Update on Colorado Appellate Decisions in Workers' Compensation Law

• Jurisdiction: Colorado,United States
• Citation: Vol. 33 No. 11 Pg. 117
• Pages: 117
• Publication year: 2004

33 Colo.Law. 117 Colorado Lawyer 2004.

2004, November, Pg. 117. Update on Colorado Appellate Decisions In Workers' Compensation Law

---

117

Vol. 33, No. 11, Pg. 117

The Colorado Lawyer
November 2004
Vol. 33, No. 11 [Page 117]

Specialty Law Columns
Workers' Compensation Report
Update on Colorado Appellate Decisions In Workers' Compensation Law
by Ralph Ogden

CORRECTED VERSION - JANUARY 2005

This column provides information about workers' compensation updates on decisions of the Colorado Supreme Court and Court of Appeals. It intends to help practitioners keep up with both the appellate interpretations of the Workers' Compensation Act and the potential ramifications of those interpretations

Column Editor

Ralph Ogden, Denver, of Wilcox & Ogden - (303) 399-5005

About The Author

Ralph Ogden

The author and column editor is Ralph Ogden of Wilcox & Ogden, Denver - (303) 399-5005. The author represents Greg Harrison in Harrison v. Pinnacol Assurance, which is discussed in this column. He also filed an amicus curiae brief on behalf of Steven U. Mullens in the Colorado Supreme Court in Lobato v. Industrial Claim Appeals Office, a case that
is mentioned at the end of the column.

This column provides updates on workers' compensation decisions of the Colorado Supreme Court and Court of Appeals. It is written to help practitioners keep up with both the appellate interpretations of the Workers' Compensation Act and the potential ramifications of those interpretations.

Key Words and Acronyms

Act:

Workers' Compensation Act

ALJ: administrative law judge

AWW: average weekly wage

COLA cost of living allowance

DIME: Division Independent Medical Examination

Director: Director of the Division of Workers' Compensation

Division: Division of Workers' Compensation

Employer: employers and insurers collectively, as used by the Colorado Court
of Appeals

FAL final admission of liability

ICAO: Industrial Claim Appeals Office

MMI: maximum medical improvement

Panel: Industrial Claim Appeals Office Panel

PALJ: prehearing administrative law judge

PPD: permanent medical impairment (the "acronym" refers to pre-1991
terminology)

PTD: permanent total disability

TTD: temporary total disability

Statutory Employers

In Newsom v. Frank M. Hall & Company,1 the Court of Appeals provided its latest interpretation of the statutory employer rule in CRS § 8-41-401(1)(a). The issue arose in the context of a personal injury lawsuit by Newsom against Frank M. Hall & Company ("Hall"). Hall was a general contractor that subcontracted with an excavating subcontractor, which in turn employed Newsom as a pipeline foreman.

Newsom was injured on the project and sued Hall for negligence. Hall moved for summary judgment on the ground that as Newsom's statutory employer, it was immune from tort liability. After the district court denied this motion, a jury found in Newsom's favor and awarded $150,000 in damages.

The Court of Appeals affirmed. The court based its opinion on the 1995 amendment to CRS § 8-41-401(1)(a). Under that statute, no contractor is an employer of a subcontractor's employee if the subcontractor to which it subcontracted part of its work has complied with CRS § 8-40-202(2)(b) "relative to such work."2 CRS § 8-40-202(2)(b) sets forth the criteria by which it is determined whether a person is an employee or an independent contractor.3 The evidence in Newsom demonstrated that the subcontractor was independent from Hall within the meaning of CRS § 8-40-202(2)(b). Therefore, Hall could not be deemed Newsom's statutory employer under CRS § 8-41-401(1).

In addition, the court held that under the plain language of CRS § 8-41-401(1) (a)(I), the dispositive question was the relationship between Hall and the subcontractor, instead of the relationship between the subcontractor and Newsom. Thus, the court did not address the question of whether Newsom was an independent contractor or employee of the subcontractor.

