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In re Compensation of Arevalo

Court of Appeals of Oregon

March 13, 2019

In the Matter of the Compensation of Rodolfo Arevalo, Claimant.
v.
Rodolfo AREVALO, Respondent. TRAVELERS INSURANCE COMPANY and Baker Industrial Services, Petitioners,

          Argued and submitted October 5, 2017.

          Workers' Compensation Board 1500901

          Benjamin C. Debney argued the cause and fled the briefs for petitioners.

          Zachary W. Brunot argued the cause and fled the brief for respondent.

          Theodore P. Heus and Preston Bunnell, LLP, fled the brief amicus curiae for Oregon Trial Lawyers Association.

          Before Ortega, Presiding Judge, and Egan, Chief Judge, and Powers, Judge. [*]

         [296 Or. App 515] Case Summary:

         Employer Baker Industrial Services and its workers' compensation insurance carrier, Travelers Insurance Company, seek judicial review of an order of the Workers' Compensation Board awarding claimant attorney fees and a 25 percent penalty under ORS 656.262(11)(a) for unreasonable claim processing. On review, Travelers assigns error to the board's award of attorney fees under ORS 656.383(2) and ORS 656.382(3), arguing that the effective date of those statutes precludes the board from awarding fees. Travelers also assigns error to the board's assessment of a 25 percent penalty and related attorney fees under ORS 656.262(11)(a) for unreasonable claim processing, arguing that the record supports the conclusion that Travelers had a legitimate doubt as to the proper method to calculate claimant's temporary total disability rate, such that its claim processing was not unreasonable. Held: The board did not err in awarding fees under ORS 656.383(2) and ORS 656.382(3) or in assessing a penalty and related attorney fees under ORS 656.262(11)(a).

         [296 Or. App 516] POWERS, J.

         Employer Baker Industrial Services (Baker) and its workers' compensation insurance carrier, Travelers Insurance Company (Travelers), seek judicial review of an order of the Workers' Compensation Board (the board) awarding claimant attorney fees and a 25 percent penalty under ORS 656.262 (11)(a) for unreasonable claim processing. On review, Travelers assigns error to the board's award of attorney fees under ORS 656.383(2) and ORS 656.382(3)[1] arguing that the effective date of those statutes precludes the board from awarding the fees. Travelers also assigns error to the board's assessment of a 25 percent penalty and related attorney fees under ORS 656.262 (11)(a) for unreasonable claim processing, arguing that the record in this case supports the conclusion that Travelers had a legitimate doubt as to the proper method to calculate claimant's temporary total disability (TTD) rate, such that its claim processing was not unreasonable. As explained below, we conclude that the board did not err in awarding attorney fees or in assessing a penalty and related attorney fees and therefore affirm.

         Beginning in 2010, claimant worked periodically for Baker, working 12-hour days. Claimant testified that, between 2010 and 2013, he completed approximately four or five projects for Baker per year and that, after each job, there was no agreement with Baker that claimant would return. In December 2013, claimant began permanent [296 Or. App 517] employment with All-Ways Excavation (AWE). Claimant reported to Baker that he was taking the AWE job and that he would no longer be available for future jobs with Baker; however, in January 2014, Baker offered claimant a week-long job at a mill in Toledo, Oregon. Claimant testified that he received permission from AWE to take one week off so that he could work the Toledo job, for which he expected to be paid a higher wage by working overtime.

         The board found that, based on claimant's testimony and Baker's office manager's testimony, claimant's work for Baker was temporary, as needed, and that there was no agreement between Baker and claimant about future work. The board found that claimant, Baker, and AWE understood that claimant's Toledo job for Baker would last only one week, after which claimant would return to his job with AWE. Claimant injured his left arm during the one-week period while working for Baker. In calculating claimant's TTD rate under OAR 436-060-0025(5), Travelers averaged claimant's 52 weeks of earnings preceding the work injury. Claimant challenged the calculation of the TTD rate, as well as the duration of benefits, and requested a hearing.

         An administrative law judge (AL J) awarded claimant TTD benefits for a portion of the additional period that claimant sought and concluded that Travelers had been unreasonable in its failure to pay that compensation. For that processing error, the ALJ assessed a penalty under ORS 656.262 (ll)(a) and attorney fees. However, the ALJ determined that Travelers had properly calculated claimant's TTD rate based on claimant's average weekly earnings with Baker for the 52 weeks prior to the date of injury. Claimant appealed the ALJ's order to the board, continuing to contend that the rate of TTD was incorrect and to seek benefits for an additional period of disability. Travelers also appealed, challenging the award of penalties and attorney fees.

         The board declined to extend claimant's benefits for an additional period of disability, but upheld the ALJ's assessment of a penalty and award of attorney fees. The board also agreed with claimant that Travelers had miscalculated claimant's TTD rate. Finding that claimant's employment [296 Or. App 518] with Baker was not continuous, but terminated after each period of work, the board concluded that, under OAR 436-060-0025(5)(a)(A) (2014), [2] claimant's wage rate for purposes of TTD must be based on claimant's wage agreement with Baker during the most recent period of employment-that is, the one-week ...


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