a causative role in the subsequent injury. The Court relied upon Jarosinski v. ICAO, which supports that it is not necessary for the work conditions to have directly caused Claimant’s infection if Claimant’s weakened condition was a contributing cause of the infection.

 

Moral of the story: A subsequent injury or symptom may be compensable if a claimant’s initial injury leaves he/she in a weakened condition; thus, contributing to the subsequent symptom or condition.

Colorado Overtime & Minimum Pay Standards Order

Colorado recently took steps to increase the salary threshold for employees falling under the “white collar” exemptions.  On January 22, 2020, the Colorado Department of Labor adopted the Colorado Overtime and  Minimum Pay Standards Order #36 (“COMPS Order”), with most of its provisions becoming effective on March 16, 2020.   The new minimum salary thresholds for exemption from overtime began on July 1, 2020.  The COMPS Order makes significant changes for both exempt and non-exempt employees, and further outlines critical Colorado wage rights and responsibilities.  The COMPS Order replaces the Minimum Wage Orders previously issued by the Division and supplements the thresholds  provided by federal law, under the Fair Labor Standards Act.  Under the Order, whenever employers are subject to it, as well as to federal and/or local labor laws, the law providing the greatest protection to employees shall apply.  Contrary to previous wage orders, under the COMPS Order virtually all private employers, in all industries, will be subject to Colorado’s minimum wage, overtime and working condition rules, unless they fall into one of the specifically enumerated exceptions.  The Order requires employers to track, record, and compensate all non-exempt employees for all “time worked”.  The Order redefines “time worked” as all the time for which the employer requires or permits an employee:

 

To be on the employer’s premises, on duty, or at a prescribed workplace (but not merely permitting an employee completely relieved from duty to arrive or remain on-premises) — including but not limited to, if such tasks take over one minute, putting on or removing required work clothes or gear (but not a uniform worn outside work as well), receiving or sharing work-related information, security or safety screening, remaining at the place of employment awaiting a decision on job assignment or when to begin work, performing clean-up or other duties “off the clock,” clocking or checking in or out, or waiting for any of the preceding. . . .

COMPS Order Rule 1.9.1.

 

Under the Order, beginning July 1, 2020, the annualized salary required for an employee to be considered “exempt” is $35,568.00, with some exceptions for nonprofits and small businesses.  After 2020, the salary threshold for exempt employees will rise every year on January 1st.   The COMPS Order also imposes a wide array of additional requirements relating to a variety of issues, including meal and rest periods, employer-provided uniforms, permissible wage deductions, calculation of non-hourly pay for overtime, and posting and distribution requirements for ease of employee access.  Employers have only one month to comply with all documentation and notices required by the Order, such as new posters, employee handbook inserts, acknowledgment forms, etc.  Interpretive Notice & Formal Opinion (INFO)#1: Colorado Overtime & Minimum Pay Standards Order (COMPS Order) #36, which can be found on the Colorado Division of Labor’s website, summarizes key parts, interpretations of, and exemptions to, COMPS Order #36.

 

If you have any questions about the requirements of COMPS Order #36, or any employment or workers’ compensation-related question please contact us.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update October 2019

Lee and Brown Partners
Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update
on recent developments within our Firm, as well as in the insurance defense community in
Colorado, Arizona and Utah.
Lee and Brown Denver AttorneysFollow us on LinkedIn

 


 In The News

Lee & Brown was well-represented this year by Members Joshua D. Brown and John Abraham at the NAMWOLF Annual Meeting and Law Firm Expo held in Los Angeles September 22-25th.  A member of the National Association of Minority and Women Owned Law Firms since 2013, Lee & Brown is proud to be a part of this outstanding organization and its efforts to promote diversity in the legal community by connecting companies who support this fundamental initiative with the minority and women-owned law firms and legal vendors who embody it and seek opportunities to succeed.

Josh and John’s very well received contribution to the conference was the screening of their video, “THIS is NAMWOLF”, shown at the conference awards banquet.  The video was an entertaining sequence of NAMWOLF member interviews conducted by the dynamic duo during the conference exposition.  In it, members themselves were able to express and share with all attendees their personal insights into what this national organization means to them and its profound impact in creating a more diverse culture throughout the legal community.  Click here to watch the video.

 

 

Lee & Brown was a platinum sponsor at the Professionals in Workers’ Compensation Annual Golf Tournament, held this year at Raccoon Creek Golf Course on September 20th.  Out representing the Firm in style were Members Katherine Lee and Josh Brown; Of Counsel, Frank Cavanaugh, Jessica Melson and Angela Lavery; as well as Associate Matt Boatwright.  Lee & Brown regularly sponsors this event which promotes the camaraderie and fellowship amongst workers’ compensation professionals from both sides of the Bar and in related fields and businesses.  This year, the PWC held a funniest hole contest, which Lee & Brown took very seriously and won!  Our Caddyshack theme was a huge success and we want to thank everyone who visited us at the Bushwood Country Club, hole no. 17!

 

 

 

 


   Noteworthy Cases – Colorado

 

Member Joshua D. Brown and Associate Kristi M. Robarge successfully defended a claim for TTD benefits and proved Claimant was terminated for cause in Hansen v. J-R Motors Company North, W.C. 5-101-017. Claimant sustained an admitted injury when she slipped and fell in the car sales lot while showing a vehicle to some customers.  When Claimant sought treatment for her injury, she underwent a post-accident drug screen.  Claimant tested positive for marijuana and was terminated by Respondent-employer for violation of the drug policy.  Claimant sought TTD benefits. Respondents argued that Claimant was terminated for cause and was not entitled to TTD benefits.  Claimant argued that her employer knew about her drug use because she took a pre-employment drug screen and was still hired; however, evidence showed that Respondent-employer did not test for marijuana in the pre-employment drug screens.  Since Respondent-employer had a strict drug policy and Claimant admitted knowledge of the policy, the ALJ found that Claimant was terminated for cause and not entitled to TTD benefits.

 

Member Karen Gail Treece, successfully defended a full contest claim in Lopez-Pando v Martin Marietta Materials, W.C. No. 5-081-406. Claimant alleged depression as well injuries to his low back, bilateral shoulders and cervical spine, which he claimed resulted from moving a frozen mud/rock clod from a conveyor belt into a chute on April 9, 2018. Claimant’s testimony of the size of the clod was inconsistent with that described by the credible employer witnesses. Ms. Treece elicited testimony that Claimant was using short term disability and did not report this as a work injury claim until the day after the expiration of his short term disability. Claimant’s testimony attributing his injury to a specific event was inconsistent with what he had told his physicians. Medical records demonstrated Claimant had underlying pre-existing conditions affecting his left shoulder, low back and neck. The ALJ did not find the Claimant’s alleged multiple injuries from the described mechanism of injury credible, and found no persuasive evidence of an acute injury. The ALJ determined Claimant failed to prove he suffered a compensable injury or occupational disease.

 

Member Fran McCracken successfully defended against Claimant’s attempt to reopen his claim in Luszko v. Allied Universal, W.C. 5-034-956. Claimant originally filed a claim for compensation and an Application for Hearing in January 2017. The case was closed following Respondents’ Motion to Close for Failure to Prosecute in January 2018, pursuant to the Director’s Show Cause Order. In June 2019, Claimant filed a second Application for Hearing endorsing multiple issues, including compensability and a petition to reopen on the basis of a change in condition. Because there was no determination of compensability of the injury prior to claim closure, Respondents filed a Motion for Summary Judgement arguing the Claimant was precluded from reopening his case on the basis of a change in condition, having never established a compensable injury for the condition to have changed. The ALJ agreed with Respondents’ interpretation of the facts and law, granted Respondents’ Motion for Summary Judgment and struck Claimant’s June 2019 Application for Hearing with prejudice.


