Opinion
W.C. No. 4-169-487
March 11, 1999.
FINAL ORDER
The respondents seek review of a final order of Administrative Law Judge Wells (ALJ) insofar as it calculated an offset for previously paid permanent partial disability benefits. We modify the ALJ's order.
The pertinent facts are undisputed. The claimant sustained a compensable injury in March 1993. The claimant initially reached maximum medical improvement (MMI) on January 3, 1994. The claimant was assigned a 12 percent whole person impairment rating, and the respondents admitted liability for $20,697.06 in permanent partial disability benefits. Apparently, the respondents paid $8,017.53 in a lump sum, with the remainder payable at the temporary total disability rate of $256.66 per week.
The claimant's condition worsened and the respondents voluntarily reopened the claim and admitted liability for temporary total disability benefits commencing October 3, 1994. Nevertheless, the respondents continued to pay the permanent partial disability benefits for which they admitted liability. The claimant again reached MMI on March 3, 1997, and was found to have a 34 percent whole person impairment.
Meanwhile, in March 1996, the claimant was awarded social security disability (SSDI) benefits retroactive to February 1, 1995. Application of the 50 percent SSDI offset resulted in a new temporary total disability rate of $190.54 per week. The claimant voluntarily paid the respondents 50 percent of the retroactive SSDI award.
The issue concerns the extent to which the respondents are entitled to offset the $20,697.06 in previously paid permanent partial disability benefits against the subsequent permanent partial disability award stemming from the 34 percent whole person impairment. The ALJ ruled that the respondents are entitled to reduce their liability for permanent partial disability benefits by subtracting the initial 12 percent impairment rating from the 34 percent impairment rating and paying permanent partial disability benefits based on the remaining 22 percent whole person impairment. Considering the claimant's age on March 3, 1997, and the $190.54 per week temporary total disability rate (reduced by the SSDI offset), the order requires the respondents to pay an additional $26,828.03, or a total of $47,525.09 in permanent partial disability benefits.
On review, the respondents argue the ALJ incorrectly calculated the offset. The respondents argue that the law entitles them to a "dollar for dollar" offset for previously paid permanent partial disability benefits, and that the ALJ's calculation is inequitable. The respondents assert that their total liability for permanent partial disability benefits is $41,461.50 (34 percent rating x 400 weeks x 1.6 age factor x $109.54 average weekly wage). Therefore, deducting $20,697.06, the respondents contend that their remaining liability is $20,764.44. We partially agree with the respondents.
Where, as here, an award is reopened due to a worsened condition, the ALJ has authority under § 8-43-303(1), C.R.S. 1998 [significantly amended for injuries occurring on or after July 1, 1997] to redetermine the claimant's medical impairment rating, and increase or decrease compensation accordingly. The ALJ should adjust the compensation in an equitable manner, even if the effect is to reduce the overall compensation which the claimant was previously awarded. Kuziel v. Pet Fair, Inc., 948 P.2d 103 (Colo.App. 1997).
Medical impairment benefits are a form of permanent partial disability benefits designed to compensate for the claimant's permanent and partial loss of earning capacity. Waymire v. Industrial Claim Appeals Office, 924 P.2d 1168 (Colo.App. 1996). Because the medical impairment benefits which the respondents paid prior to March 3, 1997, compensated for the same permanent loss of earning capacity which the claimant sustained after March 3, equity dictates that the respondents receive a dollar for dollar offset. In effect, the respondents made a substantial advance of permanent partial disability benefits, and their total liability should be reduced accordingly. Kuziel v. Pet Fair, Inc., supra. To the extent the ALJ's order ignores these principles, it constitutes an abuse of discretion.
