Peoples v. Industrial Claim Appeals Office

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          Industrial Claim Appeals Office of the State of Colorado, WC No. 4-819-262

         Irwin Fraley, PLLC, Roger Fraley, Jr., Centennial, Colorado, for Petitioner

          No Appearance for Respondent Industrial Claim Appeals Office

         Ritsema & Lyon, P.C., Nancy C. Hummel, David R. Bennett, Denver, Colorado, for Respondent State of Colorado Department of Transportation

         OPINION

         FURMAN, JUDGE

         [¶1] In a workers’ compensation case, after an employer files a final admission of liability (FAL) and learns of an overpayment, the Workers’ Compensation Act of Colorado (Act), section 8-42-113.5(1)(b.5)(I), C.R.S. 2019, requires the employer to "attempt to recover" that overpayment from a claimant within one year of learning of its existence. (We will refer to section 8-42-113.5(1)(b.5)(I) as the statute of limitations.)

         [¶2] This workers’ compensation case asks us to determine whether an employer’s listing of an overpayment on the FAL satisfies the "attempt to recover" term of the statute of limitations when a claimant’s temporary total disability (TTD) and permanent partial disability (PPD) benefits exceed the statutory cap. See § 8-42-107.5, C.R.S. 2019 (capping a claimant’s combined TTD payments and PPD payments). We conclude it does not because, in this circumstance, the claimant did not receive ongoing benefits from which the employer could recoup an overpayment. Id. ; § 8-42-113.5(1)(a), (c).

          I. Claimant’s Work-Related Injuries

         [¶3] Claimant, Carold Peoples, sustained admitted work-related injuries in February 2010. Employer, State of Colorado Department of Transportation (CDOT), began paying claimant TTD benefits in March 2010. When claimant reached maximum medical improvement (MMI) in April 2013, his TTD payments totaled $83,569.36. The parties agree this amount exceeded the applicable statutory cap on benefits of $75,000, as set by section 8-42-107.5.

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         [¶4] In May 2012, the Social Security Administration determined that claimant qualified as disabled under its provisions and awarded him a monthly sum of social security disability benefits (SSDI). Claimant received a lump sum payment of $13,938.75 for "money ... due for September 2010 through April 2012," and thereafter would receive $954 monthly. As required by section 8-42-113.5(1)(a), on May 30, 2012, claimant promptly and timely advised CDOT of his SSDI award.

         [¶5] According to claimant’s counsel, after claimant notified CDOT of the SSDI award, CDOT revised its general admission of liability to reflect an overpayment and began taking a $78 deduction from claimant’s ongoing TTD payments. This was consistent with the Act, which mandates that SSDI benefits first be deducted from workers’ compensation disability benefits. § 8-42-113.5(1)(a).

         [¶6] In April 2013, after claimant reached MMI, CDOT filed a FAL (2013 FAL), which included a calculated overpayment of $17,632.79. This calculation reflected the offsets. But because claimant’s TTD benefits ended at MMI, and his benefits had already exceeded the statutory maximum award for combined TTD and PPD benefits set by section 8-42-107.5, he would receive no ongoing benefits. Consequently, CDOT could not deduct the overpayment from future disability payments because there would be none. And, although CDOT could have sought an order for repayment under section 8-42-113.5(1)(c), it did not do so at that time or within the following year. Because neither party sought a hearing, the FAL automatically closed.

         [¶7] The parties agree that the case was reopened approximately four years later so claimant could receive needed surgery. In November 2017, CDOT filed an amended FAL modifying claimant’s scheduled permanent impairment and noted its payment of $4000 for disfigurement. CDOT again listed the overpayment of $17,632.79 it had included in its 2013 FAL.

         [¶8] Soon after, claimant applied for a hearing, seeking an additional disfigurement award for scars left by his most-recent surgery. He also endorsed the following issue:

Respondents [CDOT and its third-party administrator, Broadspire] have alleged a right to recover the $17,632.79 overpayment thay [sic] claim exists. They might have a right to claim overpayment but they do not have a right to recover it as the exact same amount of claimed overpayment was on the 4/16/13 FAL and Sec. 8-42-113.5(1)(b.5)(I) sets a one year limit on recovering such overpayments which lapsed over three years ago.

          In its response to the application for hearing, CDOT framed the issue as, "[w]hether contesting overpayment is ripe since claimant did not dispute overpayment in prior [FAL], credit for any disfigurement award against overpayment, credit for previously paid disfigurement, attorney fees."

         [¶9] The matter proceeded to a hearing. Before the hearing, the parties stipulated that the overpayment totaled $17,632.79. The presiding administrative law judge (ALJ) rejected CDOT’s ripeness contention but ruled that CDOT, by including the claimed overpayment in its 2013 FAL, satisfied the statutory requirement to assert an attempt to recover the overpayment within one year of ...