Swint v. City of Springfield ( 2020 )

679
Argued and submitted March 15, 2019, reversed and remanded August 5, 2020
In the Matter of the Compensation of
Justin A. Swint, Claimant.
Justin A. SWINT,
Petitioner,
v.
CITY OF SPRINGFIELD,
Respondent.
Workers’ Compensation Board
1701519; A167556
472 P3d 800
Claimant requested a hearing on whether his employer used the wrong rate
to calculate his periodic temporary disability compensation, resulting in a series
of underpayments that violated the employer’s obligations under ORS 656.262
(4)(b). After an administrative law judge agreed with claimant that he was enti-
tled to additional compensation, the Workers’ Compensation Board reversed
that decision. The board concluded that, because claimant’s hearing request was
made more than two years after the date of the first payment, it was time-barred
under ORS 656.319(6). Claimant seeks judicial review of the board’s order, argu-
ing that the board erred in concluding that his request was time-barred under
that statute. Held: The two-year window under ORS 656.319(6) is determined by
the specific “alleged action or inaction” in processing—a standard that necessar-
ily requires an assessment of the particular processing requirements imposed
on an employer by statute and rule. In the case of challenges to computations
required in the course of processing, the timeliness inquiry depends on (1) when
the statutes and rules require that computations be made; and (2) what, if any,
obligations are imposed to reevaluate prior computations. The board’s order did
not address those questions and failed to adequately explain why the first pay-
ment involved a claim-processing action that each subsequent payment did not.
Reversed and remanded.
Christopher D. Moore argued the cause and filed the
briefs for petitioner.
Howard R. Nielsen argued the cause for respondent. Also
on the brief was Bohy Conratt, LLP.
Before Lagesen, Presiding Judge, and DeVore, Judge, and
Sercombe, Senior Judge.
LAGESEN, P. J.
Reversed and remanded.
680 Swint v. City of Springfield
LAGESEN, P. J.
In this workers’ compensation case, claimant
requested a hearing on whether his employer used the wrong
rate to calculate his periodic temporary disability compen-
sation, resulting in a series of underpayments that violated
the employer’s obligations under ORS 656.262(4)(b). After an
administrative law judge (ALJ) agreed with claimant that
he was entitled to additional compensation, the Workers’
Compensation Board reversed that decision. The board con-
cluded that, because claimant’s hearing request was made
more than two years after the date of the first payment, it
was time-barred under ORS 656.319(6). Claimant seeks
judicial review of the board’s order, arguing that the board
erred in concluding that his request was time-barred under
that statute. For the reasons explained below, we conclude
that the board’s order lacks substantial reason to support its
conclusion, and we therefore reverse and remand the order.
The facts are not in dispute, so we draw them from
the summary in the board’s order and the ALJ’s factual find-
ings, which the board adopted. See McDowell v. Employment
Dept., 348 Or 605, 608, 236 P3d 722 (2010). Claimant, a
police officer for the City of Springfield, suffered a compen-
sable injury in September 2014; he was released to light
duty and subsequently returned to modified work later that
month. The city accepted his claim and, on October 8, 2014,
sent a “Notice of Wage Calculation” letter to claimant.1 The
notice advised claimant that his temporary total disability
(TTD) rate was calculated as $830.43, based on an aver-
age weekly wage (AWW) of $1,245.59, but that the city had
elected to provide “wage continuation” in lieu of paying tem-
porary disability benefits. “Wage continuation” refers to a
self-insured employer’s ability to “pay[ ] to an injured worker
who becomes disabled the same wage at the same pay inter-
val that the worker received at the time of injury,” which
is “deemed timely payment of temporary disability pay-
ments pursuant to ORS 656.210 and 656.212 during the
time the wage payments are made.” ORS 656.262(4)(b). The
“Notice of Wage Calculation” explained that the AWW/TTD
1
Many of the actions at issue were taken through the city’s claims adminis-
trator; for readability, we do not distinguish between the two.
