Avalanche Industries, Inc. v. Industrial Claim Appeals Office

Judge BERNARD

concurring in part and dissenting in part.

I concur with the results reached in parts I, II, and IV.A of the majority opinion. I respectfully dissent from the results reached in parts III and IV.B.

I agree a claimant may move to reopen the original award based upon a change in the claimant's physical condition. Section 8-43-803, C.R.S.2006; Lucero v. Climax Molybdenum Co., 732 P.2d 642, 647 (Colo.1987). In such a reopening, the claimant's award may be changed because the claimant has become permanently partially or totally disabled, subject to the requirements of §§ 8-42-107, 8-42-107.5, and 842-111, C.R.8.2006, or for other reasons, such as the inclusion of the cost of insurance premiums in the award as now required by Industrial Claim Appeals Office v. Ray, 145 P.3d 661 (Colo.2006).

However, it is my position that any award based on claimant's average weekly wage (AWW) must be calculated by referring to the remuneration claimant was receiving at the time of the injury, rather than the remuneration claimant was receiving at the time the award was reopened. This time factor would also apply to the calculations necessary to determine the amount of the insurance premiums required by Ray, supra. Therefore, I would reverse the order as it pertains to the method of calculating claimant's AWW and the insurance premiums.

I. Scope of Review

The validity of an award based upon a legal conclusion drawn by the Industrial Claims Appeals Office.(Panel) from undisputed facts is subject to our review. Coates, Reid & Waldron v. Vigil, 856 P.2d 850, 856 (Colo.1993). This court may set aside an order of the Panel if the award of benefits "is not supported by applicable law." Section 8-43-308, C.R.S.2006.

II Statutory History

The statutes requiring that an injured employee's AWW be used as the basis for computing workers' compensation benefits have a long history. As early as 1919, the legislature indicated an employée's AWW was the basis for computing benefits.

This law stated that wages "shall be construed" as the "money rate at which the services rendered are recompensed under the contract of hire in force at the time of the accident." The AWW was computed by referring to the total amount the employee earned for six months before the accident and dividing this sum by twenty-six. If this computation would not "fairly compute" the AWW because an employee had not worked long enough for the computation to be fair, or for "any other reason," the AWW could be computed by referring to the employee's daily earning or "any other method" that would "fairly compute" the employee's AWW. Colo. Sess. Laws 1919, ch. 210, § 47 at 716-17.

In November 1986, Colorado's voters approved a measure submitted to them by the General Assembly in which the means for computing the AWW was expanded to include employees paid by the month, the week, the day, or the hour. All these subsections included a reference to the remuneration received at the time of the accident. The language that wages "shall be construed" as the compensation rate in effect at the time of the accident was modified by the phrase, "except as hereinafter provided." The reference to allowing other modes of calculation when the specified ones would not fairly compute the AWW for any other reason was unchanged. Colo. Sess. Laws 1937, ch. 275, § 1 at 1880-88.

This structure has remained substantially the same for the past seventy years, C.S.A. 1985, ch. 97, § 826; § 81-8-1, C.R.S8.1958; § S1-8-1, C.R.S8.1968; § 8-47-101, CRS. 1978, and was not altered by the major revision of the workers' compensation statutes in 1990. See Colo. Sess. Laws 1990, ch. 62, §§ 8-40-201(19), 8-42-102 at 470, 486-87.

The computation of benefits is still based upon the AWW. Section 8-42-102(1), C.R.S. 2006. The word "wages" still "shall be con*156strued" to mean the employee's compensation at the time of the injury. Section 8-40-201(19)(a), C.R.S$.2006. The various modes of caleulation-based on whether the employee is paid monthly, weekly, daily, or hourly-still reflect the remuneration the employee was receiving at the time of the injury, "except as provided in this section." Section 8-42-102(2), C.R.S.2006. Each of these subsections contains a further reference to the wages the employee was receiving at the time of the accident or the time of the injury. Section 8-42-102(2)(a)-(d), C.R.98.2006.

The subsection concerning calculation of AWW when the enumerated methods would render an unfair result is also fundamentally unchanged since 1987. Section 8-42-102(8), C.R.S.2006, states:

Where the foregoing methods of computing the [AWW] of the employee, by reason of the nature of the employment or the fact that the injured employee has not worked a sufficient length of time to enable earnings to be fairly computed thereunder or has been ill or has been self-employed or for any other reason, will not fairly compute the [AWW], the division, in each particular case, may compute the [AWW] of said employee in such other manner and by such other method as will, in the opinion of the director based upon the facts presented, fairly determine such employee's [AWW].

