Nava v. SAIF

196 June 12, 2024 No. 398

IN THE COURT OF APPEALS OF THE

STATE OF OREGON

In the Matter of the Compensation of Luis F. Nava,

Claimant.

LUIS F. NAVA,

Petitioner,

v.

SAIF CORPORATION

and Portland Window Co Inc.,

Respondents.

Workers’ Compensation Board

1904777; A178706

Argued and submitted January 10, 2024.

James S. Coon argued the case for petitioner. Also on the

briefs was Thomas, Coon, Newton & Frost.

Michelle L. Shaffer argued the cause and filed the brief

for respondents.

Theodore P. Heus and Quinn & Heus, LLC, filed the brief

amicus curiae for Oregon Trial Lawyers Association.

Before Aoyagi, Presiding Judge, Joyce, Judge, and

Jacquot, Judge.

AOYAGI, P. J.

Affirmed.

Cite as 333 Or App 196 (2024) 197

198 Nava v. SAIF

AOYAGI, P. J.

Claimant seeks judicial review of a Workers’

Compensation Board order denying a penalty and attorney

fee under ORS 656.262(11)(a). ORS 656.262(11)(a) requires an

insurer to pay a penalty and attorney fee if, as relevant here,

the insurer unreasonably delayed compensation. In this case,

claimant argued that SAIF unreasonably delayed compensa-

tion for his meniscus tear, when it failed to modify its notice of

acceptance upon receipt of an independent medical examina-

tion (IME) report that clearly identified the meniscus tear as

caused by his work injury, instead waiting until claimant filed

an omitted condition claim. The board agreed with claimant

that SAIF was obligated to modify its notice of acceptance

upon receipt of the IME report, under ORS 656.262(6)(b)(F),

which provides, “The notice of acceptance shall * * * [b]e modi-

fied by the insurer or self-insured employer from time to time

as medical or other information changes a previously issued

notice of acceptance.” The board concluded that SAIF had

a legitimate doubt as to the existence of such an obligation,

however, such that SAIF did not act unreasonably, and there-

fore denied a penalty and attorney fee.

On judicial review, claimant challenges the board’s

penalty-and-fee ruling, arguing that SAIF did not have a

legitimate doubt as to its obligation and that the board should

have awarded a penalty and attorney fee. Claimant’s posi-

tion is supported by the Oregon Trial Lawyers Association

as amicus curiae. In response, SAIF defends the board’s deci-

sion to deny a penalty and attorney fee but disagrees with the

board’s construction of ORS 656.262(6)(b)(F). As described

below, we agree both with the board’s construction of ORS

656.262(6)(b)(F) and with the board’s ultimate decision

not to award a penalty and fee under ORS 656.262(11)(a).

Accordingly, we affirm.

FACTS

The relevant facts are undisputed. In March 2017,

claimant fell at work, injuring his knee, and filed a workers’

compensation claim. A week later, claimant’s attending phy-

sician, Dr. Reichle, diagnosed claimant as having a left knee

sprain, left knee contusion, chest wall contusion, and left

Cite as 333 Or App 196 (2024) 199

knee lateral meniscus tear. He recommended that claimant

consult a surgeon about the meniscus tear.

In late March 2017, SAIF accepted claimant’s left

knee sprain and chest wall contusion as disabling compen-

sable injuries. The notice of acceptance did not mention

claimant’s meniscus tear.

In May 2017, claimant saw a surgeon regarding

his meniscus tear. The surgeon recommend surgery. In late

July 2017, claimant underwent a meniscectomy for what

was described in the surgical report as “a complex, degener-

ative lateral meniscus tear.” SAIF paid for the surgery.

In November 2017, claimant was deemed medi-

cally stationary by his attending physician. SAIF closed the

claim in December 2017, without any award of permanent

disability. The accepted conditions were listed as left knee

strain and chest contusion. Again, no mention was made of

the meniscus tear.

