Posted by: Cliff Eley
June 02, 2009
Topic: Case Law Update

The Court of Appeals issued an important decision that may lay to rest the issue of whether a the amount of the lump sum a claimant can receive is based upon the date of injury. And it’s good news for injured workers.

The amount of the lump sum that a Claimant can receive in permanent partial and permanent total disability has changed over the years. Prior to July 1, 1992, the lump sum amount was $26,202. From July 1, 1991 until May 30, 2007, the amount of the lump sum was $37,560. At that time it changed to $60,000. However there has been considerable disagreement on whether someone injured when a smaller amount was available could petition for the greater amount when it was increased by statute. The Court of Appeals had previously ruled in Eight Thousand West Corp. v. Stewart, 546 P.2d 1281 (Colo. App. 1976), that the increase in the allowable lump sum did not apply retroactively

However, in the just-decided Nelson vs. ICAO , No. 08CA1069 (Colo. App. 2009), the Court of Appeals took another look at lump sums and found them to be procedural in nature and not substantive and as such, can be applied to injuries which occurred prior to the effective date of the change in the statute which increased the lump sums. In the Nelson, the Claimant was injured in 1990 when the effective lump sum was $26,292. After the increase to $60,000 in 2007, the Claimant asked for an additional lump sum. The Administrative Law Judge found for the Claimant and ordered that the remainder of the $60,000 be paid. However, The Industrial Claims Appeals Office followed the ruling in Eight Thousand West Corp. and found that the Claimant was limited to the $26,292 lump sum which was in force on the day of her injury.

The Court of Appeals declined to follow Eight Thousand West Corp. and ruled that the newer lump sum amount doesn’t actually increase benefits. When a lump sum is awarded the weekly payments are reduced by the lump sum. Therefore, the increased lump sum doesn’t actually increase the amount that is ultimately paid in permanent disability benefits.

Lump sum payments are available for permanent partial, permanent total disability benefits and death benefits. In its opinion, the Court didn’t appear to differentiate between benefits type when declaring that the amount of lump sums are procedural in nature and applied retroactively.

This means that if you have received a lump sum for less than $60,000 and still are owed PPD, PTD or death benefits, you can apply for an additional lump sum.

Nelson v. ICAO is Good News for Clamants Entitled to Lump Sums

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