Opinion
W.C. No. 4-471-863.
March 28, 2006.
FINAL ORDER
The respondents seeks review of an order of Administrative Law Judge Stuber (ALJ) dated November 1, 2005 that denied the respondents' motion for summary judgment and that ordered them to pay benefits based upon an average weekly wage of $689.60 until July 11, 2005, and an average weekly wage of $803.76 after that date. We affirm.
A hearing was held on the sole issue of the claimant's average weekly wage. At the outset of the hearing the respondents filed a motion for summary judgment, asserting that because the issue of average weekly wage was closed and had not been reopened the claimant was not entitled to a modification of her average weekly wage. Following the hearing the ALJ entered factual findings that may be summarized as follows. The claimant sustained a compensable injury on July 27, 2000, and on August 10, 2000 she received a letter informing her that her health insurance plan would be terminated effective August 31, 2000. The letter further stated that she could continue coverage under the plan pursuant to federal law and that the continued coverage would cost $321.63 per month for health insurance and $20.27 per month for dental insurance. She was then covered by a health insurance plan offered by her new employer, and so elected not to continue coverage of her previous plans. The claim then proceeded to closure when the claimant reached maximum medical improvement, the respondents filed a final admission. A Division independent medical examination was conducted, and the respondents filed another final admission, which closed the claim. Benefits were calculated and paid based upon an admitted average weekly wage of $415.63.
On January 28, 2003 the claimant filed a petition to reopen the claim, alleging that her condition had worsened. A hearing was held, following which the ALJ granted the petition to reopen and ordered the respondents to pay medical benefits and temporary disability benefits from February 3, 2003 to February 27, 2003 at the admitted rate of $277.09 per week. The ALJ denied temporary disability benefits after February 27, 2003. On April 18, 2005 the claimant's authorized treating physician stated that she could not work, and she has remained off work since that date. On May 4, 2005 the claimant received a letter from her then-current employer stating that under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) she was eligible to continue her health insurance at a bi-weekly cost of $129.19 for twelve weeks and a cost of $357.51 thereafter. The cost to the claimant of continuing the health insurance was therefore $178.76 per week. The respondents filed a general admission of liability admitting for temporary disability benefits at the admitted TTD rate of $277.09, beginning on April 18 and continuing. The claimant's wage at her then-current employer, Corinthian College, was $625 per week.
Based upon his factual findings the ALJ concluded that the claimant's temporary disability benefits should be calculated and paid based upon her average weekly wage of $625 and the reasonable cost of replacing her health insurance under COBRA. Accordingly, the ALJ ordered that the average weekly wage was $689.60 until July 11, 2005 and $803.76 thereafter. The ALJ also denied the respondents' motion for summary judgment.
On appeal the respondents contend that the ALJ erred in not granting their motion for summary judgment, that he abused his discretion in calculating the claimant's average weekly wage based upon earnings after the date of injury, and that he erred in adding to the claimant's average weekly wage the cost of converting her health insurance once it was discontinued. We are not persuaded that the ALJ committed reversible error.
I.
The respondents first argue that the ALJ erred in denying their motion for summary judgment. The basis for the motion was that, although the claimant's petition to reopen was concededly granted, the claimant never sought specifically to reopen the "issue" of average weekly wage. Hence, they argue that even after the petition to reopen was granted the issue of average weekly wage remained closed by operation of the final admission of liability. However, we agree with the ALJ that the claimant was not required specifically to seek reopening of the issue of average weekly wage.
