The opinion
579
Argued and submitted June 24, 2021; decision of Court of Appeals affirmed,
order of Workers’ Compensation Board reversed April 21, 2022
Marisela JOHNSON,
Respondent on Review,
v.
SAIF CORPORATION
and The Terrace Corporation,
Petitioners on Review.
(SAIF 12-01864, 12-02168)
(CA A160491) (SC S068208)
507 P3d 1277
Claimant injured her left hand in a work-related incident and SAIF accepted
her workers’ compensation claim. A short time later, claimant sought to modify
the claim to include additional injuries to her left forearm, shoulder, and upper
back. SAIF denied the request as to some of those injuries after it found that
the injuries were not compensably related to the work incident. Prior to clos-
ing claimant’s accepted claim, an examination indicated that claimant suffered
permanent impairment, including decreased grip strength that was attributed
50 percent to the accepted, compensable conditions and 50 percent to the denied
conditions. At claim closure, SAIF apportioned claimant’s permanent partial
disability award and reduced the award based on the percentage caused by the
denied conditions. The Workers’ Compensation Board upheld the apportionment
of claimant’s award, but the Court of Appeals reversed. SAIF sought review of
that decision. Held: Under ORS 656.214, a claimant is entitled to compensation
for the full measure of impairment that is due in material part to, and resulting
in material part from, the compensable industrial injury unless the insurer or
self-insured employer avails itself of the statutory process for apportionment of
combined conditions.
The decision of the Court of Appeals is affirmed. The order of the Workers’
Compensation Board is reversed.
On review from the Court of Appeals.*
Daniel Walker, Appellate Counsel, SAIF Corporation,
argued the cause and filed the briefs for petitioners on review.
Jodie Phillips Polich, Law Offices of Jodie Anne Phillips
Polich, PC, Milwaukie, argued the cause for respondent on
review. Donald M. Hooten, Beaverton, filed the brief.
______________
* On judicial review of an order of the Workers’ Compensation Board. 307 Or
App 1, 475 P3d 465 (2020).
580 Johnson v. SAIF
Benjamin Debney, Wallace, Klor, Mann, Capener &
Bishop, P.C., Lake Oswego, filed the brief for amicus curiae
Wallace, Klor, Mann, Capener & Bishop, P.C.
Rebecca A. Watkins, Sather Byerly & Holloway, LLP,
Portland, filed the brief for amici curiae Oregon Business &
Industry and Providence Health & Services.
Sommer E. Tolleson, Tolleson Conratt Nielsen Maher
& Replogle LLP, Tigard, filed the brief for amicus curiae
Associated General Contractors – Oregon Columbia Chapter.
Julene M. Quinn, Portland, filed the brief for amicus curiae
Oregon Trial Lawyers Association.
Before Walters, Chief Justice, and Balmer, Flynn, Duncan,
Nelson, and Garrett, Justices, and Nakamoto, Senior Judge,
Justice pro tempore.**
NELSON, J.
The decision of the Court of Appeals is affirmed. The
order of the Workers’ Compensation Board is reversed.
______________
** DeHoog, J., did not participate in the consideration or decision of this case.
Cite as 369 Or 579 (2022) 581
NELSON, J.
The dispute in this workers’ compensation case con-
cerns the meaning of the word “impairment” within the con-
text of the workers’ compensation statutory scheme and
whether a claimant is entitled to compensation for the full
measure of impairment where it is caused in material part,
but not solely, by a compensable injury. Under ORS 656.214
(1)(a), impairment is defined as “the loss of use or function
of a body part or system due to the compensable indus-
trial injury.” This case involves impairment—claimant’s
loss of grip strength—that was determined to be caused in
material part by an accepted, compensable condition and,
in part, by a denied condition. Claimant contends that ORS
656.214 entitles an injured worker to compensation for the
full measure of impairment due in material part to, and
resulting in material part from, the compensable injury,
including any impairment stemming from the denied condi-
tion, if applicable. SAIF disagrees, arguing that the defini-
tion of impairment does not include loss caused by a denied
condition because it is not “due to” the “compensable indus-
trial injury.”
For the reasons that follow, we conclude that claim-
ant was entitled to the full measure of her impairment.
Accordingly, we affirm the decision of the Court of Appeals.
I. BACKGROUND
A. Key Terminology and Statutory Background
We begin with an overview of the key terminology
and the workers’ compensation claims process to set the con-
text for the issues presented in this case. After a workplace
injury occurs, the worker is generally required to provide
written notice of the injury to the employer within 90 days
of the accident. See ORS 656.265(1)(a) (“Notice of an accident
resulting in an injury or death shall be given immediately
by the worker or a beneficiary of the worker to the employer,
but not later than 90 days after the accident. The employer
shall acknowledge forthwith receipt of such notice.”). During
its investigation and evaluation of a submitted claim, the
insurer or self-insured employer must determine if the
claimant’s claim is compensable. “The burden of proving
582 Johnson v. SAIF
that an injury or occupational disease is compensable and
of proving the nature and extent of any disability resulting
therefrom is upon the worker.” ORS 656.266(1). “A ‘compen-
sable 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).
After the insurer or self-insured employer makes
a determination about whether the claim is compensable,
then the employer is required to issue a written acceptance
or denial of the claim to the employee. See ORS 656.262
(6)(a) (“Written notice of acceptance or denial of the claim
shall be furnished to the claimant by the insurer or self-
insured employer within 60 days after the employer has
notice or knowledge of the claim.”). If the claim is accepted,
then the required notice of acceptance must comply with
the requirements set forth in ORS 656.262(6)(b), including
a specification of the exact conditions that are compensable
and a statement of the claimant’s rights and responsibili-
ties for returning to work. By contrast, if the insurer or self-
insured employer investigates the claim and determines
that the claim is not compensable, then the employer must
issue a written notice of its decision to deny the claim. ORS
656.262(9). The notice of denial must “stat[e] the reason for
the denial” and inform the worker of their rights to a hear-
ing to contest the denial. ORS 656.262(9).
