Subsequent Injury Fund v. Thompson, 89SC230

• Decision Date: 18 June 1990
• Docket Number: No. 89SC230,89SC230
• Citation: 793 P.2d 576
• Parties: SUBSEQUENT INJURY FUND, Petitioner, v. Donald THOMPSON, Sam Kramer, State Compensation Insurance Authority, and Industrial Claim Appeals Office, Respondents.
• Court: Colorado Supreme Court

Page 576

793 P.2d 576

SUBSEQUENT INJURY FUND, Petitioner, v. Donald THOMPSON, Sam Kramer, State Compensation Insurance

Authority, and Industrial Claim Appeals Office, Respondents.

No. 89SC230.

Supreme Court of Colorado,

En Banc.

June 18, 1990.

Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., and Michael J. Steiner, First Asst. Atty. Gen., Denver, for petitioner.

Paul Tochtrop, Denver, for respondents Sam Kramer and State Compensation Ins. Authority.

Carol Mullins, Asst. Atty. Gen., Denver, for respondent Indus. Claim Appeals Office.

No appearance for respondent Donald Thompson.

Justice LOHR delivered the Opinion of the Court.

We granted certiorari to review an unpublished decision of the Colorado Court of Appeals affirming a decision of the Industrial Claim Appeals Office (Panel). Subsequent Injury Fund v. Thompson, No. 88CA1119 (Colo.App. Mar. 23, 1989). The court of appeals held that the Subsequent Injury Fund (SIF) was liable for a portion of the permanent total disability benefits owed an employee rendered permanently and totally disabled by two separate myocardial infarctions (heart attacks) despite the employee's pre-existing non-industrial condition that made him susceptible to heart attacks. We affirm the court of appeals' judgment.

I.

On February 8, 1986, and November 23, 1986, Donald Thompson suffered work-related heart attacks that rendered him permanently and totally disabled. Thompson was awarded permanent total disability benefits pursuant to section 8-51-107(1), 3B C.R.S. (1986). ¹ Thompson's entitlement to those benefits is not disputed in this appeal. At issue is whether the SIF is liable for a portion of Thompson's permanent total disability benefits.

At a hearing before an administrative law judge (ALJ), the SIF argued that Thompson's pre-existing non-industrial atherosclerotic condition contributed to his heart attacks and, therefore, precluded SIF liability. Dr. John Lambert, Thompson's treating physician, expressed the opinion that Thompson had atherosclerosis, or coronary artery heart disease. Dr. Lambert also concluded that the atherosclerosis probably made Thompson more susceptible to heart attacks.

At the conclusion of the hearing, the ALJ issued an order finding that it had not been established "to a reasonable medical probability that atherosclerotic disease contributed to the claimant's disability and the Subsequent Injury Fund cannot therefore be relieved of liability." ² The ALJ ordered the SIF to pay for sixty percent of Thompson's permanent total disability benefits and the State Compensation Insurance Authority, Thompson's employer's insurer, to pay for the remaining forty percent.

The SIF then petitioned the Panel to review the ALJ's order. On July 15, 1988, the Panel affirmed. The Panel assumed that Thompson's atherosclerosis contributed to his heart attacks, but concluded that because a worker may be compensated for an industrial disability when employment conditions aggravate a pre-existing non-industrial condition to produce a disabling injury, the SIF was nonetheless liable.

The SIF appealed the Panel's order. The court of appeals affirmed in an unpublished opinion. Subsequent Injury Fund v. Thompson, No. 88CA1119 (Colo.App. Mar. 23, 1989).

The SIF argues that the court of appeals erred in concluding that City & County of Denver v. Industrial Commission, 690 P.2d 199 (Colo.1984) (hereinafter Hatch ), did not preclude SIF liability in this case. We disagree.

II.

Section 8-51-106, 3B C.R.S. (1986), establishes the SIF. ³ The SIF was created to pay part of a worker's permanent total disability benefits when the disability resulting from a worker's industrial injury in combination with a previous industrial disability renders the worker permanently and totally disabled. Section 8-51-106(1), 3B C.R.S. (1986), provides in pertinent part:

(a) 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.

(b) In addition to such compensation and after the completion of the payments therefor, the employee shall continue to receive compensation at his established compensation rate for permanent total disability until death out of a special fund to be known as the "subsequent injury fund", created for such purpose in the following manner....

(Emphasis added.)

Before the SIF was established, the full responsibility rule was in effect. 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. Hatch, 690 P.2d at 202; Colorado Fuel & Iron Corp. v. Industrial Comm'n, 151 Colo. 18, 26, 379 P.2d 153, 157 (1962). The full responsibility rule discouraged employers from hiring partially disabled employees. Hatch, 690 P.2d at 202; Sears, Roebuck & Co. v. Baca, 682 P.2d 11, 15 (Colo.1984). After the creation of the SIF, however, the employer of a worker who becomes permanently and totally disabled as the result of more than one industrial injury is required to pay only the portion of a worker's disability benefits that can be attributed to the injury suffered while working for the employer. The SIF pays the remainder of the disability award as well as ongoing compensation during the worker's life. Hatch, 690 P.2d at 202. Thereby, the SIF "provide[s] partially disabled workers with added opportunities for employment by relieving subsequent employers from the harsh results of the 'full responsibility' rule." Id.

In Hatch, we considered the applicability of section 8-51-106(1), 3B C.R.S. (1986), when both industrial and non-industrial disabilities exist. 690 P.2d at 202-03. Hatch suffered a series of job-related back injuries before 1980 that resulted in an award of eighteen percent permanent partial disability. In 1980, another work-related accident resulted in an additional twenty-five percent permanent partial disability. Hatch also suffered from several non-industrial health problems, including glaucoma, arthritis, asthma, alcohol abuse and obesity. The hearing officer found that the combination of these industrial and non-industrial disabilities rendered him permanently and totally disabled. Id. at 200. In determining that the SIF had no obligation to compensate Hatch for any portion of his disabilities, we gave careful reading to the statutory language of section 8-51-106(1)(a), 3B C.R.S. (1986). Because the statute provides that the SIF is liable only when a worker's "combined industrial disabilities" render the worker permanently and totally disabled, we held that the SIF is not liable when a worker's industrial and non-industrial disabilities combine to render the worker permanently and totally disabled. Id. at 202-03 (emphasis added).

The SIF argues that our reasoning in Hatch should be extended to preclude SIF liability in cases in which...