Eggert v. SAIF , 301 Or. App. 177 ( 2019 )

177
Eggert v. SAIF 30111,
December Or2019
App
Argued and submitted November 28, 2018, affirmed December 11, 2019
In the Matter of the Compensation of
Nancy E. Eggert, Claimant.
Nancy E. EGGERT,
Petitioner,
v.
SAIF CORPORATION
and The Adobe Motel, Inc.,
Respondents.
Workers’ Compensation Board
1600198; A164923
455 P3d 1000
Claimant seeks judicial review of an order of the Workers’ Compensation
Board determining that SAIF, which had accepted claimant’s knee injury claim
“contingent on the outcome” of appeal, was not required to issue a modified notice
of acceptance of claimant’s knee injury claim after exhausting its challenges to
the claim’s compensability. Claimant contends that SAIF was required to issue
a modified notice of acceptance removing the contingency and that its failure
to do so in response to claimant’s request for clarification of the notice of accep-
tance constituted a de facto denial of the claim. Held: A claim may be accepted
contingently pending appeal. When litigation is finally concluded, the acceptance
becomes final and the contingency falls away as a matter of law. Thus, after
SAIF had exhausted its challenges to compensability, it did not need to issue an
updated notice accepting the claim without the contingency. SAIF’s failure to
respond to claimant’s request for clarification of the notice of acceptance did not
constitute a de facto denial of the claim.
Affirmed.
Julene Quinn argued the cause and filed the briefs for
petitioner.
Julie Masters argued the cause and filed the brief for
respondents.
Before Powers, Presiding Judge, and Egan, Chief Judge,
and Landau, Senior Judge.*
EGAN, C. J.
Affirmed.
______________
* Egan, C. J., vice Garrett, J. pro tempore.
178 Eggert v. SAIF
EGAN, C. J.
Claimant seeks judicial review of an order of the
Workers’ Compensation Board determining that SAIF was
not required to issue a modified notice of acceptance of
claimant’s knee injury claim after SAIF exhausted its chal-
lenges to the compensability of the claim. Claimant’s peti-
tion raises a legal issue that we review for errors of law.
ORS 183.482(8)(a). We conclude that the board did not err
and affirm.
We draw the facts, which are largely procedural
and undisputed, from the board’s order. Claimant injured
her knee at work and filed a claim for a left medial menis-
cus tear, which SAIF denied. An administrative law judge
(ALJ) set aside SAIF’s denial, and SAIF appealed to the
board.
Pending appeal to the board, and in compliance
with the ALJ’s order, SAIF issued an Initial Notice of
Acceptance, which listed “left medial meniscus tear” as a
“contingent accepted medical condition.” The Initial Notice
of Acceptance also stated:
“SAIF’s acceptance of these conditions * * * is contingent on
the outcome of the appeal.”
The board affirmed the ALJ’s order setting aside SAIF’s
denial.
SAIF then closed the claim with an award of per-
manent impairment and, as required by OAR 436-030-0015,
SAIF issued an Updated Notice of Acceptance at Closure,
which described the accepted condition as “left medial
meniscus tear.”1 The notice of closure also stated, “SAIF’s
1
The notice stated, in full:
“Oregon law requires us to provide you with an additional notice regard-
ing your claim. SAIF Corporation wants to ensure you understand what your
accepted conditions are at this time.
“The accepted condition(s) for your February 17, 2013 injury include:
“left medial meniscus tear.
“SAIF was ordered to accept the conditions listed below by Opinion and
Order dated September 25, 2014. SAIF’s acceptance of these conditions has
been challenged on appeal, and the acceptance of these conditions is contin-
gent on the outcome of the appeal. SAIF is not required to pay any disability
Cite as 301 Or App 177 (2019) 179
acceptance of these conditions has been challenged on
appeal, and the acceptance of these conditions is contingent
on the outcome of the appeal.” The notice said that SAIF
was not required to pay disability compensation “unless and
until the condition is found to be compensable after all liti-
gation is final.” See ORS 656.313(1) (payment of some bene-
fits stayed pending appeal).
Shortly thereafter, SAIF filed a petition for judicial
review of the board’s order. On SAIF’s motion, we subse-
quently dismissed the petition, and SAIF paid the perma-
nent impairment award.