Cite as 305 Or App 679 (2020) 681
information was being provided because any work disabil-
ity award, if determined to be due at the time of closure,
would be based upon that wage calculation. The notice fur-
ther advised claimant that, if he disagreed with the wage
calculation, he must immediately notify the city of his
disagreement.
In this case, the wage continuation in lieu of tempo-
rary disability was the result of an agreement between the
city and the police union, the Springfield Police Association.
Pursuant to that agreement, the city paid claimant his
regular base pay plus incentives (e.g., contributions to his
retirement account, and medical and dental insurance) in
two-week intervals; he received his regular base pay for
40 hours a week even if he worked less than 40 hours, but he
did not have an opportunity to work overtime.
The first wage-continuation payment was made to
claimant on October 10, 2014, for the period of September 21
to October 4, 2014. Payroll information accompanying the
check indicates that an hourly rate of $31.14 was used to
calculate wages, which was claimant’s regular hourly base
pay rate. Wage-continuation payments continued to be paid
every two weeks until February 28, 2017, when claimant
was released to regular work without restrictions.
On April 7, 2017, claimant requested a hearing to
challenge the city’s processing of his temporary disability
benefits. In claimant’s view, the wage calculation used by the
city had erroneously failed to account for his actual wages,
including the overtime that he regularly worked, meaning
that he had not been paid “the same wage at the same pay
interval that the worker received at the time of injury” as
required by ORS 656.262(4)(b).
In response, the city disagreed with claimant’s posi-
tion that the payments violated ORS 656.262(4)(b), arguing
that claimant got a “better bargain” from the city by receiv-
ing his base pay for reduced hours rather than the hours
he worked. However, the city also asserted, as a threshold
matter, that claimant’s request for a hearing was untimely
under ORS 656.319(6). That statute provides that “[a] hear-
ing for failure to process or an allegation that the claim was
processed incorrectly shall not be granted unless the request
682 Swint v. City of Springfield
for hearing is filed within two years after the alleged action
or inaction occurred.”
The city’s timeliness argument was premised on its
view that the “alleged action” that triggered the two-year
limitation period in ORS 656.319(6) was the notice of wage
calculation. The city contended:
“Here [the city’s claims administrator] sent the Claimant
a notice of wage calculation on October 8, 2014 * * *. It
advised Claimant of the calculated average weekly wage
and advised that the city provides salary continuation in
lieu of time loss benefits. * * *
“Claimant never challenged that notice letter, again not
until April of this year. That notice letter was an affirma-
tive action that triggered the time to Request for Hearing,
but apparently Claimant was content to receive salary con-
tinuation benefits and really didn’t have any problems with
his average weekly wage because [the claims administra-
tor] never heard anything from him until April of this year
when he was represented by [counsel].”
Claimant, on the other hand, argued that each pay-
ment raised the calculation issue anew, because each pay-
ment violated the city’s ongoing obligation to pay him the
same wage at the same pay interval that he received at the
time of injury under its election to provide wage continua-
tion in lieu of disability payments. He argued that, “with
their action or failure to act, it was renewed each and every
time it acted or failed to act, so it’s timely. At worst, you
could say it—you’re going to take it back two years from
April of 2017 to April of 2015, but I think that the issue was
actually raised fully each and every time and, therefore, we
can go back farther.”
The ALJ agreed with claimant regarding timeli-
ness, rejecting the city’s view that the notice of wage calcula-
tion was the “alleged action” for purposes of ORS 656.319(6).
The ALJ reasoned that the notice advised claimant of
the city’s election to provide salary continuation in lieu of
temporary disability, but that claimant was not challeng-
ing the election. “Rather,” the ALJ explained, “claimant is
challenging the [city’s] failure to pay him the same wage
that he received at the time of injury, which is a statutory
Cite as 305 Or App 679 (2020) 683
requirement of providing salary continuation in lieu of tem-
porary disability.” “Thus, the claim processing actions being
challenged by claimant are the [city’s] wage-continuation
payments that were made in lieu of paying temporary dis-
ability benefits.” Because claimant had filed his hearing
request within two years of when those alleged underpay-
ments ended in February 2017, the ALJ determined that
claimant’s request was timely. And, on the merits, the ALJ
agreed that claimant had been underpaid, directed the city
to pay additional benefits, and assessed attorney fees and
penalties.