In March 2018, claimant filed an aggravation claim

regarding his left knee. That led to Dr. Staver performing an

IME at SAIF’s request. Staver diagnosed a traumatic injury

with “initial MRI evidence of a lateral meniscus tear.” When

SAIF asked whether the July 2017 surgical report indi-

cated an acute or degenerative tear, Staver responded that,

although the term “degenerative” had been used to describe

the tear, “the correlation of the injury, [claimant’s] physical

findings and the MRI findings definitely indicate this lat-

eral meniscal tear was directly related to the injury of March

13, 2017.” (Emphases added.) Staver acknowledged that he

did not have “a film of the intra-articular findings” and had

“only the surgeon’s description to go on.” He continued, “[H]

owever, again, in reviewing the entire medical record, it

is my opinion that the relationship of the tear, as noted, is

compatible with the nature of the injury, the patient’s com-

plaints that were specifically related to the lateral joint line

of the left knee.” Staver further opined that the recent wors-

ening related to the initial injury, noting that degenerative

changes often occur following a meniscectomy, and that

claimant’s work injury continued to represent a material

contributing cause of his need for treatment.

200 Nava v. SAIF

SAIF received the IME report in May 2018. In

claimant’s view, at that point, SAIF was obligated to modify

its acceptance notice to add the meniscus tear as a compen-

sable condition. SAIF did not do so. Instead, in October 2018,

SAIF denied claimant’s aggravation claim on the ground

that the accepted knee condition—a knee sprain—had not

worsened.

Claimant, who had not previously been represented

by an attorney, obtained counsel. On April 4, 2019, claim-

ant’s attorney filed an omitted condition claim for a left

knee lateral meniscus tear. Without conducting any further

investigation, SAIF accepted the claim on April 23, 2019.

SAIF then issued an updated notice of acceptance at clo-

sure, adding the meniscus tear as an accepted condition

and awarding permanent disability benefits for that condi-

tion. The amount of permanent disability benefits was later

increased after an arbiter examination.

Claimant requested a hearing before an admin-

istrative law judge (ALJ) to determine whether SAIF had

unreasonably delayed compensation, such that a penalty

and attorney fee should be awarded under ORS 656.262(11)

(a). Claimant argued that, under ORS 656.262(6)(b)(F),

SAIF was obligated to modify its notice of acceptance upon

receipt of the IME report and, as a consequence of failing

to do so, unreasonably delayed paying permanent partial

disability compensation. Relying on existing board case law,

the ALJ rejected that construction of ORS 656.262(6)(b)(F)

and did not award a penalty and fee under ORS 656.262(11)

(a).

The board unanimously affirmed the ALJ’s deci-

sion not to award a penalty and fee under ORS 656.262(11)

(a), but it split 3-2 on the statutory construction issue. The

majority agreed with claimant that, under ORS 656.262(6)

(b)(F), SAIF had been required to modify its acceptance

notice “upon receipt of unrebutted medical evidence estab-

lishing compensability of a condition after the initial accep-

tance,” even though claimant had not filed a new or omit-

ted condition claim. Two board members disagreed with

that construction of ORS 656.262(6)(b)(F) and indicated

that they would follow the reasoning articulated in Ernest

Cite as 333 Or App 196 (2024) 201

R. Lyons, 69 Van Natta 688, 694 (2017), and require claim-

ants to request acceptance of a new or omitted condition. All

five board members agreed, however, that SAIF should not

be required to pay a penalty and attorney fee in this case,

regardless of which construction was correct. The majority

reasoned that SAIF had not acted unreasonably, because,

given the state of the law, SAIF had a legitimate doubt as

to whether ORS 656.262(6)(b)(F) required it to modify its

acceptance notice upon receipt of the IME report. The con-

curring board members reasoned that SAIF had timely

modified its acceptance notice after claimant filed an omit-

ted condition claim, which was all that it was required to do.

Claimant seeks judicial review, challenging the

board’s decision not to award a penalty and attorney fee

under ORS 656.262(11)(a).

