Macaulay v. Villegas

Decision Date07 April 2022
Docket NumberCourt of Appeals No. 21CA0288
Citation513 P.3d 1117,2022 COA 40 M
Parties Dr. Hugh MACAULAY, Petitioner-Appellant and Cross Appellee, v. Allen VILLEGAS, Respondent-Appellee and Cross Appellant, and Industrial Claim Appeals Office of the State of Colorado, Denver Water, and Travelers Indemnity Co., Respondents.
CourtColorado Court of Appeals

Dworkin, Chambers, Williams, York, Benson & Evans, P.C., David J. Dworkin, Denver, Colorado, for Petitioner

Chris Forsyth Law Office, LLC, Chris Forsyth, Denver, Colorado for Respondent Allen Villegas

No Appearance for Respondent Industrial Claim Appeals Office

Hall & Evans, LLC, Douglas J. Kotarek, Kendra G. Garstka, Katie L. McLaughlin, Matthew J. Hegarty, Denver, Colorado, for Respondents Denver Water and Travelers Indemnity Co.


¶ 1 The Workers’ Compensation Act (Act) is intended to ensure that injured workers receive the "quick and efficient delivery" of benefits "at a reasonable cost to employers." § 8-40-102(1), C.R.S. 2021. The statutes of limitations incorporated into the Act help achieve this goal by limiting "inherent administrative and practical difficulties" that arise when claims age, "such as the proof problems associated with old injuries, the need to preserve full case records indefinitely, and the inability of insurance carriers to predict their future liability and compute appropriate reserves." Calvert v. Indus. Claim Appeals Off. , 155 P.3d 474, 476 (Colo. App. 2006). But the Act does not carry one blanket statute of limitations across all of its provisions. Instead, different sections of the Act are subject to disparate deadlines.

¶ 2 In this appeal, we examine the interplay of two of those statutes of limitations: the six-year statute of limitations within which a closed claim can be reopened under section 8-43-303, C.R.S. 2021; and the one-year statute of limitations within which a party must assert a penalty claim under section 8-43-304(5), C.R.S. 2021. To preserve the Act's cohesiveness, the two sections must work together. We conclude that harmony between the two sections can only be achieved by limiting the assertion of penalty claims to open or reopened claims. Once the statute of limitations for reopening has expired, a party can no longer pursue penalties in that claim.

¶ 3 Claimant, Allen Villegas, appeals several issues relating to his claims for recovery of penalties from his employer, Denver Water; Denver Water's insurer, Travelers Indemnity, Co.; and the physician who oversaw his workers’ compensation examination, Dr. Hugh Macaulay. Villegas asserts that Denver Water and Macaulay violated section 8-43-203(3)(b)(IV), C.R.S. 2021, of the Act by permitting "nurse case managers" — nurses skilled in administering an insurer's case management program for injured workers — to attend his medical examinations without his knowledge or permission.

¶ 4 However, because Villegas brought the penalty claims after the window to reopen his case closed, Denver Water and Dr. Macaulay sought dismissal of his claims on statute of limitations grounds. An administrative law judge (ALJ) agreed with Denver Water and Dr. Macaulay and dismissed Villegas's action. The Industrial Claim Appeals Office (Panel) affirmed the ALJ's order with respect to Denver Water but set aside the ALJ's dismissal of penalty claims against Dr. Macaulay because it concluded that the statute of limitations did not apply to him.

¶ 5 We conclude that the statute of limitations applies to Villegas's claims asserted against both Denver Water and Dr. Macaulay. We therefore affirm the Panel's order upholding the dismissal of penalty claims against Denver Water and set aside that portion of the Panel's order reinstating penalty claims against Dr. Macaulay.

I. Background

¶ 6 On February 15, 2012, while working for Denver Water, Villegas sustained an admitted work-related back injury. He received treatment for his injuries at Denver Water's in-house medical clinic. Eventually, he was placed at maximum medical improvement (MMI) and, in September 2015, Denver Water filed a final admission of liability (FAL) admitting to an impairment rating of 17% of the whole person. Villegas sought permanent total disability (PTD) benefits, but an ALJ denied and dismissed the PTD claim, leaving Villegas with a permanent partial disability (PPD) award based on the 17% whole person impairment rating. The Panel upheld the ALJ's order, and a division of this court affirmed. See Villegas v. Indus. Claim Appeals Off. , 2018 WL 4501567 (Colo. App. No. 17CA1619, Sept. 20, 2018) (not published pursuant to C.A.R. 35(e) ). Villegas petitioned for a writ of certiorari to the Colorado Supreme Court, which was denied. See Villegas v. Indus. Claim Appeals Off. , 2019 WL 135536 (Colo. No. 18SC770, Jan. 7, 2019) (unpublished order). The parties agree that Villegas's claim subsequently closed.

