The claimant seeks review of an order of Administrative Law Judge Jones (ALJ) that denied the claimant permanent total disability (PTD) benefits and granted to the respondents an offset of the settlement proceeds from a third-party action. The claimant contends that the ALJ abused her discretion in not imposing discovery sanctions, that she erred in determining that the claimant was not permanently and totally disabled, and that she erred in permitting the respondents to offset the settlement proceeds. We affirm.
The ALJ found that the claimant sustained injuries in a compensable accident on August 26, 1999, when the truck in which she was riding was struck by another vehicle. She received medical treatment and reached maximum medical improvement (MMI) on January 15, 2004. The respondents filed a Final Admission of Liability (FAL) admitting for the 24 percent impairment rating assigned by David Silva, M.D., an authorized treating physician. The claimant obtained a Division independent medical examination (DIME), which was performed by Ellen Price, D.O. and which reported that the claimant sustained permanent impairment of 26 percent of the whole person.
The ALJ also entered factual findings concerning the claimant's education and prior experience, which included a short period at a junior college, bartending school, and training at an airline's "ticketing school." Her work experience included typing, flagging on the highway, commercial driving, and computer work for an airline. The ALJ also entered factual findings concerning the claimant's treatment, her restrictions, and the results of various diagnostic and other testing, such as functional capacity examinations.
The claimant was evaluated by two vocational rehabilitation experts, Ronald Brennan (Brennan) and Meg Turner Elder (Elder). The ALJ expressly rejected as unpersuasive the opinions of Brennan and credited those of Turner-Elder. The latter testified that there were several job positions that the claimant could perform within her commutable labor market, and she stated her opinion that the claimant retained the ability to earn wages.
The ALJ also found that the claimant filed a civil suit against the individual that allegedly caused the motor vehicle accident in which she was injured. The claimant settled that suit and received $20,000 after payment of costs, fees and other expenses, which the respondents sought to offset against their liability for workers' compensation benefits.
Based upon her factual findings, the ALJ concluded that the claimant had failed to prove that she was permanently and totally disabled, and therefore denied an award of those benefits. The ALJ also authorized the respondents to offset the entire amount of the third party settlement against workers' compensation benefits owed to the claimant.
I.
The claimant first contends that the ALJ erred in denying her claim for an award of permanent total disability benefits. The claimant argues that the ALJ abused her discretion in refusing to impose discovery sanctions, that she erred in permitting the respondents' vocational rehabilitation expert to testify to the contents of her report, and that she erred in crediting certain testimony and in drawing inferences from it. We are unpersuaded that the ALJ erred.
A hearing was held on September 23, 2004, at the commencement of which the claimant's attorney moved for discovery sanctions on account of the failure of the respondents to provide timely answers to interrogatories. Tr. (Sept. 23, 2004) p. 20. Specifically, the clamant requested that the testimony of the respondents' vocational rehabilitation expert be excluded. The basis for the motion was the late production of information from the expert concerning her opinions about the employability of the claimant. The respondents' counsel responded to the motion by stating that they had produced materials from their expert "as soon as they were prepared by Ms. Elder. . . ." Tr. (Sept. 23, 2004) p. 22. The respondents also noted that discovery sanctions were only permissible where the failure to satisfy discovery obligations was willful, and he moved in turn that the testimony of the claimant's expert be excluded for similar discovery violations. Tr. (Sept. 23, 2004) p. 22-23. In response to a question from the ALJ, the claimant's attorney conceded that she had not sought an order compelling discovery responses and the ALJ denied both motions. Tr. (Sept. 23, 2004) p. 24-25. In doing so the ALJ commented that she would not exclude testimony where the parties had not sought an order compelling discovery. Tr. (Sept. 23, 2004) p. 25.
Section 8-43-207(1)(e), C.R.S. 2005 permits the ALJ to impose the sanctions provided in the rules of civil procedure for "willful failure to comply with permitted discovery." Exclusion of testimony is a possible sanction for failure to obey an order compelling discovery. C.R.C.P. 37(b)(2). In general, a discovery violation is "willful" if it is intentional, deliberate or manifests a flagrant disregard of discovery obligations. Reed v. Industrial Claim Appeals Office, 13 P.3d 810 (Colo.App. 2000). The ALJ has broad discretion in determining whether a violation has occurred and, if so, what sanction is appropriate. Shafer Seating, Inc. v. Industrial Claim Appeals Office, 85 P.3d 619 (Colo.App. 2003). Because the ALJ has broad discretion in resolving these matters, we may only set her order aside if that discretion is abused. An abuse of discretion is only shown where the order is beyond the bounds of reason, such as where it is contrary to the law or unsupported by the evidence. Pizza Hut v. Industrial Claim Appeals Office, 18 P.3d 867 (Colo.App. 2001).
