Wolford v. Pinnacol Assurance, 03SC472.

• Citation: 107 P.3d 947
• Decision Date: 28 February 2005
• Docket Number: No. 03SC472.,03SC472.
• Parties: Charlene WOLFORD, n/k/a Charlene Pribble, Petitioner, v. PINNACOL ASSURANCE, Respondent.
• Court: Colorado Supreme Court

107 P.3d 947

Charlene WOLFORD, n/k/a Charlene Pribble, Petitioner, v. PINNACOL ASSURANCE, Respondent.

No. 03SC472.

Supreme Court of Colorado, En Banc.

February 28, 2005.

As Modified on Denial of Rehearing March 21, 2005.

Wilcox & Ogden, P.C., Ralph Ogden, Denver, for Petitioner.

Vaughan & DeMuro, David R. Demuro, Pinnacol Assurance, Michael J. Steiner, Denver, for Respondent.

MARTINEZ, Justice.

Petitioner, Charlene Wolford, appeals from a court of appeals decision affirming the district court's entry of summary judgment in favor of respondent, Pinnacol Assurance (Pinnacol). See Wolford v. Pinnacol Assurance, 81 P.3d 1079 (Colo.App.2003)

. This case was initiated by Wolford against Pinnacol in the civil division of the Denver District Court (the district court) as a separate attempt from her workers' compensation case to enforce a 1995 administrative law judge (ALJ) order awarding her $81,251.63 in permanent partial disability (PPD) workers' compensation benefits. The district court found, and the court of appeals agreed, that as a matter of law Wolford forfeited her right to recover PPD benefits because she was convicted under section 8-43-402, C.R.S. (2004), of making false statements to obtain temporary total disability (TTD) benefits. We hold that to give effect to all provisions in the Workers' Compensation Act (the Act) and preserve the intent of the General Assembly, a conviction under section 8-43-402 only requires the forfeiture of the compensation that was obtained as a result of false statements. Accordingly, we reverse the decision of the court of appeals and order the case remanded to the district court for proceedings consistent with this opinion.

I. Facts and Procedure

In November 1992, Wolford was working as a counselor for Support, Inc. (Support) when she was sexually assaulted by an emotionally disturbed patient. The attacker brutally grabbed her, threw her against the wall, bit her ear, and tried to rip off her clothes. As a result of the attack, Wolford suffered from post-traumatic stress disorder that included symptoms of depression, impaired concentration, insomnia, recurring nightmares, hyperphagia, and extreme anxiety. Wolford also suffered physical injuries to her neck and shoulders.

Although Wolford attempted to return to work, she was unable to continue working as a counselor for Support. Wolford sought workers' compensation benefits from Support and its workers' compensation insurer, Colorado Compensation Insurance Authority, now doing business as Pinnacol.¹ Support and Pinnacol conceded liability for the workers' compensation claim and started paying Wolford monthly TTD benefits.

In May 1993, while receiving her TTD benefits, Wolford began working as a secretary for a law firm. She continued this employment until November 1994, just before her physician determined that she had reached maximum medical improvement (MMI).

Having reached MMI, Wolford then sought PPD benefits and future psychiatric medical benefits from Pinnacol. Pinnacol requested, and Wolford received, a division-sponsored independent medical examination (DIME). After a hearing on the extent of Wolford's permanent medical impairment, on July 26, 1995 an ALJ ordered Pinnacol to pay Wolford PPD benefits totaling $81,251.63 as well as future medical benefits.

Pinnacol appealed the order to the Industrial Claims Appeals Office (ICAO), which affirmed on January 17, 1996. Pinnacol appealed and in an unpublished opinion the court of appeals affirmed the order.

Concurrent to Pinnacol's appeal of the workers' compensation order for PPD and medical benefits, Wolford was investigated and charged with three counts of willfully making false statements to obtain workers' compensation benefits under section 8-43-402, 3 C.R.S. (1995 Supp.), and one count of theft pursuant to section 18-4-401(2)(a), 8B C.R.S. (1995 Supp.). These charges were based on allegations that Wolford filed sworn statements that she had not been working, a requirement of receiving her TTD benefits, when in fact she was working as a secretary between May 1993 and November 1994.

