May 24, 2019

Colorado Court of Appeals: Workers’ Compensation Act Requires Statutory Interest on All Past Due Amounts

The Colorado Court of Appeals issued its opinion in Keel v. Industrial Claim Appeals Office on Thursday, January 14, 2016.

John Keel, a resident of Mississippi, was killed in a workplace accident in Colorado. The employer paid workers’ compensation death benefits in Mississippi from 2010 to 2013, and claimants (Keel’s surviving spouse and children) applied for Colorado benefits. In 2013, an ALJ determined that Colorado had jurisdiction and the employer was liable for death benefits under the Colorado Workers’ Compensation Act. The ALJ left for future determination the amount of the death benefit, whether the employer should pay past due death benefits, and whether interest was due on past due amounts.

The employer subsequently calculated Keel’s average weekly wage and subtracted offsets for Social Security death benefits and Mississippi workers’ compensation benefits, and issued a check to claimants for $66,822 for past due death benefits. The employer also stated it owed claimants an additional $2,040.32 in interest, having subtracted the Mississippi death benefits paid from the past due Colorado death benefits and using the statutory 8% interest rate. Claimants contended the employer significantly miscalculated the interest award.

An ALJ agreed with the employer’s reasoning and ordered it to pay the amount of interest it had calculated. A panel of the Industrial Claim Appeals Office calculated interest differently and ordered employer to pay interest on $41,841.08 instead. On remand, the ALJ adopted the ICAO’s reasoning and ordered the employer to pay interest on the ICAO’s calculated amount. Claimants again appealed and the ICAO affirmed the ALJ’s order.

Claimants then appealed to the Colorado Court of Appeals, which clarified that the issue on appeal was what the effect of death benefits paid in another state was on past due Colorado benefits. The court agreed with claimants’ contention that the ICAO erred in determining that C.R.S. § 8-42-114 did not apply, and found that by its plain and ordinary language claimants were entitled to 8% interest on the entire past due amount, $66,822.

The court analyzed the ICAO’s reasoning and respectfully disagreed with its conclusions. The court noted that it was not bound by the ICAO’s conclusions, which were primarily based on policy concerns. ICAO relied on the Full Faith and Credit Clause in determining that the Mississippi benefits were subsumed by the Colorado benefits, but the court of appeals found the Full Faith and Credit Clause inapplicable where, as here, the industrial commission of one state lacks authority to bar recovery in another state. Rather, if more than one state has jurisdiction over a workers’ compensation claim, the claimant can seek successive awards from those states. Since the ICAO cited no Colorado authority to support its rationale, and instead applied out-of-state case law, the court of appeals found the panel’s reasoning flawed. ICAO was also concerned that the claimants might receive a windfall or a double recovery. The court found that the claimants in this case did not receive a double recovery because the Colorado benefits were offset by the Mississippi benefits. The panel also expressed concern that a claimant might time its recovery in a way to maximize benefits, which the court of appeals thought was a concern better addressed to the legislature.

The ICAO’s order was reversed with directions to remand to the ALJ so that she may order the employer to pay statutory interest on the entire past due amount.

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