When an accepted, compensable condition becomes
medically stationary—that is, when “no further material
improvement would reasonably be expected from medical
treatment, or the passage of time[,]” ORS 656.005(17)—then
the claim is subject to claim closure and any award of per-
manent partial disability, if applicable in the claimant’s
case, is calculated.1 See generally ORS 656.268 (describing
the claim closure process). At that point, ORS 656.262(7)(c)
sets out the procedure for closing the claim:
1
Permanent partial disability is defined within the workers’ compensa-
tion statutes as either “[p]ermanent impairment resulting from the compen-
sable industrial injury or occupational disease” or “[p]ermanent impairment
and work disability resulting from the compensable industrial injury or occu-
pational disease.” ORS 656.214(1)(c). Permanent partial disability benefits
are to be calculated in accordance with the rules and procedures set out in
ORS 656.214.
Cite as 369 Or 579 (2022) 583
“When an insurer or self-insured employer determines
that the claim qualifies for claim closure, the insurer or self-
insured employer shall issue at claim closure an updated
notice of acceptance that specifies which conditions are com-
pensable. * * * Any objection to the updated notice or appeal
of denied conditions shall not delay claim closure pursuant
to ORS 656.268. If a condition is found compensable after
claim closure, the insurer or self-insured employer shall
open the claim for processing regarding that condition.”
The claimant may then accept the closure and the payment
of benefits or, if the claimant objects to the terms of the notice
of closure or the scope of the award, the worker may request
reconsideration. See generally ORS 656.268(5)(c) (describ-
ing the requirements of the notice of closure, including a
statement regarding the claimant’s right to request consid-
eration). If the claimant’s physical impairment is in dispute
on reconsideration, then the Director of the Department of
Consumer and Business Services (DCBS) must appoint a
medical arbiter to consider the claim. See ORS 656.268(8)(a)
(“If the basis for objection to a notice of closure issued under
this section is disagreement with the impairment used in
rating of the worker’s disability, the director shall refer
the claim to a medical arbiter appointed by the director.”).
As before, the claimant has the burden of establishing the
nature and extent of the impairment and its relationship to
the compensable injury. ORS 656.266.
B. Facts and Procedural History
With that background in mind, we turn to the facts
of this case. The issue in this case centers on the insurer’s
calculation of claimant’s impairment award for permanent
partial disability. The relevant facts of this case are not in
dispute and are taken from the Court of Appeals’ opinion
in the decision now on review, that court’s earlier consider-
ation of this same case, Johnson v. SAIF, 291 Or App 1, 418
P3d 27 (2018) (Johnson I), and the record from the Workers’
Compensation Board.
In July 2011, claimant, a housekeeper, was injured
at work when her left hand was caught in a closing eleva-
tor door. Claimant filed a workers’ compensation claim, and
SAIF accepted the claim for contusions to the distal left
584 Johnson v. SAIF
third, fourth, and fifth fingers, and an abrasion to the distal
left middle finger.
In August 2011, after receiving treatment for the
initial injury, claimant sought treatment for additional pain
in her left forearm, shoulder, and upper back. Claimant
attributed the need for the additional treatment to the work-
place incident, specifically claiming that it occurred when
she pulled her hand back out of the closing elevator door. An
MRI revealed a partial thickness tear of the supraspinatus
tendon in claimant’s left shoulder.
In October 2011, claimant’s attending physician
conducted an examination of claimant’s left hand and
determined that claimant’s workplace injury to that hand
had resolved. The physician confirmed that claimant’s left
finger injuries were medically stationary as of October 28,
2011, and those conditions had resolved without any rat-
able permanent impairment. SAIF closed the claim for the
injury to the left hand and, pursuant to the process laid out
above and detailed in the workers’ compensation statutes
and accompanying administrative rules, determined that
claimant was not entitled to any award for permanent par-
tial disability. Claimant requested reconsideration and the
appointment of a medical arbiter.
Meanwhile, claimant continued to seek treatment
for the additional pain to her left forearm, shoulder, and
upper back. Claimant filed a new or omitted medical condi-
tion claim for a left rotator cuff tear, left upper arm sprain,
left elbow sprain, and cervical disc disorder. In January
2012, SAIF modified its initial order of acceptance to include
benefits for sprains of the left shoulder and the left trapezius
muscle, but it issued a denial of the claim for a left rota-
tor cuff tear, left upper arm, forearm, and elbow sprain,
and cervical disc disorder. In denying those claims, SAIF
explained that the conditions were not compensably related
to the work injury. Claimant requested a hearing before the
Workers’ Compensation Board on the denied claim.
In March 2012, a medical arbiter performed an
examination to determine claimant’s permanent impair-
ment related to the accepted left finger contusions and abra-
sion. The medical arbiter listed his “Impression” of claimant’s
Cite as 369 Or 579 (2022) 585
conditions as: “(1) Crush injuries left index, long, ring, and
possibly little fingers left hand. (2) Claimed rotator cuff tear,
partial tear or aggravation, left shoulder.” The medical arbi-
ter documented limited range of motion and decreased grip
strength in claimant’s left fingers. He attributed 100 per-
cent of the loss of range of motion to the accepted conditions.
As to the loss of grip strength, however, the medical arbiter
only partially attributed the impairment to the accepted
conditions (50 percent) and partially to the denied shoulder
condition (50 percent). Describing the loss of grip strength,
the medical arbiter noted that it was “a combined condition
related to her shoulder, her hand, and to disuse.”