(Emphasis supplied.)

III. Supreme Court Interpretation

Echoing the express language of a statutory structure that has remained basically unchanged, the supreme court has, at least four times, stated that the basis for calculating the AWW is the wage in effect at the time of the injury. At the time of each of these decisions, as indicated above, the workers' compensation statutes included a provision allowing a different method of calculation if the statutory methods would be unfair for "any other reason."

Roeder v. Industrial Commission, 97 Colo. 133, 46 P.2d 898 (1935), concerned interpretation of the term "wages" for purposes of calculating temporary disability awards. The supreme court determined the legislative direction was clear:

The General Assembly has given us a rule of interpretation. It says where the word "wages" is used ... it shall be construed to mean "money rate at which the services are recompensed under the contract of hire in force at the time of the accident."

Roeder v. Indus. Comm'n, 97 Colo. at 135, 46 P.2d at 899.

In State Compensation Insurance Fund v. Lyttle, 151 Colo. 590, 593, 380 P.2d 62, 64 (1963), the court similarly relied on the wages at the time of the accident:

[The term "earning capacity" [the statutory predecessor to AWW in the temporary partial disability statute] must be related to the money rate at which the services are recompensed under the contract of hire at the time of the accident.
To hold otherwise would ... result in many instances in the preposterous situation of granting larger benefits to an injured employee for temporary partial disability than he could receive if he were temporarily totally disabled.

A division of this court concluded this construction of the term "earning capacity" was sufficiently definitive that it should govern the analysis of a substantially similar successor statute. Sterling Colo. Beef v. Baca, 699 P.2d 1347, 1348 (Colo.App.1985)("It is thus clear that it was the legislative intent to use the [AWW] at the time of the injury as the basis for determining benefits throughout the Workmen's Compensation Act." (emphasis supplied)).

The supreme court described the benefits of certainty in the AWW calculation in Bellendir v. Kezer, 648 P.2d 645 (Colo.1982):

In order to effectuate the [Workers' Compensation] Act's basic goals of speedy and reliable compensation of injured workers, the General Assembly has enacted a formula which calculates awards to an injured worker based on loss of earning power at the time of injury. The formula allows all parties involved to determine with some degree of certainty the amount of compensation to which the worker is entitled. Not only does this certainty aid the parties *157in reaching prompt agreement on compensation issues, it also aids the state insurance compensation fund and other in-sur[elrs in setting employer premiums.

Bellendir v. supra, 648 P.2d at 647 (citation omitted).

When addressing how to calculate the AWW when a previously injured employee suffers a subsequent injury, the supreme court noted in Coates, supra, that "in those instances where an employee who is paid on a weekly basis has incurred a single disabling injury, the claimant's disability benefits are derived from his or her [AWW] in effect af the time of the subject injury." Coates, Reid & Waidron v. Vigil, supra, 856 P.2d at 855 (emphasis supplied).

IV. Proper Scope of Coates

Despite this clear statement, Coates has been read, at least once, as a departure from the principle that the computation of AWW must be based upon remuneration earned at the time of the injury. At least one commentator has suggested that Coates abandoned, "in the name of equity, two statutory pre-seriptions indicating that the claimant's [AWW] should have been determined based on her earnings at the time of the second injury." David P. Cain, Time, Equity and the Average Weekly Wage, 23 Colo. Law. 1831, 1831-32 (Aug.1994).

I respectfully disagree with this comment based upon the following analysis. Before July 1, 1991, the immediate predecessor to current § 8-42-104(1), C.R.8.2006, stated:

The fact that an employee has suffered a previous disability or received compensation therefor shall not preclude compensation for a later injury or for death, but in determining compensation for the later injury or death, the employee's average weekly earnings shall be such sum as will reasonably represent the employee's average weekly earning capacity at the time of the later injury and shall be arrived at according to and subject to the limitations in [the predecessor statute to § 8-42-102].

Colo. Sess. Laws 1990, ch. 62, § 8-42-104(1) at 490.

