Bowland v. Industrial Claim Appeals Office

• Decision Date: 20 August 1998
• Citation: 984 P.2d 660
• Docket Number: 97CA1740
• Parties: Howard R. BOWLAND, Petitioner, v. The INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE OF COLORADO; United Airlines, Inc.; and The Subsequent Injury Fund, Respondents.
• Court: Colorado Court of Appeals

984 P.2d 660

Howard R. BOWLAND, Petitioner, v.The INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE OF COLORADO; United Airlines, Inc.; and The Subsequent Injury Fund, Respondents.

No. 97CA1740.

Colorado Court of Appeals, Division II.

August 20, 1998.

Rehearing Denied September 24, 1998.

Certiorari Granted May 24, 1999.

Timothy Quinn, Denver, Colorado, for Petitioner.

No Appearance for Respondent Industrial Claim Appeals Office.

Clifton, Hook & Bovarnick, P.C., Clyde E. Hook, Harvey D. Flewelling, Denver, Colorado, for RespondentUnited Airlines, Inc.

Gale A. Norton, Attorney General, Martha Phillips Allbright, Chief Deputy Attorney General, Richard A. Westfall, Solicitor General, Andrew M. Katarikawe, Assistant Attorney General, Denver, Colorado, for Respondent Subsequent Injury Fund.

Gordon & Macdonald, P.C., William J. Macdonald, Denver, Colorado, for Amicus Curiae Workers' Compensation Education Association

Opinion by Judge BRIGGS.

In this workers' compensation proceeding, Howard R. Bowland(claimant) seeks review of a final order of the Industrial Claim Appeals Office(Panel).In that order, the Panel affirmed the decision by the Administrative Law Judge (ALJ) to apportion to claimant financial responsibility for part of his permanent total disability benefits, leaving him with less than a full award of benefits.We set the Panel's order aside.

Claimant worked as a baggage-handler for United Airlines, Inc.(employer).He sustained successive work-related injuries to his left hand and was later diagnosed with an occupational disease.His claims were consolidated and he received a 9% permanent partial disability rating.

Some time later, claimant suffered an industrial injury to his back.Since then, he has been unable to return to work.

It was undisputed that claimant is permanently and totally disabled as a result of the combined effect of his injuries.However, employer and the Subsequent Injury Fund (SIF) contested their respective responsibilities for payment of permanent total disability benefits.

After an evidentiary hearing, the ALJ apportioned 91% of claimant's permanent total disability to the back injury and 9% to the earlier injuries.The ALJ determined that, because the back injury occurred after the SIF had stopped accepting cases, claimant was precluded from recovering any portion of the award from it.The ALJ ordered employer to pay 91% of claimant's benefits but, relying on the apportionment statute, § 8-42-104(2), C.R.S.1997, refused to hold it liable for the balance.Hence, claimant was denied a full award of permanent total disability benefits.

The Panel affirmed the ALJ's order.It specifically rejected claimant's argument that, pursuant to recent amendments to the SIF statutes, including § 8-46-105(1), C.R.S. 1997, last employers and their insurers are financially responsible for a full award of permanent total disability benefits in those cases in which funding had previously been available from the SIF.The Panel concluded that while some legislative history supported the argument, it could not assume the General Assembly intended implicitly to repeal § 8-42-104(2), which requires that responsibility for benefits be apportioned.

On appeal, claimant argues the SIF amendments, including § 8-46-105(1), have replaced SIF funding with a modified form of the "full responsibility" rule.The rule, which was in effect in Colorado before the creation of the SIF, provides that, if an employer hires an employee previously partially disabled by an industrial injury, the employer must pay the entire disability award if the employee suffers another industrial injury and is declared permanently and totally disabled as a result.SubsequentInjury Fund v. Thompson,793 P.2d 576(Colo.1990);Waddell v. Industrial Claim Appeals Office,964 P.2d 552(Colo.App.1998).According to claimant, § 8-46-105(1) ameliorates the financial impact on last employers and their insurers of full responsibility, while protecting the right claimants have always had to a full award of benefits for permanent total disability benefits resulting from successive work injuries.

In contrast, employer argues that, by not repealing § 8-42-104(2) when the SIF statutory scheme was amended, the General Assembly chose not to return to the full responsibility rule, long ago abandoned.Hence, § 8-42-104(2) still requires apportionment of permanent total disability benefits.

