Larimer County v. ICAO

25CA0682 Larimer County v ICAO 11-26-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 25CA0682
Industrial Claim Appeals Office of the State of Colorado
DD No. 28741-2024

Larimer County,

Petitioner,

v.

Industrial Claim Appeals Office of the State of Colorado and Rita Trostel,

Respondents.

ORDER SET ASIDE AND CASE REMANDED WITH DIRECTIONS

Division VII
Opinion by JUDGE TOW
Lum and Moultrie, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced November 26, 2025

David P. Ayraud, County Attorney, Christine M. Luckasen, Assistant County
Attorney, Fort Collins, Colorado, for Petitioner

No Appearance for Respondent Industrial Claim Appeals Office

Ira Sanders, Golden, Colorado, for Respondent Rita Trostel
¶1 Larimer County appeals the award of unemployment

compensation benefits to a former employee, Rita Trostel. We set

aside the order and remand with directions.

I. Background

¶2 Larimer County employed Trostel as a senior administrative

assistant until she quit in July 2024. A deputy for the Division of

Unemployment Insurance determined that she was eligible for

benefits under section 8-73-108(4)(j), C.R.S. 2025, because she was

“mentally unable to perform the work.” Larimer County contested

the benefits award and requested a hearing. The hearing officer

determined that Trostel was disqualified from receiving benefits

under section 8-73-108(5)(e)(XXII), which provides that an employer

must not be charged for benefits when an individual quits “under

conditions involving personal reasons, unless the personal reasons

were compelling pursuant to other provisions of subsection (4) of

this section.” Specifically, the hearing officer was “unpersuaded”

that Trostel was unable to perform the work.

¶3 Trostel appealed to the Industrial Claim Appeals Office (the

Panel), which reversed the hearing officer’s decision and awarded

benefits under section 8-73-108(4)(j). The Panel, relying in part on

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Mesa County Public Library District v. Industrial Claim Appeals

Office, 2017 CO 78, held that Trostel was not mentally able to

perform the work. Larimer County appeals the Panel’s decision.

II. Legal Principles and Standard of Review

¶4 The Panel’s review of the hearing officer’s decision is governed

by section 24-4-105, C.R.S. 2025, of the State Administrative

Procedure Act. Samaritan Inst. v. Prince-Walker, 883 P.2d 3, 8

(Colo. 1994). Under this rubric, the Panel may not set aside the

hearing officer’s findings of evidentiary fact unless those findings

are “contrary to the weight of the evidence.” Colo. Custom Maid,

LLC v. Indus. Claim Appeals Off., 2019 CO 43, ¶ 12 (citation

omitted). Ultimate facts, on the other hand, are “conclusions of law

or mixed questions of law and fact that are based on evidentiary

facts and determine the rights and liabilities of the parties.” Id.

(quoting Federico v. Brannan Sand & Gravel Co., 788 P.2d 1268,

1272 (Colo. 1990)).

¶5 As for our review, we may set aside the Panel’s decision if the

findings of fact do not support the decision or the decision is

erroneous as a matter of law. § 8-74-107(6)(c)–(d), C.R.S. 2025. In

conducting our review, we “may consider whether the panel ‘applied

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improper principles of law in reaching its decision.’” Mesa Cnty.

Pub. Libr., ¶ 17 (quoting Gonzales v. Indus. Comm’n, 740 P.2d 999,

1001 (Colo. 1987)). We review de novo the Panel’s ultimate legal

conclusion as to whether a claimant was at fault for an employment

separation. Id. But, like the Panel, we do not disturb the hearing

officer’s factual findings that are supported by substantial evidence

or reasonable inferences drawn from that evidence. Yotes, Inc. v.

Indus. Claim Appeals Off., 2013 COA 124, ¶ 10.