 

Where’s My DIME?

One of the main strategies in workers’ compensation claims involves the selection of a particular venue for the DIME process. For numerous years, Rule 11 was silent on the selection of a location for the Division IME. The party requesting the DIME had the option of selecting any venue in Colorado for the appointment to take place. From there, the DIME unit would select 3 physicians in the geographic location that the selecting party indicated on its Application and the DIME process would move forward. Essentially, any part of Colorado was “fair game”  as the location in which to conduct a DIME. Continue reading the article

 


Cases You Should Know

Keep an Eye on the Statute of Limitations: In Packard v. Industrial Claim Appeals Office of the State of Colorado and City and County of Denver, Colorado, 2019COA146 (Colo. App. 2019), Claimant appealed the Panel’s holding that his claim was barred by the statute of limitations. Claimant claimed a workplace injury arising from his job duties as a firefighter for the City and County of Denver. On August 5, 2013, the City filed a report of Injury. On August 6, 2013, the City filed a Notice of Contest. On October 6, 2017, Claimant applied for hearing seeking medical and TTD benefits. Section 8-43-103 provides a 2-year general statute of limitations. The Court of Appeals held that a Notice of Contest, a First Report of Injury, and assignment of a W.C. number do not constitute notification that a Claimant is claiming entitlement to indemnity benefits within the meaning of the statute of limitations. Thus, the Court of Appeals found that Claimant’s Application for Hearing, filed 4 years after the date of injury, was untimely and his claim for indemnity benefits was barred by the statute of limitations.

Moral of the story: In order to satisfy the statute of limitations, a Claimant seeking compensation must file an Application for Hearing or Claim for Workers’ Compensation within 2 years.

 

If Benefits are Granted, File the GAL: In Miller v. Industrial Claim Appeals Office of the State of Colorado and City and County of Denver, Colorado, 18CA1894 (Colo. App. 2019), Claimant appealed the Panel’s affirmation of the denial and dismissal of her claim for penalties. The parties had gone to hearing on Claimant’s claim for entitlement to medical and indemnity benefits. The ALJ ruled in Claimant’s favor. Under Rule 5-5(C)(1) of the Colorado Workers’ Compensation Rules of Procedure, an employer has thirty days to file a general admission of liability following an ALJ’s resumption or increase of benefits. The Employer filed the GAL more than thirty days after the ALJ’s Order. Claimant subsequently applied for hearing on penalties for the Employer’s alleged failure to comply with Rule 5-5(C)(1). The Court of Appeals held that the rule was not triggered because the ALJ’s Order did not cause a resumption or increase in benefits, as no benefits had been previously paid to Claimant. Thus, the Court of Appeals affirmed that Claimant was not entitled to penalties.

This opinion is an unpublished opinion of the Court of Appeals meaning it is not binding upon lower courts. Nevertheless, following its issuance, an amendment to the rule was proposed altering its language to state that a GAL must be filed “[f]ollowing any Order (except for Orders which only involved disfigurement) becoming final which alters OR AWARDS benefits.” A public hearing regarding the adoption of this rule has not been set as of the publication of this newsletter.

Moral of the story: To avoid exposure for penalties, file a GAL after an ALJ’s order instituting payment of benefits to claimant.

 

Can you earn it?: In Jose Cruz Verdeja v. Bakers Transmission Service, W.C. No. 5-047-467 (ICAO August 19, 2019), the Claimant sought review of the ALJ’s Order denying his entitlement to PTD benefits. The Claimant sustained a compression fracture to the low back on May 19, 2017.  The Claimant underwent conservative care; however, surgery was not recommended. The Claimant was placed at MMI on March 29, 2018.  The Claimant was assigned permanent work restrictions in the light duty category.  The Claimant contended that he was permanently and totally disabled and unable to earn any wages. In preparation of hearing, Respondents retained an IME and vocational evaluation.  Respondents’ vocational evaluator identified multiple positions within the Claimant’s permanent work restrictions.  The positions considered the Claimant’s education, skills, and commutable labor market.  The ALJ credited the opinions of Respondents’ experts.  The Claimant argued that the positions identified by Respondents’ vocational evaluator were beyond his work restrictions.  ICAO affirmed the ALJ’s ruling finding that the issue of PTD is primarily factual and that her ruling was supported by substantial evidence in the record.

Moral of the story:  PTD is determined on a factual basis and an ALJ’s order will only be overruled if not supported by substantial evidence in the record.

 

Shifting Burdens and the DIME: In James Jones v. The Mitre Corporation, W.C. No. 5-034-047 (ICAO August 27, 2019), the Pro Se Claimant’s claim was found compensable for injury sustained to the neck and ears in the form of tinnitus, but not for his alleged hearing loss, as the result of being exposed to a loud noise. The Pro Se Claimant was placed at MMI on June 26, 2018 and assessed a 4% whole person permanent impairment rating of the cervical spine.  Respondents requested a DIME.  At the DIME, the Pro Se Claimant, without leave of court, presented the prior ALJ’s Order regarding compensability/causation for review by the DIME doctor. The doctor assessed a 14% whole person permanent impairment award for the cervical spine but did not address causation.   Respondents filed an Application for Hearing to overcome the DIME and requested a Samms conference with the DIME doctor to clarify her opinion and to determine whether she used the prior Order to influence her assessment and opinions on causation pertaining to the cervical spine.  The doctor changed her opinion after the Samms conference and assessed no permanent impairment rating for the cervical spine. At hearing, the ALJ ruled that the Pro Se Claimant improperly influenced the DIME doctor by presenting her with the prior ALJ’s Order. In addition, the ALJ ruled that the Pro Se Claimant reached MMI as of February 26, 2017, with no permanent impairment based on the DIME doctor’s subsequent testimony from the Samms conference.  On appeal, the Pro Se Claimant argued that the ALJ misapplied the burden of proof as it was Respondents who appealed the opinions of the DIME.  ICAO affirmed the ALJ’s Order and indicated that once an ALJ determines the DIME opinion concerning MMI and impairment, then the party seeking to overcome those opinions bears the burden of proof by clear and convincing evidence.

Moral of the story:  When a DIME physician offers conflicting opinions on MMI, impairment or causation, the ALJ is to resolve the conflict and to determine the true opinion of the DIME physician. As such, the burden may shift to the party who disagrees with the ALJ, not necessarily the party who initially sought to overcome the DIME.

 

An Unjoyful, Joy Ride: In Rush v. Enterprise Leasing, W.C. No. 5-081-615 (ICAO September 6, 2019), the Claimant was injured as a  passenger in a motor vehicle accident. The Claimant and a co-worker drovethe company vehicle to another location to pick up more vehicles.  En route, the co-worker drove down a dirt road and took off traction control before accelerating rapidly, which caused the vehicle to flip over several times.  Respondents argued that the Claimant’s activities in the vehicle constituted horseplay and was a personal deviation from his employment.  The Claimant testified that he believed they were traveling to the second location to pick up vehicles and did not have any part in the joy ride down a dirt road.  The ALJ credited the Claimant’s testimony and found the claim compensable.  The Respondents appealed the decision, arguing that the ALJ cannot rely on the Claimant’s subjective beliefs about the joy ride and deviation in her decision.  ICAO disagreed and found that there was substantial evidence to support the ALJs findings that the Claimant was not involved in a deviation from work.

Moral of the story: Non-participating victims of horseplay are entitled to workers’ compensation benefits because the employment placed them in the “zone of danger” created by the horseplay.