ANALYSIS

To determine whether the board erred by denying a

penalty and attorney fee under ORS 656.262(11)(a), we must

first address whether ORS 656.262(6)(b)(F) required SAIF

to modify its acceptance notice upon receipt of the IME

report. That presents a question of statutory construction,

which is a question of law that we review for legal error. See

SAIF v. Ramos, 252 Or App 361, 374, 287 P3d 1220 (2012)

(so reviewing). We follow our usual method of statutory con-

struction. Walker v. Providence Health System Oregon, 254

Or App 676, 683, 298 P3d 38, rev den, 353 Or 714 (2013).

Seeking to discern the legislative intent, we consider the

statutory text in context and any useful legislative history.

State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009).

ORS 656.262 is a lengthy statute that addresses

various aspects of claims processing and payment of com-

pensation on workers’ compensation claims. This case con-

cerns subparagraph (6)(b)(F), which provides,

“The notice of acceptance shall * * * [b]e modified by

the insurer or self-insured employer from time to time as

medical or other information changes a previously issued

notice of acceptance.”

The parties generally agree that because that provision uses

“shall,” it imposes some mandatory duty on insurers and

202 Nava v. SAIF

that, fundamentally, the action that the statute requires

insurers to take is modifying notices of acceptance. They

disagree about what kind of modifications the provision

requires insurers to make and what triggers that duty.

Claimant contends—and the board majority

agreed—that ORS 656.262(6)(b)(F) requires an insurer to

modify its notice of acceptance to accept new or omitted

conditions “upon receipt of unrebutted medical evidence

establishing compensability of a condition after the initial

acceptance.” Claimant argues that, in this case, the IME

report triggered that duty, requiring SAIF to modify its

notice of acceptance to add the meniscus tear as a compen-

sable condition. SAIF disagrees. SAIF argues—and the con-

curring board members agreed—that ORS 656.262(6)(b)(F)

imposes no such obligation and that the legislature intended

to make claimants, not insurers, responsible for identifying

and requesting acceptance of new and omitted conditions.

In SAIF’s view, ORS 656.262(6)(b)(F) merely reiterates the

obligation of insurers to update acceptance notices at vari-

ous points in time as required by other statutes and rules.

We begin with the text. On its face, ORS 656.262(6)

(b)(F) requires (“shall”) an insurer to modify a notice of accep-

tance “from time to time as medical or other information

changes a previously issued notice of acceptance.” We under-

stand “from time to time” to mean occasionally. See Florey

v. Meeker, 194 Or 257, 286, 240 P2d 1177 (1952) (interpret-

ing “from time to time” in a will to mean “ ‘[a]s occasion may

arise; at intervals; now and then; occasionally’ ” (quoting 37

CJS 1384 (1943))). The text also identifies the occasion for the

action—when “medical or other information changes a previ-

ously issued notice of acceptance.” ORS 656.262(6)(b)(F).

SAIF argues that, by its nature, “the phrase ‘from

time to time’ is not restrictive as to any particular period,”

Florey, 194 Or at 287, and is therefore too vague to be read as

imposing on insurers any particular obligation to modify a

notice of acceptance. We disagree. The will at issue in Florey

used the phrase “from time to time” without relation to any

triggering event, such that it was reasonably understood in

context to mean “at any time.” Id. at 286-87. By contrast, the

legislature specified the event that triggers the obligation

Cite as 333 Or App 196 (2024) 203

in ORS 656.262(6)(b)(F): “as medical or other information

changes a previously issued notice of acceptance.” Although

that language admittedly is not a model of clarity, it is clear

enough to establish that the legislature intended the receipt

of “medical or other information [that] changes a previously

issued notice of acceptance” to be the triggering event for an

insurer’s obligation to modify a notice of acceptance.

We next consider context. As SAIF, the ALJ, and the

concurring board members have emphasized, three other

provisions of the workers’ compensation statutes, includ-

ing two other paragraphs of ORS 656.262, put the onus on

claimants to alert the insurer to new or omitted medical

conditions.

