Dami Hospitality, LLC v. Industrial Claim Appeals Office

Citations

• 2017 COA 21

Syllabus

Workers' Compensation Insurance—Fine—Lapse in Coverage—Unconstitutional—Eighth Amendment. The Division of Workers' Compensation (Division) imposed a fine of $841,200 on Dami Hospitality, LLC, a small employer, for failing over several years to maintain workers' compensation insurance. On appeal, Dami argued that CRS § 8-43-409 is unconstitutional on its face and as applied. Dami also argued that the fine is grossly disproportionate both to its ability to pay and to the harm caused by the lack of workers' compensation insurance. The statute is not unconstitutional on its face. However, because the division director failed to apply the excessive fine factors adopted under the Eighth Amendment to the particular facts that Dami presented, including his ability to pay, the fine was excessive. Dami also contended that the provisions of CRS § 8-43-304 must be read into CRS § 8-43-409 to incorporate a cure provision, a limitation period, and a clear and convincing burden of proof and the fine must be set aside based on the Division's failure to meet these requirements. The Court of Appeals analyzed the statutes and determined that the Division was not obligated to credit Dami for curing the violation, was not required to prove by clear and convincing evidence that Dami violated CRS § 8-43-409, and did not have to file notice of Dami's violation within one year of Dami's lapse. The order was set aside and the case was remanded.