City and County of Denver v. Industrial Com'n

• Citation: 690 P.2d 199
• Decision Date: 15 October 1984
• Docket Number: No. 83SC166,83SC166
• Parties: CITY AND COUNTY OF DENVER and State Compensation Insurance Fund, Petitioners, v. INDUSTRIAL COMMISSION of the State of Colorado, Subsequent Injury Fund of the State of Colorado, and Harold W. Hatch, Respondents.
• Court: Supreme Court of Colorado

Page 199

690 P.2d 199

CITY AND COUNTY OF DENVER and State Compensation Insurance Fund, Petitioners, v. INDUSTRIAL COMMISSION of the State of Colorado, Subsequent Injury Fund of the State of Colorado, and Harold W. Hatch, Respondents.

No. 83SC166.

Supreme Court of Colorado,

En Banc.

Oct. 15, 1984.

Kathleen W. Robinson, Denver, for petitioners.

Duane Woodard, Atty. Gen., Charles B. Howe, Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Timothy R. Arnold, First Asst. Atty. Gen., Kathryn J. Aragon, Asst. Atty. Gen., Denver, for respondents Industrial Com'n of State of Colo. and Subsequent Injury Fund of State of Colo.

George T. Ashen, James E. Freemyer, Denver, for respondent Harold W. Hatch.

ROVIRA, Justice.

We granted certiorari to review an unpublished decision of the court of appeals affirming a decision of the Industrial Commission of Colorado (Commission). The court struck the Subsequent Injury Fund (SIF) as a party on the ground that it is not a legal entity which can sue or be sued. It ruled that section 8-53-106(2)(b), 3 C.R.S. (1982 Supp.), established the applicable standard of review, and that that part of the Commission's order which reversed the referee's order represented an ultimate conclusion of fact. It also held that in order to impose liability on the SIF, a condition of permanent total disability must be the result of a prior and subsequent industrial disability exclusive of nonindustrial physical conditions and disabilities. We affirm the court of appeals decision in all respects except that part striking the SIF as a party.

I.

Harold W. Hatch, the claimant, a 58-year-old employee of the City and County of Denver (Denver) for twelve years, injured his back while working on January 18, 1980. Hatch had sustained a series of employment-related back injuries for which he had undergone surgery beginning in 1960. As a result of these pre-1980 industrial accidents, he had received an award of eighteen percent permanent partial disability.

After the 1980 accident, Hatch took medical retirement and filed a claim against Denver seeking compensation for permanent and total disability. At the request of the claimant, without objection by Denver, SIF was joined as a party because of the claimant's prior history of industrial injuries. The attorney general represented the SIF.

At a hearing in August 1980, the evidence established that in addition to the industrial injuries Hatch also had glaucoma, arthritis, asthma, a history of alcohol abuse, and was obese. One medical expert was of the opinion that as a result of the 1980 accident Hatch was permanently disabled to the extent of twenty-five percent as a working unit. Another doctor did not believe that the 1980 accident would leave Hatch with any permanent disability, but because of his multiple medical problems he should be medically retired. He rated Hatch as twenty percent partially disabled as a working unit.

The hearing officer found that: (1) Hatch sustained an industrial accident in 1980; (2) he had previously sustained permanent partial industrial disability in an industrial accident and, combined with the permanent partial disability of twenty-five percent as a working unit sustained in 1980, he was rendered permanently and totally incapable of gainful employment. Based on these findings, he concluded that Denver and its insurance carrier, State Compensation Insurance Fund (SCIF), were liable for the disability related to the 1980 accident, and the SIF was responsible for paying to the claimant $214 per week for the rest of his life, such payments to commence after Denver and SCIF had paid a total of $20,802.50.

The SIF petitioned the Commission for review. It contended that the claimant had failed to demonstrate that his permanent total disability was solely the result of the combined industrial disabilities, and that there was insufficient evidence to support a finding of permanent total disability.

The Commission rejected the latter contention. It concluded that the industrial injuries suffered by the claimant plus his other infirmities established his permanent total disability. ¹ However, it then determined that pursuant to section 8-51-106(1)(a), 3 C.R.S. (1983 Supp.), the SIF was not liable for any payments because the claimant's permanent total disability was not caused exclusively by the industrial disabilities. Denver and SCIF were ordered to pay all compensation benefits to which the claimant was entitled.