 

Covering your tracks: In Hansen v. Bavarian Inn Restaurant, Inc., W.C. No. 5-061-844 (ICAO September 4, 2019), the Claimant appealed a decision of the ALJ that he was terminated for cause and not entitled to TTD benefits.  Claimant worked at a bar in downtown Denver where a fight occurred between employees of the bar and patrons entering the establishment.  During the fight, Claimant was hit in the head several times and a co-worker was shot.  While filling out an incident report, the Claimant was permitted to review the surveillance video of the incident.  The following day, the employer was unable to access the surveillance video and noted that the Claimant’s Google drive was open on the computer.  The Claimant admitted to uploading the surveillance videos to his Google drive account. Claimant was charged with tampering with evidence. The employer had a written policy prohibiting disclosure, distribution, transmission or copying of confidential information and the Claimant had signed a document affirming his knowledge of this policy.  The ALJ found that the Claimant was provided permission to view the surveillance video but not upload any files to his personal Google drive account. The ALJ found that the Claimant’s actions violated the company’s written policy, which led to his termination.  The ALJ denied and dismissed the Claimant’s claim for TTD benefits.  ICAO upheld the ALJ’s Order.

Moral of the story: Having written policies that employees review, with receipt acknowledgment of same, helps prove termination for cause.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update September 2019

Lee and Brown Partners
Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update
on recent developments within our Firm, as well as in the insurance defense community in
Colorado, Arizona and Utah.
 
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   Noteworthy Cases – Colorado

 

Members John Abraham and Fran McCracken successfully defended against Claimant’s claim of a compensable occupational disease in Vargas v. Cargill Meat Solutions, W.C. 8-093-534-001.  Claimant worked as a snout trimmer and alleged to have suffered bilateral carpal tunnel syndrome as a result of an occupational disease.  At hearing, Ms. McCracken elicited testimony from Respondents’ expert that Claimant’s duties as a snout trimmer did not meet the causation requirements for carpal tunnel syndrome.  Furthermore, Claimant’s job duties lacked the sufficient force to cause a work-related condition pursuant to Rule 17, Exhibit 5 of the Division’s Medical Treatment Guidelines. The ALJ credited the opinion of Respondents’ expert and found Claimant failed to prove that he suffered an occupational disease in the form of bilateral carpal tunnel syndrome.  The claim was denied and dismissed.

 

 In Gammill v. Walmart Associates Inc., Member Fran McCracken successfully defended against Claimant’s claim of compensability for a back injury. Respondents sought to withdraw a General Admission of Liability, based on prior medical records indicating that Claimant’s back injury was pre-existing. Respondents’ medical expert also testified that Claimant’s congenital deformity was an incidental finding not related to the work injury and that  fusion surgery to treat low back pain should only be considered after conservative treatment was exhausted. The ALJ found that Claimant failed to meet his burden of proving entitlement to workers’ compensation benefits by a preponderance of the evidence. Respondents were therefore permitted to withdraw the GAL as improvident.

 

Member Fran McCracken also successfully defended against a claim for penalties for the alleged failure to timely pay a lump sum settlement amount to Claimant within fifteen days in McDonald v. Walmart Associates Inc. The ALJ found that Claimant failed to demonstrate that penalties should be assessed for Respondents’ untimely payment of the settlement check. Specifically, the ALJ noted that Respondents acted reasonably in ensuring that Claimant timely received the check by stopping payment on a first check that was issued and requesting a new check be overnighted to Respondents’ counsel while consistently communicating with Claimant’s counsel regarding the arrival of the check. Additionally, the ALJ found that Respondents cured the issue of delayed settlement prior to Claimant filing the Application for Hearing and Amended AFH, which resulted in the curing of the alleged violation as allowed by statute.

 

Noteworthy Cases – Arizona

 

Before The Industrial Commission of Arizona, Associate Daniel Mowrey defended Claimant’s full contest claim in Johnson v. KWD Enterprise, Inc., ICA No. 20183310358.  Claimant alleged a low back injury as a result of her employment as a home health care nurse.  Claimant stated that she was injured while lifting a patient in her bed. At hearing, Mr. Mowrey elicited testimony from Claimant that she did not initially report the injury or seek treatment for over two weeks following the alleged injury.  Claimant further admitted to not filing a claim for workers’ compensation until her unemployment benefits were denied. Mr. Mowrey also submitted an expert medical opinion that the claim was not compensable. The ALJ found the testimony and corresponding medical records did not meet the standard to establish an industrial injury.  The ALJ denied and dismissed the claim.

 


Working from Home and Workers’ Compensation

 While telecommuting is not realistic for every company, many jobs have at least some component that employees can perform flexibly, even if a job requires an employee to be onsite for specific hours. The question then arises, “What is an employer’s liability for injuries occurring at an employee’s home or when traveling between the home and work?”  A compensable injury is one which “arises out of” and “in the course of” the employment.   An injury “arises out of” a work-related activity if it is “sufficiently interrelated to the conditions and the circumstances under which the employee usually performs his job functions that the activity may reasonably be characterized as an incident of employment, even though the activity itself is not a strict obligation of employment and does not confer a strict benefit on the employer.” City of Boulder v. Streeb, 706 P.2d 786 (Colo. 1985). Continue reading the article

 


Cases You Should Know

Enough of this Horseplay!: In Rifle Tequilas, Inc. and Truck Insurance Exchange v. Pena Alvarez, No. 18CA1367 (July 11, 2019), Claimant was a restaurant employee who sustained injuries to his facial area as a result of an altercation with another employee. Claimant, as permitted by the employer, had a beer after the restaurant closed. The altercation regarding the beer arose while Claimant was washing dishes. The ALJ found the claim to be compensable, notwithstanding the Respondents’ argument that Claimant was engaged in horseplay at the time of injury. Specifically, the ALJ used the four factor test from Lori’s Family Dining, Inc. v. ICAO to determine whether the horseplay deviated so substantially that Claimant’s resulting injury was not compensable: (1) the extent and seriousness of the deviation; (2) the completeness of the deviation, i.e. whether it was commingled with the performance of a duty or involved in an abandonment of duty; (3) the extent to which the practice of horseplay had become an accepted part of the employment; and (4) the extent to which the nature of the employment may be expected to include some horseplay. The ALJ found the claim to be compensable, noting that Claimant was permitted to drink beer while working, the altercation involved the beer, and there was “no credible evidence” that Claimant was reprimanded for prior altercations. Thus, the ALJ concluded that horseplay was “an inherent part of the workplace.” The Court of Appeals noted that the finding of the extent of a deviation is a question of fact for the ALJ and that a claimant is not required to prove every element of the four-part test. Rather, the ALJ’s finding only needs to be sound and readily discernible based on the factors.

 

Moral of the story: Horseplay may be considered an inherent part of the workplace when there are no consequences for prior acts of horseplay.

 
 

Grant or Deny? The Director Will Decide: In Webster v. Czarnowski Display Service Inc., W.C. No. 5-009-761 (July 16, 2019), Claimant sought to change his physician under C.R.S. § 8-43-404(5)(a). The Director of the Division of Workers’ Compensation denied Claimant’s request, as Claimant sought treatment for injuries and conditions not related to his work injury. The ICAO held that the Director has broad discretionary authority to grant a Claimant’s request for a change of physician. In this case, Claimant’s request was based on his personal dissatisfaction with his physician. The ICAO upheld the Director’s denial of Claimant’s request, as there was no abuse of discretion.

 

Moral of the story: The Director and ALJ have broad discretion in granting a request for change of physician under C.R.S. § 8-43-404(5)(a).