The city sought board review of the ALJ’s decision,
arguing, among other contentions, that the ALJ erred in
concluding that the hearing request was timely. As it did
before the ALJ, the city argued that the “October 8, 2014 let-
ter was the action that triggered the two-year time frame for
claimant to request a hearing regarding the average weekly
wage and temporary disability rate calculations.” Claimant
defended the ALJ’s ruling, again arguing that each pay-
ment involved a new alleged action—or inaction—in failing
to pay the statutorily required rate.
The board ultimately rejected the claimant’s view
and the ALJ’s conclusion that each payment involved a new
“alleged action,” but it also rejected the city’s position that
the notice of wage calculation was the relevant trigger.2 The
board instead ruled that the first payment, not the notice or
subsequent payments, was the relevant “alleged action”:
“[T]he claim processing ‘action’ that triggered the two-
year limitation period in ORS 656.319(6) occurred on
October 10, 2014 (the date of the first wage-continuation
payment), when the employer allegedly did not include
overtime when calculating claimant’s ‘same wage.’ That is
when the employer’s allegedly incorrect processing of the
wage replacement began. Because that action triggered
the running of the two-year time limitation, claimant’s
April 7, 2017, request for hearing was untimely filed and
thus time-barred.”
2
The order states, “Although we disagree with the employer’s contention
that the Notice of Wage Calculation letter tolled [sic] the two-year limitation in
ORS 656.319(6), we still conclude that claimant’s hearing request was not timely
filed.”
684 Swint v. City of Springfield
The board therefore vacated the ALJ’s order and dismissed
claimant’s request for a hearing.
Claimant seeks judicial review of that order. He
argues, as he did before the ALJ and the board, that the
“alleged action or inaction” in this case is the city’s failure
to pay the statutorily required rate—an ongoing processing
obligation that was breached within the two-year limita-
tions period. The city, as it did below, disputes that proposi-
tion. But the city now hedges, in light of the board’s order,
about exactly when the “alleged action or inaction” occurred:
“Although claimant asserts that each salary check he
received was a new separate processing action giving rise to
an independent right to request a hearing, the actual action
that claimant asserts was allegedly incorrect—calculation
of his salary at base wage—occurred either when he was
informed by the Notice of Wage Calculation letter, or when he
received his first check based on that wage rate calculation.”
(Emphasis added.)
The ambiguity in the city’s response highlights the
fundamental problem with the board’s order: It fails to artic-
ulate the connection between the facts of the case and the
result reached, leaving the city to supply an explanation.
See Walker v. Providence Health System Oregon, 254 Or App
676, 686, 298 P3d 38, rev den, 353 Or 714 (2013) (“In deter-
mining whether the board’s order is supported by substan-
tial reason, we consider whether that order articulates the
reasoning that leads from the facts found to the conclusions
drawn.” (Internal quotation marks omitted.)).
The timeliness question presented in this case is
bound up, to a significant extent, in the merits of claimant’s
allegations. On the merits, claimant contends that ORS
656.262(4)(b) creates an ongoing or recurring obligation to
pay “the same wage at the same pay interval that the worker
received at the time of injury” if the employer wants to take
advantage of that provision, whereas the city argues that
the statute contemplates only an initial wage calculation.
The closely related question under ORS 656.319(6) concerns
when the “alleged action or inaction occurs” for that type
of processing error: when the calculation is made, or when
each payment is calculated incorrectly (or made without
Cite as 305 Or App 679 (2020) 685
correcting the initial calculation)? Thus, both the merits
and timeliness turn on what particular processing obliga-
tions an employer has with regard to calculating wages for
purposes of ORS 656.262(4)(b), and when those processing
obligations must occur.3
Here, however, the board never addressed the ques-
tion of what ORS 656.262(4)(b) specifically requires with
regard to processing and, in particular, the timing and
nature of an employer’s wage calculation obligations under
that statute. Instead, the board discussed our decision in
French-Davis v. Grand Central Bowl, 186 Or App 280, 285,
62 P3d 865 (2003), and its own decisions applying ORS
656.319(6), before concluding that the limitation period was
triggered by the first payment, not the earlier notice of cal-
culation or subsequent payments. But nothing in the board’s
order, or any of the cases cited therein, logically connects the
facts of this case to the board’s conclusion.
