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In re Compensation of Snyder

Court of Appeals of Oregon

August 23, 2017

In the Matter of the Compensation of Brian Snyder, Claimant.
v.
SAIF CORPORATION and Morrow County, Respondents. Brian SNYDER, Petitioner,

          Argued and submitted March 3, 2016

         Workers' Compensation Board 1304318

          Dale C. Johnson argued the cause and fled the brief for petitioner.

          Julie Masters argued the cause and fled the brief for respondents.

          Before Ortega, Presiding Judge, and Lagesen, Judge, and Garrett, Judge.

         Case Summary: Claimant petitions for review of a final order of the Workers' Compensation Board under ORS 656.298(1). The issue is whether claimant is entitled to a penalty and attorney fees under ORS 656.262(11) on the ground that SAIF Corporation unreasonably delayed to pay compensation when it initially closed claimant's claim for the accepted condition of central cord syndrome without an award of impairment. SAIF did so even though claimant had undergone a spinal surgery that, under the applicable administrative rules, resulted in impairment as a matter of law-an error that SAIF later corrected. The board concluded that claimant was not entitled to the requested penalty and fees because, at the time that SAIF initially closed the claim, the information before SAIF gave rise to a "legitimate doubt" regarding its liability for permanent impairment for the central cord syndrome. Held: Based on the evidence in the record about the medical evidence that SAIF could permissibly consider at the time that it closed the claim, and the procedural information known to SAIF at the time of closure, a reasonable person could find that SAIF had a legitimate doubt that the spinal surgery was for the accepted central cord syndrome and, thus, a legitimate doubt as to whether it was liable for impairment for that surgery under the applicable administrative rules.

         Affirmed.

         [287 Or. 362] LAGESEN, J.

         Claimant petitions for review of a final order of the Workers' Compensation Board. ORS 656.298(1). The issue before us is whether claimant is entitled to a penalty and attorney fees under ORS 656.262(11) on the ground that SAIF Corporation "unreasonably delay[ed] *** to pay compensation" when it initially closed claimant's claim for the accepted condition of central cord syndrome without an award of impairment. SAIF did so even though claimant had undergone a spinal surgery that, under the applicable administrative rules, resulted in impairment as a matter of law-an error that SAIF later corrected. The board concluded that claimant was not entitled to the requested penalty and fees because, at the time that SAIF initially closed the claim, the information before SAIF gave rise to a "legitimate doubt regarding its liability for permanent impairment for the cervical cord syndrome." See Hamilton v. Pacific Skyline. Inc., 266 Or.App. 676, 680-81, 338 P.3d 791 (2014) (explaining that an insurer's delay in payment is not unreasonable if, in view of the information available to the insurer, the insurer had a legitimate doubt about its liability). On review to determine whether the board applied the correct legal standard and, if so, whether substantial evidence supports the board's finding that SAIF had a legitimate doubt about its liability, Brown v. Argonaut Insurance Company, 93 Or.App. 588, 591, 763 P.2d 408 (1988), we affirm.

         Claimant does not assign error to the board's findings of historical fact. We therefore draw our statement of the facts from the board's order and, to the extent that the board adopted the factual findings of the administrative law judge (ALJ) who initially heard this matter, from the ALJ's order. McDowell v. Employment Dept, 348 Or. 605, 608, 236 P.3d 722 (2010).

         Claimant injured his right knee at work. SAIF thereafter accepted claimant's workers' compensation claim for workers' compensation benefits for a right knee sprain. Claimant's knee injury required surgery, and that surgery caused claimant to suffer new conditions: bradycardia, hypoxemia, and central cord syndrome. Claimant had [287 Or. 363] cervical surgery for that central cord syndrome shortly after his knee surgery. SAIF later issued an amended notice of acceptance accepting the bradycardia and hypoxemia; SAIF initially denied the claim as to central cord syndrome. An ALJ overturned SAIF's denial, concluding that the central cord syndrome was a compensable consequential condition of claimant's workplace injury. Consistent with the ALJ's ruling, SAIF amended its notice of acceptance to include central cord syndrome.

         After accepting the central cord syndrome, SAIF, which had closed claimant's claim with respect to the other accepted conditions, then had claimant evaluated by two medical examiners, Drs. Dordevich and Bald, to obtain closing information about that condition. Those doctors prepared a report in which they opined that, as to the central cord syndrome, claimant was medically stationary without impairment. Claimant's attending physician, Dr. Earl, signed a concurrence letter, stating that he concurred with Dordevich and Bald that the central cord syndrome was medically stationary and that claimant had no impairment with respect to the central cord syndrome. SAIF then reclosed the claim. In so doing, it awarded no additional impairment in connection with the central cord syndrome.[1]

         Claimant sought reconsideration with the Appellate Review Unit (ARU) and, in support of that request, submitted a letter in which Earl indicated that he would not have concurred in the examiners' findings of no impairment if he had known that the applicable administrative rules required that an impairment value be assigned to claimant's central cord syndrome because claimant had undergone spinal surgery for that condition. Noting Earl's change of opinion, the ARU concluded that there was insufficient information to close the claim and issued an Order on Reconsideration directing that SAIF's notice of closure be rescinded. SAIF later reclosed the claim, this time awarding impairment in connection with the accepted central cord syndrome based on the fact that claimant had spinal surgery for the accepted central cord syndrome and OAR 436-035-0350(2), which [287 Or. 364] required the assignment of an impairment value for claimant's spinal surgery.

         Once SAIF reclosed the claim, claimant requested a hearing on entitlement to a penalty and attorney fees under ORS 656.262(11), among other things. Claimant contended that, by initially closing his claim without awarding impairment based on his spinal surgery, SAIF unreasonably delayed paying compensation within the meaning of ORS 656.262 (ll)(a). The ALJ concluded that claimant was entitled to the requested penalty and fees under ORS 656.262(11). SAIF appealed to the board, arguing that (1) claimant was seeking the requested penalty and fees in a procedurally improper manner and (2) ORS 656.268 provides the exclusive ...


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