 
 

IME on My Way: In Wanner v. Patterson UTI Drilling Co, W.C. No. 5-065-967-001 (July 17, 2019), ICAO affirmed an ALJ’s Order that found Claimant’s claim compensable.  Claimant was initially injured at work on December 22, 2017, when he was struck by a board on his left side. Claimant sustained additional injuries on March 28, 2018, while driving home from an IME.  There were two primary issues in this claim: 1) whether the initial injury on December 22, 2017 was a compensable claim; and 2) whether Claimant was entitled to ongoing medical benefits following the motor vehicle accident on March 28, 2018. Respondents argued on appeal that the motor vehicle accident was an intervening event that severed the causal connection.  The ALJ opined that Respondents’ intervening event argument was based on the mistaken premise that an injury during travel to an IME appointment is an intervening event. The ALJ ruled, and the ICAO agreed, that under the “quasi-course of employment” doctrine, an injury occurring during travel to and from authorized medical treatment is compensable.  The ALJ’s Order was affirmed.

 

Moral of the story: Injuries that occur during travel to and from authorized medical treatment are compensable.

 
 

Safety First? Sometimes: In Burd v. Builder Services Group Inc., d/b/a Mato, W.C. No. 5-058-572-01 (July 9, 2019), Respondents sought review of the ALJ’s Order that denied a reduction in disability benefits due to a safety rule violation and increased the average weekly wage (AWW).  Claimant was injured when he fell off a roof while installing fire insulation products.  Claimant was not attached to a safety line, as was required; therefore, Respondents reduced his temporary benefits by 50% due to the imposition of the safety rule penalty pursuant to C.R.S. § 8-42-112(1)(b).  The ALJ found that the employer did not prove Claimant willfully violated the safety rule, as the employer’s management did not consistently understand the rule itself. Additionally, the ALJ found that the employer did not enforce the safety rule.  The ICAO found that there was substantial evidence to support the ALJ’s ruling.  The ALJ’s Order was affirmed.

 

Moral of the story: If the safety rule is not regularly understood and enforced, you will not be successful in taking the 50% safety rule violation reduction.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update August 2019

Lee and Brown Partners
Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update
on recent developments within our Firm, as well as in the insurance defense community.
Lee and Brown Denver AttorneysFollow us on LinkedIn

 


 

In The News

It is with great pride that we announce the Attorneys of Lee & Brown, LLC, who have been selected by their peers for inclusion in The Best Lawyers in America 2020® in the field of Workers’ Compensation Law – Employers.


 

   Noteworthy Cases – Colorado

In Metcalf v. Caterpillar Incorporated Co., Of Counsel Sheila Toborg and Of Counsel William Sterck successfully defended  against Claimant’s claim of compensability. Claimant argued that she sustained a compensable injury and that she was entitled to medical care, temporary total disability benefits, and temporary partial disability benefits. During hearing, Ms. Toborg argued, and presented evidence, that the Claimant did not establish she sustained an injury in the course and scope of her employment and that the Claimant’s condition was not an occupational disease, but rather the result of trauma. Mr. Sterck further argued, in Respondents’ Position Statement, that Claimant had no basis for her claim in either law or in fact.  Due to the combined efforts of Ms. Toborg and Mr. Sterck, the ALJ found that Claimant failed to meet her burden of proving her claim compensable and the claim was dismissed.

 
Noteworthy Cases – Arizona

Before The Industrial Commission of Arizona, Associate Daniel Mowrey successfully defended Claimant’s Appeal in Szach v. SW Ambulance, ICA No. 20160-260291.  Claimant protested the closure of his claim and sought continuing medical benefits. Claimant also sought to link upper body injury and subsequent surgery to the admitted claim.  The ALJ relied upon testimony from Respondents’ medical expert, who opined that the upper body injury and subsequent surgery was not related to the admitted knee injury.  The ALJ denied and dismissed the claim. The Claimant appealed. Upon appeal, the Panel found the evidence supported the ALJ’s findings and affirmed.

Also before The Industrial Commission of Arizona, Associate Daniel Mowrey successfully defended against Claimant’s full contest claim in Selby v. Cornet Limited DBA Medstar, ICA No. 20180-70036.  Claimant alleged a traumatic hernia as a result of transferring a patient at work.  Mr. Mowrey elicited testimony from Claimant that he could not pinpoint the specific time or act which directly caused the hernia.  Claimant further admitted that he did not feel pain until 4:00 a.m. the next morning.  Mr. Mowrey argued that the testimony did not meet the requirements of a compensable hernia under A.R.S. Section 23-1043. The ALJ found the testimony and corresponding medical records did not meet the standard outlined in A.R.S. Section 23-1043 to establish an industrial hernia.  The ALJ denied and dismissed the claim.

 


Alligators, Burritos and Bears – Oh My!

Having litigated several “assault” cases, nothing ceases to amaze this author more than the vast number of unfortunate ways people find themselves in the most bizarre and unforeseeable situations. Courts across the United States adjudicating assault-based cases in the workers’ compensation context are faced with determining whether the events leading to the assault arose out of an injured workers’ employment or whether the event was purely personal in nature. Here are some of the more inexplicable events that could give rise to a claim — you decide whether these claims would be compensable. Continue reading the article

 


Cases You Should Know

Don’t FAL to Take Notice: In Dickens v. Wagner Equipment, No. 18CA1806 (June 20, 2019), Claimant sought review of a final Order by ICAO affirming the decision of an ALJ denying his Petition to Reopen and dismissing his claim for additional benefits. Claimant had sustained an admitted, compensable injury to his right knee in 2006 while working for Respondents. He underwent extensive authorized medical treatment and reached MMI in 2010. Because Claimant continued to experience pain, the claim was voluntarily reopened by Respondents. Claimant reached MMI a second time in August 2013 and Respondents filed a FAL based on the ATP finding Claimant at MMI. It was undisputed that neither Claimant, nor his Counsel, were properly served the 2013 FAL. Claimant’s Counsel eventually obtained a copy of the FAL directly from the Division on April 28, 2014. On May 22, 2014, within 30 days of receiving the FAL from the DOWC, Claimant filed an Objection to the FAL, but did not file an Application for Hearing at that time, as required by Section 8-43-203(2)(b)(II)(A), C.R.S. 2018. Instead, more than 30 days later, on June 23, 2014, Claimant filed an Application for Hearing on the sole issue of, “whether Respondent’s FAL was properly served, and if so, when and based upon such whether Claimant’s Objection was timely.” The matter was heard before an ALJ, who held that the claim had not closed because Claimant did not receive proper notice. Claimant filed another Application for Hearing on August 22, 2017, endorsing new issues not previously endorsed. Respondents argued that Claimant’s claim was closed by operation of law because Claimant failed to file within 30 days of receiving the FAL. The ALJ agreed and held Claimant’s claim automatically closed per statutory rules. Claimant appealed and the Colorado Court of Appeals held that the claim closed in 2014 when Claimant’s Counsel received actual notice of the FAL by obtaining a copy from the Division.  Because Claimant failed to file an Application for Hearing challenging the issues raised in the FAL within 30 days of receiving it, the claim closed.

Moral of the Story: The 30-day statutory time-frame for Claimant to file an Application for Hearing in connection with an objection to the FAL begins to run at the time of notice of the FAL. Even if initially improperly served, the time-frame begins when Claimant receives actual notice, or receipt of notice, of the FAL.
 

DIME flies when you are having fun: In Suomie v. Spectrum Retirement Communities, W.C. 5-050-347 (June 14, 2019), Claimant sought review of an Order that denied Claimant the statutory right to request a DIME.  Respondents filed a medica-only FAL in July 2017.  Because Claimant had lost no time as a result of the injury and received no impairment rating, no temporary benefits or PPD benefits were admitted on the FAL. Claimant objected to the FAL and sought a DIME. Respondents filed a Motion to Strike the DIME Application based on the finding of Loofburrow 320 P.3d 327 (Colo. 2014). The ALJ agreed with Respondents and struck the DIME Application, noting it was not ripe. Claimant appealed. The Panel disagreed with the ALJ’s finding that Claimant did not have a statutory right to a DIME. The Panel noted that the ALJ did not follow the proper legal standard for denial of a DIME as noted in Martinez v. Energy Savings Crew, LLC, W.C. No. 5-055-251 (May 31, 2019). The Panel did not follow the reasoning noted in Loofburrow because it involved a claim where no FAL was filed. The Panel held that a medical-only FAL has the same legal effectiveness as any other FAL and was sufficient to trigger the right to challenge an ATP’s decision through a DIME.

