AGO 84-13.

• Case Date: August 02, 1984
• Court: Colorado

Colorado Attorney General Opinions 1984. AGO 84-13. August 2, 1984Department of Law Attorney General OpinionFORMAL OPINION of DUANE WOODARD Attorney General Opinion No. 84-13 AG Alpha No. LA WC AGANE Charles McGrath Director, Division of Labor 1313 Sherman Street, Room 314 Denver, CO 80203 RE: Whether the recent Colorado Supreme Court ruling disallowing deductions in the amount of the federal social security disability cost-of-living increases from workers' compensation payments shall be given retroactive or prospective applicationDear Mr. McGrath: This opinion letter is in response to your request for a formal attorney general opinion in which you inquired about the retroactive or prospective application and attendant effects of the Colorado Supreme Court decision in the case of Engelbrecht v. Hartford Accident & Indemnity Co., 680 P.2d 231 (Colo. 1984). QUESTIONS PRESENTED AND CONCLUSIONS Your request for an attorney general's opinion presents the following questions: Is the supreme court decision in Engelbrecht disallowing deductions in the amount of federal social security disability cost-of-living increases from workers' compensation payments to be given retroactive or prospective application? My conclusion is that the Engelbrecht decision should be given complete retroactive application to the claimants in Engelbrecht and other claimants who have preserved their rights on this issue. The decision should be given further retroactive application to the extent that all periodic compensation payments made after the date of judgment in Englebrecht should be recomputed so as to delete all federal social security disability cost-of-living increases which may have been computed onto the claimant's original social security disability award. Does such retroactive or prospective application apply to all cases affected by social security disability offsets, including open cases, closed cases eligible to petition to reopen, closed cases not eligible to petition to reopen, and cases which have been settled? My conclusion is that, except for the claimants in Engelbrecht and in cases where rights to review or appeal on this issue have been specifically preserved, the decision applies from the date of judgment to all open cases where reduced periodic compensation benefits are now being paid or would have been paid past that date had not cost-of-living reductions caused the compensation payment to be reduced to zero. Except for such cases, any petition to reopen which is otherwise granted under section 8-53-113, C.R.S. (1983 Supp.) should, in my opinion, be denied with respect to this issue. Is the interest penalty provided in section 8-52-109(2), C.R.S. (1973) applicable to all moneys due as a result of this supreme court decision? My conclusion is that the interest penalty provided in section 8-52-109(2), C.R.S. (1973) will accrue from the date of judgment for any moneys due, and from the dates of the respective social security disability cost-of-living offsets for the claimants in Engelbrecht and cases where rights to review or appeal on this issue have been preserved. ANALYSIS The questions presented for analysis and response are triggered by the recent Colorado Supreme Court decision in Engelbrecht v. Hartford Accident & Indemnity Co., supra, announced on April 23, 1984. The opinion notes that both Stanley Dailey and Alvin Engelbrecht were injured in work related accidents and consequently received state workers' compensation benefits as well as federal social security disability benefits. Relying on section 8-51-101(1)(c), C.R.S. (1973), the workers' compensation insurers deducted one-half of the federal social security disability benefits including cost-of-living increases to such benefits. Reversing separate panels of the court of appeals, the supreme court, in a case of first impression, disallowed deductions in the amount of the cost-of-living increases from the workers' compensation payments and remanded the cases to the court of appeals with directions to return them to the Industrial Commission for entry of an appropriate order. The supreme court's opinion was based exclusively on statutory interpretation and did not note any constitutional deficiency in regard to cost-of-living deductions as such, nor did the opinion discuss the question of retroactive...