ORS 656.262(6)(d) requires claimants to notify

insurers in writing if they believe that a condition has

been incorrectly omitted from the notice of acceptance, and

it prohibits claimants who have not done so from alleging

the de facto denial of the omitted condition in a subsequent

claim hearing:

“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 work-

er’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. A worker

who fails to comply with the communication requirements

of this paragraph or ORS 656.267 may not allege at any

hearing or other proceeding on the claim a de facto denial of

a condition based on information in the notice of acceptance

from the insurer or self-insured employer. Notwithstanding

any other provision of this chapter, the worker may initiate

objection to the notice of acceptance at any time.”

The procedure for a claimant to notify the insurer of an

omitted condition, or a new condition, is provided in ORS

656.267(1), which states:

“To initiate omitted medical condition claims under

ORS 656.262(6)(d) or new medical condition claims under

this section, the worker must clearly request formal writ-

ten acceptance of a new medical condition or an omitted

204 Nava v. SAIF

medical condition from the insurer or self-insured employer.

A claim for a new medical condition or an omitted condi-

tion is not made by the receipt of medical billings, nor by

requests for authorization to provide medical services for

the new or omitted condition, nor by actually providing

such medical services. * * * Notwithstanding any other pro-

vision of this chapter, the worker may initiate a new medi-

cal or omitted condition claim at any time.”

Finally, ORS 656.262(7)(a) reiterates that a claimant who

has not given the notice required by ORS 656.262(6)(d) and

ORS 656.267(1) may not allege the de facto denial of a new

or omitted condition in a subsequent claim hearing:

“After claim acceptance, written notice of acceptance or

denial of claims for aggravation or new medical or omit-

ted condition claims properly initiated pursuant to ORS

656.267 shall be furnished to the claimant by the insurer

or self-insured employer within 60 days after the insurer

or self-insured employer receives written notice of such

claims. A worker who fails to comply with the communica-

tion requirements of subsection (6) of this section or ORS

656.267 may not allege at any hearing or other proceeding

on the claim a de facto denial of a condition based on infor-

mation in the notice of acceptance from the insurer or self-

insured employer.”

Based on those statutory provisions, SAIF argues

that the legislature intended claimants, not insurers, to be

responsible for identifying new and omitted conditions and

did not intend insurers to have any obligation regarding

new or omitted conditions until and unless a claimant gives

written notice. The concurring board members agree with

SAIF, and, in fact, not very long ago, the board itself agreed.

In 2017, the board stated in Lyons, 69 Van Natta at 694,

that “ORS 656.262(6)(b)(F) neither provides an independent

means for the resolution of claim processing issues arising

from an insurer’s acceptance nor transcends the statutory

process mandated by ORS 656.262(6)(d) and ORS 656.267(1)

for a claimant to object to a Notice of Acceptance and seek

acceptance of an allegedly omitted medical condition.”

In SAIF’s view, various provisions of the work-

ers’ compensation statutes require insurers to respond to

claims, requests, and objections received from claimants.

Cite as 333 Or App 196 (2024) 205

For example, as just described, when a claimant gives writ-

ten notice of an omitted condition, ORS 656.262(6)(d) gives

the insurer 60 days “to revise the notice or to make other

written clarification in response,” and ORS 656.262(7)(a)

reiterates that 60-day deadline. Another example is ORS

656.277(1)(a), which gives an insurer 14 days to respond to

a claimant’s request to reclassify an accepted injury from

nondisabling to disabling. SAIF argues that, in the context

of those other statutory provisions, ORS 656.262(6)(b)(F)

simply clarifies that insurers must modify their notices of

acceptance to conform to their decisions on such claims,

requests, and objections—as opposed to requiring insurers

to modify notices of acceptance based on new medical infor-

mation even when the claimant has not made a request.

SAIF’s contextual argument has appeal. The cited

statutory provisions plainly envision claimants giving insur-

ers written notice of new or omitted conditions and protects

insurers from allegations of de facto denial in the absence

of such notice. See ORS 656.262(6)(d) (regarding de facto

denial); ORS 656.262(7)(a) (regarding de facto denial); ORS

656.267(1) (requiring the claimant to make “a clear request

for formal written acceptance” of a new or omitted condi-

tion). Indeed, we agree with SAIF that, when the legislature

enacted ORS 656.262(6)(d) and (7)(a) in 1995, it intended

claimants to be solely responsible for identifying new and

omitted conditions and bringing them to insurers’ attention.

