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Baum v. Industrial Claim Appeals Office of State of Colorado

Court of Appeals of Colorado, Fourth Division

June 20, 2019

Jason Baum, Petitioner,
v.
Industrial Claim Appeals Office of the State of Colorado and United Airlines, Respondents.

          Court of Appeals No. 18CA1990 Industrial Claim Appeals Office of the State of Colorado WC No. 4-961-870.

          Turner, Roepke & Mueller, LLC, Robert W. Turner, Greenwood Village, Colorado, for Petitioner

          No Appearance for Respondent Industrial Claim Appeals Office

          Ritsema & Lyon, P.C., Alana S. McKenna, M. Holly Colvin Herring, Denver, Colorado, for Respondent United Airlines

          OPINION

          WELLING JUDGE.

         ¶ 1 Claimant, Jason Baum, appeals the final order of the Industrial Claims Appeal Office affirming the summary judgment of the director of the Division of Workers' Compensation in favor of self-insured employer, United Airlines (UAL).

         ¶ 2 This workers' compensation action calls on us to clarify the boundary between where an employer can and cannot take credit for having an approved wage continuation plan under section 8-42-124, C.R.S. 2018. Here, UAL paid Baum full pay under its wage continuation plan after he sustained an admitted work-related injury, but UAL also claimed a credit on its final admission of liability (FAL) for the comparable temporary total disability (TTD) benefits it would have otherwise been statutorily required to pay Baum. This credit increased Baum's reported TTD benefits, pushing them over the statutory cap set by section 8-42-107.5, C.R.S. 2018. Baum challenged UAL's right to take the credit. But both the director of the Division of Workers' Compensation (Division) and the Industrial Claim Appeals Office (Panel) held that UAL acted within its rights in taking the credit. Because we, too, conclude that UAL was entitled to take the credit, we affirm.

         I. Background Facts

         ¶ 3 Baum sustained admitted, work-related injuries on September 7, 2014. His injuries caused him to be temporarily totally disabled and off work until July 2016. He was placed at maximum medical improvement (MMI) with a permanent impairment rating of 2% of the whole person on September 25, 2016.

         ¶ 4 For the first nine months after his injury - until June 17, 2015 - UAL paid Baum his full salary under its wage continuation plan. After Baum's earned benefits under the wage continuation plan ran out in June 2015, UAL paid him TTD benefits pursuant to section 8-42-105, C.R.S. 2018, until July 29, 2016. Unlike the benefits Baum received under UAL's wage continuation plan, the TTD benefits he received from June 2015 to July 2016 were paid at the lower statutorily mandated rate of two-thirds of Baum's average weekly wage. See § 8-42-105.

         ¶ 5 In the FAL it filed after Baum reached MMI, UAL calculated that it had overpaid Baum TTD benefits by $1459.83.[1] It also took the position that Baum was not entitled to any compensation for his 2% whole person permanent impairment because the calculated TTD payments exceeded the statutory cap set by section 8-42-107.5 for combined TTD and permanent partial disability (PPD) benefits. UAL calculated this sum by adding the amount it had paid Baum in TTD benefits from June 2015 to July 2016 ($48, 944.85) and the amount it would have paid Baum in TTD benefits from September 2014 to June 2015 ($33, 949.49) had it not been paying him his full salary during those nine months under its wage continuation plan. In other words, UAL took credit on the FAL for TTD payments it would have made but for its wage continuation plan. The calculated TTD benefits totaled $82, 894.34, which exceeds the applicable statutory cap of $81, 435.67 by $1458.67.

         ¶ 6 Baum objected to UAL's claim of an overpayment, imposition of the statutory cap, and claimed credit for TTD benefits he did not receive. He filed an application for hearing, seeking TTD from the date of his injury until June 17, 2015, the day he exhausted his wage continuation benefits, as well as full payment of the PPD benefits he would otherwise receive for his 2% whole person impairment.