¶6 The disqualifying provisions of section 8-73-108(5)(e) “must be

read in light of the express legislative intent set forth in [section

8-73-108(1)(a)] to provide benefits to those who become unemployed

through ‘no fault’ of their own.” Cole v. Indus. Claim Appeals Off.,

964 P.2d 617, 618 (Colo. App. 1998). “‘[F]ault’ is a term of art

which is used as a factor to determine whether the claimant or the

employer is responsible overall for the separation from

employment.” Id. “[W]hether a claimant is at fault for a separation

from employment . . . must be determined on a case-by-case basis,

with due consideration given to the totality of the circumstances in

each particular situation.” Morris v. City & County of Denver, 843

P.2d 76, 79 (Colo. App. 1992).

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III. Analysis

¶7 Larimer County argues that the Panel’s decision is not

supported by the hearing officer’s findings of fact and is erroneous

as a matter of law. We agree.

A. Proceedings Below

¶8 The hearing officer found that Trostel resigned from

employment two days after returning from Family Medical Leave Act

(FMLA) leave because she felt like she was ignored by staff and her

supervisor. The hearing officer recognized that Trostel went on

FMLA leave due to stress and anxiety, but that upon her return to

work she performed her duties, including working the front desk.

The hearing officer found that Trostel’s stress and anxiety resumed

when she felt ignored. Trostel then went to the office on a Saturday

(when no one else was working), cleaned out her desk, and left a

resignation letter dated the day earlier. She gave two weeks’

notice — though explained that she would be taking those two

weeks off — and said she was “thankful” for her “role in serving the

citizens of the [c]ounty.”

¶9 The hearing officer determined that the work environment on

Trostel’s return from leave was not objectively unsatisfactory and

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there was no evidence that she was unable to continue working.

The hearing officer recognized that “although it is undisputed that

various health problems motivated [Trostel’s] decision to quit, it is

also clear that her separation from this employment resulted when

she chose to resign.” The hearing officer concluded that Trostel quit

for “subjectively personal reasons” and was not entitled to benefits.

¶ 10 The Panel found no error in the hearing officer’s findings but

determined that his legal analysis was incorrect. The Panel said:

In general, unemployment benefits are
intended for those separated from employment
due to no fault of their own. Section
8-73-108(1)(a). “Fault” for these purposes
does not necessarily mean culpability, but is
defined as a volitional act or the opportunity to
exercise some control in the totality of the
circumstances. See Collins v. Indus. Claim
Appeals Off., 813 P.2d 804 (Colo. App. 1991).
However, because quitting is volitional, it is
generally unnecessary to consider whether the
claimant is at “fault” for the separation from
employment. Instead, the pertinent
consideration is whether an award is
warranted under the statute. See Cole v.
Indus. Claim Appeals Off., 964 P.2d 617 (Colo.
App. 1998); see also M & A Acquisition Corp. v.
Indus. Claim Appeals Off., 456 P.3d 102 (Colo.
App. 2019).

¶ 11 The Panel then noted that section 8-73-108(4)(j) provides for

an award of benefits when a claimant separates from employment

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because of a physical or mental inability to perform the work. The

Panel cited Mesa County for the proposition that “where a claimant

separates because of a mental inability to perform assigned work,

inquiry into the cause of the mental inability is not required by

section 8-73-108(4)(j) or related case law.”

¶ 12 The Panel repeated the hearing officer’s findings that Trostel

quit shortly after returning from FMLA leave because she felt like

she was ignored by staff and her supervisor. The Panel also

repeated the hearing officer’s findings that Trostel’s stress and

anxiety resumed following her return to work. The Panel then held

that “based on these findings, we conclude that [Trostel] separated

from this employment because she was not mentally able to

perform the work,” and awarded benefits under section

8-73-108(4)(j).

B. The Panel’s Errors

¶ 13 As a threshold issue, we acknowledge that the level of

deference the Panel must give to the hearing officer is governed by

whether the question of a claimant’s mental inability to perform the

work is an evidentiary fact or an ultimate fact. As noted, the Panel

owes (as do we) great deference to the hearing officer’s findings of

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evidentiary fact, but it is permitted to reweigh those evidentiary

facts to come to a different conclusion on an ultimate fact — that is,

a conclusion, based on the evidentiary facts, which determines the

rights and liabilities of the parties. Colo. Custom Maid, LLC, ¶ 12.

