In the Matter of the Compensation of Susan Caren, Claimant.
PROVIDENCE HEALTH SYSTEM OREGON, Respondent on Review. Susan CAREN, Petitioner on Review,
and submitted September 11, 2018.
review from the Court of Appeals (WCB 1405147) (CA A160470).
Bartolomeo, Di Bartolomeo Law Office PC, Astoria, argued the
cause and filed the briefs for petitioner on review.
Langer, Lyons Lederer LLP, Salem, argued the cause and filed
the brief for respondent on review.
Walters, Chief Justice, and Balmer, Nakamoto, Flynn, Duncan,
Nelson, and Garrett, Justices. [**]
Or. 467] Case Summary: Claimant injured her back at work and
employer accepted a "lumbar strain." She also had
preexisting arthritis in her back, which doctors estimated
caused part of her overall impairment. In awarding permanent
partial disability, the Worker's Compensation Board
agreed that the department had correctly reduced
claimant's award to factor out the impairment related to
her preexisting arthritis. Claimant disagreed, arguing that,
under the permanent partial disability statute, ORS 656.214,
her entire impairment was "due to" her work injury,
and thus the entire impairment should have been rated for her
permanent partial disability award, not just the part related
directly to her work injury. Additionally, claimant contended
that the employer could only reduce that award to factor out
her preexisting arthritis, as it had done, if it were to deny
a "combined condition" and close the claim under
ORS 656.268(1)(b). Held: The legislature intended
that workers be compensated for their entire impairment if
that impairment is due in material part to the compensable
injury, except where the employer has issued a denial of a
"combined condition" and utilized the closure
process set out in ORS 656.268(1)(b).
decision of the Court of Appeals is reversed, and the
decision of the Workers' Compensation Board is reversed
Or. 468] FLYNN, J.
dispute in this workers' compensation case arises from
the intersection of overlapping statutory provisions that
control the determination of a worker's permanent partial
disability. ORS 656.214 obligates employers to provide
compensation for a worker's permanent impairment, meaning
"loss of use or function" that is "due to the
compensable industrial injury." ORS 656.214(1)(a). But
another statute limits the employer's liability when the
compensable injury combines with a qualifying
"preexisting condition" to "cause or
prolong" the injured worker's' disability or
need for medical treatment, unless the compensable injury is
the "major contributing cause" of the
"combined condition." ORS 656.005(7)(a)(B). As part of
that liability limit, the legislature has created a process
by which the employer issues a denial of the "combined
condition" and then pays permanent partial disability
compensation only for the estimated portion of the
worker's permanent impairment that is attributable to the
"current accepted condition." ORS 656.268 (1)(b).
The question we must resolve is whether the legislature
intended that an employer would obtain the same limited
liability when the employer has not followed the process that
the legislature has created for estimating a reduced amount
of permanent impairment following the denial of a
"combined condition." We conclude that the
legislature intended that injured workers would be fully
compensated for new impairment if it is due in material part
to the compensable injury, except where an employer has made
use of the statutory process for reducing liability after
issuing a combined condition denial.
Overview of the Workers' Compensation Claims
begin with an overview of key terminology and the basic
workers' compensation claim process before [365 Or. 469]
explaining the procedural history of this particular case.
"A 'compensable injury' is an accidental injury
* * * arising out of and in the course of employment
requiring medical services or resulting in disability or
death[.]" ORS 656.005(7)(a). Traditionally, an injury
"arises out of a worker's employment "'if
the labor being performed in the employment is a material,
contributing cause which leads to the unfortunate
result.'" Schleiss v. SAIF, 354 Or. 637,
643-44, 317 P.3d 244 (2013) (quoting Olson v. State Ind.
