Wilson v. Jim Snyder Drilling, 86SC325

• Decision Date: 14 December 1987
• Docket Number: No. 86SC325,86SC325
• Citation: 747 P.2d 647
• Parties: Gary WILSON, Claimant in the death of Dean Booth Wilson, Petitioner, v. JIM SNYDER DRILLING, State Compensation Insurance Fund, Division of Labor, and The Industrial Commission of the State of Colorado, Respondents.
• Court: Colorado Supreme Court

Page 647

747 P.2d 647

Gary WILSON, Claimant in the death of Dean Booth Wilson, Petitioner, v. JIM SNYDER DRILLING, State Compensation Insurance Fund Division of Labor, and The Industrial Commission of the State of Colorado, Respondents.

No. 86SC325.

Supreme Court of Colorado En Banc.

Dec. 14, 1987.

Richard T. Goold, Denver, for petitioner.

Russell A. Stanley, Denver, for respondents Jim Snyder Drilling and State Compensation Ins. Fund.

Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Robert C. Lehnert, Asst. Atty. Gen., Denver, for respondent Indus. Com'n of the State of Colo.

Paul Conaway, Denver, for amicus curiae Colo. Trial Lawyers Ass'n.

LOHR, Justice.

In Wilson v. Jim Snyder Drilling, 729 P.2d 1022 (Colo.App.1986), the Colorado Court of Appeals held that cost-of-living increases in federal social security death benefits are not "periodic death benefits" within the meaning of section 8-50-103, 3B C.R.S. (1986), and therefore cannot be deducted from state workers' compensation death benefits. In reaching that result, the court of appeals relied upon Engelbrecht v. Hartford Accident & Indemnity Co., 680 P.2d 231 (Colo.1984), in which we reached a like conclusion as to periodic disability benefits payable under section 8-51-101(1)(c), 3B C.R.S. (1986). The court of appeals also noted that in its decision in Rusk v. Industrial Commission, 716 P.2d 156 (Colo.App.1985), ¹ it had held that Engelbrecht should not be applied retroactively to permit recovery of offsets taken prior to April 23, 1984, the date of announcement of Engelbrecht. Concluding that the same retroactivity considerations apply to deductions for cost-of-living adjustments in social security death benefits as pertain to such adjustments in social security disability benefits, the court of appeals held that the claimant, Gary Wilson, could not recover for cost-of-living increases in social security death benefits deducted from his workers' compensation death benefits prior to our decision in Engelbrecht. We granted certiorari and now affirm the holding of the court of appeals that the cost-of-living deductions were improper but reverse the determination that the claimant cannot recover for any such deductions taken prior to Engelbrecht.

I.

The father of Gary Wilson was killed in an on-the-job accident in December of 1977. The decedent was an employee of Jim Snyder Drilling, whose workers' compensation insurance carrier was the State Compensation Insurance Fund (State Fund). As a dependent minor child, Gary Wilson was awarded periodic workers' compensation death benefits pursuant to section 8-50-103, 3B C.R.S. (1986). ² Wilson was also eligible for and received periodic federal social security death benefits. Pursuant to section 8-50-103, the State Fund reduced Wilson's state periodic death benefits by the amount of his social security periodic death benefits. As cost-of-living increases were added to Wilson's social security benefits from time to time, the State Fund also deducted these increases from his state benefits. Wilson's case was closed before we issued our opinion in Engelbrecht.

On May 25, 1984, approximately one month after we announced our decision in Engelbrecht, Wilson filed a petition to reopen his case, seeking reimbursement of the deductions taken from his state periodic death benefits for the cost-of-living increases in his social security death benefits. A hearing was held before a hearing officer on October 9, 1984. The hearing officer subsequently issued his Findings of Fact, Conclusions of Law, and Order on March 4, 1985. The hearing officer implicitly held, upon the basis of our decision in Engelbrecht, that section 8-50-103 does not authorize the deduction of cost-of-living increases in social security death benefits from state death benefits. The hearing officer ruled, however, that Engelbrecht should be applied prospectively only, with the result that Wilson could recover nothing since all of the erroneous deductions in his case predated Engelbrecht. On August 6, 1985, the Industrial Commission (Commission) adopted and affirmed the decision of the hearing officer.

Wilson appealed the Commission's decision to the Colorado Court of Appeals. The court of appeals affirmed the order of the Commission, holding that section 8-50-103 does not authorize the deduction of social security cost-of-living increases, but that Engelbrecht should be applied prospectively only. Wilson v. Jim Snyder Drilling, 729 P.2d 1022 (Colo.App.1986). Wilson then filed a petition for certiorari with this court. We granted certiorari.