¶ 7 In his opening-answer brief, Villegas states that "[s]ometime after April 5, 2018," he learned that a supervisor at Denver Water's clinic testified in an April 5, 2018, hearing that "staff members at the clinic serve as nurse case managers, and not in a treating capacity, when employees are injured at work." Villegas does not dispute that the case in which the supervisor testified did not involve him. The information became pertinent because the Act requires employers and insurers to advise claimants of their right to refuse to be examined in the presence of a nurse case manager. See § 8-43-203(3)(b)(IV).

¶ 8 The Act requires employers or their insurers to offer managed care services to injured workers. § 8-42-101(3.6)(p)(II), C.R.S. 2021. The Act defines case management as "a system developed by the insurance carrier in which the carrier shall assign a person knowledgeable in workers’ compensation health-care to communicate with the employer, employee, and treating physician to assure that appropriate and timely medical care is being provided." § 8-42-101(3.6)(p)(I)(A). A "nurse case manager" is "a highly skilled nurse who specializes in managing workers’ compensation injuries, whether it is a catastrophic injury or an injury that requires surgery." Workers’ Compensation Guide § 2:14, Westlaw (database updated Apr. 2018).

¶ 9 Nearly one year after learning that some of the nurses at Denver Water's clinic may have served as nurse case managers, on April 4, 2019, Villegas filed an application for hearing in which he asserted claims for penalties against Denver Water and Dr. Macaulay because they allegedly permitted nurse case managers to attend his appointments with Dr. Macaulay without his knowledge or consent. Villegas asserted sixty-five separate grounds for penalties, including allegations that Denver Water and Dr. Macaulay violated sections 8-42-101(3.6)(p)(II), 8-43-203(3)(b)(IV), and 8-47-203(1), C.R.S. 2021. He also petitioned to reopen his closed claim "on the basis of fraud, treatment after MMI, [and] MMI."

¶ 10 Denver Water and Dr. Macaulay moved to strike the application for hearing, but a prehearing administrative law judge (PALJ) only partially granted their request. The PALJ permitted some claims to continue but dismissed others. Denver Water and Dr. Macaulay also moved to add a statute of limitations defense, which, they informed the PALJ, they had inadvertently omitted. The PALJ denied Denver Water's request to add a statute of limitations defense, finding that Denver Water had failed to establish good cause for its late inclusion. The PALJ granted Dr. Macaulay's request to add a statute of limitations defense.

¶ 11 As Villegas explains in his opening-answer brief, "[d]ue to ongoing discovery" he "was ordered to withdraw and refile his application for hearing." In a new application for hearing filed on October 14, 2019, Villegas again endorsed sixty-five separate grounds for penalties despite the PALJ's order striking the "penalty claims 1 through 3 and 18 through 58" in his initial application for hearing because such penalty claims concerned allegations that "predate[d] the date of injury." In their responses to Villegas's October 14, 2019, application for hearing, Denver Water and Dr. Macaulay endorsed the statute of limitations as a defense.

¶ 12 Denver Water later moved for summary judgment, seeking the dismissal of Villegas's application for hearing. An ALJ granted Dr. Macaulay's request to join the motion. Denver Water and Dr. Macaulay's primary contention was that the applicable statute of limitations barred Villegas's penalty allegations. They argued that Villegas could not assert any penalty claims unless his case — which had been closed after the supreme court denied his petition for writ of certiorari — was reopened under section 8-43-303. Reopening, they pointed out, must be sought within the later of six years of the date of injury or two years of the last indemnity payment. But Villegas's injury occurred in February 2012, more than seven years before he filed his April 2019 application for hearing. And according to Denver Water and its FAL, his PPD payments "were scheduled to be paid until October 17, 2016," because Villegas would reach the statutory benefits cap at that time. Villegas does not dispute this timeline.

¶ 13 The ALJ agreed that the period for filing a petition to reopen had expired. Further, the ALJ rejected Villegas's assertions that Denver Water and Dr. Macaulay had withheld information about nurse case managers from him. To the contrary, the ALJ noted that Denver Water had notified Villegas of his right to refuse the presence of a nurse case manager by sending him "the statutorily required brochure" with Denver Water's notice of contest (NOC).

¶ 14 The ALJ referred to the affidavit of Denver Water's insurance adjuster, Theresa Manshardt, who stated that she "filed a [NOC] on July 9, 2012, with an information brochure attached. The brochure was sent to [Villegas] with the July 9, 2012[,] NOC. The NOC state[d], ‘Brochure...

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