Ace. Com., 222 Or. 407, 414-15, 352 P.2d 1096 (1960));
see also Hopkins v. SAIF, 349 Or. 348, 351, 245 P.3d
90 (2010) (describing a "compensable injury" as
proven by a "material contributing cause"
standard). When an injury is compensable, the worker may be
entitled to a variety of benefits through the period of
recovery, including "medical services for conditions
caused in material part by the injury," temporary
disability compensation for lost wages, and permanent partial
disability compensation. ORS 656.245; ORS 656.210; ORS
rule for compensation is different when the worker has a
"combined condition," which arises when an
"otherwise compensable injury combines *** with a
preexisting condition to cause or prolong disability or a
need for treatment." ORS 656.005(7)(a)(B). If the worker has
a combined condition, it "is compensable only if, so
long as and to the extent that the otherwise compensable
injury is the major contributing cause of the disability of
the combined condition or the major contributing cause of the
need for treatment of the combined condition."
Id. However, only certain preexisting causes qualify
as a "preexisting condition" that can form a
"combined condition"-generally only conditions
diagnosed prior to the injury or "arthritis." ORS
Or. 470] If the worker has a "combined condition,"
then the claim may be closed when the "accepted injury
is no longer the major contributing cause of the worker's
combined *** condition." ORS 656.268(1)(b). But,
"before the claim may be closed" on that basis, the
employer must send the worker a written notice denying the
combined condition. ORS 656.262(7)(b).
employer closes a worker's claim, the employer
"shall issue *** an updated notice of acceptance that
specifies which conditions are compensable." ORS
656.262(7)(c). Also at the time of closure, the employer
calculates and pays permanent partial disability. ORS
656.214.In general, "permanent partial
disability" means "[permanent impairment resulting
from the compensable industrial injury," where
"impairment" is "the loss of use or function
of a body part or system due to the compensable industrial
injury." ORS 656.214(1)(a), (c)(A). Permanent impairment
is measured according to standards adopted by the Director of
the Department of Consumer and Business Services and is
"expressed as a percentage of the whole person."
ORS 656.214(1)(a); ORS 656.726(4)(f). However, if the claim
has been closed "because the accepted injury is no
longer the major contributing cause of the worker's
combined or consequential condition or conditions," then
permanent partial disability compensation is based on an
estimate of "the likely permanent disability that would
have been due to the current accepted condition." ORS
Procedural History of this Case
calculation of permanent partial disability in the notice of
claim closure is the source of the dispute that arose in this
case. Claimant injured her back at work, and employer issued
a notice of acceptance listing the accepted condition as a
"lumbar strain." A few months later, claimant
underwent surgery to address a lumbar disc herniation, but
she continued to experience back pain and [365 Or. 471]
enrolled in and completed a comprehensive pain management
program. At discharge from that program, a staff physician
measured diminished lumbar range of motion but also noted
preexisting arthritis in the lumbar spine, which the
evaluator estimated contributed to 50 percent of the
impairment in claimant's spine. However, claimant did not
request that employer accept a "combined
condition," and employer did not accept or deny a
claimant's attending physician released her to return to
regular work, the physician concurred with the earlier
evaluator that preexisting arthritis contributed to an
estimated 50 percent of claimant's lumbar impairment.
Based on that report, employer issued a notice of closure in
which it calculated claimant's permanent partial
disability as 50 percent of her impairment from reduced range
of motion. On reconsideration, the department's medical
arbiters estimated that claimant's arthritis was actually
responsible for 70 percent of her current impairment, and the
Order on Reconsideration reduced her permanent partial
disability compensation accordingly.
review of that decision, the administrative law judge and the
Workers' Compensation Board agreed that the department
had correctly reduced claimant's disability to factor out
the estimated contribution from her preexisting arthritis.
The board reasoned: "[I]t is undisputed that
claimant's permanent impairment is due in part to
'arthritis' (i.e., a legally cognizable
'preexisting condition') and in part to her accepted
lumbar strain. Accordingly, claimant's impairment was
appropriately apportioned." The Court of Appeals
affirmed in a per curiam opinion, citing to an earlier
decision in which it had held that, if the worker has a
"legally cognizable" preexisting condition (such as
claimant's arthritis), then "impairment due to the
compensable industrial injury" is calculated by
factoring out the estimated contribution from the preexisting
condition, "unless [the preexisting condition] is part
of an accepted combined condition claim that remains
compensable at the time of closure." McDermott v.