The difficulty for SAIF is that the legislative history does

not end in 1995. Two years later, in 1997, the legislature

enacted ORS 656.262(6)(b)(F), and, based on its legislative

history, the purpose of that enactment was to shift some

of the responsibility for identifying new and omitted con-

ditions back to insurers. Because the legislative history is

important to our analysis, we describe it in some detail.

In 1995, the legislature passed Senate Bill (SB) 369,

a bill that made numerous changes to the workers’ compen-

sation statutes. Or Laws 1995, ch 332. Most importantly for

present purposes, SB 369 added the text codified as ORS

656.262(6)(d) and (7)(a).1 As described in a bill summary

1

As originally enacted, ORS 656.262(6)(d) and (7)(a) contained both their

current text, as previously quoted, and additional text that was moved to ORS

656.267(1) in 2001. Or Laws 2001, ch 865, §§ 7, 10. The 2001 amendments

206 Nava v. SAIF

presented by Senator Gene Derfler, one of the bill’s sponsors,

those provisions were proposed in response to case law hold-

ing that an insurer’s failure to expressly accept or deny each

condition for which treatment was requested or provided

would be “deemed to be a denial” of the compensability of

the unmentioned conditions.2 Exhibit A, Senate Committee

on Labor and Government Operations, SB 369, Jan 30,

1995, at 13-14 (Sponsor Summary of SB 369). Disliking that

approach, the legislature sought to establish “a procedure

for a worker to challenge the completeness of a notice of

acceptance” or get “an insurer to consider the compensabil-

ity of a new medical condition” and to prevent workers from

alleging denial of a specific condition if they failed to follow

that procedure. Id.

Two years later, in 1997, the legislature passed

House Bill (HB) 2971. Or Laws 1997, ch 605. As origi-

nally drafted, HB 2971 had a singular purpose: to overrule

Messmer v. Deluxe Cabinet Works, 130 Or App 254, 881 P2d

180 (1994), rev den, 320 Or 507 (1995), a case holding that,

once an insurer closed a claim and awarded permanent

disability for a given condition, the insurer was precluded

from later litigating the compensability of that condition.

The legislature had tried to “overrule” Messmer in 1995 as

part of SB 369 (1995). Sponsor Summary of SB 369, at 14.

However, we concluded in Deluxe Cabinet Works v. Messmer,

140 Or App 548, 550, 915 P2d 1053, rev den, 324 Or 305

(1996), that the 1995 legislation had failed to achieve that

goal. The legislature therefore tried again in 1997. Insurers

advocating for HB 2971 explained that allowing insurers to

contest the compensability of conditions after claim closure

would avoid the need for pre-closure litigation of every pos-

sibly compensable condition, which was beneficial because

redistributed the text enacted in 1995, but those amendments did not change the

contents of the three sections, considered together, in any way material to our

analysis. That is, we do not understand the 2001 amendments to have changed

the framework that was established in 1995 and, as we will discuss, amended in

1997.

2

See, e.g., SAIF v. Blackwell, 131 Or App 519, 522, 886 P2d 1028 (1994) (stat-

ing that medical “reports showing that claimant was in need of medical treat-

ment for knee conditions other than knee strain were ‘claims,’ ” and the insurer’s

“conduct in failing to expressly accept or deny the claims within the required

statutory period were de facto denials of those claims”).

Cite as 333 Or App 196 (2024) 207

many conditions never result in post-closure medical costs.

Testimony, House Committee on Labor, HB 2971, April 22,

1997, Ex B (statement of SAIF Corporation representative

Chris Davie).