Moral of the Story: Filing any FAL triggers the statutory time requirements to request a DIME.  Even when a medical-only FAL has been filed, the claimant has a statutory right to a DIME.
 

The Penalty Box: In Conger v. Johnson Controls W.C. 4-981-806 (July 1, 2019), Respondents sought review of an ALJ’s Order requiring Respondents to pay penalties in the amount of $22,800. Respondents failed to timely authorize medical treatment, as Ordered by a prior ALJ, and thus were penalized for violation of said Order. The Panel, citing Supreme Court precedent holding that the correct test to determine whether a fine or penalty is excessive, is whether the amount of the fine is grossly disproportional to the gravity of the offense.  The Panel determined that the ALJ correctly determined, based upon the evidence, Respondents’ actions were objectively unreasonable in failing to provide the specific medical treatment noted in the Order. The Panel noted that the case highlighted the proportionality of penalties imposed for the gravity of the actions of the party. Here, the Panel applied the gross proportionality test in determining whether the penalties imposed by the ALJ on Respondents, were supported by substantial evidence of unreasonable conduct by Respondents in authorizing and paying for medical treatment. The Panel upheld the finding of the ALJ that the Respondents’ conduct in violation of the Order was objectively unreasonable, but remanded to the ALJ to review whether his finding of the amount of the penalty imposed was proportional to the harm, or risk of harm, by Respondents’ failure to comply with the Order.
 
Moral of the story: It is imperative to timely comply with court orders. Failure to comply with an order subjects respondents to potential penalties which are at the judge’s discretion and proportional to the offense.

 
Survey Says: “Compensable”:  In Olvera v. Air Cleansheen LLC, W.C. 5-073689 (June 4, 2019), Claimant sought review of an Order by an ALJ that denied compensability of the claim. Claimant worked for the employer laundering sheets and towels through a commercial laundry. The employer’s business provided clean linens to bed and breakfast locations. Claimant was injured in an automobile accident on November 8, 2017, while transporting the employer’s laundry in her car. While driving in what was deemed to be the course and scope of her employment, she was involved in auto accident when another driver ran a stop sign. Claimant reported the accident to her supervisor and went to the ER complaining of injuries to her back. Claimant’s treatment was paid for by the other driver’s auto insurance, but when those funds reached their policy limit, Claimant filed a workers’ compensation claim in April 2018. On the issue of compensability, the ALJ found that Claimant was not credible because of irregularities in her submitted evidence and held that she disclaimed and excluded any work relationship to her accident because she was not being truthful or credible, dismissing the claim. The ICAO held that the Findings of Fact did not support the ALJ’s Order under C.R.S. § 8-41-293(1)(a).  The Panel noted that the ALJ did not identify any statements that were not believed that would also support a denial of the claim’s compensability. They held that an employee who suffers a compensable injury at the hands of a third party can pursue remedies against the third person and also file a claim under the Workers’ Compensation Act.  The ALJ’s Order was set aside and the matter remanded for additional findings to determine compensability.
 
Moral of the Story: A claimant may file a workers’ compensation claim even if they have already pursued, and received, benefits from a third party.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update July 2019

Lee and Brown LLC Partners and Certifications

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update
on recent developments within our Firm, as well as in the insurance defense community.
Lee and Brown Denver AttorneysFollow us on LinkedIn

 


 

Congratulations are in Order!

 

Lee & Brown has recognized the daily commitment, dedication and professionalism of three of its own.  We are very happy to make the following announcements:

L&B welcomes M. Frances McCracken to the Firm as Partner.  Ms. McCracken has been with L&B for 4 years after the dissolution of her previous Firm.  Her 30 years of experience in insurance defense is a great asset to our Firm, as is her commitment to her profession and her clients.  Ms. McCracken’s practice over the years has involved all aspects of the litigation process, including success in trials and appeals, arbitration, mediation and case settlement.  She has defended cases in the Colorado State District Courts, Court of Appeals, the Supreme Court, as well as U.S. District Court.  Her expertise as a legal writer and litigator raises the bar for not only our Firm, but in the insurance defense and legal community as a whole.  Please join us in congratulations to Fran, for a well-deserved lifetime achievement.

 

L&B announces the promotion of Associate Jessica Melson to Of Counsel.  Ms. Melson joined L&B in February 2012 with previous insurance defense experience. Since that time, she has grown tremendously as an attorney in her dedication and her commitment to provide the best legal defense for her clients while developing into a strong example as a professional to the Firm’s Jr. Associates and in the legal community.  Ms. Melson regularly shares her knowledge of insurance defense by providing educational counseling to clients. She has volunteered pro bono legal services for the Colorado Lawyers Committee and Metro Volunteer Lawyers. The Firm congratulates you, Jessica, on your achievements thus far in the legal profession.

 

L&B promotes Associate Angela M. Lavery to Of Counsel.  Ms. Lavery came to L&B in 2011 as a Paralegal.  It soon became apparent that Ms. Lavery, who earned her law degree from the University of Denver Sturm College of Law in 1995, was capable of much more.  Since receiving her license from the State of Colorado in 2012, Ms. Lavery has been diligently working to provide excellent legal defense to her clients, to whom she also regularly counsels on the ever-changing and evolving analysis of legal issues and the law.  Ms. Lavery has blossomed into a patient and knowledgeable mentor for the Jr. Associates and Law Clerks in the Firm, as well as in the legal community.  Outside of the Firm, she still makes time to contribute pro bono as a Court-Appointed Special Advocate for Children with Denver CASA.  Congratulations, Angela, on a job well done.  The Firm is proud to have you join us as Of Counsel.

You have all made L&B a better place by your contributions and your dedication and we look forward to sharing in your future accomplishments.

 


Noteworthy Cases

In Tremain v. Caterpillar, Inc. and Liberty Mutual Insurance, W.C. No. 5-092-748, Of Counsel Sheila Toborg and Of Counsel William Sterck successfully defended against Claimant’s claim of compensability for an injury he believed to be in the course and scope of his employment. Claimant argued that he sustained a compensable injury and that he was entitled to medical care and disability benefits. During hearing, Ms. Toborg argued that, per Respondents’ expert report, Claimant’s exhibited symptoms were chronic and not work-related. Mr. Sterck argued in the Respondents’ Position Statement that Claimant had no claim in fact, or in law, for the relief he was seeking. Because of the combined efforts of Ms. Toborg and Mr. Sterck, the ALJ found that Claimant failed to prove by a preponderance of the evidence that he had a compensable claim. The claim was dismissed.

 

In Thompson v. The Home Depot and Liberty Mutual Insurance, W.C. No. 4-886-616, Of Counsel Sheila Toborg and Associate Jessie M. Tasselmyer successfully defended against Claimant’s attempt to overcome the Division Independent Medical Examination for injuries sustained as a result of a May 2012 admitted work injury.  ICAO affirmed the ALJ’s ruling and found that they had no basis to overturn the prior ruling. The ALJ appropriately credited the opinion of Respondents’ expert and that there was no perceivable error of law.

