Giddings v. ICAO, 01CA0077 (September 13, 2001): Claimant sustained an industrial injury in 1996. In 1999, the administrative law judge (ALJ) ordered respondents to pay for surgery and psychiatric treatment recommended by the treating physicians. In a 2000 order, the ALJ found that respondents willfully and wantonly failed to comply with the 1999 order. The ALJ also found that claimant was denied additional psychiatric treatment as a result of respondents' failure to pay the psychiatrist's bill. The ALJ imposed penalties on respondents under C.R.S. § 8-43-401(2)(a) of 8% interest on the unpaid medical expenses, rather than up to $500 per day under C.R.S. § 8-43-304(1).
On appeal, the court of appeals agreed with claimant's contention that the specific penalty provision in § 8-43-401(2)(a) does not exclude imposition of penalties under the general penalty provision in § 8-43-304(1). The court of appeals followed the holding of the supreme court in Holliday v. Bestop, Inc., 23 P.3d 700 (Colo. 2001), that when a penalty is premised on a failure, neglect or refusal to obey an order, the penalties available under § 8-43-304(1) may be imposed.
Penalties pursuant to § 8-43-304(1) may be imposed regardless of whether the order violated is one issued by a Prehearing ALJ (PALJ), an ALJ, the Director of the Division of Workers' Compensation (DWC), or the Industrial Claim Appeals Office (ICAO). Where the order is one for payment of medical benefits, the ALJ has discretion to order penalties based on either § 8-43-401(2)(a)  or § 8-43-304(1).
The court of appeals also interpreted the Holliday decision as overruling Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997), which held that where the "gravamen" of the conduct for which a party seeks penalties stemmed from the failure to pay medical benefits, only the specific penalty provision of § 8-43-401(2)(a) applied. The court of appeals held that because the ALJ is no longer bound by the Sears "gravamen" test, he may impose penalties not only for failure to pay medical bills, but also for the resulting discontinuation of psychiatric treatment under § 8-43-304(1). The case was remanded to the ALJ with directions to reconsider the penalties to be imposed under either of the penalty statutes.