Case Law Updates, April 2011

Kondracki v. Metro Taxi, W.C. No. 4-782-175, ICAO

This claim addresses the “similar” insurance coverage requirements of C.R.S. § 40-11.5102(5)(b). Claimant was injured while operating a taxi cab.  Metro asserted that Claimant was an independent contractor.  The ALJ held that Claimant was an employee of Metro Taxi based on the terms of the agreement between Claimant and Metro.  Additionally, Metro was uninsured at the time, and notified of such due to another pending claim.  The ALJ assessed penalties against Metro for violation of C.R.S. § 40-11.5102(5)(b) as Claimant’s insurance policy with AIG was “not similar” to workers’ compensative coverage. The panel affirmed. What this means for you: An employer cannot evade the required workers’ compensation coverage by contracting out work to independent contractors with substandard coverage plans. Ensure all independent contractors or contract employees have sufficient coverage similar to workers’ compensation coverage.


Lane v. Hospital Shared Services, W.C. No. 4-784-015, ICAO

This claim addresses the causation requirement between inability to earn wages and eligibility for permanent total disability (PTD) benefits. Claimant injured his left arm and hand tripping over a pallet jack.  In addition to his workers’ compensation injury, Claimant suffered from numerous, debilitating non-work related conditions. With all of his injuries and illnesses, Claimant was unable to work and asserted a claim for PTD benefits.  The ALJ determined Claimant’s inability to earn wages was due to his non-work related conditions and complications, and he was therefore not eligible for PTD benefits. The panel affirmed.  What this means for you: Claimant bears the burden to prove that the industrial injury is a “significant causative factor” in Claimant’s inability to earn wages and subsequent entitlement to PTD benefits.


Trusty v. Big Lots Stores, Inc., W.C. No. 4-770-446, ICAO

This claim addresses the requirement to assert the affirmative defense of issue preclusion (a.k.a. collateral estoppel). Claimant suffered a low back injury which was found compensable by ALJ Felter. Claimant underwent a Division IME (DIME) and was provided a 20% whole person impairment rating. Respondents challenged the DIME, and ALJ Jones found Respondents overcame the DIME by clear and convincing evidence. Claimant appealed on the basis that compensability was determined by ALJ Felter, and thus precluded from consideration by ALJ Jones. The panel referenced Sunny Acres Villa, Inc. and held that the issue sought to be precluded must be identical to an issue actually determined in prior proceedings. Because Claimant did not raise the issue of impairment or the issue of the nature and extent of his permanent impairment before ALJ Felter, ALJ Jones properly considered the issue at hearing and did not commit error in determining Respondents met their burden to overcome the DIME by clear and convincing evidence. What this means for you: Collateral estoppel will rarely be an available affirmative defense, as issues raised in subsequent hearings are rarely similar, let alone identical, to issues raised in initial compensability proceedings.


Pankratz v. Hancock Fabrics, W.C. No. 4-653-869, ICAO

This claim addresses the rights of the parties to alter a settlement agreement in the event the Medicare Set Aside (MSA) approved amount far exceeds the estimated amount. The parties entered into an approved settlement agreement with Respondents’ agreement to fund an MSA which was estimated to be approximately $30,000. The final approved MSA amount was over $488,000. Respondents filed an Application for Hearing and requested the MSA portion of the settlement be set aside to due mutual mistake of material fact. Claimant then alleged penalties against Respondents for failure to comply with the Order approving the settlement. The ALJ found Respondents failed to prove mutual mistake and denied Claimant’s claim for penalties Claimant appealed the ALJ’s failure to impose penalties, and asserted the ALJ erred in determining he had no jurisdiction over the MSA. The panel held that W.C.R.P. Rule 7-2(A)(1) clearly stated that approval of a settlement agreement does not constitute approval of an MSA, and therefore Respondents were not in violation of the Order, or subject to penalties, by failing to adequately fund the MSA. What this means for you: The panel intimated the MSA might well be a binding agreement, a breach of which could lead to a cause of action. However, the panel did not reach any further conclusions as that issue was not before the panel. Structure settlement language carefully to allow for setting aside the settlement agreement in the case of a “surprise” MSA amount.


Smith v. J-T Initiatives, Inc., W.C. No. 4-815-801, ICAO

This claim affirms established law that a Claimant is entitled to an increase in average weekly wage based on concurrent employment, which will correspondingly increase Claimant’s temporary total disability benefit rate.


Olaes v. Elkhorn Construction Company, W.C. No. 4-782-977, ICAO

This claim affirms established law that a Claimant who is responsible for termination of their employment cannot allege entitlement to lost wages through temporary total disability benefits.  In this claim, Claimant falsified his social security and permanent resident card.


Steele v. Denver Public Schools, W.C. Nos. 4-826-116 & 4-833-702, ICAO

This claim affirms established law that a Claimant must prove compensability by a preponderance of the evidence, and an ALJ’s determination regarding compensability will not be disturbed on appeal unless the findings of fact are not supported by the evidence.


Johnson v. Champ, LLC, W.C. No. 4-785-983, ICAO

This claim concerns the required supporting documentation for proper filing of a Final Admission of Liability (FAL). At hearing, the ALJ concluded the physician’s report attached to the FAL had been altered, most likely by outside influence, in regards to permanent impairment and MMI. Respondents had admitted for a wrist injury, which was at MMI, but not Claimant’s neck, elbow, and shoulder conditions. As such, the ALJ held the FAL to be void, and assessed penalties against Respondents in the amount of $49,050 for violation of W.C.R.P. 5-5.  Respondents appealed, citing violation of due process, and improper burden shifting on causation. The panel held Respondents were not provided sufficient notice regarding the allegedly altered FAL, thus the ALJ abused his discretion by not providing the insurer with a fair opportunity to respond to the allegation. Regarding causation, the panel found the ALJ had not made sufficient findings of fact to conclude that Respondents knew the disputed conditions were related to the admitted condition upon the filing of the FAL, and therefore could not assess penalties.  The panel remanded the claim back to the ALJ for further findings.  What this means for you: Whenever a Claimant asserts a claim for penalties, request that the ALJ make in-depth, specific findings of fact for the basis of penalties so that your counsel can properly consider appeal without remand.