Here, we perceive no abuse of discretion in the ALJ's refusal to exclude the testimony of the respondents' vocational rehabilitation expert. As we read the record, the ALJ implicitly found that if a discovery violation occurred, it was not willful. This determination is supported by the respondents' representation that they provided the information as soon as it was received. Moreover, the claimant's attorney specifically stated to the ALJ that she did not wish the hearing to be continued in order to permit the respondents to provide further information. Tr. (Sept. 23, 2004) p. 17. Additionally, she was given the opportunity at the close of the hearing to present evidence to rebut the testimony of the respondents' expert, and she did present such evidence at a subsequent hearing. Under these circumstances, we are unable to conclude that the ALJ abused her discretion in refusing to impose discovery sanctions.
The claimant also argues that the ALJ's findings of fact do not support the conclusion that she is permanently and totally disabled. Specifically, the claimant contests specific factual findings entered by the ALJ, such as that the claimant is able to drive a certain distance, or sit for a certain period of time, or perform certain household chores. The thrust of the claimant's argument is that the ALJ entered broad general findings regarding issues such as the claimant's ability to perform certain tasks, but that when the evidence is examined closely those findings have no support. We disagree that the ALJ erred in this respect. Because her dispositive findings of fact are supported by the record and support the legal conclusion that the claimant is able to earn wages, her order may not be disturbed.
Section 8-40-201(16.5)(a), C.R.S. 2004, defines PTD as the claimant's inability "to earn any wages in the same or other employment." Under the statute, the claimant carries the burden of proof to establish permanent total disability. In determining whether the claimant has sustained his burden of proof, the ALJ may consider a number of "human factors." Christie v. Coors Transportation Co., 933 P.2d 1330 (Colo. 1997). These factors include the claimant's physical condition, mental ability, age, employment history, education and the "availability of work" the claimant can perform. Weld County School District RE-12 v. Bymer, 955 P.2d 550 (Colo. 1998). The overall objective of this standard is to determine whether, in view of all of these factors, employment is "reasonably available to the claimant under his or her particular circumstances." Weld County School District RE-12 v. Bymer, 955 P.2d at 558.
Because the issue of PTD is factual, we must uphold the ALJ's resolution if supported by substantial evidence in the record. § 8-43-301(8), C.R.S. 2005. This standard of review requires that we consider the evidence in the light most favorable to the prevailing party, and defer to the ALJ's credibility determinations, resolution of conflicts in the evidence and plausible inferences drawn from the record. Bymer v. Weld County School District RE-12, supra; Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo.App. 2003). The existence of other evidence, such as the opinions of the claimant's vocational expert which, if credited, might support a contrary determination does not afford us grounds to grant appellate relief. Colorado Fuel and Iron Corp. v. Industrial Commission, 152 Colo. 25, 380 P.2d 28 (1963). The ALJ is not required to cite every piece of evidence before crediting evidence to the contrary. Crandall v. Watson-Wilson Transportation System, Inc., 171 Colo. 329, 467 P.2d 48 (1970). Rather, as expressly recognized by the ALJ, evidence not cited is implicitly rejected as unpersuasive. (Conclusions of Law at 5, ¶ 3); Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, 5 P.3d 385 (Colo.App. 2000). To the extent that a witness's testimony was inconsistent the ALJ was free to rely on those portions she found persuasive and to reject other portions. See Colorado Springs Motors, Ltd. v. Industrial Commission, 165 Colo. 504, 441 P.2d 21 (1968).
The ALJ's factual determinations are supported by substantial evidence in the vocational and medical expert testimony she found persuasive, and the findings support the conclusion that the claimant is not permanently totally disabled. The ALJ's dispositive factual findings were those rejecting the testimony of the claimant's expert as less credible than that of the respondents' expert and determining that there were jobs reasonably available to the claimant within her labor market. The respondents' expert, Meg Turner-Elder, testified as an expert in the field of vocational evaluations. Tr. (Sept. 23, 2004) p. 136. Her testimony included a description of her experience and an explanation of the methods she uses when retained to perform a vocational evaluation, including identifying transferrable skills and a commutable labor market. Tr. (Sept. 23, 2004) p. 145-48. Further, Turner-Elder identified specific positions that she believed the claimant could fill, and testified to that opinion at some length. Tr. (Sept. 23, 2004) p. 151-63. The expert also opined that generally the claimant "remains capable of earning any wages today." Tr. (Sept. 23, 2004) p. 164. Because the expert's testimony and her report constitute substantial evidence supporting the ALJ's factual finding that the claimant is able to earn wages, the claimant has failed to establish grounds on which to disturb the ALJ's order denying PTD benefits.