Relying on this language, a division of this court reversed an ALJ's conclusion that for the purposes of awarding permanent total disability benefits to an employee who suffered separate injuries while working for the same employer, the AWW should be based upon the employee's lower income at the time of the second injury. Vigil v. Indus. Claim Appeals Office, 841 P.2d 335 (Colo.App.1992), aff'd in part and rev'd in part, Coates, Reid & Waldron v. Vigil, supra. The division concluded the claimant's AWW should have been based upon the higher salary the claimant earned at the time of the first injury.

In Coates, supra, 856 P.2d at 855, the supreme court affirmed the division's conclusion that the predecessor of § 8-42-102(8) granted ALJs "broad discretion" to determine whether cireumstances justified using "an alternative method of computing compensation benefits based upon the employee's [AWW] when these methods were unfair for "any other reason."

However, the supreme court reversed the Vigil division's ruling that this discretion should have been used to base the claimant's AWW on her higher income earned at the time of her earlier injury, instead of her lower income earned at the time of her subsequent injury. By doing so, the supreme court did not endorse an exercise of discretion that would disconnect the calculation of an employee's AWW from remuneration received at the time of the injury. Instead, the supreme court simply held:

Where there are such unique cireum-stances as those presented herein, and where the standard statutory methods of computing a claimant's [AWW] work a gross inequity to the claimant, we hold that [the predecessor to § 8-42-102(8)] provides an appropriate and fair solution, and is to be taken into consideration by the ALJ in such instances.

Coates, Reid & Waldron v. Vigil, supra, 856 P.2d at 857.

Coates did not signal a departure from the requirement that the computation of AWW must be tied to the remuneration an employee receives at the time of the injury. Rather, Coates was simply one case in a series *158recognizing that when the methods of caleu-lating AWW found in § 8-42-102(@2)(a)-(d) are too confining, ALJs are free to look to other methods, as long as those methods are focused on determining a fair level of compensation based upon what the employee was earning, or was previously capable of earning, at the time of the injury.

The supreme court was careful in Coates to state the basic principle and to cite Bellen-dir v. Kezer, supra, the opinion enumerating the important public policy reasons for linking the calculation of AWW with remuneration received at the time of the injury. There is no suggestion this principle was rejected or criticized; rather, it was affirmed.

This affirmation is made even clearer by the manner in which the supreme court distinguished Dugan v. Industrial Commission, 690 P.2d 267 (Colo.App.1984). Dugan was laid off from a carpenter's job. He took a lower paying welder's job and was injured after working as a welder for two days. He argued his AWW should be based upon the wages he received as a carpenter.

The Dugan division first cited the principle that the basis for determining AWW is the remuneration paid at the time of the injury. Then the division concluded the discretion contained in the predecessor to § 8-42-102(8) should not be used to calculate the employee's award based upon his previous wages as a carpenter, because it would be unfair to the welding company to award compensation based upon a higher hourly rate than it paid the employee.

The Coates court distinguished Dugan in this way:

[T}he claimant [in Dugan] had not suffered any injury while employed in his higher-paid position, and only became injured after he had commenced working in the latter employment position; thus there was no evidence that, absent the single injury, he would have earned more than the amount of his wages at the later, lower-paying position.

Coates, Reid & Waldron v. Vigil, supra, 856 P.2d at 856 n. 8.

This distinction is consistent with the statutory mandate that the AWW is to be computed based upon the remuneration received at the time of the injury. Dugan was not injured when he received the higher wage. Thus, the ALJ did not have discretion under § 8-42-102(8) to tie Dugan's award to the higher wage he received at a different job before his injury.

Further, when indicating that the phrase "for any other reason" found in § 8-42-102(8) provides broad discretion to ALJs to employ alternative methods of calculation, the supreme court cited one supreme court decision and three opinions from divisions of this court; Williams Bros. v. Grimm, 88 Colo. 416, 297 P. 1003 (1931); Drywall Products v. Constuble, 832 P.2d 957 (Colo.App.1991); R.J.S. Painting v. Industrial Commission, 732 P.2d 239 (Colo.App.1986); and Western Sizzlin Steak House v. Axton, 701 P.2d 96 (Colo.App.1984). Each of these cases authorized departing from the specific formula included in the relevant subsection of § 8-42-102(2)(b), but none of them suggested the alternative calculation should be divorced from compensation received at the time of the injury.

