Judge can use discretion in calculating AWW where default would be unjust

In Colorado, a claimant's AWW may be calculated according to a discretionary exception to the default method of calculation.

Case name: Avalanche Industries, et al. v. Clark and Industrial Claim Appeals Office of the State of Colorado, No. 07SC255 (Colo. 12/15/08).

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Ruling: The Colorado Supreme Court upheld a ruling by an administrative law judge finding the claimant's average weekly wage was correctly determined using the discretionary method of calculation.

What it means: In Colorado, a claimant's AWW may be calculated according to a discretionary exception to the default method of calculation. Where a claimant suffered an injury at a previous job but became permanently disabled in a subsequent job due to the injury, the AWW may be calculated using the second job's earnings and insurance costs.

Summary: The claimant injured her lumbar spine while working as a secretary. She was awarded workers' compensation for permanent partial disability at her first job. Before the claim was closed, she took a new job. She was precluded from accepting COBRA coverage from her first job because her subsequent employer also offered coverage. However, her condition worsened over time. She reopened the claim while employed at the second job. She was eventually declared permanently and totally disabled and was forced to retire. Her AWW at her second job was higher, and her initial employer argued the AWW should be calculated at the lower initial rate. The employer argued this rate should be applied because that was when the injury occurred. It also argued it should not have to pay her COBRA benefits at the rate of her second employer because she did not accept them while employed there.

The court reasoned that Colorado's discretionary exception should be used to calculate the claimant's AWW. It pointed out that while calculation of AWW is generally tied to the time of injury, the exception affords an ALJ discretion to determine AWW, including a claimant's cost for COBRA insurance. This is based not only on the claimant's wage at the time of injury, but on other relevant factors when the case's circumstances warrant it.

The court also noted the discretionary exception is limited by circumstances where a claimant can reopen a claim and circumstances where the default provision results in an injustice, and must take into account that all benefit awards under the workers' compensation scheme cannot exceed the monetary maximum in the statute.

February 10, 2009

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