Coates, Reid & Waldron v. Vigil

• Decision Date: 26 July 1993
• Docket Number: No. 92SC489,92SC489
• Citation: 856 P.2d 850
• Parties: COATES, REID & WALDRON; Colorado Compensation Insurance Authority; The Industrial Claim Appeals Office of the State of Colorado; and Director, Division of Labor, Department of Labor and Employment, Petitioners, v. Maria VIGIL, Respondent.
• Court: Colorado Supreme Court

Page 850

856 P.2d 850

COATES, REID & WALDRON; Colorado Compensation Insurance

Authority; The Industrial Claim Appeals Office of the State

of Colorado; and Director, Division of Labor, Department of

Labor and Employment, Petitioners, v. Maria VIGIL, Respondent.

No. 92SC489.

Supreme Court of Colorado,

En Banc.

July 26, 1993.

Michael J. Steiner, Jeanne Labuda, Asst. Atty. Gen., Denver, for petitioners.

Withers, Siedman & Rice, P.C., Gudrun Rice, Grand Junction, for respondent.

Justice SCOTT delivered the Opinion of the Court.

Petitioners Coates, Reid & Waldron, the Colorado Compensation Insurance Authority, the Colorado Industrial Claim Appeals Office, and the Director of the Department of Labor & Employment seek our review of a decision by the court of appeals, Vigil v. Industrial Claim Appeals Office, 841 P.2d 335 (Colo.App.1992), which held that the Industrial Claim Appeals Panel's (Panel) final order affirming the order of the Administrative Law Judge (ALJ) was not supported by the applicable law. The ALJ and the Panel determined respondent Maria Vigil's (Vigil) workers' compensation benefits based upon her average weekly earnings for a second, lower-paying temporary employment position, in lieu of also considering those wages earned at the time of Vigil's earlier, higher-paying permanent work position. The court of appeals held that the ALJ's method of determining Vigil's disability benefits did not fairly compensate her for her work-related injuries and therefore, the ALJ should have exercised the discretion accorded him under section 8-47-101(4), 3B C.R.S. (1986) (now codified at section 8-42-102(3), 3B C.R.S. (1992 Supp.)), to compute Vigil's benefits in a more equitable manner; specifically, that court held that the ALJ should have calculated Vigil's compensation benefits based upon her average weekly wage in effect at the time of her first employment assignment, rather than her second assignment.

We find that the record fails to indicate if, in computing Vigil's benefits, the ALJ considered whether employing her average weekly wage based upon her second, lower-paying temporary position produced an equitable result. We therefore find that the ALJ's order is inconsistent with section 8-47-101(4), a statutory provision which accords an ALJ broad discretion in situations where the standard methods of computing the average weekly wage of the injured employee are inequitable. Accordingly, we affirm the court of appeals decision setting aside the Panel's final order, on the ground that the basis for that order is not supported by the applicable law. We also find, however, that the court of appeals erroneously substituted its judgment for that of the ALJ when that court specifically directed the ALJ to calculate Vigil's compensation award based upon her average weekly wage earned during her first employment position. Thus, without setting out the precise computational method to be employed by the ALJ in his formulation of Vigil's compensation award, we direct the court of appeals to remand the cause to the Panel with instructions to remand to the ALJ for a re-calculation of Vigil's benefits in a manner that will assure a fair and equitable result, pursuant to the discretion accorded an ALJ in section 8-47-101(4).

I.

In 1980, respondent Maria Vigil became employed as a maid/housekeeper for petitioner Coates, Reid & Waldron, an owner of vacation condominiums. In September, 1987, Vigil sustained a work-related injury; at the time of the injury, Vigil's average weekly wages were roughly $418.00 per week. After a period of temporary total disability, Vigil returned to work at Coates, Reid & Waldron, but because her work-related injuries precluded her from continuing her work as a maid/housekeeper, in January, 1988, she was assigned to work as a laundry worker, performing light-duty tasks only. In this employment capacity, Vigil earned approximately $290.00 per week, a nearly 31% decrease in earnings from that earned as a maid/housekeeper. A few months later, in March, 1988, Vigil incurred a second work-related injury, and as a result of this injury, was unable to return to work in any capacity.