Instead, in Williams Bros. v. Grimm, supra, the employee worked for the fifteen weeks before his injury, but was on vacation, inferred by the court to be "forced" because of the winter, for the eleven weeks immediately preceding this period. The computational method contained in the predecessor statute to § 8-42-102(2)(b) required the AWW to be determined by dividing the total amount the employee earned during the six months before the injury by twenty-six weeks. Because the supreme court concluded it would be unfair to "penalize" the employee for the forced vacation, the court approved the use of the discretion contained in the predecessor statute to § 8-42-102(8) to increase the period of time the employee worked to the full twenty-six weeks. However, the computation was still conducted based upon the total amount the employee earned before the injury, not upon any subsequent wage rate.

To avoid unfair underpayment of benefits, the ALJ in Drywall Products v. Constuble, supra, retroactively applied the piecework rate the employee had begun to earn shortly *159before his injury. To avoid unfair overpayment of benefits, the ALJs in R.J.S. Painting, supra, and Western Sizzlin Steak House v. Axton, supra, used the hourly rate the employee was earning at the time of the injury, but multiplied it by the actual hours worked per week, rather than a forty-hour week. In each of these cases, the rate of pay was derived from what the employee was making per hour or per piece at the time of the injury, but was multiplied by a different number of hours worked or pieces made to reach a fair result. See also Univ. Park Holiday Inn v. Brien, 868 P.2d 1164 (Colo.App.1994)(calculation predicated on earnings at the time of the injury put a ceiling on the employee's temporary partial disability benefits); Hendricks v. Indus. Claim Appeals Office, 809 P.2d 1076, 1079 (Colo.App.1990) (temporary partial disability case) ("We hold that if a simple comparison between pre-injury and post-injury wages would distort the loss of earning capacity attributable to the injury, then the claimant's post-injury wage must reflect the wage level in effect at the time of injury.").

Coates, therefore, reaffirmed the connection between the calculation of AWW and the level of remuneration at the time of the injury, rather than abandoned it. Thus, I submit the supreme court merely indicated that

§ 8-42-102(2) may be read as establishing a rule that the claimant's earnings at the time of the injury are paramount in determining the wage, while [§ 8-42-1028)] grants the ALJ the authority to alter the specific statutory methods of calculating the wage when, for various reasons, they do an injustice to a particular worker.

Cain, supra, 23 Colo. Law. at 1882.

V. Legislative Emphasis

Effective July 1, 1991, the legislature amended § 8-42-104(1) by removing the reference to the statute preceding § 8-42-102, and by requiring the employee's earnings "at the time of the later injury" be used in calculating the employee's compensation. A division of this court determined this amendment was designed to change "the prior law" reflected in Vigil, supra, and "to require that benefits payable to a disabled employee for a later injury be based upon the employee's [AWW] at the time of the later injury." Platte Valley Lumber, Inc. v. Indus. Claim Appeals Office, 870 P.2d 684, 686 (Colo.App.1994).

Further, in 1991 the legislature also amended the temporary partial disability statute discussed in State Compensation Insurance Fund v. Lyttle, supra. The General Assembly removed the reference to "earning capacity" as the basis for determining benefits, and substituted the phrase "the difference between [the AWW] at the time of the injury and [the AWW] during the continuance of the temporary partial disability." Colo. Sess. Laws 1991, ch. 219, § 8-42-106 at 1306.

This change indicates the legislature meant what it has said since 1919, and particularly since 1987; the AWW is computed based upon what the employee was earning at the time of the injury, not at any other time.

VI. Campbell and Pizza Hut

Claimant relies heavily on Campbell v. IBM Corp., 867 P.2d 77 (Colo.App.1993), and Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App.2001). In my view, this reliance is misplaced.

In Campbell, the employee was injured at her job in 1979. She continued to work for ten years, during which her condition worsened. She then she stopped work. She suffered three periods of temporary total disability during this ten-year span.

To determine the employee's AWW for purposes of a temporary total disability award, the ALJ based the award on the wages the employee earned at the time of the injury in 1979. Relying on § 8-42-102(8), the division reversed, concluding it would be unjust to base the employee's wages on her lower earnings at the time of the injury, rather than on the wages she earned at the time of her subsequent disabilities.

However, before reaching this conclusion, the division determined the employee suffered from an occupational disease, rather than an accidental injury. Although the divi*160sion "d[id] not agree that this issue is determinative of the claimant's [AWW]," it also noted, "in cases of occupational disease, the 'time of injury' is generally held to be the time of last exposure or onset of disability." Campbell v. IBM Corp., supra, 867 P.2d at 81.

