Climax Molybdenum Co. v. Walter

• Decision Date: 17 June 1991
• Docket Number: No. 90SC481,90SC481
• Parties: CLIMAX MOLYBDENUM COMPANY and Colorado Compensation Insurance Authority, Petitioners, v. Stephen WALTER, the Industrial Claim Appeals Office and Director, Division of Labor, Respondents.
• Court: Colorado Supreme Court

Page 1168

812 P.2d 1168

CLIMAX MOLYBDENUM COMPANY and Colorado Compensation

Insurance Authority, Petitioners, v. Stephen WALTER, the Industrial Claim Appeals Office and Director, Division of Labor, Respondents.

No. 90SC481.

Supreme Court of Colorado,

En Banc.

June 17, 1991.

Rehearing Denied July 9, 1991.

John Berry, Paul Tochtrop, Denver, for petitioner Colorado Compensation Ins. Authority.

Gale A. Norton, Atty. Gen., Raymond T. Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Paul Farley, Deputy Atty. Gen., Mary Karen Maldonado, First Asst. Atty. Gen., Michael P. Serruto, Asst. Atty. Gen., Denver, for respondents.

Justice QUINN delivered the Opinion of the Court.

The question in this case concerns the proper method for apportioning liability between a workers' compensation insurer and the Subsequent Injury Fund for workers' compensation benefits owed to an employee who is permanently and totally disabled as a result of the combined effects of two industrial injuries and an occupational disease. In an unpublished opinion, Climax Molybdenum Co. v. Walter (No. 89CA1305, Colo.App. June 7, 1990), the court of appeals held that, because the last industrial disability sustained by the worker, Stephen Walter, was caused by the occupational disease of silicosis resulting from an injurious exposure to silicon dust during his employment with Climax

Molybdenum Company, the allocation of liability for workers' compensation benefits was controlled by section 8-51-112(1), 3B C.R.S. (1986), which imposes workers' compensation liability upon the last employer in the case of an industrial disability caused by an occupational disease, rather than section 8-51-106(1)(a), 3B C.R.S. (1986), which allocates workers' compensation liability between the employer and the Subsequent Injury Fund when a worker who previously sustained permanent partial industrial disability becomes permanently and totally disabled as a result of a subsequent industrial injury. ¹ Based on that analysis, the sole responsibility for Walter's permanent total disability was imposed upon the Colorado Compensation Insurance Authority, which was the workers' compensation insurer of Climax Molybdenum Company (hereinafter collectively referred to as Climax). We hold that Climax is liable only for that portion of Walter's permanent total disability attributable to his occupational disease and that the Subsequent Injury Fund is responsible for the remaining portion of Walter's permanent total disability. We accordingly reverse the judgment of the court of appeals.

I.

Because the question in this case centers on which of two statutes controls the allocation of workers' compensation liability for an employee's permanent total disability resulting from a combination of two industrial injuries and an occupational disease, a brief review of the statutory scheme is appropriate before outlining the pertinent facts.

The Workers' Compensation Act defines the term "injury" to include "disability or death resulting from accident or occupational disease." § 8-41-108(2), 3B C.R.S. (1986). This statutory definition of injury was adopted by the General Assembly in 1975. Ch. 71, sec. 5, § 8-41-108(2), 1975 Colo.Sess.Laws 291, 293. Prior to 1975, the Colorado Occupational Disease Disability Act, which was enacted in 1945, ch. 163, sec. 1-33, 1945 Colo.Sess.Laws 432-446, provided for workers' compensation benefits for certain occupational diseases, including silicosis. As a result of this separate statutory scheme for occupational diseases, the pre-1975 version of the Workers' Compensation Act provided that the term "injury" should not be construed to include disability or death due to occupational disease. § 8-41-108(3), 3 C.R.S. (1973). In 1975, however, the General Assembly repealed the Occupational Disease Disability Act, ch. 71, sec. 62, 1975 Colo.Sess.Laws 291, 311, and incorporated into the Workers' Compensation Act a definition of "injury" that expressly included disability or death resulting from an occupational disease.

The Workers' Compensation Act defines the term "accident" to mean an unforeseen, unexpected, undesigned, or unusual event or occurrence, § 8-41-108(1), 3B C.R.S. (1986), and defines the term "occupational disease" as follows:

[A] disease which results directly from the employment or the conditions under which work was performed, which can be seen to have followed as a natural incident of the work and as a result of the exposure occasioned by the nature of the employment, and which can be fairly traced to the employment as a proximate cause and which does not come from a hazard to which the worker would have been equally exposed outside of the employment.