         ¶ 7 UAL filed a motion for summary judgment, arguing that its wage continuation plan was valid and had been approved by the director and in constant operation since 1973. It also argued that because Baum received his full pay under the plan and the plan "did not impair . . . [his] earned sick or vacation benefits," it was expressly entitled to claim a TTD credit by section 8-42-124(2)(a).

         ¶ 8 The director of the Division agreed. He rejected Baum's contention that benefits paid under the wage continuation plan were similar to vacation or sick leave. Instead, the director concluded that because benefits under the wage continuation plan could not be accessed at an employee's discretion or for a purpose other than compensation for a work-related injury - a UAL employee can tap benefits earned under the wage continuation plan "only when they have suffered an injury 'covered by the applicable state workers' compensation law'" - the benefits were not similar to vacation or sick leave. Therefore, their accrual and exercise did not bar UAL from taking the claimed TTD credit. The director further concluded that because UAL properly claimed the credit, Baum's benefits exceeded the statutory cap and he was not entitled to receive any PPD benefits or TTD benefits for the period September 8, 2014, to June 17, 2015.

         ¶ 9 The Panel affirmed on review. It, too, rejected Baum's argument that wage continuation benefits accrued under UAL's plan are "similar" to vacation or sick leave. Because it concluded that wage continuation benefits are different from vacation and sick leave, UAL properly took the credit for TTD benefits and Baum was not entitled to any additional benefits.

         II. Wage Continuation Plans

         ¶ 10 To give context to how we address Baum's contentions, a brief explanation of wage continuation plans authorized by section 8-42-124 of the Workers' Compensation Act (Act) is helpful. Although most injured workers receive TTD benefits under the Act, it authorizes - and to some extent, incentivizes - employers to adopt a plan that pays injured workers more benefits than they would have received in TTD benefits. In this regard, the Act states as follows:

Any employer . . . who, by separate agreement, working agreement, contract of hire, or any other procedure, continues to pay a sum in excess of the [TTD] benefits prescribed by articles 40 to 47 of this title to any employee temporarily disabled as a result of any injury arising out of and in the course of such employee's employment and has not charged the employee with any earned vacation leave, sick leave, or other similar benefits shall be reimbursed if insured by an insurance carrier or shall take credit if self-insured to the extent of all moneys that such employee may be eligible to receive as compensation or benefits for temporary partial or temporary total disability under the provisions of said articles, subject to the approval of the director.

§ 8-42-124(2)(a) (emphasis added). As pertinent here, the provision expressly permits an employer to establish a plan that pays an injured worker unable to work because of a temporarily disabling work injury more than the worker would have received in TTD benefits under section 8-42-105.

         ¶ 11 The Act incentivizes employers to create such plans by permitting the participating self-insured employers to "take credit" on their admission forms for the equivalent amount the employer would have paid in TTD or temporary partial disability benefits if not for the employer's wage continuation plan. § 8-42-124(2)(a). Insured participating employers are entitled to a reimbursement from the insurer of the equivalent TTD amount. Id. However, if the employer "charge[s]" the injured worker "with any earned vacation leave, sick leave, or other similar benefits" during the time of disability - in other words, if the employer makes the worker use vacation time or sick time while unable to work because of the work-related injury - then the employer cannot take advantage of the credit on its admission form or seek reimbursement from the insurer. See id.

         ¶ 12 With this framework in mind, we turn first to Baum's constitutional challenges to section 8-42-124, followed by the statutory interpretation issue previewed at the start of this opinion.

         III. Constitutional Challenges

         ¶ 13 Baum first argues that section 8-42-124 is unconstitutional "on its face and as applied" because the plan was approved by the director without the opportunity for injured workers to challenge the plan in court. He contends that the lack of "appellate review" denied him his property interest in workers' compensation benefits without due process. He further contends that the absence of appellate review of approved wage continuation plans renders the statute unconstitutional on its face and violates the separation of powers in Article ...


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