SAIF, 286 Or.App. 406, 420, 422, 398 P.3d 964 (2017).
Or. 472] Claimant argues that the Court of Appeals has
misconstrued the meaning of loss "due to the compensable
industrial injury," on which permanent partial
disability is based. According to claimant, the legislature
intended ORS 656.268(1)(b) to provide an exception to a
general rule that the employer is obligated to pay
compensation for the full measure of the worker's
disability if the disability as a whole is caused in material
part by the compensable injury, and the legislature intended
that employers would obtain the benefit of that exception
only by following the specified process. In other words, the
dispute turns on whether the legislature intended that
permanent partial disability for workers with a preexisting
condition will be calculated automatically under the method
described in ORS 656.268 (1)(b)-absent an "accepted
combined condition"-or whether the legislature intended
that permanent partial disability will be calculated under
the method described in ORS 656.268(1)(b) only when the
employer has issued a denial of a "combined
condition" and closed the claim under the process
specified in ORS 656.268(1)(b). We allowed review to resolve
that question of statutory construction.
all questions of statutory construction, our goal is to
determine the intention of the legislature when it enacted
the relevant statutes. See State v. Gaines, 346 Or.
160, 171, 206 P.3d 1042 (2009). We have explained that the
words adopted by the legislature provide the best evidence of
what the legislature intended, although we also give
appropriate weight to any pertinent legislative history.
Id. at 171-72. We examine the "workers'
compensation statutes as a whole" and our "prior
judicial interpretations" of those statutes to determine
whether the legislature intended that the estimated
contribution from a preexisting condition would be factored
out of a workers' permanent impairment only when an
employer follows the process specified in ORS 656.268(1)(b)
for accomplishing that result. See Brown v. SAIF,
361 Or. 241, 283, 391 P.3d 773 (2017) (explaining that
process for construing a different provision of chapter 656).
understand whether the legislature intended the process for
denying and closing a "combined condition" to [365
Or. 473] be the only process through which an employer's
liability for permanent impairment will be reduced to account
for a preexisting condition, we first explain the
longstanding method for calculating permanent partial
disability under ORS 656.214, to which the legislature added
the process for identifying, accepting, and denying
"combined conditions." We then explain that
"combined condition" process and our prior
construction of the process in Schleiss, 354 Or.
637. Finally, we explain why the process proposed by employer
allows a denial of compensation through a process that is
inconsistent with the notice requirements that the
legislature has otherwise specified in the workers'
compensation laws. From those considerations, we conclude
that the legislature intended the combined condition process
to create an exception to the general rule that employers pay
compensation for the full measure of the workers'
permanent impairment if the impairment as a whole is caused
in material part by the compensable injury, and we conclude
that the legislature intended that employers would obtain the
benefit of that exception only by issuing a denial of a
"combined condition" and following the process that
the legislature has specifically provided in ORS
656.268(1)(b) for reducing the worker's permanent partial
Text and Prior Construction of ORS 656.214
explained above, permanent partial disability means
"[p]ermanent impairment resulting from the compensable
industrial injury," and "impairment" is the
loss of use or function "due to" the compensable
injury. ORS 656.214 (1)(a). The pertinent portions of that
"(1) As used in this section:
"(a) 'Impairment' means the loss of use or
function of a body part or system due to the compensable
industrial injury or occupational disease determined in
accordance [365 Or. 474] with the standards provided under
ORS 656.726 expressed as a percentage of the whole person.
"(b) 'Loss' includes permanent and complete or
partial loss of use.
"(c) 'Permanent partial disability' means:
"(A) Permanent impairment resulting from the compensable
industrial injury or occupational disease; or
"(B) Permanent impairment and work disability resulting
from the compensable industrial injury or ...