The employee in Pizzo Hut was injured while delivering pizzas. He subsequently obtained a second job working at a hospital and worked concurrently at both jobs for two weeks. He then voluntarily quit the delivery job. The division affirmed the ALJ's order requiring the pizza company to pay the employee benefits based on the AWW of his hospital income, rather than his delivery income.

The division concluded § 8-42-102(8) provided the ALJ with discretion to reach this result, "although the record contains evidence that could have supported the calculation of claimant's [AWW] based upon his earnings at the time of the injury." Pizza Hut v. Indus. Claim Appeals Office, supra, 18 P.3d at 870. The division stated it did not matter, for purposes of calculating the employee's AWW, that the employee was not concurrently employed by the pizza company and the hospital when the employee was injured. See Broadmoor Hotel v. Indus. Claim Appeals Office, 939 P.2d 460 (Colo.App.1996).

Campbell is distinguishable from this case because of the division's conclusion the employee suffered from an occupational disease. Based on that conclusion, as the division pointed out, the time of the injury was the last onset of disability,. As the employee's last onset of disability in Campbell was in 1989, basing her AWW, in whole or in part, on her 1989 income would not violate the requirement of calculating awards based upon wages paid at the time of the injury.

Even assuming Campbell can be cited as support for the proposition that an ALJ has discretion to depart from remuneration received at the time of injury when calculating the AWW, I respectfully submit Campbell and Pizza Hut were incorrectly decided.

The division in Campbell did not have the benefit of the supreme court's decision in Coates, which was issued approximately one month later. The division in Pizza Hut cited Coates, but only for the general proposition that ALJs have discretion when choosing alternative methods for computing the AWW.

Campbell and Pizza Hut do not refer to the extensive statutory history of the linkage of AWW to remuneration at the time of the injury. As indicated above, the legislature reendorsed this linkage when it passed the general revisions to the workers' compensation statutes in 1990 and when it amended the subsequent injury law in 1991.

It is a general principle that the legislature is aware, when amending a statute, of prior judicial construction of the statute. The legislature is deemed to have approved the construction to the degree the statute remains unchanged after being amended. See Union Carbide Corp. v. Indus. Claim Appeals Office, 128 P.3d 319 (Colo.App.2005).

Here, however, there is extensive statutory history announcing a legislative intention, and substantial judicial construction of those statutes, clearly contrary to the result claimant argues is required by Campbell and Pizzo Hut. These two cases are of recent vintage, and they contradict the "long-continuing contemporaneous construction" by the legislature, the supreme court, and divisions of the court of appeals. See Schlagel v. Hoelsken, 162 Colo. 142, 147, 425 P.2d 39, 42 (1967).

Campbell and Pizzo Hut do not discuss Roeder v. Industrial Commission, supra; State Compensation Insurance Fund v. Lyt-tle, supra; and Bellendir v. Kezer, supra. Pizza Hut does not analyze the effect of those cases upon Coates, or recognize the limitations upon Coates's scope based upon the language of and authorities cited in that opinion.

It is, therefore, my conclusion that Campbell and Pigza Hut are unsupported by statute or case law. These two cases do not represent a settled judicial perspective on this issue; rather, they are a departure from that settled judicial perspective.

*161VIL Conclusion

Bellendir v. Kezer, supra, explains why linking the AWW to the employee's remuneration at the time of the injury is important. Such a link provides employers and employees with sufficient certainty to agree on prompt awards, and it gives insurers a predictable basis for setting insurance premiums for employers.

Claimant's position undermines these goals by introducing a significant level of uncertainty. An employer can predict an employee's injury may degenerate over time and result in reopening the award. However, employers and insurers will have great difficulty in setting premiums if the calculation of the AWW is based on a wage figure that did not exist at the time of the injury. The incentive to settle elaims promptly will diminish, as employers and insurers will be unsure about their ultimate financial responsibility to employees.

Employees may also be adversely affected by claimant's position. If an employee is making a lower wage at the time the claim is reopened, then an ALJ would be free, under this reasoning, to reduce the employee's award by calculating the AWW based upon the lower amount of the recent salary.

Thus, I respectfully conclude that, for the reasons set forth above, claimant's position undercuts the stability of a system that has been in place for over eighty years. If this sort of sweeping change is to be made; it should be made by the legislature, not the courts.