Claimant then asked SAIF to provide a “clarified
Notice of Acceptance” that did not include the statement
that SAIF’s acceptance was contingent on the outcome of lit-
igation.2 At that time, the determination of compensability
compensation for any condition under appeal unless and until the condition
is found to be compensable after all litigation is final:
“left medial meniscus tear.
“The accepted condition(s) does not include a combined condition unless
specifically indicated in this updated notice of acceptance. If a combined con-
dition is accepted in this document, that acceptance is effective on the date of
injury.
“Your overall claim remains accepted as disabling.
“Notice to worker: This notice restates and includes all prior
acceptances. The conditions that were the basis of this claim open-
ing were the only conditions considered at the time of claim closure.
The insurer or self-insured employer is not required to pay any
disability compensation for any condition specifically identified as
under appeal, unless and until the condition is found to be compen-
sable after all litigation is complete. Appeal of any denied conditions
or objections to this notice will not delay claim closure. Any con-
dition found compensable after the Notice of Closure is issued will
require the insurer to reopen the claim for processing of that con-
dition. If you believe a condition has been incorrectly omitted from
this notice, or this notice is otherwise deficient, you must communi-
cate the specific objection to the insurer in writing.”
(Boldface in original.) Claimant challenged the benefits awarded by the notice of
closure, which the board ultimately upheld.
2
Claimant’s request stated, in part:
“The initial Notice of Acceptance in this claim was issued December 19,
2014, and states as follows:
“SAIF was ordered to accept the conditions listed below by opinion and
order dated September 25, 2014. SAIF’s acceptance of these conditions had
been challenged on appeal and the acceptance of the conditions is contingent on
the outcome of the appeal. SAIF is not required to pay any permanent disability
180 Eggert v. SAIF
had become final, the claim had been closed, and claimant’s
benefits for impairment had been paid.3
SAIF did not respond to claimant’s request to
clarify the notice of acceptance, and claimant requested a
hearing, asserting a “de facto denial/challenge to Notice of
Acceptance/medical services.” The parties presented their
positions to the ALJ in writing. The ALJ concluded that
SAIF was not required to amend its notice of acceptance,
and claimant appealed to the board.
Citing our opinion in Crawford v. SAIF, 241 Or App
470, 480, 250 P3d 965 (2011), the board determined that
SAIF was required to respond to claimant’s request for clar-
ification by revising the notice of acceptance or by making
“other relevant clarification,” but that it was not required to
issue a new notice of acceptance. In Crawford, we addressed
the requirements of ORS 656.262(6)(d) and ORS 656.267,4
compensation or medical payments for any condition under appeal unless and
until the condition is found to be compensable after all litigation is final.
“By Judgment of the Court of Appeals, the above-referenced Notice of
Acceptance became final on August 5, 2015. However, to date, a Modified
Notice of Acceptance has not been issued. The applicable administrative
rules require SAIF to issue a Modified Notice of Acceptance and a Form 1502
* * * under the circumstances. It appears neither of these have been issued
to date. Please issue a clarified Notice of Acceptance that does not state it is
conditional or contingent upon any outcome of litigation, since all litigation
regarding initial compensability has concluded.”
(Emphasis in original.)
3
SAIF notes that, in the litigation challenging the benefits awarded by
the notice of closure, claimant did not raise an issue concerning the contingent
nature of the notice of acceptance.
4
ORS 656.262(6)(d) provides:
“An injured worker who believes that a condition has been incorrectly
omitted from a notice of acceptance, or that the notice is otherwise deficient,
first must communicate in writing to the insurer or self-insured employer
the worker’s objections to the notice pursuant to ORS 656.267. The insurer
or self-insured employer has 60 days from receipt of the communication
from the worker to revise the notice or to make other written clarification in
response.”
ORS 656.267 provides:
“(1) To initiate omitted medical condition claims under ORS 656.262
(6)(d) * * * the worker must clearly request formal written acceptance of a new
medical condition or an omitted medical condition[.] * * *
“(2)(a) Claims properly initiated for new medical conditions and omitted
medical conditions related to an initially accepted claim shall be processed
pursuant to ORS 656.262.”