In French-Davis, we considered what type of “inac-
tion” amounts to a “failure to process” a claim so as to trig-
ger the two-year limitation period in ORS 656.319(6). We
explained that, as used in the statute, “inaction” refers
to “what might be called (oxymoronically) affirmative
inaction”—a “failure to perform a time-specific, discrete
duty, request or obligation.” Id. at 285. We explained that,
if it were otherwise and the “inaction” referred to an ongo-
ing failure to act, then the time period would never expire.
Id.In this case, the board distinguished French-Davis
on the ground that “claimant is not alleging a failure to pro-
cess the claim, but rather is alleging that the employer pro-
cessed the claim incorrectly by not including consideration
of overtime in his ‘same wage’ calculation for wage continu-
ation purposes.” It then explained, “In other words, the issue
in this case is not an alleged failure to process, as was the
case in French-Davis, but rather concerns an alleged incor-
rect claim processing. Thus, we are required to determine
the date of the alleged ‘action’ (as opposed to ‘inaction,’ as
3
Despite being bound up with the merits, timeliness under ORS 656.319(6)
is jurisdictional and the board is required to address it before reaching the mer-
its. Hamilton v. SAIF, 275 Or App 978, 983, 365 P3d 1116 (2015).
686 Swint v. City of Springfield
was the case in French-Davis) that triggered the two-year
period under ORS 656.319(6).” 4
The board then turned to one of its own opinions,
Terrizino D. Williams, 58 Van Natta 1487, 1489 (2006), which
it described as “instructive.” In Williams, the claimant had
“alleg[ed] that the employer processed the claim incorrectly
by not including supplemental temporary disability in his
initial temporary disability payment.” Id. at 1490. The board
in that case determined that it involved “action” rather
than “inaction” as in French-Davis, and that the triggering
“ ‘action’ occurred on February 12, 2003, when the employer
allegedly did not correctly include supplemental temporary
disability in claimant’s temporary disability payment.” Id.
In its order in this case, the board relied on the
implication from Williams that each payment was not a new
processing “action”:
“Of note, temporary disability benefit payments in Williams
from February 23, 2003 through July 2, 2003, if consid-
ered individually, would have been within two years of the
request for hearing. However, our decision did not address
each payment, but, as mentioned, focused on the com-
mencement of the incorrect processing as the ‘action’ trig-
gering ORS 656.319(6).
“Applying the Williams rationale to the present case, we
do not evaluate each individual wage-continuation payment
separately as an ‘action’ under ORS 656.319(6). Rather, we
conclude that the claim processing ‘action’ that triggered
the two-year limitation in ORS 656.319(6) occurred on
October 10, 2014 (the date of the first wage-continuation
payment), when the employer allegedly did not include
overtime when calculating claimant’s ‘same wage.’ That is
when the employer’s allegedly incorrect processing of the
wage replacement began. Because that action triggered
4
The board’s characterization of claimant’s argument was incomplete.
Claimant contended that each check represented an incorrect processing “action”
in that the check, in claimant’s view, was based on an incorrectly computed wage
rate, but claimant also argued that, with each check, the city failed to act to
correct its alleged previous error. If claimant is correct in either respect—that
is, if (1) with each check, the city had a discrete obligation to correctly compute
claimant’s wage rate but did so incorrectly; or (2) with each check, the city had a
discrete processing obligation to review and correct any past errors in the wage
rate, but did not take that action—then his hearing request would be timely as to
those checks issued no more than two years before his hearing request.
Cite as 305 Or App 679 (2020) 687
the running of the two-year time limitation, claimant’s
April 7, 2017, request for hearing was untimely filed and
thus time-barred.”
(Footnotes omitted.)
