Dee Enterprises v. Industrial Claim Appeals

• Decision Date: 31 July 2003
• Docket Number: No. 02CA2040.,02CA2040.
• Citation: 89 P.3d 430
• Parties: DEE ENTERPRISES, d/b/a D & D Electric; and Mid-Century Insurance Company, Petitioners, v. INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE OF COLORADO and Ronald Nations, Respondents.
• Court: Colorado Court of Appeals

89 P.3d 430

DEE ENTERPRISES, d/b/a D & D Electric; and Mid-Century Insurance Company, Petitioners, v. INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE OF COLORADO and Ronald Nations, Respondents.

No. 02CA2040.

Colorado Court of Appeals, Div. I.

July 31, 2003.

Joel N. Varnell & Associates, Chris Forsyth, Denver, Colorado, for Petitioners.

No Appearance for Respondent Industrial Claim Appeals Office.

Bisset Law Firm, Jennifer Bisset, Denver, Colorado, for Respondent Ronald Nations.

Opinion by Chief Judge DAVIDSON.

In this workers' compensation proceeding, Dee Enterprises and its insurer, Mid-Century Insurance Company (collectively employer), seek review of the final order issued by the Industrial Claim Appeals Office (Panel) upholding the order of the administrative law judge (ALJ) finding that Ronald Nations (claimant) had suffered a compensable injury and awarding him benefits. We affirm.

I. Constitutionality

On appeal, employer's primary contention is that §§ 8-43-201 and 8-43-301, C.R.S. 2002, of the Workers' Compensation Act (Act), are unconstitutional. Specifically, employer argues that these statutes violate both the doctrine of separation of powers, under article III of the Colorado Constitution, and the requirement that district courts have original jurisdiction in civil cases, as mandated in article VI, § 9(1). We conclude that employer has failed to establish beyond a reasonable doubt that the Act violates these provisions of the Colorado Constitution.

Preliminarily, we agree with employer that this court has original jurisdiction to address challenges to the constitutionality of the Act. The standard of review is de novo, and because statutes are presumed to be constitutional, the challenging party bears the burden of proving them unconstitutional beyond a reasonable doubt. Thus, as relevant here, when the General Assembly creates an administrative agency and provides it specific powers pursuant to the state's police power, the agency's exercise of those powers within the scope of its authority is presumed to be valid and constitutional. MGM Supply Co. v. Indus. Claim Appeals Office, 62 P.3d 1001 (Colo.App.2002).

A. Police Power

The General Assembly created the Act as a substantive right pursuant to its police power. See Sch. Dist. No. 1 v. Indus. Comm'n, 66 Colo. 580, 185 P. 348 (1919). The Act is a mutual renunciation of common law tort claims and defenses in favor of a no-fault system with reduced but guaranteed benefits. Whiteside v. Smith, 67 P.3d 1240 (Colo.2003). The Act is the exclusive remedy for workers injured within the scope and course of their employment and precludes employees from bringing tort actions against their employers. Section 8-41-102, C.R.S. 2002; Kandt v. Evans, 645 P.2d 1300 (Colo. 1982).

The constitutionality of all types of workers' compensation acts generally has been firmly established. 1 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 2.07, at 2-14 (2002). Indeed, the legislature has broad discretion to enact measures for the protection of the public health, safety, and welfare, so long as the remedy adopted is rationally related to a legitimate governmental purpose. See Young v. Indus. Claim Appeals Office, 969 P.2d 735 (Colo. App.1998)

. It is well established that the employer-employee relationship involves a vital public interest and that there is a need for its regulation. See Corcoran v. P.G. Corcoran Co., 245 Minn. 258, 71 N.W.2d 787 (1955).

B. Separation of Powers

Section 8-43-201 of the Act confers jurisdiction on ALJs to hear and determine workers' compensation matters, and § 8-43-301 provides the Panel with jurisdiction to review the ALJs' orders. Employer contends that these provisions violate the constitutional separation of powers doctrine by conferring judicial authority on an administrative agency that is part of the executive branch. We disagree.

Article III of the Colorado Constitution prohibits one branch of government from exercising powers that the constitution vests in another branch. People v. Barth, 981 P.2d 1102 (Colo.App.1999). The separation of powers doctrine does not require a complete division of authority among the three branches, however, and the powers exercised by different branches of government necessarily overlap. People in Interest of R.W.V., 942 P.2d 1317, 1320 (Colo.App.1997)("absolute separation of government functions among the co-equal branches is neither required nor desirable to achieve the constitution's ultimate goal of effective and efficient government"); Nev. Indus. Comm'n v. Reese, 93 Nev. 115, 560 P.2d 1352 (1977)(because an administrative agency exercises executive, judicial, and legislative power, a strict application of the separation of powers doctrine would make the mere existence of an agency unconstitutional); McKay v. N.H. Comp. Appeals Bd., 143 N.H. 722, 732 A.2d 1025 (1999)(separation of powers doctrine requires some overlapping and duality as a matter of practical and essential expediency). Indeed, the fundamental purpose of the doctrine is not to create three mutually exclusive departments of government, but to prevent one department from exercising power that is essential to another department's exercise of its constitutionally defined functions. Colo. Gen. Assembly v. Lamm, 700 P.2d 508 (Colo.1985).