Cite as 301 Or App 177 (2019) 181
as related to omitted condition claims, and explained that
the nature of a claimant’s request will dictate the response
required from the insurer. When a claimant expressly seeks
to have an omitted condition accepted, the insurer must
respond by processing an omitted condition claim pursu-
ant to ORS 656.262(7)(a), by either accepting or denying the
claim within 60 days. Id. When, however, “the worker seeks
a mere clarification of a notice of acceptance,” the insurer’s
obligation to respond within 60 days under ORS 656.262
(6)(d) may be satisfied either by revising the notice of closure
or by making other relevant clarification, including by a let-
ter explaining what conditions are accepted. Id.The board here determined that, because claimant’s
request sought only a clarification of the notice of acceptance
and was not a request for acceptance of a new or omitted
condition, it did not trigger an obligation to issue a new
notice of acceptance or denial, but it did require a response
by one of the two methods described in Crawford. The board
concluded that, because SAIF failed to so respond, claimant
was entitled under ORS 656.262(11)(a) to a penalty for an
unreasonable delay or refusal to pay compensation.5
However, the board rejected claimant’s contention
that SAIF’s failure to respond to claimant’s request for clar-
ification constituted a denial of the claim. The board noted
that, having accepted the claim in response to the ALJ’s
order, SAIF could not withdraw its acceptance, except pur-
suant to ORS 656.262(6)(a) (providing for withdrawal of a
notice of acceptance under limited circumstances). Because
the claim had previously been accepted and processed as
an accepted claim (with the exception of benefits that were
stayed pending appeal pursuant to ORS 656.313), the board
concluded that SAIF’s failure to respond to claimant’s
request for clarification did not constitute a denial.
The board also rejected claimant’s contention that
a “contingent” acceptance is not permitted by the statutes.
The board discussed our opinion in SAIF v. Mize, 129 Or App
636, 639, 879 P2d 907 (1994), in which we held that, pending
an appeal of a compensability determination, the insurer’s
5
SAIF does not challenge the assessment of that penalty.
182 Eggert v. SAIF
issuance of a “clear and unqualified” acceptance will result
in a dismissal of the appeal. In rejecting claimant’s conten-
tion that a “contingent” acceptance is not an authorized form
of acceptance, the board cited ORS 656.262(7)(c) and OAR
436-030-0015(1)(c)(A)(ii),6 both having come into effect after
Mize, which the board concluded require an insurer to issue
an updated notice of acceptance at closure that includes
conditions found compensable through a litigation order but
still on appeal or under review. The board noted its own case
law requiring that, when a claim is accepted as a result of
litigation and the insurer challenges the order, the insurer
must nonetheless process the claim as accepted, see Albert
D. Avery, 51 Van Natta 814 n 1, on recons, 51 Van Natta 927
(1999), but that, to avoid the outcome of Mize, an insurer
may accept the claim on a contingent basis. See Valerie
Barbeau, 49 Van Natta 1189 (1997). The board concluded
that, in this case, SAIF could properly accept the claim as
contingent pending appeal and was bound by the express
terms of its acceptance, and that the contingency fell away
when we dismissed SAIF’s petition.
On judicial review, claimant contends that the board
erred in failing to order SAIF to issue a notice of acceptance
after the conclusion of the litigation, because SAIF has never
issued an acceptance that complies with the terms of ORS
656.262(6),7 as there is no statutory authority for a “contingent”
6
ORS 656.262(7)(c) provides that claim closure is to proceed despite objec-
tions to the updated notice of closure or the appeal of denied conditions. OAR
436-030-0015(1)(c)(A)(ii) requires that the notice of acceptance at claim closure
include “[a] list of all compensable conditions, even if a condition was denied,
ordered accepted by litigation, and is under appeal.”
7
ORS 656.262(6)(a) requires an insurer to issue written notice of acceptance
or denial of a claim within 60 days after the employer has notice or knowledge of
the claim. ORS 656.262(6)(b) provides:
“The notice of acceptance shall:
“(A) Specify what conditions are compensable.
“(B) Advise the claimant whether the claim is considered disabling or
nondisabling.
“(C) Inform the claimant of the Expedited Claim Service and of the hear-
ing and aggravation rights concerning nondisabling injuries, including the
right to object to a decision that the injury of the claimant is nondisabling by
requesting reclassification pursuant to ORS 656.277.
