Eggert v. SAIF

177

Eggert v. SAIF 30111,

December Or2019

App

Argued and submitted November 28, 2018, affirmed December 11, 2019

In the Matter of the Compensation of

Nancy E. Eggert, Claimant.

Nancy E. EGGERT,

Petitioner,

v.

SAIF CORPORATION

and The Adobe Motel, Inc.,

Respondents.

Workers’ Compensation Board

1600198; A164923

455 P3d 1000

Claimant seeks judicial review of an order of the Workers’ Compensation

Board determining that SAIF, which had accepted claimant’s knee injury claim

“contingent on the outcome” of appeal, was not required to issue a modified notice

of acceptance of claimant’s knee injury claim after exhausting its challenges to

the claim’s compensability. Claimant contends that SAIF was required to issue

a modified notice of acceptance removing the contingency and that its failure

to do so in response to claimant’s request for clarification of the notice of accep-

tance constituted a de facto denial of the claim. Held: A claim may be accepted

contingently pending appeal. When litigation is finally concluded, the acceptance

becomes final and the contingency falls away as a matter of law. Thus, after

SAIF had exhausted its challenges to compensability, it did not need to issue an

updated notice accepting the claim without the contingency. SAIF’s failure to

respond to claimant’s request for clarification of the notice of acceptance did not

constitute a de facto denial of the claim.

Affirmed.

Julene Quinn argued the cause and filed the briefs for

petitioner.

Julie Masters argued the cause and filed the brief for

respondents.

Before Powers, Presiding Judge, and Egan, Chief Judge,

and Landau, Senior Judge.*

EGAN, C. J.

Affirmed.

______________

* Egan, C. J., vice Garrett, J. pro tempore.

178 Eggert v. SAIF

EGAN, C. J.

Claimant seeks judicial review of an order of the

Workers’ Compensation Board determining that SAIF was

not required to issue a modified notice of acceptance of

claimant’s knee injury claim after SAIF exhausted its chal-

lenges to the compensability of the claim. Claimant’s peti-

tion raises a legal issue that we review for errors of law.

ORS 183.482(8)(a). We conclude that the board did not err

and affirm.

We draw the facts, which are largely procedural

and undisputed, from the board’s order. Claimant injured

her knee at work and filed a claim for a left medial menis-

cus tear, which SAIF denied. An administrative law judge

(ALJ) set aside SAIF’s denial, and SAIF appealed to the

board.

Pending appeal to the board, and in compliance

with the ALJ’s order, SAIF issued an Initial Notice of

Acceptance, which listed “left medial meniscus tear” as a

“contingent accepted medical condition.” The Initial Notice

of Acceptance also stated:

“SAIF’s acceptance of these conditions * * * is contingent on

the outcome of the appeal.”

The board affirmed the ALJ’s order setting aside SAIF’s

denial.

SAIF then closed the claim with an award of per-

manent impairment and, as required by OAR 436-030-0015,

SAIF issued an Updated Notice of Acceptance at Closure,

which described the accepted condition as “left medial

meniscus tear.”1 The notice of closure also stated, “SAIF’s

1

The notice stated, in full:

“Oregon law requires us to provide you with an additional notice regard-

ing your claim. SAIF Corporation wants to ensure you understand what your

accepted conditions are at this time.

“The accepted condition(s) for your February 17, 2013 injury include:

“left medial meniscus tear.

“SAIF was ordered to accept the conditions listed below by Opinion and

Order dated September 25, 2014. SAIF’s acceptance of these conditions has

been challenged on appeal, and the acceptance of these conditions is contin-

gent on the outcome of the appeal. SAIF is not required to pay any disability

Cite as 301 Or App 177 (2019) 179

acceptance of these conditions has been challenged on

appeal, and the acceptance of these conditions is contingent

on the outcome of the appeal.” The notice said that SAIF

was not required to pay disability compensation “unless and

until the condition is found to be compensable after all liti-

gation is final.” See ORS 656.313(1) (payment of some bene-

fits stayed pending appeal).

Shortly thereafter, SAIF filed a petition for judicial

review of the board’s order. On SAIF’s motion, we subse-

quently dismissed the petition, and SAIF paid the perma-

nent impairment award.