Employer maintains, however, that pursuant to §§ 8-43-201 and 8-43-301, ALJs and the Panel have the power to enforce workers' compensation orders. According to employer, these orders involve private rights stemming from common law, and their rulings are binding without the parties' consent. Consequently, employer argues, ALJs and the Panel exercise functions essential to the judicial branch, in violation of article III. We disagree.

1. Judicial Power

Traditionally, judicial power has been defined as consisting of three elements: (1) examination of the "truth of the fact," (2) determination of the "law arising upon that fact," and (3) ascertainment and application of the remedy. See, e.g., Union Colony v. Elliott, 5 Colo. 371 (1880)(citing Justice Blackstone). Not every exercise of duties judicial in nature, however, is necessarily an exercise of "judicial power." Indeed, many administrative officials are required to make determinations of fact and apply the law thereto. It is generally agreed that the essence of judicial power is the ability to carry a judgment into effect. See Firelock Inc. v. Dist. Court, 776 P.2d 1090, 1094 (Colo.1989)

; Cedar Rapids Human Rights Comm'n v. Cedar Rapids Cmty. Sch. Dist., 222 N.W.2d 391 (Iowa 1974).

a. Quasi-Judicial Power

We agree with employer that an administrative agency cannot validly exercise a purely judicial function. See City & County of Denver v. Lynch, 92 Colo. 102, 106, 18 P.2d 907, 909 (1932) ("It is universally held that the legislative department is powerless to confer judicial duties upon the officials of other departments."). However, the agency may nevertheless possess quasi-judicial powers that blend legislative and judicial characteristics, so long as the legislature retains authority to effectively change the agency's rules and the courts can effectively correct errors made in the determination of cases. See 1 Frank E. Cooper, State Administrative Law 17 (1965).

Here, the General Assembly has granted to ALJs and the Panel quasi-judicial power with limited jurisdiction to conduct administrative hearings, make findings, and render administrative decisions thereon, in workers' compensation claims arising between an employer and employee. See Ontario Mining Co. v. Indus. Comm'n, 86 Colo. 206, 280 P. 483 (1929). But this exercise of judgment and discretion does not involve pure judicial power in the constitutional sense. Cf. People ex rel. Hubbard v. Colo. Title & Trust Co., 65 Colo. 472, 178 P. 6 (1918)(public utilities commission's exercise of judgment and discretion as incidental to the administration of law is not the exercise of judicial power within the meaning of article III); Am. Sulphur & Mining Co. v. Brennan, 20 Colo.App. 439, 446, 79 P. 750, 752 (1905)("mere fact that duties are imposed upon officers which require the exercise of judgment and discretion does not of itself render their proceedings conducted in pursuance of their authority judicial, in the sense in which the term is used in the Constitution"); Goodrum v. Asplundh Tree Expert Co., 824 S.W.2d 6 (Mo.1992)(citing De May v. Liberty Foundry Co., 327 Mo. 495, 37 S.W.2d 640 (1931); commission is not vested with judicial power in the sense in which the term is used in article III); Wylie Corp. v. Mowrer, 104 N.M. 751, 726 P.2d 1381 (1986)(workers' compensation commission is no more "purely judicial" than are other administrative agencies); Mallatt v. Luihn, 206 Or. 678, 294 P.2d 871 (1956)(administrative officials do not exercise judicial power in the traditional sense of the word).

Employer's contention to the contrary notwithstanding, neither an ALJ nor the Panel has the power to carry a judgment into effect. By the specific terms of the Act, only a court of competent jurisdiction has the power to enforce the payment of orders issued by ALJs or the Panel by reducing such an award to judgment. See § 8-43-304, C.R.S.2002 (any employer or insurer who refuses to obey a lawful order issued by an ALJ or the Panel shall be subject to the order reduced to judgment by a court of competent jurisdiction); § 8-43-408(3), C.R.S.2002 (certified copy of an award of director, ALJ, or Panel may be filed with the clerk of the district court, the recording of which shall have all the effect of a judgment of the district court); Hard v. Indus. Comm'n, 174 Colo. 51, 482 P.2d 353 (1971); Passaretti v. Indus. Comm'n, 711 P.2d 1285 (Colo.App.1985).

Thus, the awards and determinations of ALJs and the Panel, including any penalties imposed, lack judicial finality because they are not enforceable by execution or other proceedings, see C.R.C.P. 69, until a district court...