“(D) Inform the claimant of employment reinstatement rights and
responsibilities under ORS chapter 659A.
Cite as 301 Or App 177 (2019) 183
acceptance of a claim. If, however, SAIF’s “contingent”
acceptance constituted an acceptance under ORS 656.262
(6)(a), then, claimant contends, SAIF was required to issue
a new notice of acceptance at claim closure to remove the
contingency.
We agree with claimant that no statutory provision
explicitly authorizes acceptance of a claim on a contingent
basis. But, as we have noted, OAR 436-030-0015(1)(c)(A)(ii)
requires that a notice of acceptance at closure include accep-
tance of conditions that have been ordered accepted through
litigation and that are under appeal. The board has explic-
itly provided that, to fulfill that requirement—as well as the
requirements of ORS 656.262(7)(c) that claim closure will not
be delayed pending resolution of disputes concerning com-
pensability and that, at claim closure, all compensable con-
ditions must be listed in an updated notice of acceptance—a
claim may be accepted contingently pending appeal.
And our case law implicitly requires the same con-
clusion. When a claim is ordered accepted by this court, the
board, or an ALJ, the employer is required to process the
claim as accepted, even pending appeal, by reopening the
claim and processing it through to the issuance of a notice of
claim closure. See Providence Health System v. Walker, 252
Or App 489, 500, 507, 289 P3d 256 (2012), rev den, 353 Or
867 (2013) (Walker) (ORS 656.313(1) contemplates that claim
processing will continue pending litigation of compensabil-
ity and that omitted condition claims will be reopened and
processed pending appeal). We reject claimant’s contention
that a claim need not be accepted in order to be “processed,”
as required by Walker. The “reopening” that we said in
Walker is required is the initial procedural mechanism for
the processing of an accepted claim.
The requirement that a disputed claim be accepted
and processed while under review or on appeal presents a
conundrum for the insurer in light of Mize, where we held
“(E) Inform the claimant of assistance available to employers and work-
ers from the Reemployment Assistance Program under ORS 656.622.
“(F) Be modified by the insurer or self-insured employer from time to
time as medical or other information changes a previously issued notice of
acceptance.”
184 Eggert v. SAIF
that an employer forfeits its challenge to the compensabil-
ity of the claim by issuing an unconditional acceptance. 129
Or App at 640. We note that, in Mize, we explicitly did not
address whether a contingent acceptance was permissible
under then-existing statutes. Id. at 640 n 2.8 But Walker and
Mize, along with OAR 436-030-0015(1)(c)(A)(ii), together
require the conclusion that, when an employer challenges
a litigation order requiring acceptance of a condition, the
notice of acceptance at claim closure may include a state-
ment that the acceptance is contingent on the final outcome
of the challenged order.
The remaining question is whether, after SAIF’s
challenges finally concluded, SAIF was required to mod-
ify its notice of acceptance at closure in response to claim-
ant’s request for clarification. Citing ORS 656.262(6)(b)(F)
(requiring that a notice of acceptance be modified from
time to time “as medical or other information changes a
previously issued notice of acceptance”), claimant contends
that the notice was required to be modified to reflect the
new information that the acceptance was no longer contin-
gent. But, as the board concluded (and as even claimant
acknowledged in her request to SAIF), SAIF had previously
accepted the claim, and our judgment dismissing SAIF’s
petition caused SAIF’s notice of acceptance to become final
as a matter of law. The contingency described in the notice
of acceptance was thereby removed by operation of law. And
we agree with the board that, although SAIF was required
to respond to claimant’s request for clarification, it was not
required to issue a new notice of acceptance removing the
contingency, as our judgment had that effect as a matter of
law. We therefore affirm the board’s order determining that
SAIF’s failure to respond to claimant’s request for clarifica-
tion did not constitute a de facto denial of the claim.
Affirmed.
8
We also note that, despite claimant’s position here that the claim has never
been accepted, claimant’s letter did not explicitly request acceptance of the claim;
it only requested clarification of the acceptance, which, as the board correctly
concluded, would not trigger an obligation to issue a notice of acceptance or denial
under ORS 656.262(6)(d). Crawford, 241 Or App at 480.