It is true that when a claim is closed pursuant to a final admission, § 8-43-203(2)(b)(II), C.R.S. 2005 refers to the closure of "issues" rather than to closure of the entire claim. However, § 8-43-303, C.R.S. 2005, the reopening statute, does not state that specific "issues" are reopened. Rather, the statute authorizes reopening of the "award." It is well established that a final order, whether it results from an admission, agreement or a contested hearing, which grants a benefit becomes an "award" subject to the reopening provisions. Burke v. Industrial Claim Appeals Office, 905 P.2d 1 (Colo.App. 1994). Here, it was not, as the respondents appear to argue, separate and distinct "issues" that were reopened by the ALJ's order. Rather, the previous "award" was reopened pursuant to § 8-43-303. The reopening of the "award" had the effect of reopening the issue of average weekly wage. (We note that one exception to this principle is found in § 8-43-303(2)(b), which authorizes reopening of an award "only as to medical benefits." Although the petition to reopen that was granted in this case is not a part of the record, the ALJ awarded medical and indemnity benefits and we therefore presume that the petition to reopen did not rely solely on § 8-43-303(2)(b).) Had the general assembly intended § 8-43-303 to be interpreted in the way urged by the respondents, it was fully capable of employing language such as that used in § 8-43-203(2)(b)(II) to specify that only "issues" were to be reopened.
II.
The respondents also contend that the ALJ abused his discretion in calculating the claimant's average weekly wage based on earnings from a job held subsequent to the date of injury. The respondents argue that permitting an increase in a claimant's average weekly wage based upon earnings at a subsequent employer is contrary to applicable law and to sound public policy. We disagree.
The AWW is ordinarily calculated based on the claimant's earnings at the time of the injury. § 8-40-201(19)(a), C.R.S. 2004; § 8-42-102(2), C.R.S. 2005. However, § 8-42-102(3) grants the ALJ substantial discretion to modify the AWW if, for any reason, the statutorily prescribed methods will not fairly compute the wage in view of the particular circumstances of the case. Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App. 2001). The overall objective in calculating the AWW is to arrive at "fair approximation of the claimant's wage loss and diminished earning capacity." Campbell v. IBM Corp., 867 P.2d 77, 82 (Colo.App. 1993).
An abuse of discretion is not shown unless the ALJ's determination of the AWW is "beyond the bounds of reason," as where it is unsupported by the evidence or contrary to applicable law. Pizza Hut v. Industrial Claim Appeals Office, supra. The pertinent findings of fact must be upheld if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2004. This standard of review requires that we defer to the ALJ's resolution of conflicts in the evidence, credibility determinations and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo.App. 2003).
Admittedly, the ALJ's discussion regarding his reasons for basing the average weekly wage on the claimant's earnings from her subsequent employment is sparse. However, the ALJ cited both Campbell and Pizza Hut, and we infer from his citation of that authority that he exercised his discretion under § 8-42-102(3) in order to reach "a fair approximation" of the claimant's wage loss. Campbell, 867 P.2d at 82. In Campbell the court stated that "[a]lthough the authority under § 8-42-102(3) is discretionary, we believe it would be manifestly unjust to base claimant's disability benefits in 1986 and 1989 on her substantially lower earnings in 1979." Id. Moreover, in Pizza Hut the court upheld the calculation of the claimant's average weekly wage based upon employment that he did not hold at the time of his injury, but which more accurately reflected his future earning capacity. The court stated that "the fact that claimant was not concurrently employed by the hospital and the employer at the time of the injury does not preclude the exercise of discretion under § 8-42-102(3) and an award of medical impairment benefits based on a higher wage; it merely constitutes one circumstance to be considered." Pizza Hut, 18 P.3d at 869.
We disagree with the respondents that Campbell and Pizza Hut are legally distinguishable from the present case. Although there are factual differences between the cases, the general principle applies that the statute affords the ALJ discretionary authority to calculate the average weekly wage based on earnings other than those the claimant received at the time of injury if equity so demands. Moreover, we have in the past expressly rejected the respondents position that Campbell is distinguishable based in that case upon the continuity of the claimant's employment with a single employer. In Fisher v. Micha Enterprises, W.C. No. 3-709-842 (August 1, 1995) aff'd. Mica Enterprises v. Industrial Claim Appeals Office, No. 95CA1418 (Colo.App. May 2, 1996) (not selected for publication) we rejected the argument that Campbell did not apply because the claimant in that case had changed employers. We are not persuaded that a different result is appropriate here and we cannot state that the ALJ's decision to calculate the claimant's average weekly wage based upon subsequent employer exceeds the bounds of reason.