HB 2971 provided an opening, however, to revisit the

1995 legislation and do some renegotiating. Robert Moore,

testifying on behalf of a group of claimants’-side attorneys,

asserted that the 1995 enactment of ORS 656.262(6)(d) and

(7)(a), which required claimants to request acceptance of

new or omitted conditions, combined with HB 2971’s pro-

posed rejection of Messmer, would create a situation in

which claimants would not know until closure which con-

ditions had actually been accepted. Tape Recording, House

Committee on Labor, HB 2971, Apr 22, 1997, Tape 66, Side A

(testimony of Robert Moore, Oregon Workers’ Compensation

Attorneys). According to SAIF’s representative, SAIF’s

practice with respect to initial notices of acceptance was to

try to accept all conditions that were compensable accord-

ing to the information available at the time, which usually

involved going through the medical report and listing all

accepted conditions. Tape Recording, House Committee on

Labor, HB 2971, Apr 22, 1997, Tape 66, Side A (statement of

Chris Davie, SAIF). The problem, according to Moore, was

when new conditions arose after the initial acceptance or

when omitted conditions were discovered after the initial

acceptance.

Moore explained that, under existing law, insurers

who received medical reports identifying clearly compensa-

ble new or omitted medical conditions related to an accepted

claim had no obligation to update the notice of accep-

tance unless and until the claimant made a request. Tape

Recording, House Committee on Labor, HB 2971, Apr 22,

1997, Tape 66, Side A (statement of Robert Moore). That was

problematic, Moore argued, because unrepresented claim-

ants had no motivation to give notice of a new or omitted

condition if the workers’ compensation insurer was already

paying their medical bills and, further, often either did not

receive the medical reports or did not understand their sig-

nificance. Id. As a result, unrepresented claimants often

failed to give insurers notice of new or omitted conditions,

208 Nava v. SAIF

and those conditions were then not included in the closure

notice, because a closure notice lists only those conditions

that have been expressly accepted or expressly denied. Id.

After Moore raised that concern, the Management

Labor Advisory Committee (MLAC)3 proposed changes to

HB 2971. One of those changes was the addition of what

is now ORS 656.262(6)(b)(F). Tom Mattis, representing the

Workers’ Compensation Division, told the Senate Committee

on Rules and Elections that the final version of HB 2971 not

only would overrule Messmer but would also address what

appears to be the same concern raised by Moore, which

Mattis described as follows:

“[T]he current statute places almost the full burden of clar-

ifying a claim acceptance on the worker. Nothing in the

current statute requires an insurer to update the claim

acceptance when more is known about the worker’s condi-

tion. Most workers assume that everything is ‘under con-

trol,’ as long as they have an accepted claim and the med-

ical bills are paid. Then, if their claim is closed with less

permanent disability than they expected, they may be very

surprised to learn that only some of their conditions were

ever accepted.”

Testimony, Senate Committee on Rules and Elections, HB

2971, June 11, 1997, Ex AA, at 1 (testimony of Tom Mattis,

Deputy Administrator, Workers’ Compensation Division

(boldface and underlining omitted; formatting modified)).

Mattis explained that, as amended, “HB 2971 requires

insurers to clarify the compensable conditions” in three

ways: (1) by “issu[ing] updates when they receive new infor-

mation;” (2) by issu[ing] a revised Notice of Acceptance prior

to claim closure;” and (3) “[i]f a condition should have been

included before claim closure, but wasn’t found compensable

until after the claim was closed,” by reopening the claim. Id.

at 2. The legislature passed the bill as amended. Or Laws

1997, ch 605.

3

“MLAC is a 10-member committee appointed by the Governor, with five

members representing labor and five representing employers. ORS 656.790(1). The

committee reports findings and recommendations to the Legislative Assembly on

various matters. ORS 656.790(3).” Nancy Doty, Inc. v. WildCat Haven, Inc., 297

Or App 95, 111 n 8, 439 P3d 1018, rev den, 365 Or 556 (2019).

Cite as 333 Or App 196 (2024) 209

The upshot of the foregoing legislative history is that

the 1995 legislature enacted statutory provisions that made

claimants solely responsible to identify new and omitted med-

ical conditions and bring them to the insurer’s attention, but

then the 1997 legislature sought to shift some of that burden

back to insurers by enacting ORS 656.262(6)(b)(F).