In April 2012, an Order on Reconsideration mod-
ified SAIF’s earlier notice of closure. The reconsideration
order acknowledged that SAIF had denied the left rotator
cuff tear, left upper arm sprain, left elbow sprain, and cer-
vical disc disorder as noncompensable. It also further noted
that SAIF had accepted, after the claim closure was issued,
a left shoulder sprain and left trapezius muscle strain.
None of those injuries was subject to the reconsideration
order, which was limited to the left finger contusions and
abrasion. Based on the medical arbiter’s findings regard-
ing those conditions, claimant was awarded benefits for a
left-hand impairment value of seven percent whole person
impairment. That value included benefits for the loss of grip
strength, apportioned to the accepted left-hand claim at
50 percent, per the medical arbiter’s findings.
Both parties requested a hearing before the
Workers’ Compensation Board (board). The board upheld
the medical arbiter’s findings and affirmed the apportion-
ment of claimant’s permanent partial disability award.2
Claimant sought judicial review of that decision, arguing
that her entire impairment from the loss of grip strength,
which she claimed was caused in material part by the com-
pensable hand injury, is compensable and should have been
rated, without apportionment, for the permanent partial
2
The Workers’ Compensation Board did reverse a portion of the findings
below, related to an increase in claimant’s whole person impairment and an
award of attorney fees. Those decisions are not in dispute before this court on
this claim.
586 Johnson v. SAIF
disability award. In the Court of Appeals’ initial consider-
ation of this case, that court relied on this court’s opinion
in Schleiss v. SAIF, 354 Or 637, 317 P3d 244 (2013), which
is described in detail below, to reject claimant’s argument
and uphold the order of the Workers’ Compensation Board.
Johnson I, 291 Or App at 7.
Claimant petitioned this court for review, advanc-
ing the same arguments as before. While that petition for
review was pending, this court issued its decision in Caren
v. Providence Health System Oregon, 365 Or 466, 446 P3d
67 (2019). This court allowed claimant’s petition for review,
vacated the Court of Appeals’ decision, and remanded the
case to the Court of Appeals for reconsideration in light of
that decision. Johnson v. SAIF Corporation, 365 Or 657, 451
P3d 1014 (2019).
On remand, the Court of Appeals reversed its ear-
lier decision. Johnson v. SAIF, 307 Or App 1, 5, 475 P3d 465
(2020) (Johnson II). Relying on this court’s decision in Caren,
the Court of Appeals explained that, when a worker’s impair-
ment is due to a combination of the compensable injury and a
preexisting condition, “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.”
Johnson II, 307 Or App at 4 (quoting Caren, 365 Or at 468).
Because apportionment between different injuries can only
occur in a combined condition claim, and because claimant’s
impairment was not the result of a combined condition, that
court concluded that claimant was entitled to the full mea-
sure of her impairment, without regard to SAIF’s previous
denial of the rotator cuff injury. Id. at 5.
SAIF petitioned for review, arguing that the Court
of Appeals decision conflicts with the plain language of ORS
656.262(2). That statute provides that compensation for a
claim is to be paid upon an employer’s notice or knowledge of
that claim, “except where the right to compensation is denied
by the insurer or self-insured employer.” ORS 656.262(2).
SAIF contends that the decision below improperly extends
this court’s decision in Caren beyond the combined conditions
Cite as 369 Or 579 (2022) 587
process specific to that case. As we understand SAIF’s view,
impairment does not include loss due to a condition that
has been denied as “noncompensable” and, accordingly, any
award for permanent partial disability should be adjusted
to reflect only the portion of the impairment that claimant
is entitled to based solely on the accepted condition.
We allowed review to consider the extent to which
the workers’ compensation statutes, and specifically ORS
656.214, require an insurer or self-insured employer to
award benefits for the full measure of an injured worker’s
impairment when that impairment may be apportioned,
at least in part, to a previously denied, noncompensable
condition.
II. ANALYSIS
On review, SAIF argues that the Court of Appeals
was incorrect in applying Caren to this case and that that
court’s conclusion demonstrates what SAIF describes as a
“fundamental confusion” about the meaning of “compen-
sable industrial injury” in cases, like this one, involving
denied conditions. Instead, SAIF argues that the statu-
tory scheme of the workers’ compensation statutes and the
case law interpreting those statutes supports the proposi-
tion that benefits—including awards for permanent partial
disability—are not intended to flow from specifically denied
conditions. In SAIF’s view, when an insurer issues a par-
tial denial of a medical condition, the denied condition is not
subject to an award of permanent partial disability unless
the condition is later determined to be compensable, and the
denial is overturned. Here, SAIF argues that claimant was
not entitled to an award for impairment attributable to the
denied left rotator cuff tear because claimant never estab-
lished that that injury was compensable and SAIF had spe-
cifically denied the claim.3
3
Amici Oregon Business & Industry (OBI) and Providence Health & Services
write in support of SAIF, reiterating many of the same arguments and specifi-
cally arguing that the definition of impairment in ORS 656.214 makes clear that
“[a] denied condition is expressly not a compensable condition” and, accordingly,
“a worker should not receive disability awards for impairment due to a denied
condition.” Additionally, Associated General Contractors – Oregon Columbia
Chapter and Wallace, Klor, Mann, Capener & Bishop, P.C., have each submitted
an amicus curiae brief in support of SAIF. Oregon Trial Lawyers Association
wrote in support of claimant.
