Colorado § 8-43-406 - Compensation in lump sum.

§ 8-43-406. Compensation in lump sum.

(1) At any time after six months have elapsed from the date of injury, the claimant may elect to take all or any part of the compensation awarded in a lump sum by sending written notice of the election and the amount of benefits requested to the carrier or the noninsured or self-insured employer. The carrier or self-insured employer shall file the calculation of the lump sum due and notice that the lump sum has been paid to the claimant within ten days after the election. When the claimant is unrepresented, the director shall calculate amounts to be paid based on the present worth of partial payments, considering interest at four percent per annum, and less a deduction for the contingency of death. The director shall make the method of calculation of lump sums available to all parties at all times, including posting the information on the division's website. Neither the director nor an administrative law judge shall in any way attempt to condition the lump sum payment on the claimant waiving the right to pursue permanent total disability benefits.

(2) If a claimant who has been awarded compensation is the injured worker or the sole dependent of a deceased injured worker, the aggregate of all lump sums granted to the claimant must not exceed eighty thousand eight hundred sixty-eight dollars and ten cents.

(3) If a claimant who has been awarded compensation is one of multiple dependents of a deceased injured worker, the aggregate of all lump sums granted to the claimant must be a proportionate share, as determined by the director or administrative law judge, of an amount not to exceed one hundred sixty-one thousand seven hundred thirty-four dollars and fifteen cents.

(4) For injuries sustained on or after January 1, 2014, the director shall adjust the lump-sum limits set forth in subsections (2) and (3) of this section on July 1, 2014, and each July 1 thereafter, by the percentage of the adjustment made by the director to the state average weekly wage pursuant to section 8-47-106. A claimant who has received compensation under this section is not entitled to any further compensation under this section related to the claim as a result of an adjustment by the director pursuant to this subsection (4).

Source: L. 90: Entire article R&RE, p. 515, § 1, effective July 1. L. 91: (1) amended, p. 1352, § 6, effective May 29; (2) amended, p. 1326, § 41, effective July 1. L. 2007: Entire section amended, p. 1474, § 9, effective May 30. L. 2010: (1) amended, (SB 10-187), ch. 310, p. 1459, § 8, effective July 1. L. 2014: (2) amended and (3) and (4) added, (SB 14-191), ch. 316, p. 1375, § 9, effective July 1.

Editor's note: This section is similar to former § 8-52-103 as it existed prior to 1990.

ANNOTATION

Annotator's note. (1) Since § 8-43-406 is similar to § 8-52-103 as it existed prior to the 1990 repeal and reenactment of the "Workers' Compensation Act of Colorado", articles 40 to 47 of this title, relevant cases construing that provision have been included in the annotations to this section.

(2) Cases included in the annotations to this section which refer to the industrial commission were decided prior to the enactment of 1986 Senate Bill No. 12 which abolished said commission and transferred its powers, duties, and functions under this section to the director of the division of labor.

Subsection (1) is not unconstitutionally vague and does not constitute an unconstitutional delegation of power to an administrative agency. A "best interests" standard has been relied on by the general assembly in other instances to govern the resolution of conflicting interests. Warren v. S. Colo. Excavators, 862 P.2d 966 (Colo. App. 1993).

Since the general assembly may place valid limitations upon any remedy, the section does not violate § 6 of article II of the Colorado Constitution. Warren v. S. Colo. Excavators, 862 P.2d 966 (Colo. App. 1993).

This section is to be construed liberally for the protection of the employee. Employers' Mut. Ins. Co. v. Indus. Comm'n, 65 Colo. 283, 176 P. 314 (1918).

And there is no fixed rule as to the allowance of a lump sum. No fixed rule can be laid down for determining whether weekly compensation or a lump sum should be allowed a claimant under this section. In most cases the controlling factor must be the character, capacity, and business ability of the claimant. Kokotovich v. Indus. Comm'n, 69 Colo. 572, 195 P. 646 (1921); Rinehart v. Indus. Comm'n, 719 P.2d 729 (Colo. App. 1986).

For the allowance of a lump sum award is left to the discretion of the commission. The award may be in part a lump sum, and if the commission thinks it is for the best interest of the parties, the balance due may be ordered to be paid monthly. The matter is left to the discretion of the commission and not subject to review. Indus. Comm'n v. Big Six Coal Co., 72 Colo. 377, 211 P. 361 (1922); Rinehart v. Indus. Comm'n, 719 P.2d 729 (Colo. App. 1986).

Where claimant's primary purpose in requesting a partial lump sum settlement was to pay his attorney fees in a single payment, the commission did not act in excess of its statutory authority in considering the reasonableness of the attorney fees in concluding that it should deny a lump sum settlement. Rinehart v. Indus. Comm'n, 719 P.2d 729 (Colo. App. 1986) (decided prior to 1986 abolishment of industrial commission).

Also, within commission's discretion to determine amount and manner of payment of lump sum. Indus. Comm'n v. Big Six Coal Co., 72 Colo. 377, 211 P. 361 (1922).

Furthermore, a lump sum award becomes a vested right which survives. McBride v. Indus. Comm'n, 97 Colo. 166, 49 P.2d 386 (1935).

Phrase "the aggregate of all lump sums granted" as used in subsection (2) requires that the aggregate of all lump sum payments, whether they be for permanent total disability and/or permanent partial disability, be considered in determining the limitation. Ritter v. Indus. Comm'n, 44 Colo. App. 32, 615 P.2d 40 (1980).

To interpret subsection (2) retrospectively could create chaos in the operations of workmen's compensation insurers whose premium rates and loss reserves are computed on their potential liability inherent in the statutory scheme that was in effect upon issuance of the insurance. Eight Thousand W. Corp. v. Stewart, 37 Colo. App. 372, 546 P.2d 1281 (1976).

The limit on the aggregate of all lump sums granted to a claimant in subsection (2) of this section, as amended, is procedural and prospective and, thus, applies to transactions that occur after its enactment even though the claimant applied for and was granted a lump-sum payment before subsection (2) was amended in 2007. Nelson v. Indus. Claim Appeals Office, 219 P.3d 416 (Colo. App. 2009), aff'd sub nom. Specialty Rests. Corp. v. Nelson, 231 P.3d 393 (Colo. 2010).

The apportionment of death benefits under § 8-42-121 necessarily determines and controls a dependent's proportionate share of the maximum lump sum allowed under subsection (3) of this section. Amaya v. Indus. Claim Appeals Office, 2022 COA 131, 524 P.3d 856.

Statute as basis for jurisdiction. See Tavenor v. Royal Indem. Co., 84 Colo. 521, 272 P. 3 (1928).