The legislative history thus confirms our under-

standing of the text and overcomes the ambiguity created

by the coexistence of ORS 656.262(6)(d) and (7)(a) and ORS

656.267(1) with ORS 656.262(6)(b)(F). Like the board, we

construe ORS 656.262(6)(b)(F) as requiring an insurer

to modify the notice of acceptance when it receives unre-

butted medical or other information that is incompatible

with the existing notice of acceptance. As applied here, that

means that, when SAIF received unrebutted medical evi-

dence clearly establishing the compensability of claimant’s

meniscus tear, SAIF was required to modify its notice of

acceptance to include the meniscus tear as a compensable

condition, even though claimant had not filed an omitted

condition claim.

Having concluded that the board correctly con-

strued ORS 656.262(6)(b)(F), we turn to the issue of legit-

imate doubt. The board determined that, even though

ORS 656.262(6)(b)(F) required SAIF to modify its notice of

acceptance upon receiving the IME report, SAIF did not act

“unreasonably” in failing to do so, because SAIF had legiti-

mate doubt as to what ORS 656.262(6)(b)(F) required. ORS

656.262(11)(a) provides for an insurer to pay a penalty and

attorney fee only when the insurer “unreasonably delays or

unreasonably refuses to pay compensation, attorney fees

or costs, or unreasonably delays acceptance or denial of a

claim.” “An insurer ‘unreasonably delays’ payment of com-

pensation for purposes of ORS 656.262(11) if, at the time

compensation is due, the insurer had no legitimate doubt

regarding its liability for the compensation.” Snyder v. SAIF,

287 Or App 361, 367, 402 P3d 743 (2017) (some internal quo-

tation marks omitted). Based on its conclusion that SAIF

had legitimate doubt and therefore did not act unreason-

ably, the board did not impose a penalty and fee under ORS

656.262(11)(a).

210 Nava v. SAIF

We review the “legitimate doubt” determination for

substantial evidence and substantial reason. Walker, 254

Or App at 686. “Whether an insurer has a legitimate doubt

or acts unreasonably must ‘be considered in the light of all

the evidence available to the insurer.’ ” Snyder, 287 Or App

at 367 (quoting Brown v. Argonaut Insurance Company, 93

Or App 588, 591, 763 P2d 408 (1988)). The inquiry also takes

into consideration the state of the law when the compen-

sation is due, including statutes, rules, and, to the extent

that the relevant provisions are ambiguous, case law inter-

preting them. Walker, 254 Or App at 688 (concluding that

the insurer lacked a legitimate doubt where the relevant

statute unambiguously and indisputably required a par-

ticular action, notwithstanding the lack of case law, but

recognizing that case law could create a legitimate doubt

in some circumstances, “such as where applicable statutes

are reasonably susceptible to competing interpretations”);

Providence Health System v. Walker, 252 Or App 489, 507,

289 P3d 256 (2012), rev den, 353 Or 867 (2013) (considering

board case law in determining whether an insurer had legit-

imate doubt).

We agree with the board that SAIF had a legitimate

doubt in this case. As described, the text of ORS 656.262(6)

(b)(F) is not a model of clarity, and other provisions of the

workers’ compensation law—including two other para-

graphs in the same statute—make its meaning even less

clear. It is only upon close examination of nearly 30-year-

old legislative history that ORS 656.262(6)(b)(F)’s meaning

becomes apparent and, until this decision, neither we nor

the Supreme Court had ever construed it. Moreover, at the

time SAIF received claimant’s IME report in 2018, the board

had only a year earlier issued its decision in Lyons, 69 Van

Natta at 694, which reasonably would have been understood

as supporting SAIF’s reading of ORS 656.262(6)(b)(F).4

Under the circumstances, the board’s “legitimate

doubt” determination is supported by substantial evidence

and substantial reason. We disagree with claimant that

4

In its decision in this case, the board majority distinguished its Lyons hold-

ing on the ground that there was no initial notice of acceptance when the claim-

ant sought acceptance of an additional condition, but readers would not necessar-

ily have foreseen that future distinction.

Cite as 333 Or App 196 (2024) 211

the board’s explanation falls short on the substantial rea-

son requirement. Viewed as a whole, the order adequately

explains its reasoning.

Affirmed.