588 Johnson v. SAIF
For her part, claimant acknowledges that Caren
involved consideration of a combined condition and agrees
with SAIF that there was no combined condition in this
case. Both parties recognize that the combined condition
analysis in Caren is inapplicable here and, to the extent that
the Court of Appeals relied on it below, contend that that
reliance was misplaced. Claimant, however, agrees with the
Court of Appeals that she was entitled to the full measure
of impairment due to the compensable injury and disputes
SAIF’s assertion that the decision below improperly forces
an insurer to pay benefits for a denied condition. Instead,
in claimant’s view, the decision below recognizes that con-
ditions that are not compensable—here, the previously
denied left rotator cuff tear—can contribute to impairment
that is part of the compensable injury. Claimant argues
that an injured individual is entitled the full measure of
impairment—even where a portion of that impairment may
have been caused, in part, by a noncompensable or denied
condition—where the accepted condition is at least a mate-
rial contributing cause of the impairment. It is claimant’s
position that the Court of Appeals properly determined that
claimant was entitled to compensation for her loss of grip
strength, the impairment value at issue here.
As explained above, the workers’ compensation
statutes provide for a specific process that must be adhered
to following a workplace injury. When an accepted, com-
pensable injury becomes medically stationary, and proper
notice has been issued to the claimant, then the insurer or
self-insured employer calculates the amount of disability
benefits due to the claimant. See ORS 656.268. Our under-
standing of the primary disagreement between the parties
is that the dispute centers around the meaning of the word
“impairment” and whether that term includes loss that is
caused in part by a previously denied condition and in part
by the accepted compensable injury, but where neither party
contends that a combined condition exists. The meaning of
the word impairment, and what that word encompasses, is a
question of statutory construction.
When we are confronted with an issue of statutory
construction, we resolve that issue following the established
Cite as 369 Or 579 (2022) 589
statutory interpretation framework laid out in PGE v.
Bureau of Labor and Industries, 317 Or 606, 610-12, 859 P2d
1143 (1993), and State v. Gaines, 346 Or 160, 171-72, 206
P3d 1042 (2009). Our primary goal in interpreting statutory
provisions is to determine the intent of the legislature at the
time it enacted the relevant statutes. See Gaines, 346 Or at
171 (“This court remains responsible for fashioning rules of
statutory interpretation that, in the court’s judgment, best
serve the paramount goal of discerning the legislature’s
intent.”). To determine whether the legislature intended for
injured workers to receive the full measure of impairment
caused in part by a compensable injury, even if such impair-
ment was also caused in part by a previously denied condi-
tion, we examine the workers’ compensation statutes as a
whole and our prior judicial interpretations of those stat-
utes. See Caren, 365 Or at 472 (citing Brown v. SAIF, 361 Or
241, 283, 391 P3d 773 (2017)). With that in mind, we turn to
the statutes at issue in this case.
A. Textual Analysis and Prior Judicial Construction
We begin with key definitions from the workers’
compensation statutes themselves. 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). This court has con-
strued “arising out of,” as used in the definition of “com-
pensable injury,” to mean that a workplace injury must be
a material contributing cause of disability or the need for
medical treatment in order for the injury to be compensable.
Olson v. State Ind. Acc. Com., 222 Or 407, 414, 352 P2d 1096
(1960). We explained that “arising out of” does not necessi-
tate that the injury be the sole cause of the need for treat-
ment, “but is sufficient if the labor being performed in the
employment is a material, contributing cause which leads to
the unfortunate result.” Olson, 222 Or at 414-15. The mate-
rial contributing cause standard remains the accepted test
for establishing the existence of a compensable injury under
ORS 656.005(7)(a). See Schleiss, 354 Or at 643 (describing
the test for establishing a compensable injury); see also
Hopkins v. SAIF Corp., 349 Or 348, 351, 245 P3d 90 (2010)
(same).
590 Johnson v. SAIF
“Impairment” is specifically defined as “the loss of
use or function of a body part or system due to the compen-
sable industrial injury.” ORS 656.214(1)(a) (emphasis added).
“Permanent partial disability” is “[p]ermanent impairment
resulting from the compensable industrial injury or occu-
pational disease.” ORS 656.214(1)(c). Thus, combining those
definitions, an award for permanent partial disability is
based on permanent loss of use or function of a body part
or system resulting from the compensable industrial injury.
Impairment benefits awarded under the workers’ compensa-
tion statutes, including benefits for permanent partial dis-
ability, are expressed as a percentage of a whole person and
calculated according to the process laid out in the workers’
compensation statutes and accompanying administrative
rules. See generally ORS 656.214(3) (stating that impair-
ment benefits “shall be expressed as a percentage of the
whole person” and laying out procedures for calculation of
those benefits).
We have previously addressed the meaning of
“impairment,” the causes that contribute to it, and how
impairment impacts the calculation of awards of permanent
partial disability in several cases. Although those cases do
not answer all the questions presented in this case, each
provides insight and context for understanding our decision
today. We review those cases now.
1. Barrett I and Barrett II
This court considered the relationship between
impairment and the causes contributing to it in a case that
explained the method for calculating awards for permanent
partial disability under ORS 656.214. See Barrett v. D & H
Drywall, 300 Or 325, 709 P2d 1083 (1985) (Barrett I), adh’d
to on recons, 300 Or 553, 715 P2d 90 (1986) (Barrett II). In
the Barrett cases, the claimant injured his back after falling
from a ladder at work. Barrett I, 300 Or at 327. The work
injury combined with a preexisting, asymptomatic arthritic
condition in the claimant’s low back. Id. The employer
accepted responsibility for the portion of the back injury
that resulted from the work accident but denied liability
for the preexisting arthritic condition under ORS 656.214
Cite as 369 Or 579 (2022) 591
(1985).4 This court held that the calculation of permanent
partial disability should consider impairment related to the
claimant’s preexisting osteoarthritis, explaining that
“[t]he oft-expressed maxim still applies: An employer takes
the worker as he finds him. Whether the worker suffers
greater permanent partial disability (measured by the loss
of earning capacity) because of a preexisting condition is
irrelevant in deciding the amount of loss of earning capac-
ity caused by a new injury superimposed on a preexisting
condition.”