Denver and SCIF appealed, naming the Commission, the claimant, and the SIF as respondents. The court of appeals on its own motion ordered the SIF stricken as a party on the ground that it is not a legal entity which can sue and be sued. See Sears, Roebuck & Co. v. Baca, 670 P.2d 1244 (Colo.App.1983), aff'd in part, rev'd in part, Sears, Roebuck & Co. v. Baca, 682 P.2d 11 (Colo.1984).

The court then held that the Commission's order finding the claimant permanently and totally disabled, but that such disability was not caused exclusively by the industrial accidents, was an ultimate conclusion of fact which the Commission was authorized to make pursuant to section 8-53-106(2)(b), 3 C.R.S. (1982 Supp.). ² The court also agreed with the Commission that in order to impose liability on the SIF a condition of permanent total disability must be the result of a prior and a subsequent industrial disability, exclusive of nonindustrial physical conditions and disabilities.

Denver and SCIF petitioned for certiorari, which we granted in order to consider three issues: first, whether section 8-51-106(1)(a), 3 C.R.S. (1983 Supp.), precludes compensation by the SIF when nonindustrial factors contribute to the claimant's permanent disability; second, whether the Commission properly applied the statutory standard of review established by section 8-53-106(2)(b), 3 C.R.S. (1982 Supp.); third, whether, when only the SIF seeks review by the Commission of a hearing officer's order, a favorable ruling by the Commission may be upheld on appeal.

II.

Since certiorari was granted, we have resolved the issue of the status of the SIF. In Sears, Roebuck & Co. v. Baca, 682 P.2d 11 (Colo.1984), we held that the SIF is not a legal entity but the Director of the Division of Labor is a proper party to represent the SIF and to safeguard its interests. ³ In light of our decision in Sears we answer the third question in the affirmative. In addition, we note that Denver and SCIF raised no objection to the SIF's participating in the hearing before the hearing officer, did not object to the petition for review filed by the SIF, and included the SIF as a party in its appeal from the Commission's decision. Therefore, we reverse the decision of the court of appeals striking the SIF as a party.

III.

Petitioners contend that section 8-51-106(1)(a), 3 C.R.S. (1983 Supp.) requires benefits to be paid by the SIF, regardless of the contribution of nonindustrial factors to the claimant's permanent total disability. We disagree. This section provides:

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.

Section 8-51-106(1)(a), 3 C.R.S. (1983 Supp.) (emphasis added).

The purpose of establishing the SIF was to provide partially disabled workers with added opportunities for employment by relieving subsequent employers from the harsh results of the "full responsibility" rule. Sears, Roebuck & Co. v. Baca, 682 P.2d 11 (Colo.1984); Horizon Land Corp. v. Industrial Commission, 34 Colo.App. 178, 524 P.2d 638 (1974). Before the SIF was created, an employer who hired a partially disabled worker was responsible for the entire disability award if the worker suffered a subsequent injury and was declared permanently and totally disabled. Colorado Fuel & Iron Corp. v. Industrial Commission, 151 Colo. 18, 379 P.2d 153 (1962). In those limited circumstances provided by the statute, affected employers may now seek to apportion liability between themselves and the SIF when a worker suffers at least two accidents, each resulting in a permanent partial industrial disability, and the combined effect of his industrial disabilities renders him permanently and totally disabled. When liability is apportioned, the employer pays for only that portion of the worker's total disability which can be attributed to the subsequent injury. The SIF pays the remainder of the worker's total disability award as well as ongoing compensation payments for the rest of the worker's life. ⁴

Before the 1975 legislation broadened the scope of apportionment to include any permanent partial industrial disability, the SIF compensated workers only in the more limited circumstances of cumulative job-related injuries to the hand, arm, foot, leg, or eye. Ch. 210, sec. 76, 1919 Colo.Sess.Laws 730. If the legislature had wanted to fully enhance opportunities for employment of persons with prior medical conditions or handicaps, employers would have been accorded the protection of apportionment not only for prior industrial disabilities, but also for prior nonindustrial impairments. Marino, Primer on Permanent Disability in the Colorado Workmen's Compensation Law, 57 Den.L.J. 573, 581 (1980). The legislature has not extended apportionment to prior nonindustrial impairments, and we refuse to do so now.

We must give effect to the...