Vigil subsequently filed for workers' compensation disability benefits and was awarded temporary total disability benefits based on her wages at the time of her original injury. Vigil reached maximum medical improvement from both injuries in August, 1990. In September, 1990, the ALJ ruled that Vigil suffered from a permanent total disability as a result of the two injuries. The ALJ specifically found that

upon a consideration of all the evidence ... the claimant's original injury contributes to the claimant's permanent total disability at the rate of 80% and ... the [second injury] contributes to the claimant's permanent total disability at the rate of 20%.

The claimant's average weekly wage at the time she sustained injuries from the [second injury] was $290.00. Since it has been determined that the [second injury] contributed to her permanent and total disability, it is concluded that her average weekly wage for the computation of permanent total disability benefits is $290.00.

(Emphasis added.) Presumably, the ALJ's basis for employing the amount of Vigil's weekly earnings at the time of her second injury for the purpose of computing Vigil's permanent and total disability compensation was section 8-47-102(1), 3B C.R.S. (1986) (now codified with changes at section 8-42-104(1), 3B C.R.S. (1992 Supp.)). That section provides that, for purposes of determining compensation for a later, independent industrial injury incurred by a worker, the ALJ is to apply the average weekly wage earned by the worker at the time of that later injury. ¹

Vigil subsequently sought review of the order of the ALJ, contending first, to a Panel of the Industrial Claim Appeals Office, that she was entitled to permanent partial disability benefits for her disability resulting from the original injury, in addition to the permanent total disability benefits, and next, that in any event, her benefits should be computed in a manner that would fairly compensate her for her loss of wage-earning capacity resulting from her first injury. The Panel disagreed with Vigil and affirmed the ALJ's order on the grounds that

at the time [Vigil's] condition attributable to the first injury stabilized, she became eligible for an award of permanent total disability. Hence, she is not entitled to a separate award for permanent partial disability. The rationale for this holding is that "at a given moment in time, a person can be no more than totally disabled." Kehm v. Continental Grain, quoting 2 A. Larson, The Law of Workmen's Compensation, section 59.41 (1986). The fact that the claimant returned to work with a substantial wage loss after her first injury thereby reducing her rate of compensation for permanent total disability does not alter the result that she may not be compensated for more than she is entitled to for her permanent total disability.

Vigil then appealed the Panel's decision to the court of appeals. That court agreed with the ALJ and the Panel that Vigil was not entitled to concurrent permanent partial and permanent total disability benefits, inasmuch as "an injured worker with successive injuries may not receive permanent partial disability benefits once payment of permanent total disability benefits commences." Vigil, 841 P.2d at 336 (citing Kehm v. Continental Grain, 756 P.2d 381 (Colo.App.1987)). ² Notwithstanding this conclusion however, the court of appeals set aside the final order of the Panel on the grounds that

[t]he unique factual situation presented here demonstrates that the standard method of determining [Vigil's] average weekly wage was unfair. First, [her] earnings at the time of her first injury were much higher than at the time of her second injury. Second[ ], the ALJ specifically found that the bulk of claimant's permanent total disability was attributable to the first injury. Third, claimant reached maximum medical improvement as to both injuries at the same time, which prevented her from receiving permanent partial disability benefits for her first injury. These factors demonstrate that the computation of claimant's permanent total disability based on her average weekly wage at the time of her second injury did not fully compensate claimant for her industrial injuries. We note also that both injuries were sustained while the claimant was working for the same employer. We conclude therefore, that [Vigil] will be more fairly compensated by basing her benefits on her average weekly wage at the time of her first injury.

Vigil, 841 P.2d at 337. As authority for its decision, the court of appeals cited section 8-47-101(4), 3B C.R.S. (1986) (now codified at section 8-42-102(3), 3B C.R.S. (1992 Supp.)), which accords discretion to an ALJ to use whichever calculation variables are indicated, if the standard method of computing an injured worker's average weekly wage does not fairly compensate the worker. ³ The court of appeals thus concluded that because Vigil "will be more fairly compensated by basing her benefits on her average weekly wage at the time of her first injury," Vigil, 841 P.2d at 337, the Panel "abused its discretion in not applying section 8-47-101(4) in computing" Vigil's average weekly wage. Id. That court then remanded the cause to the Panel with directions that the Panel remand the matter to the ALJ so that the ALJ could re-compute Vigil's permanent total disability benefits based solely on her average weekly earnings in effect at the time of her first injury.

Petitioners then sought review by this court of the court of appeals decision, arguing that an ALJ may not deviate from the statutory directive to compute permanent and total disability benefits based on the average weekly wage in effect at the time of the injury giving rise to that award, except in limited instances. The petitioners further argue...