Barrett I, 300 Or at 328 (footnote omitted). That holding
acknowledged that it is difficult, if not impossible at times, to
separate out the individual components of impairment when
a compensable injury is superimposed on a preexisting con-
dition. Id. at 331. Accordingly, compensation for a claimant’s
impairment is calculated considering the full symptoms
caused by the compensable injury. Id.
Following a petition for reconsideration in that
case, we clarified that impairment “due to the compensa-
ble injury” included impairment that occurred because the
compensable injury triggered a preexisting asymptomatic
condition to become symptomatic. Barrett II, 300 Or at 555-
56. Specifically, we explained that the permanent partial
disability award should not directly compensate the claim-
ant for the osteoarthritis itself but, if the work injury caused
a preexisting “disease to produce symptoms where none
existed immediately prior to the accident,” and “those symp-
toms produced loss-of-earning capacity,” then the workers’
compensation statutes, as they existed at that time, required
that the claimant be compensated for that loss. Id.
This court later summarized the holding of the
Barrett cases clearly and succinctly: “Barrett determined
that the worker’s permanent partial disability was the full
amount of his new impairment, without reduction for the
portion of that loss attributable to his preexisting condition.”
Caren, 365 Or at 476. That explanation matches the rule
4
Under ORS 656.214(5) (1985), which was in place at the time the Barrett
cases were decided, the criterion for determining a rating of disability for per-
manent partial disability was “the permanent loss of earning capacity due to the
compensable injury.”
592 Johnson v. SAIF
proposed by claimant in this case, but our inquiry cannot
end there. As SAIF points out, the legislature overhauled a
large portion of the workers’ compensation statutes after the
Barrett cases were decided and the holding of those cases
do not carry the same relevance today as when they were
decided. This court has acknowledged as much in Schleiss, a
case presenting similar questions:
“Barrett is of doubtful utility here for another funda-
mental reason. When Barrett was decided in 1985, no stat-
ute addressed the role in [permanent partial disability]
award determinations of impairment that is attributable to
a preexisting condition that has combined with a compen-
sable injury. * * * However, the workers’ compensation stat-
utes now provide specific standards for determining how
and when conditions that ‘combine’ workplace injuries with
preexisting conditions are compensable and how and when
impairment caused by such conditions can be apportioned.
In light of those statutory changes, impairment attribut-
able to a legally cognizable preexisting condition now must
be apportioned in a [permanent partial disability] award
where a combined condition has been established, and the
compensable injury is no longer the major contributing
cause of the impairment or the need for medical treatment.”
Schleiss, 354 Or at 649-50. Additionally, even if the under-
lying proposition of Barrett remains the same, those cases
only answer part of the question posed here.
2. Schleiss
As noted, after Barrett—and, in part, because of
Barrett—the legislature significantly revised the statutory
scheme of Oregon’s workers’ compensation system during a
1990 special legislative session. See Caren, 365 Or at 476;
Brown, 361 Or at 265-66 (describing the 1990 special ses-
sion and the overhaul of the workers’ compensation statutes
that resulted); see also Or Laws 1990, ch 2, § 3 (Spec Sess)
(detailing the changes made during the legislative session).
One of the legislative changes that came out of that session
was the creation of the “combined condition” framework. See
Or Laws 1990, ch 2, § 3 (Spec Sess) (detailing the changes
made during the legislative session). The 1990 legislation
amended the definition of “compensable injury” to specify,
that when an “otherwise compensable injury” combines with
Cite as 369 Or 579 (2022) 593
a preexisting condition to create a new condition or need for
treatment, the combined condition “is compensable only if
* * * the otherwise compensable injury is the major contrib-
uting cause of the disability of the combined condition or
the major contributing cause of the need for treatment of
the combined condition.” See ORS 656.005(7)(a)(B). As we
would later explain, that amendment altered the material
contributing cause standard by creating a major contribut-
ing cause standard for combined conditions. The decisions of
this court that followed the 1990 legislative overhaul of the
workers’ compensation statutes provide additional context
for us in evaluating this case.
This court was presented with its first opportunity
to clarify the meaning of “impairment” and its contributing
causes under the revised workers’ compensation statutory
scheme in Schleiss. There, the claimant injured his back at
work and the insurer accepted his claim for a lumbar strain.
Schleiss, 354 Or at 639. At claim closure, the injured worker
claimed new impairment caused in part by the workplace
injury but also in part by a preexisting degenerative joint
disease and accelerated aging due to smoking. Id. at 639-40.
Mirroring part of the arguments made in this case,
the claimant in Schleiss challenged the award of perma-
nent partial disability. The claimant argued that because
“the compensable injury materially contributed to the total
impairment, all the impairment is ‘due to’ the compensa-
ble injury,” and should result in an award covering the full
measure of impairment without a reduction or apportion-
ment based on the estimated contribution of the preexisting
conditions. Id. at 643. The insurer rejected that argument
and instead asserted that the phrase “due to” referenced
“the percentage of the worker’s total impairment that was
caused by the compensable injury, so that the percentage of
the total impairment ‘due to’ any other contributing cause
must be excluded from the award.” Id. There, we observed
that,
“[o]n the surface of things, either of those proposed mean-
ings is plausible. The dictionary definition of ‘due to’ is
‘because of.’ Webster’s Third New Int’l Dictionary 699
(unabridged ed 2002). Consistently with that meaning, as
594 Johnson v. SAIF
claimant asserts, ‘due to’ could mean that a compensable
injury must have materially contributed to a worker’s total
impairment; alternatively, as SAIF contends, ‘due to’ could
refer instead to the percentage of a worker’s total impair-
ment to which the compensable injury contributed.”