The question raised is the intent of the General Assembly in amending the SIF statutes, including the addition of § 8-46-105(1), without repealing § 8-42-104(2).Specifically, we must determine whether financial responsibility for that portion of a permanent total disability award previously paid by the SIF has been shifted to the claimant or, instead, back to the last employer and its insurer.To answer that question, we must initially consider the applicable statutes and their recent amendments.

I.

Apportionment of disability awards is governed by § 8-42-104(2).It provides that:

In case there is a previous disability, the percentage of disability for a subsequent injury shall be determined by computing the percentage of the entire disability and deducting therefrom the percentage of the previous disability as it existed at the time of the subsequent injury.In such cases awards shall be based on said computed percentage.Such computation, when applicable, shall be made in the following types of awards under articles 40 to 47 of this title: Permanent total, permanent partial, including scheduled, working unit, and lump sum; except that, in the event the provisions of section 8-46-101 are applicable,such apportionment shall not be made.(emphasis supplied)

Section 8-46-101, C.R.S.1997, creates a different form of apportionment under which a permanently and totally disabled worker still recovers full compensation for permanent and total disabilities:

(1)(a) In a case where an employee has previously sustained permanent partial industrial disability and in a subsequent injury sustains additional permanent partial industrial disability and it is shown that the combined industrial disabilities render the employee permanently and totally incapable of steady gainful employment and incapable of rehabilitation to steady gainful employment, then the employer in whose employ the employee sustained such subsequent injury shall be liable only for that portion of the employee's industrial disability attributable to said subsequent injury, and the balance of compensation due such employee on account of permanent total disability shall be paid from the subsequent injury fund as is provided in this section.

(b)(I) In addition to such compensation and after the completion of the payments therefor, the employee shall continue to receive compensation at said employee's established compensation rate for permanent total disability until death out of a special fund to be known as the subsequent injury fund, hereby created for such purpose....

In 1992, the General Assembly substantially amended the SIF statutes, including the addition of § 8-46-104, C.R.S.1997.Under the new statute, the SIF is precluded from accepting new cases after July 1, 1993:

No cases shall be accepted into the subsequent injury fund for injuries occurring on or after July 1, 1993, or for occupational diseases occurring on or after April 1, 1994.When all payments have been made for all cases accepted into the fund, any remaining balance shall revert to the general fund.

SeeColo. Sess. Laws 1992, ch. 238, § 8-46-104 at 1830.

The purpose of this latter enactment was to address the escalating cost of the SIF, which had run out of funds.See Hearing on H.B. 1280 Before the House Labor and Industry Committee, 58th General Assembly, Second Regular Session (Tape of February 19, 1992, at 9:59 a.m.); Hearing on H.B. 1280 Before the Senate Committee on Business Affairs and Labor, 58th General Assembly, Second Regular Session (Tape of April 1, 1992, at 3:36 p.m.).

In the same session, the General Assembly added another new provision, now codified at § 8-46-105(1).The new statute establishes a method for limiting an employer's financial responsibility for a full award of permanent total disability benefits, while at the same time permitting the employer's insurer to spread the cost of paying a full award:

Effective July 1, 1993 in any case in which an employee previously has sustained permanent partial disability and, in a subsequent injury, sustains additional permanent partial disability and it is shown that the combined industrial disabilities render the employee permanently and totally disabled, then the premiums of the employer in whose employ the employee sustained such subsequent injury shall be determined only on the basis of such subsequent injury and not on the basis of the employee's permanent total disability.The total cost of the employee's permanent total disability shall not be considered in determining the employer's premiums, but shall be considered by the commissioner of insurance in setting rates.The insurance carrier or self-insured employer may seek indemnification from any previous employer of the injured employee for a share of benefits proportional to their liability.

SeeColo. Sess. Laws 1992, ch. 238, § 8-46-105 at 1831.

This provision was amended again in 1993 when the General Assembly deleted the last sentence permitting the liable employer to seek indemnification from previous employers.SeeColo. Sess. Laws 1993, ch. 351, § 8-46-105 at 2142.The sentence was deleted because it created difficulties with settling claims, given an employer's ongoing and unknown liability to subsequent employers.Deletion of the sentence also negated the risk that carriers for prior employers would be precluded from recouping the cost of benefits through increased premiums where the prior employer had changed carriers or had gone out of business by the time the subsequent injury...