Insofar as the claimant has raised other arguments disputing the denial of permanent total disability benefits, we have considered those arguments and reject them as unpersuasive.
II.
The claimant also contends that the ALJ erred in several respects in authorizing the respondents to offset the entire amount of the third-party settlement. Specifically, the claimant argues that she had insufficient notice that the issue would be raised at the hearing, that the ALJ erroneously placed the burden of proof on the claimant, that the respondents had previously settled that issue with the claimant, and that, in any event, the ALJ erred in failing to allocate portions of the settlement proceeds to non-economic damages. We perceive no error warranting reversal.
At the commencement of the hearing held on September 23, 2004 the parties discussed the issues to be adjudicated. The respondents stated that the issue of "offsets" was endorsed for hearing, and that "[r]espondents seek as an additional offset a credit for Claimant's $20,000 net tort recovery. . . ." Tr. (Sept. 23, 2004) p. 6. The claimant's attorney stated that she believed that that issue had been settled by attorneys previously representing the parties, and that the issue had not been previously raised by the current respondents' attorney. Tr. (Sept. 23, 2004) p. 10. Respondents' counsel then responded that he disagreed that the matter had been settled, stating that the previous settlement had resolved the then-current lien, but had reserved the right to any subrogation lien created by future benefits paid. Tr. (Sept. 23, 2004) p. 10-11. Shortly after this discussion the ALJ inquired of the claimant's attorney whether she was prepared to stipulate to the facts surrounding the issue of the subrogation lien. She replied that she was not, noting that any allocation of the settlement proceeds between economic and other damages needed to be completed by the district court. Tr. (Sept. 23, 2004) p. 19. She reiterated that she was "at a loss as to why this is being raised now," and stated that testimony was required from witnesses who were not present. Tr. (Sept. 23, 2004) p. 19-20. She then stated that "I hope that issue will be struck, since it needs to be brought up at a later time, properly pled, or if it's in district court, that would be appropriate." Tr. (Sept. 23, 2004) p. 20. During the cross-examination of the claimant, counsel for the respondents questioned her regarding the third-party settlement and the claimant's attorney objected on the grounds that it was not relevant. Tr. (Sept. 23, 2004) p. 75. She stated again that the ALJ did not have jurisdiction over the matter, which needed to be resolved in district court. Tr. (Sept. 23, 2004) p. 75.
A second hearing was held on November 15, 2004 to permit the claimant to present rebuttal testimony. At the commencement of that hearing the claimant moved to strike the issue of the offset of the settlement proceeds. Tr. (Nov. 15, 2004) p. 4. The ALJ deferred ruling on the motion to strike, inquiring of the claimant's attorney whether the motion could be addressed in "the closing statement you're planning to submit?" She replied that she was prepared to do that and the ALJ then stated that she would not rule on the motion until after she reviewed the "closing statement." Tr. (Nov. 15, 2004) p. 6. Following the taking of testimony, the ALJ reminded the claimant's attorney that her post-hearing written argument should address the motion to strike the issue of the offset of settlement proceeds. Tr. (Nov. 15, 2004) p. 48. Following the hearing the claimant submitted a proposed order containing a conclusion that the claimant had not had adequate notice of the issue.
In her order the ALJ noted that the claimant contended that she had insufficient notice that the offset of the subrogation lien would be adjudicated at the hearing. The ALJ rejected that argument, implicitly finding that the endorsement of "offsets" by the respondents sufficiently advised the claimant of the possibility that the issue would be raised. The ALJ also noted that no evidence was presented that "the trial court apportioned these settlement proceeds," and concluded that the mere characterization in correspondence from counsel of the settlement as for "pain and suffering" was insufficient to establish any apportionment. She further concluded that since there was no evidence presented of any proper allocation of the settlement to economic and non-economic components, the respondents were entitled to offset the entire amount.