Id. The insurer in that case also argued that the “claim-
ant had the burden of asserting and proving” a compen-
sable combined condition if the “claimant wished to have
an impairment caused in part by a preexisting condition”
included in the calculation of his permanent partial disabil-
ity award. Id. at 651.
Following a detailed examination of the surround-
ing statutory framework, and the meaning of “due to” within
the context of those statutes, this court concluded that it
was not necessary to resolve the dispute between the par-
ties concerning the meaning of “due to” within the newly
enacted combined condition framework because there was
“no evidence in the record that either of the contributing
causes on which the medical arbiter and the board relied
[was] a legally cognizable preexisting condition that would
authorize the apportionment of claimant’s impairment in a
combined condition claim.” Schleiss, 354 Or at 651. As we
explained, if a preexisting contributing cause of the injury
is not a legally cognizable “preexisting condition”—defined
as “any injury, disease, congenital abnormality, personality
disorder or similar condition that contributes to disability
or need for treatment, provided that * * * the worker has
been diagnosed with the condition, or has obtained medi-
cal services for the symptoms of the condition regardless of
diagnosis,” ORS 656.005(24)(a)—then it does not qualify for
apportionment under the combined condition framework.
Schleiss, 354 Or at 651. Accordingly, the claimant’s case was
remanded to the board for reconsideration under the mate-
rial contributing cause standard discussed above. See id. at
655 (“The decision of the Court of Appeals is reversed, and
the case is remanded to the Workers’ Compensation Board
for further proceedings.”).
Our holding in Schleiss reflects the principle that,
even after the legislature created the combined condition
framework, apportionment is only appropriate in cases that
Cite as 369 Or 579 (2022) 595
fall under the ambit of the combined condition process—
i.e., cases presenting an otherwise compensable condition
that combines with a legally cognizable preexisting con-
dition. We understand Schleiss to confirm that where no
legally cognizable preexisting condition exists, the general
rule remains that, where an accepted, compensable injury is
a material contributing cause of the claimant’s impairment,
then the claimant is entitled to the full measure of com-
pensation for that impairment, not just the percentage of
impairment caused solely by the compensable injury. That
general rule, initially announced in the Barrett cases, was
at least implicitly confirmed again in Schleiss.
3. Caren
Not long after Schleiss, this court was presented
with an opportunity to address an actual combined condi-
tion. In Caren, the claimant injured her back at work and
the employer issued a notice of acceptance that listed the
accepted condition as a “lumbar strain.” 365 Or at 470. During
claim closure, after the claimant had received treatment for
her injury, the physician determined that the claimant suf-
fered from a diminished range of motion in her lumbar area.
Id. at 471. That same physician also noted that the claimant
appeared to suffer from preexisting arthritis in the lumbar
spine and attributed part of the claimant’s impairment to
the preexisting arthritis, but part to the accepted workplace
injury.5 Id. The claimant never requested, and the employer
never considered, apportionment according to the combined
condition process. Id. Nonetheless, the claimant’s perma-
nent partial disability award was reduced according to the
percentage of her impairment that was determined to be
caused by her preexisting arthritis. Id.
This court allowed review of that case to determine
whether the legislature intended the “combined condition”
process to modify the rule for calculating permanent partial
5
Initially, the physician and an evaluator attributed the diminished lum-
bar range of motion at 50 percent the result of the preexisting arthritis and
50 percent the result of the workplace injury. Caren, 365 Or at 471. The DCBS
medical arbiters later estimated that the claimant’s arthritis was actually
responsible for 70 percent of the impairment to her lumbar range of motion.
Id. That estimate was used to calculate, and reduce accordingly, the claimant’s
award for permanent partial disability. Id.
596 Johnson v. SAIF
disability—the material contributing cause rule—in every
case where the employer identifies a claimant’s preexisting
condition, or if the apportionment benefits are limited to
instances where a specific combined condition is identified,
formally denied, and closed according to the statutory pro-
cess. Caren, 365 Or at 480. In other words, this court sought
to determine whether apportionment was a limited excep-
tion, available only when the claimant or employer follows
the combined condition process, or if that limited liability is
also available where a combined condition is denied.
To answer that question, this court examined the
text, context, and legislative history of the statute that lays
out the process for apportionment of a combined condition,
ORS 656.268(1). See Caren, 365 Or at 472. ORS 656.268(1)
provides that an insurer or self-insured employer is required
to close a claimant’s claim and determine the extent of per-
manent partial disability when
“[t]he accepted injury is no longer the major contributing
cause of the worker’s combined or consequential condition
or conditions pursuant to ORS 656.005(7). When the claim
is closed because the accepted injury is no longer the major
contributing cause of the worker’s combined or consequen-
tial condition or conditions, and there is sufficient infor-
mation to determine permanent disability, the likely per-
manent disability that would have been due to the current
accepted condition shall be estimated.”
This court explained that the traditional method for calcu-
lating a permanent partial disability award before examin-
ing how, and under what conditions, the combined condition
framework changes that process. Ultimately, this court con-
cluded 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’ perma-
nent impairment if the impairment as a whole is caused in
material part by the compensable injury, and * * * that the
legislature intended that employers would obtain the bene-
fit 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 workers’ permanent partial disability.”