 


 

In May of this year the Colorado Court of Appeals rendered an opinion that focused on the admissibility of past medical expenses when the claimant/plaintiff is injured on the job and sues the third-party tortfeasor. The Court considered whether “billed” medical expenses versus what was actually “paid” were to be considered by the court and jury in awarding damages to a claimant/plaintiff. Before trial, the defendant had extinguished the insurer’s subrogation interest in the amounts paid by paying off the insurer’s claim for those damages.  Continue reading the article

 


Cases You Should Know

You Get a Fine, I Get a Fine, Everybody Gets a Fine: In Colorado Department of Labor and Employment v. Dami Hospitality, 2019CO47M (June 3, 2019)(awaiting publication), the DOWC fined Dami $841,200 for failure to carry workers’ compensation insurance for 1,698 days. Dami appealed. ICAO affirmed; however, the Supreme Court reversed the decision deciding the fine violated the Excessive Fines Clause of the 8th Amendment because the DOWC failed to consider Dami’s ability to pay the fine. The Colorado Supreme Court found the Court of Appeals applied the incorrect test to determine whether the fine was excessive. It held that the correct test to determine whether a fine is excessive is whether the amount of the fine is grossly disproportional to the gravity of the offense. The Court ruled, “The court of appeals’ ruling is thus reversed and the case is remanded to that court for return to the Division of Workers’ Compensation to determine whether the per diem fines at issue are proportional to the harm or risk of harm caused by each day of the employer’s failure to comply with the statutory requirement to carry workers’ compensation insurance.”

Moral of the Story: It is imperative to have workers’ compensation insurance coverage. Failure to do so can result in substantial fines.

 

Is it a Cure? In Rajabi v. ICAO; Arvada Fire Protection District…, 2018CA1599 (May 16, 2019)(unpublished), Claimant sustained an admitted injury to the right hand in April 2017 and was diagnosed with complex regional pain syndrome. Claimant requested help with housekeeping and yard work. The ATP recommended in-home housekeeping and yard services. Nonetheless, the ATP did not assign Claimant restrictions pertaining to the right hand.

The Colorado Court of Appeals affirmed ICAO’s Order finding that Claimant’s request for in-home housekeeping and yard services was not reasonable, necessary, and related to the claim. Specifically, the request for in-home housekeeping and yard services was not “medical in nature or incidental to obtaining such medical or nursing treatment.”  The Court opined that Claimant’s request for in-home housekeeping and yard work did not relieve and or cure Claimant’s condition. As such, the request was not medically reasonable or necessary.  The Colorado Court of Appeals affirmed the credibility determinations and legal standards utilized by the ALJ.

Moral of the Story:  Treatment recommended by an ATP must cure and/or relieve a claimant of his/her symptoms resulting from a work-related injury.

 

Make it Count. In Humphrey v. FedEx Freight Inc., W.C. No. 4-911-782, the Claimant sought review of an Order denying his Motion to Strike the Respondents’ Final Admission of Liability (FAL).  Respondents allegedly failed to attach the proper MMI medical report when filing the FAL. As such, the claim was never administratively closed and the Claimant was not required to pursue a reopening of his claim.  ICAO set aside the ALJ’s Order and remanded the case to the ALJ for further findings.  ICAO ruled that FALs are a jurisdictional requirement “and their inadequacy may be raised at any time…” The ALJ was instructed to address his findings of fact and conclusions of law as to why Claimant’s Motion was denied.

Moral of the Story: A FAL must be filed with the proper medical report to administratively close the claim.

 

Better to Be Assertive: In the Matter of the Claim of Quincy Bryant v. Transit Mix Concrete and Traveler’s Indemnity Company, W.C. no. 5-058-044-001 (ICAO June 5, 2019), ICAO affirmed in part, and remanded in part, an ALJ’s Order that Respondents overcame the DIME. First, the Panel held that the ALJ erred in reversing the DIME physician with respect to the Table 53 diagnosis. The ALJ incorrectly held that the law requires objective rigidity in order to assign a Table 53 diagnosis when rating the cervical spine. The law has no such requirement: the requisite rigidity may arise from the Claimant’s subjective complaints or objective evidence. Secondly, the Panel held that the ALJ properly found that Respondents did not waive their ability to assert a safety violation. Although Respondents did not assert a safety rule violation in the FAL, they did timely assert it in their Application for Hearing challenging the findings of the DIME. Ultimately, the Panel reversed the ALJ’s findings with respect to the Table 53 diagnosis and remanded for further findings on whether there was evidence, subjective or objective, of rigidity.  The Panel affirmed the ALJ’s finding that Respondents did not waive the ability to assert a safety rule violation.

Moral of the Story: A Table 53 diagnosis requires objective evidence with respect to pathology, but not with respect to rigidity. Respondents must make sure to assert all implicated affirmative defenses on their pleadings in order to prevent waiver.

 

Smacking Some Sense into Loofbourrow: In this next case, Respondents filed a medical-only FAL. Seventy five days later, Claimant objected to the FAL and filed a Notice and Proposal to Select a DIME. Respondents moved to strike Claimant’s request for a DIME as untimely because it was filed outside of the 30-day time requirement. The ALJ agreed and struck Claimant’s request for DIME. Claimant appealed and argued, according to Loofbourrow, 320 P.3d 327 (Colo. 2014), a medical-only FAL does not close a claim, has no statutory significance, and does not trigger the statutory time requirements to request a DIME. The Panel disagreed. It distinguished Loofbourrow because it involved a claim where no FAL was filed. The Panel affirmed the ALJ and held that a medical-only FAL has the same legal effectiveness as any other FAL. Martinez v. Energy Savings Crew, LLC, W.C. No. 5-055-251 (May 31, 2019).

Moral of the Story: Filing a FAL triggers the statutory time requirements to request a DIME. Without a FAL, a claim may remain open indefinitely.

 

No Alter Ego Here: In McRobbie v. Estate of Mary E. Wales, W.C. No. 5-052-934 (May 24, 2019), Claimant worked as a caregiver to Mary Wales. She was seating Ms. Wales on a shower bench when she felt shooting pain going through her left arm into her fingers. Claimant was later diagnosed with a cervical disc herniation. Ms. Wales subsequently passed away. The ALJ found that Mary Wales and Carolyn Cargile (Mrs. Wale’s daughter who held Power of Attorney) were joint employers and that each were personally liable for Claimant’s injury. The ALJ found that Ms. Cargile was personally liable as Claimant’s employer based on the theory of an alter ego. The ICAO reversed, finding that when an individual is acting through a power of attorney as an agent and identifies as such, she cannot be named as an employer for a contract of employment or be personally liable. The ICAO further explained that the theory of an alter ego does not apply when an agent discloses that she is acting on behalf of an employer through a power of attorney. The ALJ’s Order was corrected to designate the sole employer to be the Mary E. Wales Revocable Trust.

Moral of the story: An individual acting as an agent to an identified principal cannot be held personally liable for a workers’ compensation claim.

 

Explanation is Key: In Gil De Prieto v. Spirit Hospitality II LLC, W.C. No. 5-019-619 (May 24, 2019), Claimant sustained a left shoulder injury while working as a housekeeper. As a procedural matter, Respondents were permitted to take a post-hearing deposition of a physician. Claimant then filed an Opposed Motion to Submit Rebuttal Evidence via a Deposition of another physician in order to rebut Respondents’ post-hearing deposition. The ALJ summarily denied Claimant’s Motion. The ICAO found that the denial of Claimant’s Motion was an abuse of discretion because the ALJ did not provide any basis or reasoning behind his Order. The ALJ’s Order was set aside and remanded for further findings.

Moral of the story: An ALJ’s findings of fact and conclusions of law are an abuse of discretion if they are not supported by the evidence or fail to provide an explanation behind the order.