First, we disagree with the claimant's argument that she was afforded insufficient notice that this issue would be raised. It is undisputed that the respondents endorsed "applicable offsets" as an issue to be heard at the hearing. An "offset" is generally defined as "[s]omething (such as an amount or claim) that balances or compensates for something else." Black's Law Dictionary at 1120 (8th ed. 2004). We also note that the term "offset" is frequently used in connection with the respondents' right to take credit for settlement amounts received in civil cases pursuant to a subrogation right. E.g., Colorado Compensation Insurance Authority v. Jorgensen, 992 P.2d 1156 (Colo. 2000); Harrison v. Pinnacol Assurance, 107 P.3d 969 (Colo.App. 2004); Andrews v. Industrial Claim Appeals Office, 952 P. 853 (Colo.App. 1998); Metcalfe v. Bruning Div. Of AMI, 868 P.2d 1145 (Colo.App. 1993); Kennedy v. Industrial Commission, 735 P.2d 891 (Colo.App. 1986). Although the claimant correctly notes that the Act contains other "offsets" that might have been referred to by the endorsement of the issue, there is no indication in the record that the claimant inquired either formally in discovery or informally regarding precisely which offset the respondents intended to assert at the hearing. Under these circumstances, we decline to disturb the ALJ's finding that the endorsement of "offsets" adequately notified the claimant that the respondents might assert the right to offset the settlement amounts against workers' compensation benefits.
We also disagree with the claimant's argument that the ALJ misapplied the burden of proof in requiring the claimant to show an allocation of the settlement proceeds between damages that should be offset and those that should not. It is undisputed that an insurer is subrogated only as to the portion of the settlement proceeds compensating the plaintiff for damages that were payable under the Act. Colorado Compensation Insurance Authority v. Jorgensen, supra. And, as the claimant noted at the hearing, the forum before which the civil suit was pending has jurisdiction to hear and adjudicate the question regarding the allocation of the settlement proceeds. Id. However, in our view, this did not preclude the ALJ from adjudicating the issue properly raised before her of the respondents' subrogation rights. The ALJ could plausibly infer that the absence of an apportionment reached either by agreement or by the district court should properly result in the respondents' offset of the entire amount. See Jordan v. Fonken Stevens, P.C., 914 P.2d 394 (Colo.App. 1995). Although the ALJ lacks jurisdiction to attempt apportionment of the settlement proceeds, see id., where the claimant fails to provide a basis for apportionment it is appropriate for the ALJ to permit offset of the entire settlement amount. See Brownson-Rausin v. Valley View Hospital, W.C. No. 3-101-431 (Sept. 8, 2004).
The claimant further asserts that the ALJ erred in failing to conclude that the insurer had fully and finally settled its right to assert any subrogation lien on benefits paid. Although it appears undisputed that the insurer and the claimant settled at least part of the then-existing lien in exchange for payment to the latter of $7,674, we cannot conclude that the record compelled the ALJ to conclude that any future lien was settled as well. The record contains correspondence from the claimant's attorney in the civil suit to a "Recovery Specialist" employed by the insurer, in which he expresses the claimant's appreciation regarding the settlement process just completed. Although the letter refers to the insurer's decision to "discount [its] lien" in order to permit the claimant to be compensated for her pain and suffering, it also refers to settlement of the "liens maintained" by the insurer. We cannot conclude that this evidence so clearly and unequivocally establishes that the insurer settled all future liens that it was error for the ALJ not to enter a finding to that effect. Finally, although the record contains the settlement entered into between the claimant and the defendant in the civil suit, it apparently does not contain any written agreement entered into between the claimant and the insurer regarding compromise of the subrogation liens.
The claimant also argues that the ALJ erred in failing to make various equitable adjustments, including allocation of some portion of the settlement proceeds to the insurer's share of fees and costs, allocation to non-economic losses, allocation to the loss of consortium suffered by the claimant's spouse, and allocation of a portion of the settlement proceeds "on account of PIP benefits." Of these arguments, the claimant did raise at the hearing the question of the allocation of a portion of the settlement proceeds to non-economic damages, and argued that the district court was the appropriate forum to perform that function. Tr. (Sept. 23, 2004) p. 19, 75. There is no evidence from which the ALJ could have inferred that the offset should be equitably apportioned based on the other factors raised by the claimant for the first time on appeal.
IT IS THEREFORE ORDERED that the ALJ's order dated January 24, 2005 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________ Curt Kriksciun
____________________ Thomas Schrant
Josetta Schuster, Mancos, CO, High Country Transportation, Cortez, CO, Liberty Mutual Insurance Company, Englewood, CO, Bethiah Beale Crane, Esq., Dr., Durango, CO, (For Claimant).
Scott M. Busser, Esq., Denver, CO, (For Respondents).
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