§ 8-41-108(3), 3B C.R.S. (1986).

Section 8-51-106, 3B C.R.S. (1986), establishes a statutory fund called the Subsequent Injury Fund, which was originally created in 1945 as part of the Workers' Compensation Act. Ch. 164, sec. 1-3, 1945 Colo.Sess.Laws 447-48. The purpose of this fund is to provide employment opportunities for partially disabled persons by relieving employers who employ such persons from the full responsibility for permanent total disability resulting from a subsequent disabling industrial injury sustained while working for the employer. See Subsequent Injury Fund v. Thompson, 793 P.2d 576, 578-79 (Colo.1990); Sears, Roebuck & Co. v. Baca, 682 P.2d 11, 15 (Colo.1984); Horizon Land Corp. v. Industrial Comm'n, 34 Colo.App. 178, 181, 524 P.2d 638, 640 (1974). Prior to the enactment of this statute, an employer "who hired a partially disabled employee was required to pay the entire disability award if the worker suffered another industrial injury and was declared permanently and totally disabled as a result." Thompson, 793 P.2d at 578; see City and County of Denver v. Industrial Comm'n, 690 P.2d 199, 202 (Colo.1984). Section 8-51-106(1)(a) relieves the employer from the full responsibility for permanent total disability by providing that when an employee has previously sustained permanent partial industrial disability and becomes permanently and totally disabled as a result of additional permanent partial industrial disability sustained in a subsequent injury, "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 [S]ubsequent [I]njury [F]und."

In addition to establishing the Subsequent Injury Fund, the General Assembly, as part of the Occupational Disease Disability Act of 1945, enacted a "full responsibility rule." Ch. 163, sec. 13, 1945 Colo.Sess.Laws 432, 438. This statutory rule states that "the employer in whose employment the employee was last injuriously exposed to the hazards of such disease, and the insurance carrier, if any, on the risk when such employee was last so exposed under such employer, shall alone be liable therefor, without right to contribution from any prior employer or insurance carrier." Id. In the case of certain occupational diseases, including silicosis, the statutory scheme imposes liability upon the employer in whose employ the worker was last exposed to specific harmful substances--silicon dioxide dust in the case of silicosis--on each of at least sixty days or more, or the employer's insurer. Id. The "full responsibility rule" for occupational diseases was subsequently incorporated into section 8-51-112(1), 3B C.R.S. (1986), of the Workers' Compensation Act when the Occupational Disease Disability Act was repealed in 1975. Ch. 71, sec. 36, § 8-51-112, 1975 Colo.Sess.Laws 291, 304. In recognition of the fact that the full responsibility rule might deter an employer from hiring a person partially disabled by an occupational disease, section 8-51-112(2), 3B C.R.S. (1986), states that if an employee has been previously disabled from silicosis, workers' compensation benefits shall be apportioned as follows:

[T]he last employer or his insurance carrier, if any, shall be liable only for compensation and medical benefits as provided by articles 40 to 54 of this title, including funeral expenses and death benefits, up to the amount of ten thousand dollars. In addition to such benefits, such employee or, in the event of death, his dependents shall receive additional benefits equivalent to the difference between the amount paid by the last employer or his insurance carrier, if any, and the total amount of benefits payable under said articles. Such additional benefits shall be paid out of the [S]ubsequent [I]njury [F]und created by the provisions of section 8-51-106.

II.

The facts are not in dispute. Walter worked for Climax in a variety of manual labor jobs from 1961 to 1985 and suffered three industrial injuries that arose out of and in the course of his employment. The first injury occurred in October 1984, while Walter was working as a hang-up man and injured his right shoulder. As a result of that injury, Walter underwent surgery and sustained a permanent partial disability that precluded him from doing most of the extremely arduous tasks which he had previously performed at Climax. In July 1985 Walter sustained a partial hearing loss in both ears while working at Climax. The final industrial disability was caused by the occupational disease of silicosis, which arose from Walter's work near underground blasting operations.

An administrative law judge found that Walter was permanently and totally disabled and allocated his permanent total disability as follows:

One-third of [Walter's] current disability is due to his hearing problems, one-third of his current disability is due to his shoulder problems, and one-third of his disability is due to his pulmonary problems. Concerning the one-third of [Walter's] disability attributable to his pulmonary problems, seventy percent of that...