 

Read Between the Lines: In Lopez v. Holsinger Drywall Inc., W.C. No. 5-066-416 (May 16, 2019), Claimant sustained several injuries, including fractures of his pelvis and vertebrae in his back, after falling 12 feet to the ground while working on an apartment construction project. Claimant’s claim for compensation was denied by Respondents on the basis that he was an independent contractor as defined by C.R.S. § 8-40-202(2)(b). At hearing, the ALJ found that Claimant was an independent contractor, not Respondents’ employee. ICAO reversed the ALJ’s Order, finding that the ALJ misapplied the legal standard when he placed undue reliance on two documents signed by Claimant wherein he declared himself an independent contractor. The Panel explained that “the nature of the working relationship” must be examined as a whole rather than relying exclusively on the requirements of the controlling statute. The Panel analyzed Claimant’s actual working relationship with the parties and found that the undisputed record showed that he was not engaged in operating an independent business and, therefore, was not an independent contractor. The ALJ’s Order was reversed and the claim was ordered to be compensable.

Moral of the story: Simply meeting the statutory requirements to establish an independent contractor status does not necessarily mean an individual is an independent contractor. Other circumstances surrounding a claimant’s employment relationship should also be considered when determining his/her employment status.

The Legal Buzz – Lee & Brown Newsletter and Case Law Update June 2019

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In the News
The Colorado Self-Insured Association (CSIA) held their annual membership luncheon on June 18, 2019. Lee and Brown, LLC, a professional member of CSIA, was proud to be a sponsor of this year’s luncheon. Attending on behalf of Lee and Brown, LLC were Of Counsel Bradley Hansen, Esq. and Associate Angela Lavery, Esq.   CSIA is an association of Colorado employers approved by the State of Colorado to insure their workers’ compensation benefits internally. Members include representatives of self-insured entities in both the public and private sectors, as well as other professionals involved in the workers’ compensation system. CSIA’s mission is to educate members, provide networking opportunities, and promote legislative action that maintains a cost-benefit balance. CSIA also promotes the goal of promoting timely and effective programs to return injured employees to work.

 


 

Noteworthy Cases

In Lasater v. Walmart Stores, Inc., W.C. No. 5-078-097, Member John M. Abraham successfully defended against Claimant’s entitlement to maintenance medical care. Claimant argued that she required ongoing treatment, after being placed at MMI, for her low back injury due to continued complaints of pain and physical restrictions.  Claimant had a pre-existing history of low back pain prior to the industrial injury. Respondents’ expert credibly testified that the Claimant’s medical records documented a pre-existing history of low back pain that was supported by objective medical evidence. Respondents’ expert further testified that her condition remained unchanged and any ongoing complaints were the result of her pre-existing low back condition.  The ALJ found that the Claimant’s need for ongoing maintenance medical care was the result of her pre-existing condition and not the industrial injury. As such, the ALJ denied and dismissed Claimant’s claim for maintenance medical care.

 

Fran McCrackenIn Misenhimer v. Walmart Associates, W.C. nos. 5-038-861 & 5-089-956, Of Counsel M. Frances McCracken successfully defended against Claimant’s consolidated claims for additional medical benefits for her admitted right hip injury and compensability for her denied left hip injury. In 2017, Claimant injured her right hip falling from a six-foot ladder. Respondents admitted liability for this injury. In 2018, Claimant alleged she sustained injury to her left hip while lifting bags of cat and dog food. Respondents’ expert credibly and persuasively testified that right hip surgery would not lessen Claimant’s pain or improve her function and that a pre-existing condition caused Claimant’s left hip symptoms. The ALJ found that Claimant failed to prove she was entitled to ongoing medical benefits for her right hip and compensability for her left hip injury. Thus, the ALJ denied and dismissed Claimant’s request for prior authorization for right hip surgery and claim for the left hip injury.

 

Brad HansenIn Benavidez, Sr. v. Xtreme Drilling Coil Service,, W.C. No. 4-952-617, Of Counsel Bradley Hansen successfully defended against Claimant’s attempt to overcome the DIME opinion regarding MMI and entitlement to additional TTD benefits. Claimant sustained a back injury while working on an oil rig for the Employer. Claimant had a previous work injury to his back but claimed all of his current complaints and symptoms were due to the injury on the oil rig. The ALJ found that Claimant’s testimony, and the testimony of his expert, did not prove by clear and convincing evidence that the DIME should be overcome.

In Bryan v. Steamboat Ski & Resort Corporation, W.C. No. 5-029-664, Of Counsel Bradley J. Hansen and Associate Kristi Robarge Krisit Robargesuccessfully defended a full contest claim. Claimant alleged that she sustained an injury to her low back and neck when she was bumped by a housekeeping cart.  Claimant had a prior low back injury and was actively receiving treatment at the time of the new alleged injury. Claimant’s ATP and Respondents’ expert all opined that Claimant’s current symptoms were related to the prior injury and chronic pain syndrome.  The ALJ found that the accident did not create a disability or need for medical treatment and any ongoing need for treatment was related to Claimant’s chronic pain and prior injury.  Claimant’s claim was denied and dismissed.

 

Jessica MelsonIn Comfort v. Community Education Centers, W.C. No. 5-037-333, Associate Jessica Melson successfully defended Claimant’s Application for Hearing to Overcome the DIME. In the DIME, Claimant was found to have sustained 6% permanent impairment to her jaw from a board falling on her. Claimant sought to overcome the DIME alleging she was not at MMI because she required additional treatment for her jaw. She also alleged the DIME erred because she sustained additional impairment to her cervical spine and shoulder. Ms. Melson presented persuasive evidence of the extensive medical treatment and evaluations Claimant had that found she had no additional injury. Dr. Striplin credibly testified the DIME was correctly performed and there were no errors. The ALJ found Claimant failed to overcome the DIME.


 

Fine, Fine Everywhere a Fine – Excessive Fines by the DOWC

Dami Hospitality, LLC., is the owner of a hotel in Denver that employs between 4 and 10 people at any given time.  Dami let its workers’ compensation policy lapse more than once. DOWC discovered the lapses and issued a notice requiring Dami to answer a compliance questionnaire and advised that Dami could request the prehearing conference over this issue.  Dami did not respond to this notification so a second notification was sent on June 25, 2014, with a compliance questionnaire and an option to set a prehearing conference.  On July 11, 2014 Dami sent in a certificate of insurance covering Dami from July 10, 2014 to July 10, 2015.

DOWC issued a specific findings of fact, conclusions of law and order dated October 30, 2014 fining Dami $841,200!  Under Section 8-43-409(1),(b), C.R.S.  Continue reading this article
 


Cases You Should Know

Theories Are Not Scientific Evidence: In Lorenzen v. Pinnacol Assurance, 2019COA54 (April 18, 2019)(awaiting publication), the Colorado Court of Appeals upheld a district court’s judgment in favor of the defendant-insurer against a bad faith claim brought by the Claimant.  Claimant alleged that the insurer’s denial of authorization resulted in a 13-day delay of Claimant’s spinal cord surgery causing permanent impairment to the spine due to prolonged nerve compression.  Claimant presented multiple medical experts who were generally in agreement that, while “sooner is better” is a sound medical principle when providing treatment, there was no definitive medical evidence that the 13-day delay actually caused any impairment.  The district court excluded the testimony based on Colorado Rule of Evidence 702, which requires that medical evidence be reliable, relevant and not based on unsupported speculation.  The Court of Appeals agreed, finding that because Claimant could not prove the insurer’s conduct caused impairment, he could not prove bad faith.
 
Moral of the story: A party seeking to prove that an insurer’s conduct caused a medical condition must offer actual medical evidence of a relationship between the conduct and the condition, not just a theory that a causal relationship is possible.