Claimant then asked SAIF to provide a “clarified

Notice of Acceptance” that did not include the statement

that SAIF’s acceptance was contingent on the outcome of lit-

igation.2 At that time, the determination of compensability

compensation for any condition under appeal unless and until the condition

is found to be compensable after all litigation is final:

“left medial meniscus tear.

“The accepted condition(s) does not include a combined condition unless

specifically indicated in this updated notice of acceptance. If a combined con-

dition is accepted in this document, that acceptance is effective on the date of

injury.

“Your overall claim remains accepted as disabling.

“Notice to worker: This notice restates and includes all prior

acceptances. The conditions that were the basis of this claim open-

ing were the only conditions considered at the time of claim closure.

The insurer or self-insured employer is not required to pay any

disability compensation for any condition specifically identified as

under appeal, unless and until the condition is found to be compen-

sable after all litigation is complete. Appeal of any denied conditions

or objections to this notice will not delay claim closure. Any con-

dition found compensable after the Notice of Closure is issued will

require the insurer to reopen the claim for processing of that con-

dition. If you believe a condition has been incorrectly omitted from

this notice, or this notice is otherwise deficient, you must communi-

cate the specific objection to the insurer in writing.”

(Boldface in original.) Claimant challenged the benefits awarded by the notice of

closure, which the board ultimately upheld.

2

Claimant’s request stated, in part:

“The initial Notice of Acceptance in this claim was issued December 19,

2014, and states as follows:

“SAIF was ordered to accept the conditions listed below by opinion and

order dated September 25, 2014. SAIF’s acceptance of these conditions had

been challenged on appeal and the acceptance of the conditions is contingent on

the outcome of the appeal. SAIF is not required to pay any permanent disability

180 Eggert v. SAIF

had become final, the claim had been closed, and claimant’s

benefits for impairment had been paid.3

SAIF did not respond to claimant’s request to

clarify the notice of acceptance, and claimant requested a

hearing, asserting a “de facto denial/challenge to Notice of

Acceptance/medical services.” The parties presented their

positions to the ALJ in writing. The ALJ concluded that

SAIF was not required to amend its notice of acceptance,

and claimant appealed to the board.

Citing our opinion in Crawford v. SAIF, 241 Or App

470, 480, 250 P3d 965 (2011), the board determined that

SAIF was required to respond to claimant’s request for clar-

ification by revising the notice of acceptance or by making

“other relevant clarification,” but that it was not required to

issue a new notice of acceptance. In Crawford, we addressed

the requirements of ORS 656.262(6)(d) and ORS 656.267,4

compensation or medical payments for any condition under appeal unless and

until the condition is found to be compensable after all litigation is final.

“By Judgment of the Court of Appeals, the above-referenced Notice of

Acceptance became final on August 5, 2015. However, to date, a Modified

Notice of Acceptance has not been issued. The applicable administrative

rules require SAIF to issue a Modified Notice of Acceptance and a Form 1502

* * * under the circumstances. It appears neither of these have been issued

to date. Please issue a clarified Notice of Acceptance that does not state it is

conditional or contingent upon any outcome of litigation, since all litigation

regarding initial compensability has concluded.”

(Emphasis in original.)

3

SAIF notes that, in the litigation challenging the benefits awarded by

the notice of closure, claimant did not raise an issue concerning the contingent

nature of the notice of acceptance.

4

ORS 656.262(6)(d) provides:

“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 worker’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.”

ORS 656.267 provides:

“(1) To initiate omitted medical condition claims under ORS 656.262

(6)(d) * * * the worker must clearly request formal written acceptance of a new

medical condition or an omitted medical condition[.] * * *

“(2)(a) Claims properly initiated for new medical conditions and omitted

medical conditions related to an initially accepted claim shall be processed

pursuant to ORS 656.262.”