Cite as 369 Or 579 (2022) 597
Caren, 365 Or at 473. As this court understood the legisla-
tive amendments creating the combined condition process,
the changed statutory provisions were intended to limit
an employer’s liability for preexisting conditions, but only
where the employer follows the specific process laid out in
ORS 656.268(1)(b) for reducing a worker’s permanent par-
tial disability award. Caren, 365 Or at 487. In short, we con-
cluded that the legislature intended apportionment in com-
bined condition cases to be a limited exception to the general
rule that a worker is entitled to compensation for the full
measure of the workers’ impairment where the impairment
is caused in material part by the compensable injury.
B. Application of Barrett, Schleiss, and Caren to This Case
Each of those cases—Barrett, Schleiss, and Caren—
provides insight into our past interpretations of the phrase
“due to the compensable injury” and the definition of “impair-
ment” in ORS 656.214. There are two primary propositions
that those cases provide that guide us here. First, Barrett
and Schleiss stand for the basic, underlying rule that, when
an accepted, compensable injury is a material contributing
cause of the claimant’s impairment, then the claimant is
entitled to the full measure of compensation for that impair-
ment. See Barrett II, 300 Or at 555-56; Schleiss, 354 Or
at 651. That general rule remains true today. The second
proposition that bears emphasis is that apportionment may
only be used by an insurer to reduce benefits for impair-
ment where the legislature has identified an exception to, or
limitation on, the material contributing cause standard. An
example of such an exception occurs where the impairment
is caused by a legally cognizable preexisting condition that
the insurer formally denied as a combined condition prior
to claim closure. See Caren, 365 Or at 487 (“We conclude
that employers obtain the benefit of that exception only by
issuing a denial of the ‘combined condition’ and following
the process that the legislature has specifically provided in
ORS 656.268(1)(b) for reducing the worker’s permanent par-
tial disability.”). Both of those rules are consistent with our
understanding of the workers’ compensation scheme, flow
from our prior interpretations of ORS 656.214, and provide
a preliminary basis upon which we analyze this case.
598 Johnson v. SAIF
Here, the board upheld SAIF’s determination that
claimant was not entitled to an award of permanent partial
disability for any of her impairment that was caused by the
denied conditions. That approach effectively reduced claim-
ant’s award in the same way that apportionment would
reduce her award in a combined condition case. As explained
above, claimant received an award for seven percent whole
person impairment for the injuries to her left hand. Within
that value, the impairment for the loss of grip strength was
apportioned only 50 percent to the accepted compensable
hand claim. The award for permanent partial disability
was reduced accordingly. Because the board’s decision uti-
lized a method to apportion, and ultimately reduced claim-
ant’s impairment award, and because we have previously
explained that apportionment is only authorized by statute
as a limited exception to the general rule that a claimant is
entitled to the full measure of impairment, available only
when specific conditions are met, we first address whether
the combined condition statutory framework allowed for
apportionment in this case.
As we explained in Caren, and have reiterated here,
an employer or insurer may only avail itself of the ability to
apportion awards in combined condition cases. To qualify
for the limited combined condition exception, there must be
a legally cognizable preexisting condition that has combined
with the otherwise compensable injury. See Caren, 365 Or at
483 (“ ‘[L]egally cognizable preexisting condition is only one
requirement for reducing the worker’s impairment under
ORS 656.268(1)(b) to account for a combined condition; it also
requires that the condition has combined with the ‘other-
wise compensable injury’ and that the employer can meet
‘its burden of proof to establish the otherwise compensable
injury is not, or is no longer, the major contributing cause
of the disability of the combined condition.’ ” (First quoting
ORS 656.005(7)(a)(B); then quoting ORS 656.266(2)(a))). As
a reminder, a legally cognizable “preexisting condition” is
“any injury, disease, congenital abnormality, personality
disorder, or similar condition that contributes to disability
or need for treatment, provided that * * * the worker has
been diagnosed with such condition, or has obtained med-
ical services for the symptoms of the condition regardless
Cite as 369 Or 579 (2022) 599
of diagnosis.” ORS 656.005(24)(a). Here, both parties agree
that this case does not present a combined condition and
that this court’s analysis in Caren is inapplicable.6 There is
no combined condition presented in this case because there
was no evidence in the record to suggest that claimant’s
denied left rotator cuff tear was previously diagnosed or
treated prior to the workplace injury.
As explained, usually, when no combined condition
exists, the general rule that a claimant is entitled to the
full measure of impairment where the accepted condition
is a material contributing cause of the disability applies.
The text of ORS 656.214, and our prior decisions discussed
above, support that proposition. That leaves two ques-
tions that must be answered in order to resolve this case:
(1) whether the full measure of impairment is calculated as
the percentage of the impairment that is directly caused by
the compensable injury or as a whole and (2) whether there
is a limited exception to the general rule that allows for
apportionment when there is a specific, previously denied
condition. Those questions are left unanswered by our previ-
ous decisions and are implicated directly in this case.
C. Further Analysis
We begin by addressing the first question. Here, the
parties disagree about the meaning of “due to” within the
definition of impairment. SAIF argues that the phrase “due
to” within the definition of impairment limits the employer’s
liability to only compensate the claimant for impairment
that is caused by the compensable injury. Claimant, on the
other hand, maintains that the workers’ compensation stat-
utes, and our prior cases interpreting those statutes, make
6
The Court of Appeals also acknowledged that Caren was not directly
applicable to this case: “Caren did not explicitly address the issue presented
here—whether a worker should be compensated for the ‘full measure’ of impair-
ment caused in material part by a work injury in combination with a noncog-
nizable preexisting condition that the employer had previously denied outright.”