  

The Clock is Ticking, Or Is It?: In McGlothlen v. ICAO, 18CA0763 (April 25, 2019)(nsfop), the Colorado Court of Appeals set aside an ALJ’s Order which dismissed a claim for a work injury on the basis that the statute of limitations had run.  Claimant first reported symptoms in 2012, but did not file a claim.  The employer filed a First Report of Injury and Notice of Contest in 2013.  Instead of pursuing workers’ compensation benefits, Claimant filed a lawsuit in federal court against her employer.  The suit was dismissed on the basis that Claimant’s only relief was through workers’ compensation.  When Claimant filed a workers’ compensation claim in 2017, the ALJ dismissed on the grounds that the two-year statute of limitations had run without a reasonable excuse to extend an additional year.  The Court of Appeals disagreed, noting that the Act acknowledged a First Report from an employer as notice of a claim unless specifically objected to by a Claimant.  In the federal court lawsuit, the employer argued that the First Report was a claim for workers’ compensation, while later arguing to the ALJ that the Report was insufficient notice of a claim for purposes of the statute of limitations.  The Court of Appeals remanded to the ALJ to reconsider whether there was a reasonable excuse allowing for extension of the statue of limitations under the facts.
 
Moral of the story: By creating a First Report of Injury, an employer acknowledges that an employee may have reported a work injury and therefore, this may be considered a “notice claiming compensation.”  Arguing that a First Report is notice in one court proceeding, while denying it in another, will not help your statute of limitations defense.

 

Tortfeasors Can’t Reap the Windfall: In Scholle v. Delta Air Lines, Inc., 2019COA81, 18CA0049 & 18CA0760 (May 23, 2019), a division of the Colorado Court of Appeals reversed the district court’s admission of evidence of the amount of workers’ compensation benefits paid by the insurer. The injury at issue arose from a collision between William Scholle, a United Air Lines employee, and Daniel Moody, a Delta employee, during the course and scope of the two men’s respective employment. United Air Lines, a self-insured employer, settled its subrogation interests with Delta. Mr. Scholle initiated a personal injury lawsuit against Delta in district court, and the case went to trial to determine the amount of damages Mr. Scholle incurred. The trial court judge allowed Delta to present evidence of the amount of workers’ compensation benefits paid because the trial court held that the collateral source rule did not apply. Under the collateral source rule, evidence of payment by a third-party or collateral source, typically an insurance company, cannot be admitted. The purpose of the rule is to prevent the tortfeasor from benefiting from the payment by the collateral source. The Court of Appeals held that workers’ compensation payments still constitute payments by a collateral source when the insurer has settled with the tortfeasor. Thus, the Court of Appeals held that the trial court erred in allowing evidence of the amount of workers’ compensation benefits paid. The Court of Appeals reversed and remanded to the trial court for a new trial.
 
Moral of the story: Parties in a subrogation action cannot sidestep the collateral source rule by settling the insurer’s subrogation interests before proceeding to trial in district court. At trial, only evidence of the amount of medical benefits billed will be admitted, not the amount actually paid per the workers’ compensation fee schedule.

FINE, FINE EVERYWHERE A FINE – EXCESSIVE FINES BY DOWC

BACKGROUND

On June 3, 2019 the Colorado Supreme Court issued a published opinion captioned Colorado Department of Labor and Employment, Division of Workers’ Compensation v. Dami Hospitality, LLC, 2019SC47.  The decision involved a fine handed down by the DOWC against an uninsured employer.

FACTS

Dami Hospitality, LLC., (Dami) is the owner of a hotel in Denver that employs between 4 and 10 people at any given time.  Dami let its workers’ compensation policy lapse on July 1, 2005.  When notified of the violation for failing to maintain coverage Dami conceded the violation and paid a settlement in June 2006.  Just 2 months later Dami’s coverage lapsed again and it went without coverage from August 10, 2006 to June 8, 2007.  Dami maintained coverage from June 9, 2007 to September 11, 2010, but it’s coverage lapsed on September 12, 2010 and Dami went without coverage until July 9, 2014.

DOWC discovered the lapses and issued a notice requiring Dami to answer a compliance questionnaire and advised that Dami could request the prehearing conference over this issue.  Dami did not respond to this notification so a second notification was sent on June 25, 2014, with a compliance questionnaire and an option to set a prehearing conference.  On July 11, 2014 Dami sent in a certificate of insurance covering Dami from July 10, 2014 to July 10, 2015.

DOWC issued a specific findings of fact, conclusions of law and order dated October 30, 2014 fining Dami $841,200!  Under Section 8-43-409(1),(b), C.R.S.

For every day the employer fails or has failed to ensure to keep the insurance required by articles 40 to 47 of this title in force, allows or has allowed insurance to lapse, or fails or has failed to affect the renewal of such coverage: impose a fine of: (I) not more than two hundred and fifty dollars for an initial violation; or (II) not less than two hundred and fifty dollars or more than five hundred dollars for a second and subsequent violation.

A separate schedule of funds was promulgated under Rule 3-6(D) in conjunction with the statutory section classifying second and subsequent violations as follows:

Class VII 1-20 Days $250/Day

Class VIII 21-25 Days $260/Day

Class IX 26-30 Days $280/Day

Class X 31-35 Days $300/Day

Class XI 36-40 Days $400/Day

Class XII 41 Days $500/Day

The DOWC fine was based on this classification process.  Dami explained that its lapse in coverage was based on its reliance that others maintain coverage and that given its $50,000 a year payroll, it was unable to pay the fine.  DOWC treated Dami’s response as a petition to review and, in an effort to settle the fine dispute, offered to decrease the fine amount to $425,000.  Dami claimed, among other things, that the fine was in violation of the Eighth Amendment prohibiting excessive fines.  DOWC declined DAMI’s leniency request citing that the reasons for coverage lapse were within Dami’s control, that discretion on fine amount was not within its power and that it could not address the constitutional arguments.  Dami appealed and at the Industrial Claim Appeals Office (ICAO) level the issue was sent back to DOWC to consider various mitigating and non-mitigating factors.  The DOWC issued a subsequent Order declining the issue on remand, essentially stating that the graduated fines under the Rule take into account these mitigating and non-mitigating factors.  Dami again appealed to the ICAO which then simply affirmed the DOWC.

The case was ultimately appealed to the Colorado Court of Appeals which found that the DOWC abused its discretion by not considering various mitigating and non-mitigating factors as required by applicable case law.  The DOWC then petitioned for certiorari to the Colorado Supreme Court.

RULING

The Colorado Supreme Court considered whether the Eighth Amendment excessive fines clause applies to companies.  It concluded that this clause does apply to companies, finding that companies are subject to similar protections against excessive fines just as individuals.  The Colorado Supreme Court further found that fines are subject to proportionality test to determine if they are excessive.  The Court held that when a fine is imposed on a per diem basis, with each day being a separate violation, evaluation of whether the fine is excessive must be done with each daily fine.  Therefore, the whole matter was sent back to DOWC so the parties could have a potential evidentiary hearing over proportionality considerations.

IMPLICATIONS

The DOWC has been in the habit of issuing compliance/show cause orders and subsequent fines against noncomplying employers.  Many of these orders have appeared excessive and were the subject of newspaper articles.  In addition, the DOWC maintains a recently created uninsured fund designed to provide coverage for injured workers hurt on the job working for noncomplying employers.  This fund is, in part, funded by DOWC fines levied against noncomplying employers.  These orders are issued without any mechanism for an evidentiary hearing over the mitigating factors identified by the court in this Dami decision.  Given this decision, it appears evidentiary hearings may now need to be held in conjunction with the compliance/show cause orders issued by DOWC.  Other possible implications include finding or creating new funding mechanisms to help build-up the uninsured employers fund outside of fines and penalties.

If you have any questions about fines, or any other topics, please contact us.