In June 1996, Wolford pleaded guilty in the criminal division of the Denver District Court (the criminal court) to one count of willfully making false statements to obtain workers' compensation benefits under section 8-43-402 and on August 19, 1996, was sentenced to six years probation and ordered to pay restitution. The court probation department recommended that Wolford's restitution be set based upon the TTD benefits Wolford received after returning to work on May 3, 1993, and continuing through November 1994 when she stopped working. During that time, Wolford received forty-two payments totaling $16,693.63 in TTD compensation. Although at the time of her sentencing Wolford had also received several PPD compensation payments, neither the probation department nor the district attorney sought restitution for those payments. As a result, the criminal court only ordered restitution of the TTD compensation Wolford received after she started working.²

Although the court of appeals had affirmed the award for PPD and future medical benefits in July 1996, Pinnacol continued to dispute the award because of Wolford's conviction under section 8-43-402. In September 1996, Pinnacol filed a Final Admission of Liability with the Division of Workers' Compensation stating: "Pursuant to C.R.S. 8-43-402, as amended, claimant forfeits all right to compensation upon conviction.... Benefits terminated as of [August 19, 1996]." Pinnacol argued that under section 8-43-402 a conviction for willfully making false statements to obtain any workers' compensation benefit resulted in the forfeiture of all benefits associated with a claim regardless of whether the false statements were related to the benefits.

Wolford requested a hearing before an ALJ on the limited issue of whether or not her conviction under section 8-43-402 resulted in the forfeiture of her future medical benefits. The hearing did not address the forfeiture of her PPD benefits. The ALJ found that although section 8-43-402 stated that a claimant "shall forfeit all right to compensation under [the Act] upon conviction," future medical benefits were not "compensation" and Wolford was still entitled to those benefits. Pinnacol appealed the ruling and the ICAO and the court of appeals affirmed. See Support, Inc. v. Indus. Claim Appeals Office, 968 P.2d 174, 176 (Colo.App.1998)

.

Following the court of appeals' ruling, Wolford demanded that PPD benefits also be paid because, like the future medical benefits, the PPD benefits were not forfeited pursuant to her conviction under section 8-43-402. Pinnacol refused to pay PPD benefits³ and, in April 2000, Wolford requested another hearing with an ALJ to decide the issue. Before the hearing could be held, however, Wolford filed this separate action in the district court against Pinnacol seeking enforcement of the original 1995 ALJ order for PPD benefits.

In the district court, Wolford asserted that the forfeiture provision of section 8-43-402 is limited to only those benefits obtained through her false statements and does not allow for the forfeiture of benefits to which Wolford is otherwise entitled. Any other interpretation, according to Wolford, would result in a windfall for Pinnacol. In addition, Wolford asserted that the imposition of a forfeiture of her PPD benefits is a criminal penalty, the application of which through an additional proceeding separate from her criminal sentence violated protections against Double Jeopardy and Excessive Fines embodied in the United States and Colorado constitutions. The district court rejected all of these claims and found the plain meaning of "all right to compensation" under the Workers' Compensation Act to include compensation unrelated to the false statements. Accordingly, the district court found that Wolford forfeited her PPD benefits as a matter of law when she was convicted under section 8-43-402 and entered summary judgment against her.

Wolford appealed and the court of appeals affirmed. As an issue of first impression, the court found that a conviction under section 8-43-402 resulted in the forfeiture of all compensation under the Act and consequently Wolford was no longer entitled to PPD benefits.

We granted certiorari to determine whether the forfeiture provision of section 8-43-402 applies to all workers' compensation benefits or only those obtained by making a false statement or representation. We also granted certiorari to determine if the imposition of the forfeiture provision violates the Excessive Fine and Double Jeopardy Clauses of the United States and Colorado constitutions.

II. Analysis

Our initial task is to determine the meaning and extent of the forfeiture provision of section 8-43-402. Our analysis of section 8-43-402 is broken down into two parts. First we review the Act as a whole and determine that to give meaning and effect to all provisions of the Act, section 8-43-402 cannot be interpreted so broadly as to result in a complete forfeiture of all compensation, including the compensation unrelated to the false statements. To do so would undermine the General Assembly's understanding of how the workers' compensation system functions and render at least two other provisions of the Act meaningless. Second, we construe section 8-43-402 to require a nexus between the false statements and the compensation forfeited. In doing so, we preserve the remedial intent of the Act and the deterrent effect of the penalties set forth in section 8-43-402. In addition, the nexus requirement avoids rendering other provisions meaningless and provides the most rational means to read all provisions in the Act harmoniously.

We next determine that Wolford's conviction under 8-43-402 required the forfeiture of the TTD benefits she received while working fulltime as a secretary because there exists a nexus between that compensation and her...