III.
The respondents also contend that the ALJ erred in including in the average weekly wage the cost of replacing the claimant's discontinued health insurance. They argue, first, that calculating the average weekly in that manner is contrary to the law and, second, that the health insurance was not provided by the respondent employer but by a subsequent employer and thus should not have been included in the average weekly wage. We disagree that the ALJ erred.
The respondents principally rely on Midboe v. Industrial Claim Appeals Office, 88 P.3d 643 (Colo.App. 2003), in arguing that the ALJ erred in including the COBRA amount in the claimant's AWW. The respondents argue that because the claimant did not purchase the COBRA coverage offered by the employer, the ALJ should have declined to include the replacement cost of health insurance in the claimant's AWW.
The ALJ, however, relied on Ray v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 04CA2261, July 14, 2005), which is authority contrary to Midboe and which held that the claimant's cost of continuing the employer's group health insurance plan should be included in the AWW even where the claimant has failed to purchase replacement insurance. The ALJ concluded that Ray was more persuasive and more completely effectuated the legislative intent underlying the statute.
Since the announcement of Ray we have issued several orders electing to follow Ray rather than Midboe. See e.g., Wantland v. U.S. Waste Industries, W.C. No. 4-630-784 (January 23, 2006); Stegman v. Sears Roebuck Company, W.C. Nos. 4-559-482 4-483-695 (July 27, 2005). We have also noted that in two unpublished decisions, the court elected to follow Ray rather than Midboe under circumstances where the claimant declined to purchase continuing insurance. Ashmore v. Industrial Claim Appeals Office, No. 04CA1870 (Colo.App. July 21, 2005) (not selected for publication); Carmody v. Industrial Claim Appeals Office No. 04CA2672(Colo.App. August 4, 2005) (not selected for publication). Finally, the supreme court has granted certiorari review of Ray and two unpublished cases raising the same issue. Pending further guidance from the supreme court, we are not persuaded to alter our opinion that Ray correctly states the law and the ALJ did not err.
Finally, the respondents argue that even if Ray correctly controls the resolution of this issue, it does not authorize calculation of the claimant's average weekly wage based upon the cost of continuing health insurance provided by a subsequent employer. Rather, the respondents argue, § 8-40-201(19)(b) only permits inclusion in the average weekly wage of the cost of continuing the respondent employer's group health plan. In our view, however, this construction of § 8-40-201(19)(b) is overly restrictive. Although the statute admittedly refers to "the employer's group health insurance plan," that term may reasonably be construed as a subsequent employer for purposes of calculating the average weekly wage under the discretionary authority granted by § 8-42-102(3). The statutory definition of the term "employer" is broad. See § 8-40-203, C.R.S. 2005; § 8-40-302, C.R.S. 2005. And we do not believe that the substantial discretion afforded by § 8-42-102(3) to calculate the average weekly wage "in such other manner and by such other method" as will fairly determine the wage is constrained in the way urged by the respondents. That discretion permits the ALJ to calculate the average weekly wage based upon the earnings from a subsequent employer, and those earnings may under the proper circumstance include the cost of continuing a health insurance plan, as well as other enumerated factors.
Insofar as the respondents have asserted other arguments, we have considered them and are not persuaded to alter this result.
IT IS THEREFORE ORDERED that the ALJ's order dated November 1, 2005, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ John D. Baird
____________________________________ Curt Kriksciun
Gladys Louise Clark, Colorado Springs, Avalanche Industries, Inc., Colorado Springs, CO, Claudia Renegar, Western Guaranty Fund Services, Denver, CO, Gordon J. Heuser, Esq., Colorado, Springs, CO, (For Claimant).
Thomas L. Kanan, Esq. and C. Adam Foster, Esq., Denver, CO, (For Respondents).