However, we disagree with the respondents that they are entitled to an offset for all of the permanent partial disability benefits paid before March 3, 1997. As we have previously noted, temporary total disability benefits and permanent partial disability benefits are normally paid consecutively, since the degree of permanent impairment cannot be determined until the claimant reaches MMI. Keith v. Bethesda Care Center, W.C. No. 3-962-376 (February 2, 1998); Hetherington v. Aspen Leaf Builders Supply, Inc., W.C. No. 3-058-466 (May 22, 1997). As a practical matter, a reopening sometimes results in the claimant receiving contemporaneous payments of temporary and permanent disability benefits, but the claimant is not entitled to receive both types of benefits for the same periods of time. Hetherington v. Aspen Leaf Builders Supply, Inc., supra; compare Mesa Manor v. Industrial Claim Appeals Office, 881 P.2d 443 (Colo.App. 1994).
Here, the claimant initially reached MMI on January 3, 1994, and was not again entitled to temporary disability benefits until his condition worsened on October 3, 1994. Thus, for the interim period, the claimant was sustaining a permanent partial loss of earning capacity for which he received no compensation other than the equivalent of permanent partial disability benefits paid at the rate of $256.66 per week. Significantly, the claimant was not entitled to SSDI benefits for this period of time.
Under these circumstances, it would be inequitable to allow the respondents to reduce their total liability of $41,461.50 by all of the permanent partial disability benefits which the claimant received between January 3 and October 3, 1994. During this period, the claimant was sustaining a loss of earning capacity which was not mitigated by SSDI benefits. See National Fruit Product v. Crespin, 952 P.2d 1207 (Colo.App. 1997) (permanent partial benefits not offset against subsequent permanent total benefits because PPD paid in different amounts and for different periods than PTD). Therefore, the claimant was not enjoying a "double recovery" on account of receiving both workers' compensation benefits and SSDI benefits for the same loss. Yates v. Sinton Dairy, 883 P.2d 562 (Colo.App. 1994) (purpose of SSDI offset contained in § 8-42-103(1) (c) (I), C.R.S. 1998, is to prevent worker from receiving full social security and workers' compensation benefits for the same disability).
Thus, we conclude that the respondents are entitled to a dollar for dollar offset of all permanent partial disability benefits paid prior to the March 3, 1997, except for permanent partial disability benefits paid between January 3 and October 3, 1994. For the period January 3 to October 3, the respondents are entitled to an offset of only $7,431.06 ($190.54 x 39 weeks), despite the fact that the respondents actually paid the equivalent of $10,009.74 ($256.66 x 39 weeks) in permanent partial disability benefits. This calculation prevents the respondents from reducing their overall liability for permanent partial disability benefits on account of the SSDI offset, but ignoring a period of time when the claimant was ineligible for SSDI while sustaining a permanent and partial loss of earning capacity.
In summary, the ALJ's order is inequitable because it understates the respondents' pre-payment of permanent partial disability benefits. Kuziel v. Pet Fair Inc. supra. However, it would also be inequitable to allow the respondents to take advantage of the SSDI offset to reduce their liability with respect to a period of time when the claimant was not receiving SSDI. Therefore, we conclude that the respondents are entitled to an offset of $18,118.38 ($20,697.06 — $2,578.69 [$10, 009.74 — $7,431.06]), against their total liability of $41,461.50.
IT IS THEREFORE ORDERED that the ALJ's order dated November 21, 1997, is modified in accordance with the provisions of this order.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ David Cain
_________________________________ Dona Halsey
NOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. 1998.
Copies of this decision were mailed March 11, 1999 to the following parties:
Kelly Wallace, P. O. Box 31044, Widefield, CO 80931
CGF Industries, Inc., d/b/a Williams Printing, Inc., 800 Bank IV Tower, Topeka, KS 66603
Brandee DeFalco Galvin, Colorado Compensation Insurance Authority — Interagency mail (For Respondents)
Anthony L. Sokolow, Esq., 620 S. Cascade Ave., Suite 103, Colorado Springs, CO 80903 (For Claimant)
Michelle Carey, Esq., 101 N. Tejon, Suite 410, Colorado Springs, CO 80903
BY: ______________