The court rejected Hall's argument that CRS § 8-40-202(2)(b) applied only to individuals and not to business entities:

Although the [CRS] § 8-40-202(2)(b) criteria for independence refer to "individuals" in the context of the statute defining "employee," we perceive no basis for limiting the applicability of those criteria to natural persons when the context is the [CRS] § 8-41-401(1)(a)(I) cross-reference to [CRS] § 8-40-202(2)(b). . . . [Thus,] entities as well as individuals may be statutory employees. . . .4

Finally, the court noted that in its petition for rehearing, Hall had provided transcripts of the 1995 legislative hearings on the amendment to CRS § 8-41-401.5 Hall argued that these transcripts contained testimony that supported its construction of the statutes. The court held that because the statute was clear and unambiguous, it was prohibited from looking at legislative history to determine legislative intent. A petition for certiorari in the Newsom case is pending.6

FFE Transportation Services, Inc. v. Industrial Claim Appeals Office7 involved a claimant who was employed as a long-distance driver under a written employment agreement with D. Grego Trucking Company ("Grego"). Grego had a conforming lease8 with FFE Transportation Services, Inc. ("FFE"), to which the claimant was not a party. Grego did not carry workers' compensation insurance, although both Grego and the claimant were insured under an occupational accident policy that the court held was similar to a workers' compensation policy. This insurance paid benefits to the claimant after she was injured.9

The ALJ found that FFE conducted its trucking business by "contracting out its work to independent contractors such as Grego," and that the lease between FFE and Grego satisfied the requirements for an independent contractor agreement under CRS § 40-11.5-102.10 Because the claimant was not a party to that lease, however, the ALJ held that she was not "working . . . under a lease agreement" within the meaning of CRS § 8-40-101(5) and, therefore, was a statutory employee of FFE.11 The Panel affirmed.

The Court of Appeals, however, disagreed. It held that "the term 'under' as used in [CRS] § 8-40-301(5) is not ambiguous and . . . the word 'under' means 'below: situated beneath: within the group - or designation of.'"12 This meant that independent contractors and their drivers were excluded from the class of statutory employees.

The court noted that CRS § 8-41-401(7) stated that "this section shall not apply to any person excluded from the definition of 'employee' pursuant to section 8-40-301 (5)." CRS § 8-40-301(5) in turn excludes from the definition of employee "any person who is working as a driver under a lease agreement pursuant to . . . [CRS §] 40-11.5-102 . . . with a common carrier or contract carrier."13 Thus, because the claimant was working "under" this lease agreement - albeit two levels "under" - she was excluded as a statutory employee of FFE.

The Court of Appeals also looked to the language of CRS § 40-11.5-102(5)(a), which required that "a conforming lease with a common carrier who is an independent contractor 'shall provide for coverage under workers' compensation or a private insurance policy that provides similar coverage.'" (Emphasis in original.) The court held that if the General Assembly had intended to limit the exclusion in CRS § 8-40-301(5) to independent contractors who were in direct privity with the contract carrier, it would not have added the language in CRS § 301(6) "because in that event the two provisions would be redundant in that 'driver' and 'independent contractor' would be interchangeable terms."14 Finally, the court noted that the statutory policy of providing benefits to injured workers was satisfied because the worker received benefits under a private policy that paid "similar" benefits to those required under the Workers' Compensation Act ("Act").15

Apportionment

In Duncan v. Industrial Claim Appeals Office,16 the Colorado Court of Appeals affirmed an order apportioning only 25 percent of the liability for medical and temporary disability benefits to an employer and its insurer. The claimant had suffered an industrial injury to her knee in 1977, after which her knee began a natural degeneration because of aging. She reinjured her knee in the 2002 industrial accident that gave rise to this appeal.

An ALJ found that both her need for medical treatment and her disability after the 2002 injury resulted from a combination of the 1977 injury, the natural degeneration process, and the 2002 injury. The ALJ then apportioned 75 percent of the causation to the 1977 injury and the aging degeneration and 25 percent to the 2002 accident. The 2002 employer was ordered to pay 25 percent of her...