Cite as 301 Or App 177 (2019) 181

as related to omitted condition claims, and explained that

the nature of a claimant’s request will dictate the response

required from the insurer. When a claimant expressly seeks

to have an omitted condition accepted, the insurer must

respond by processing an omitted condition claim pursu-

ant to ORS 656.262(7)(a), by either accepting or denying the

claim within 60 days. Id. When, however, “the worker seeks

a mere clarification of a notice of acceptance,” the insurer’s

obligation to respond within 60 days under ORS 656.262

(6)(d) may be satisfied either by revising the notice of closure

or by making other relevant clarification, including by a let-

ter explaining what conditions are accepted. Id.

The board here determined that, because claimant’s

request sought only a clarification of the notice of acceptance

and was not a request for acceptance of a new or omitted

condition, it did not trigger an obligation to issue a new

notice of acceptance or denial, but it did require a response

by one of the two methods described in Crawford. The board

concluded that, because SAIF failed to so respond, claimant

was entitled under ORS 656.262(11)(a) to a penalty for an

unreasonable delay or refusal to pay compensation.5

However, the board rejected claimant’s contention

that SAIF’s failure to respond to claimant’s request for clar-

ification constituted a denial of the claim. The board noted

that, having accepted the claim in response to the ALJ’s

order, SAIF could not withdraw its acceptance, except pur-

suant to ORS 656.262(6)(a) (providing for withdrawal of a

notice of acceptance under limited circumstances). Because

the claim had previously been accepted and processed as

an accepted claim (with the exception of benefits that were

stayed pending appeal pursuant to ORS 656.313), the board

concluded that SAIF’s failure to respond to claimant’s

request for clarification did not constitute a denial.

The board also rejected claimant’s contention that

a “contingent” acceptance is not permitted by the statutes.

The board discussed our opinion in SAIF v. Mize, 129 Or App

636, 639, 879 P2d 907 (1994), in which we held that, pending

an appeal of a compensability determination, the insurer’s

5

SAIF does not challenge the assessment of that penalty.

182 Eggert v. SAIF

issuance of a “clear and unqualified” acceptance will result

in a dismissal of the appeal. In rejecting claimant’s conten-

tion that a “contingent” acceptance is not an authorized form

of acceptance, the board cited ORS 656.262(7)(c) and OAR

436-030-0015(1)(c)(A)(ii),6 both having come into effect after

Mize, which the board concluded require an insurer to issue

an updated notice of acceptance at closure that includes

conditions found compensable through a litigation order but

still on appeal or under review. The board noted its own case

law requiring that, when a claim is accepted as a result of

litigation and the insurer challenges the order, the insurer

must nonetheless process the claim as accepted, see Albert

D. Avery, 51 Van Natta 814 n 1, on recons, 51 Van Natta 927

(1999), but that, to avoid the outcome of Mize, an insurer

may accept the claim on a contingent basis. See Valerie

Barbeau, 49 Van Natta 1189 (1997). The board concluded

that, in this case, SAIF could properly accept the claim as

contingent pending appeal and was bound by the express

terms of its acceptance, and that the contingency fell away

when we dismissed SAIF’s petition.

On judicial review, claimant contends that the board

erred in failing to order SAIF to issue a notice of acceptance

after the conclusion of the litigation, because SAIF has never

issued an acceptance that complies with the terms of ORS

656.262(6),7 as there is no statutory authority for a “contingent”

6

ORS 656.262(7)(c) provides that claim closure is to proceed despite objec-

tions to the updated notice of closure or the appeal of denied conditions. OAR

436-030-0015(1)(c)(A)(ii) requires that the notice of acceptance at claim closure

include “[a] list of all compensable conditions, even if a condition was denied,

ordered accepted by litigation, and is under appeal.”

7

ORS 656.262(6)(a) requires an insurer to issue written notice of acceptance

or denial of a claim within 60 days after the employer has notice or knowledge of

the claim. ORS 656.262(6)(b) provides:

“The notice of acceptance shall:

“(A) Specify what conditions are compensable.

“(B) Advise the claimant whether the claim is considered disabling or

nondisabling.

“(C) Inform the claimant of the Expedited Claim Service and of the hear-

ing and aggravation rights concerning nondisabling injuries, including the

right to object to a decision that the injury of the claimant is nondisabling by

requesting reclassification pursuant to ORS 656.277.