The supreme court’s guidance is not entirely clear as to the category

in which the mental inability question belongs.

¶ 14 Over fifty years ago, when applying similar language in an

older version of the statute, the supreme court characterized

whether “claimant’s unsatisfactory work was the result of being

mentally unable to perform the work” as an ultimate fact. Tague v.

Coors Porcelain Co., 481 P.2d 424, 426 (Colo. App. 1971)

(discussing section 82-4-8(4), C.R.S. 1963).

¶ 15 But in Mesa County Public Library, the supreme court

described the Panel as having “adopted the hearing officer’s finding

that [the claimant] was mentally unable to perform her job duties.”

Mesa Cnty. Pub. Libr., ¶ 2 (emphasis added). The court

distinguished that finding from the hearing officer’s conclusion that

the claimant was nevertheless at fault for this inability. Id. at ¶ 13.

However, the court later referred to the resolution of this question

as both a “finding” and a “determin[ation],” id. at ¶ 23, before once

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again saying that the hearing officer “found” that the claimant was

unable to perform her job duties, id. at ¶ 27.

¶ 16 It appears that the supreme court in Mesa County treated the

issue as an evidentiary fact rather than an ultimate one.1 If that is

the case, the Panel failed to defer to the hearing officer’s finding in

this regard, despite record support for it. Our inquiry would thus

generally end there with the necessary result being a reversal of the

Panel’s erroneous decision. See Yotes, ¶ 28 (“Because the hearing

officer’s findings are supported by substantial evidence in the

record, they are binding on review by the Panel.”).

¶ 17 In light of the analytical uncertainty, however, we alternatively

address whether the Panel erred in its application of the law or its

reweighing of the hearing officer’s evidentiary facts to reach a

different conclusion on the ultimate fact of whether Trostel was

unable to perform the work. We conclude that it did both.

1 Consistent with this later approach, the court of appeals division

in Cole v. Industrial Claim Appeals Office, 964 P.2d 617, 618 (Colo.
App. 1998), treated the issue as an evidentiary — rather than an
ultimate — fact when it noted that “the hearing officer did not make
any evidentiary finding, implicitly or otherwise, that claimant was
unable to continue working at the time of her resignation, nor
would the record support any such finding.”

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¶ 18 First, we disagree with the Panel’s characterization of the legal

test. The Panel said, “[B]ecause quitting is volitional, it is generally

unnecessary to consider whether the claimant is at ‘fault’ for the

separation from employment. Instead, the pertinent consideration

is whether an award is warranted under the statute.” At its core,

the second sentiment is accurate: the pertinent consideration in

any benefits eligibility case is whether an award is warranted under

the statute.

¶ 19 But the first statement is simply wrong, and neither case the

Panel cites in support of the proposition — Cole and M & A

Acquisition Corp. — can bear the weight the Panel places on it. In

Cole, the division did not say fault was not to be considered; to the

contrary, the division said, ‘fault’ is a term of art which is used as a

factor to determine whether the claimant or the employer is

responsible overall for the separation from employment.” Cole, 964

P.2d at 618. And the relevance of M & A Acquisition Corp. is

unclear, as the claimant in that case did not quit but, rather, was

fired. M & A Acquisition Corp., ¶ 1. In any event, the division

instructed the Panel on remand to consider whether the claimant

was at fault for the separation. Id. at ¶ 26. Thus, to the extent the

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Panel determined that it did not need to consider whether Trostel

was at fault for her separation from employment, it applied the

wrong legal standard.

¶ 20 Moreover, while the hearing officer relied on Cole, the Panel

felt that Mesa County required a determination that Trostel was

entitled to benefits. The Panel, however, misreads Mesa County.

