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Sneath v. Express Messenger Service12/12/1996
Opinion by JUDGE CRISWELL
Claimant, Greg A. Sneath, seeks review of an order of the Industrial Claim Appeals Office (Panel) that allowed Colorado Compensation Insurance Authority (CCIA) to offset against its liability for workers' compensation benefits due to claimant an amount that claimant had received from the settlement of his personal injury claim against a third party. We set aside the order and remand for further proceedings.
The underlying facts are virtually undisputed and disclose the following:
Claimant was employed as an "express driver" by an employer, who was insured for workers' compensation benefits by CCIA. He used his own vehicle to make deliveries for his employer, and he received a commission of 45% of the revenues received from customers to whom he made deliveries. However, his employer arbitrarily designated 50% of these commissions as an "expense reimbursement" for which it did not pay social security taxes and for which it did not withhold federal or state income taxes.
In February 1991, claimant was involved in a work-related automobile accident and sustained a compensable injury . He filed a claim for workers' compensation benefits and an initial series of hearings was held before an Administrative Law Judge (ALJ). As a result of these hearings, the amount of the "expense reimbursement" was subtracted by the Panel from claimant's gross commissions, resulting in a substantially reduced average weekly wage and lesser benefits.
This initial award was made in July 1993, and claimant appealed that award to this court. A division of this court, relying upon Fillippone v. Industrial Commission, 41 Colo. App. 322, 590 P.2d 977 (1978) (for workers' compensation purposes, employee's expenses are not to be deducted from gross pay in determining wages), set aside the order and directed that benefits be based upon all of the commission payments made to claimant. Sneath v. Express Messenger, 881 P.2d 453 (Colo. App. 1994). That opinion became final, and consequently, in November 1994, an increased award was entered.
While these workers' compensation proceedings were pending, claimant instituted a third-party action to recover damages for his personal injuries sustained in the automobile accident. In 1992, he inquired of CCIA whether he should include CCIA's statutory subrogation claim in his demand and was specifically informed, in writing, that he should not do so and that CCIA would prosecute that claim on its own behalf.
Thereafter, in November 1993, after the entry of the Panel's initial award, but while claimant's appeal to this court was pending, CCIA demanded that the third party's liability carrier reimburse it for the payments that CCIA had made to claimant. That carrier made such payment, but the record does not reflect that the carrier required CCIA to release any claim that might accrue to it as the result of any future payment of benefits.
On July 18, 1994 -- four days after Sneath v. Express Messenger, supra, was announced -- CCIA inquired of claimant whether he had settled the claim he had asserted against the third party. Claimant responded that he had not. In addition, claimant explained that, in accordance with CCIA's previous direction to him, he would not seek to recover for any subrogated claim. CCIA failed to respond to claimant with respect to this subject.
Some two months after this exchange of correspondence, claimant settled his third-party claim, and shortly thereafter, the ALJ entered a new award, based upon a recomputation of benefits as required by Sneath v. Express Messenger, supra. However,
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