“(D) Inform the claimant of employment reinstatement rights and

responsibilities under ORS chapter 659A.

Cite as 301 Or App 177 (2019) 183

acceptance of a claim. If, however, SAIF’s “contingent”

acceptance constituted an acceptance under ORS 656.262

(6)(a), then, claimant contends, SAIF was required to issue

a new notice of acceptance at claim closure to remove the

contingency.

We agree with claimant that no statutory provision

explicitly authorizes acceptance of a claim on a contingent

basis. But, as we have noted, OAR 436-030-0015(1)(c)(A)(ii)

requires that a notice of acceptance at closure include accep-

tance of conditions that have been ordered accepted through

litigation and that are under appeal. The board has explic-

itly provided that, to fulfill that requirement—as well as the

requirements of ORS 656.262(7)(c) that claim closure will not

be delayed pending resolution of disputes concerning com-

pensability and that, at claim closure, all compensable con-

ditions must be listed in an updated notice of acceptance—a

claim may be accepted contingently pending appeal.

And our case law implicitly requires the same con-

clusion. When a claim is ordered accepted by this court, the

board, or an ALJ, the employer is required to process the

claim as accepted, even pending appeal, by reopening the

claim and processing it through to the issuance of a notice of

claim closure. See Providence Health System v. Walker, 252

Or App 489, 500, 507, 289 P3d 256 (2012), rev den, 353 Or

867 (2013) (Walker) (ORS 656.313(1) contemplates that claim

processing will continue pending litigation of compensabil-

ity and that omitted condition claims will be reopened and

processed pending appeal). We reject claimant’s contention

that a claim need not be accepted in order to be “processed,”

as required by Walker. The “reopening” that we said in

Walker is required is the initial procedural mechanism for

the processing of an accepted claim.

The requirement that a disputed claim be accepted

and processed while under review or on appeal presents a

conundrum for the insurer in light of Mize, where we held

“(E) Inform the claimant of assistance available to employers and work-

ers from the Reemployment Assistance Program under ORS 656.622.

“(F) Be modified by the insurer or self-insured employer from time to

time as medical or other information changes a previously issued notice of

acceptance.”

184 Eggert v. SAIF

that an employer forfeits its challenge to the compensabil-

ity of the claim by issuing an unconditional acceptance. 129

Or App at 640. We note that, in Mize, we explicitly did not

address whether a contingent acceptance was permissible

under then-existing statutes. Id. at 640 n 2.8 But Walker and

Mize, along with OAR 436-030-0015(1)(c)(A)(ii), together

require the conclusion that, when an employer challenges

a litigation order requiring acceptance of a condition, the

notice of acceptance at claim closure may include a state-

ment that the acceptance is contingent on the final outcome

of the challenged order.

The remaining question is whether, after SAIF’s

challenges finally concluded, SAIF was required to mod-

ify its notice of acceptance at closure in response to claim-

ant’s request for clarification. Citing ORS 656.262(6)(b)(F)

(requiring that a notice of acceptance be modified from

time to time “as medical or other information changes a

previously issued notice of acceptance”), claimant contends

that the notice was required to be modified to reflect the

new information that the acceptance was no longer contin-

gent. But, as the board concluded (and as even claimant

acknowledged in her request to SAIF), SAIF had previously

accepted the claim, and our judgment dismissing SAIF’s

petition caused SAIF’s notice of acceptance to become final

as a matter of law. The contingency described in the notice

of acceptance was thereby removed by operation of law. And

we agree with the board that, although SAIF was required

to respond to claimant’s request for clarification, it was not

required to issue a new notice of acceptance removing the

contingency, as our judgment had that effect as a matter of

law. We therefore affirm the board’s order determining that

SAIF’s failure to respond to claimant’s request for clarifica-

tion did not constitute a de facto denial of the claim.

Affirmed.

8

We also note that, despite claimant’s position here that the claim has never

been accepted, claimant’s letter did not explicitly request acceptance of the claim;

it only requested clarification of the acceptance, which, as the board correctly

concluded, would not trigger an obligation to issue a notice of acceptance or denial

under ORS 656.262(6)(d). Crawford, 241 Or App at 480.