Although the board’s order refers to the Williams
“rationale,” Williams itself supplies little explanation as to
why the first payment in that case involved “processing” but
later payments did not. The two-year window under ORS
656.319(6) is determined by the specific “alleged action
or inaction” in processing—a standard that necessarily
requires an assessment of the particular processing require-
ments imposed on an employer by statute and rule. In the
case of challenges to computations required in the course of
processing, the timeliness inquiry depends on (1) when the
statutes and rules require that computations be made; and
(2) what, if any, obligations are imposed to reevaluate prior
computations. Williams did not address those questions.
Although it does not appear that the claimant in Williams
sought judicial review to test whether the order in that case
was supported by substantial reason, that does not insulate
the board’s later opinions from scrutiny for substantial rea-
son. In other words, an agency’s reliance on its own prec-
edent cannot supply the required substantial reason—the
logical explanation as to how the conclusion follows from the
facts found—when that precedent itself lacks the requisite
substantial reason connecting the facts found to the legal
conclusions reached.
The reasoning in the remaining cases cited by the
board is equally sparse on that point, providing only bare
conclusions. See Randall E. Kelley, 54 Van Natta 1645, 1646
(2002) (concluding, without analysis, that “[w]e decline to
find that each individual temporary disability payment
constitutes an ‘action or inaction’ under the statute”); see
also Howard E. Benjamin, 65 Van Natta 215 (2013) (rely-
ing on Williams and concluding, in a case where no pay-
ments occurred in the two years before the claimant’s 2011
hearing request, that the request was untimely filed with
regard to the insurer’s claim processing actions in 2006 and
2007); Jesse G. Ayala, Jr., 66 Van Natta 1845, 1850 (2014)
(referring to Williams and stating that, “whether claimant’s
688 Swint v. City of Springfield
challenge is interpreted as contesting the employer’s ‘action’
of calculating his TTD benefits as TPD benefits starting
August 2010, or its ‘action’ of awarding such benefits in the
February 8, 2011 closure notice (which the employer was
obligated to pay effective February 22, 2011),” the April 2013
hearing request was untimely).
In fact, the only case cited in the board’s order that
analyzed the question of “action or inaction” in terms of spe-
cific statutory or rule requirements reached the opposite
conclusion as to whether separate payments involved dis-
crete processing obligations. See Armando Morin, 68 Van
Natta 1760, 1764 (2016) (explaining that “OAR 436-060-0150
(5)(h) and (6) establish specific time frames for the payment
of temporary disability benefits generally, and following an
ALJ’s order. Those time-specific obligations fell on multiple
dates. Therefore, we evaluate each obligation separately in
determining which of the multiple issues raised by claim-
ant’s hearing request are timely and may be addressed.”).
Here, the board did not engage with the reasoning in that
case—which appears to have approached the question cor-
rectly, determining first what processing obligations the
employer had and the timing of those obligations. Instead,
the board distinguished Morin solely on the ground that it
“involved a failure to process, as opposed to incorrect claim
processing”—a conclusion that fails to account for the fact
that claimant also alleged that the city had a discrete pro-
cessing obligation to review and correct any past errors in
the wage rate, but did not take that action. See 305 Or App
at 686 n 4.
On the facts of this case, the lack of reasoning with
regard to when the calculation of a wage is, or is not, an
action that is part of the processing of a payment made
pursuant to ORS 656.262(4)(b) is especially pronounced,
because the city provided a notice of calculation before the
first payment, relied on that as a claim-processing action
that required a response from claimant if he disagreed, and
had never argued that the initial payment following the
notice of calculation constituted the claim-processing action.
Beyond that, on the face of it, the record in this case sup-
plies no basis to conclude that the city’s first check to the
claimant involved a processing action or inaction that each
Cite as 305 Or App 679 (2020) 689
subsequent check did not also involve. The board’s order
fails to adequately explain why the first payment nonethe-
less involved a claim-processing action related to the city’s
obligation under ORS 656.262(4)(b) but each subsequent
payment did not. We therefore reverse and remand the order
for reconsideration.
Reversed and remanded.