II.

In Engelbrecht v. Hartford Accident & Indemnity Co., 680 P.2d 231 (Colo.1984), we faced the issue of whether cost-of-living increases in social security disability benefits are themselves "periodic disability benefits" within the meaning of section 8-51-101(1)(c), 3B C.R.S. (1986), and therefore trigger deductions from state workers' compensation permanent disability benefits. Section 8-51-101(1)(c) provides in pertinent part:

In cases where it is determined that periodic disability benefits granted by the federal old-age, survivors, and disability insurance act are payable to an individual and his dependents, the aggregate benefits payable for temporary total disability, temporary partial disability, permanent partial disability, and permanent total disability pursuant to this section shall be reduced, but not below zero, by an amount equal as nearly as practical to one-half such federal periodic benefits.... ³

We held that to interpret the phrase "periodic disability benefits" in section 8-51-101(1)(c) to include cost-of-living increases in social security disability payments would not be consistent with the purposes of the Workmen's Compensation Act, sections 8-40-101 to 8-54-127, 3B C.R.S. (1986 & 1987 Supp.), "to protect employees who suffer injuries arising out of their employment and to give injured workers a reliable source of compensation." Engelbrecht, 680 P.2d at 233. Furthermore, we noted that to allow an injured worker to retain the full cost-of-living increase in federal benefits would not contravene the intent of the General Assembly to prevent double awards, i.e., payment of the full amount of social security and workers' compensation benefits for the same disability. We explained:

[A] cost-of-living increase [in federal social security disability benefits] does not result in a double award. The federal government has decided that it will maintain the buying power of social security payments, not that it will provide additional benefits for a particular injury. Because Colorado does not provide benefits to keep pace with inflation, there is no double payment.

Id. Finally, we noted that "allowing an insurer to deduct one-half the cost-of-living increase each time one occurs, and thus decrease the amount the insurer owes, is not consistent with the goal [of the Workmen's Compensation Act] of determining with certainty the amount owed." Id. Therefore, we held that cost-of-living increases in social security disability benefits may not be deducted from workers' compensation disability benefits pursuant to section 8-51-101(1)(c).

III.

The issues in the case before us are whether the rationale of Engelbrecht, which related to disability benefits, is applicable as well to death benefits, and if so whether the claimant can recover the cost-of-living increases in federal death benefits that were previously deducted from his state workers' compensation death benefits. These are issues of first impression.

The parties have characterized this case as presenting the single question of whether Engelbrecht should be applied retroactively to the petitioner's claim. The Commission and the court of appeals addressed the issue as characterized by the parties. The issue, however, is not the retroactive application of Engelbrecht. In Engelbrecht we construed section 8-51-101(1)(c), the state periodic disability benefit statute. The instant case requires us to interpret section 8-50-103, the state periodic death benefit statute. The retroactive application of Engelbrecht is not implicated in this case, except by analogy. Instead, we must decide whether section 8-50-103 authorizes the deduction of cost-of-living increases in social security benefits. If such deductions are not authorized, we must then decide whether the claimant in this case can recover amounts erroneously so deducted from his state death benefits in the past.

A.

Section 8-50-103 provides: In case of death, the dependents of the deceased entitled thereto shall receive as compensation or death benefits sixty-six and two-thirds percent of the deceased employee's average weekly wages, not to exceed a maximum of eighty percent of the state average weekly wage per week for accidents occurring on or after September 1, 1975, and not less than a minimum of twenty-five percent of the applicable maximum per week. In cases where it is determined that periodic death benefits granted by the federal old age, survivors, and disability insurance act or a workmen's compensation act of another state or of the federal government are payable to an individual and his dependents, the aggregate benefits payable for death pursuant to this section shall be reduced, but not below zero, by an amount equal to one hundred percent of such periodic benefits.

While our decision in Engelbrecht is central to our decision here, it is not dispositive. Disability benefits awarded to a worker under section 8-51-101(1)(c) and death benefits awarded to a worker's dependents under section 8-50-103 are distinct and independent from one another. In Re Claim of Dick v. Industrial Commission, 197 Colo. 71, 73-74, 589 P.2d 950, 951 (1979).

As in Engelbrecht, however, the question of the deductibility of the federal cost-of-living increases at issue here must be examined in light of the purposes of the Workmen's Compensation...