¶ 21 In Mesa County, the employee was terminated after she failed

to complete a required report despite having been warned that

failure to do so may result in termination. Mesa Cnty. Pub. Libr.,

¶¶ 6-9. The hearing officer determined that the employee was

mentally unable to perform her duties but found that her own

underperformance at work, which led to her supervisors’ criticism

of her, had caused her inability to perform. Id. at ¶ 12. The

supreme court held that, once an employee is found to be “mentally

unable to perform the work,” the statute does not permit an inquiry

into the cause of that mental inability. Id. at ¶¶ 22-23. Instead,

the supreme court ruled, “A finding by the Division under section

8-73-108(4)(j) that an employee is ‘mentally unable to perform the

work’ effectively amounts to a finding that the employee is not at

fault for her separation from employment.” Id. at ¶ 23.

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¶ 22 Here, in direct contrast to Mesa County, the hearing officer did

not determine that Trostel was mentally unable to perform the work

and then seek to identify the cause of her inability to do so. To the

contrary, he determined that Trostel was not mentally unable to

perform the work. Mesa County, therefore, has no bearing on this

case, and, by giving it dispositive weight, the Panel applied the

wrong legal standard.

¶ 23 Second, to the extent the Panel could be said to have simply

exercised its authority to reweigh the hearing officer’s evidentiary

findings to arrive at a different ultimate fact, we conclude that the

evidentiary findings do not support the Panel’s decision.

¶ 24 The hearing officer heard the following evidence. Trostel

testified that she quit for “health reasons, [being] incapacitated,”

and “needed to quit due to stress manifesting in health issues.”

When she took FMLA leave, she submitted documentation from her

physician that she was unable to work due to “stress and the effects

on her body, mind, and spirit” as a result of an alleged “toxic work

environment.” She also testified that she had been sexually

harassed for two decades by a manager who no longer worked for

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Larimer County. She reported the harassment in early 2020, and

Larimer County terminated the manager a few weeks later.

¶ 25 On cross-examination, Trostel was asked about another letter

from her physician clearing her to return to work after her FMLA

leave. Trostel testified that, at that time, she agreed with the doctor

that her symptoms were under control. She also acknowledged that

the sexual harassment allegations had been resolved four years

earlier and that the manager’s employment had ended at that time.2

When asked to explain what about that incident led Trostel to quit

in 2024, Trostel testified that new management “diminished her

value” and she felt “ostracized.”

¶ 26 When Trostel returned to work, she successfully performed

her duties for two days. While she testified that her “symptoms

resumed” when “she walked in the door,” she did not notify anyone

that her symptoms had recurred. When she resigned, she made no

2 Trostel testified that she believed the manager had been allowed to

quit. A human resources representative for the county testified that
Larimer County fired the manager in March 2020. Regardless, it is
undisputed that the manager’s employment with the county ended
in early 2020 as a result of the harassment.

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mention of mental inability to do the work, sought no additional

leave, and provided no explanation for her resignation.

¶ 27 Based on this evidence, the hearing officer found that the work

environment upon returning from FMLA leave was not objectively

unsatisfactory. The Panel disagreed with the hearing officer and

determined that Trostel was mentally unable to perform the work.

Significantly, it did so without explaining why the evidentiary facts

warranted a determination that Trostel was mentally unable to

perform the work.

¶ 28 Perhaps that is because the hearing officer’s findings of

evidentiary fact do not support the Panel’s determination. The work

environment was not objectively unreasonable and there is no

evidence, let alone substantial evidence, that Trostel was mentally

unable to perform any functions of her work.

IV. Disposition

¶ 29 Because the Panel’s decision is not supported by substantial

evidence and is erroneous as a matter of law, we must set it aside.

We remand with directions to reinstate the hearing officer’s decision

disqualifying Trostel from unemployment compensation benefits.

JUDGE LUM and JUDGE MOULTRIE concur.

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