Johnson II, 307 Or App at 4. That court, nonetheless, used this court’s reasoning
in Caren to conclude that claimant was entitled to the full measure of impair-
ment for her injury. Id. at 5 (“Although SAIF denied claimant’s shoulder con-
dition, SAIF has not denied the combined condition that was identified by the
medical arbiter and that resulted in claimant’s range-of-motion impairment in
her hand. Accordingly, under Caren, claimant is entitled to be awarded the ‘full
measure’ of impairment.”).
600 Johnson v. SAIF
clear that a worker is entitled to the full measure of impair-
ment so long as the worker’s accepted and compensable
injury is a material contributing cause of the impairment.
That question was deliberately left unanswered in Schleiss.
In this case, we must answer that question with regard to a
denied condition that arose with the compensable injury.
Here, claimant injured her left hand in a work-
related incident. After investigating and evaluating the
claim, SAIF determined that it was compensable and issued
a notice of acceptance. Later, claimant sought to amend
the claim and a portion of that modification—the left rota-
tor cuff tear, left upper arm and elbow sprain, and cervical
disc disorder—was denied as not compensably related to the
accepted workplace injury. Accepting the conclusion that the
denied conditions were not compensably related to the work-
place injury,7 we first note that it is correct that impairment
values that stem solely for those conditions should not lead
to an award of permanent partial disability. In other words,
if claimant sought benefits for the left rotator cuff tear,
left upper arm and elbow sprain, and cervical disc disor-
der, there would be no compensation. Those conditions were
denied. That principle alone, however, does not sufficiently
answer the question posed here. The impairment at issue in
this case is not the damage to the rotator cuff tear, upper
arm and elbow, or cervical disc per se—those are claimant’s
noncompensable conditions. The impairment at issue is the
loss of grip strength in claimant’s left hand. The question
is whether claimant is entitled to the full measure of that
impairment where the accepted conditions—the injuries
to claimant’s left fingers and sprains to her left shoulder
area—are a material contributing cause of the impairment
as a whole. As we understand the statutes and the record in
this case, the answer is yes.
In Barrett I, this court acknowledged the long-
standing guideline that an employer takes the worker as
he finds him. 300 Or at 328; see also Surratt v. Gunderson
Bros., 259 Or 65, 74, 485 P2d 410 (1971) (emphasizing that
7
The denial of the left rotator cuff tear, left upper arm and elbow sprain, and
cervical disc disorder is not in dispute in this case, other than the impact of that
denial on the calculation of claimant’s award for permanent partial disability.
Cite as 369 Or 579 (2022) 601
“the individual workman is taken as the industrial acci-
dent finds him with all his apparent defects”); Keefer v.
State Indus. Acc. Commission, 171 Or 405, 412, 135 P2d 806
(1943) (“The Oregon Workmen’s Compensation Law, as that
of many of the other states prescribes no standard of phys-
ical fitness to which the employee must conform, and com-
pensation is not based on any implied warranty of perfect
health.”). Although the legislature significantly overhauled
the workers’ compensation statutes following our decision
in the Barrett cases, we do not understand those changes to
alter that tenet. Instead, those changes identified circum-
stances in which an employer’s liability for impairment can
be limited because of a legally cognizable preexisting condi-
tion that combines with a compensable condition. Outside of
those circumstances, however, an injured worker is entitled
to compensation for the full measure of their impairment
that is caused in material part by the compensable injury.
We pause here briefly, before concluding, to address
SAIF’s proposed interpretation of the workers’ compen-
sation statutes that discuss denied conditions. SAIF, and
amici supporting SAIF, maintain that a denial has the legal
effect of establishing that the specific denied condition is
not eligible for any benefits. SAIF argues that the Court of
Appeals’ decision in this case forces insurers to pay benefits
for denied conditions and instead advocates that this court
recognize an additional exception to the rule announced
above.
We agree with SAIF’s contention that benefits are
not intended to flow directly from denied conditions. ORS
656.262(2) makes clear that compensation for any claim
shall be paid promptly upon an employer’s notice or knowl-
edge of the claim, “except where the right to compensation is
denied by the insurer or self-insured employer.” (Emphasis
added.) The proposition that benefits do not flow from denied
conditions is also supported by ORS 656.268(15), which
states that “[c]onditions that are direct medical sequelae to
the original accepted condition shall be included in rating
permanent disability of the claim unless they have been spe-
cifically denied.” (Emphasis added.) Even in the context of
awarding attorney fees in workers’ compensation cases, the
legislature has recognized that a denied claim is “[a] claim
602 Johnson v. SAIF
for compensation which an insurer or self-insured employer
refuses to pay on the express ground that the injury or con-
dition for which compensation is claimed is not compensable
or otherwise does not give rise to an entitlement to any com-
pensation[.]” See ORS 656.386(1)(b)(A) (defining a denied
claim as it relates to awards for attorney fees).
The proposition that compensation should not flow
from a denied claim is also clear in the process specifically
laid out for claim closure and rating of permanent disability.
Under ORS 656.262(7)(c),
“[w]hen an insurer or self-insured employer determines
that the claim qualifies for claim closure, the insurer or
self-insured employer shall issue at claim closure an
updated notice of acceptance that specifies which condi-
tions are compensable. * * * Any objection to the updated
notice or appeal of denied conditions shall not delay claim
closure pursuant to ORS 656.268. If a condition is found
compensable after claim closure, the insurer or self-insured
employer shall reopen the claim for processing regarding
that condition.”
By the terms of that statute, the updated notice of acceptance
at claim closure defines the compensable conditions and spe-
cifically separates out a process for appeal of a denied con-
dition that is not subject to compensation. The claim closure
and rating of permanent disability are expected to proceed
without the denied conditions. As we understand that stat-
ute, there is no point at which the denied condition would be
subject to compensation unless, and until, it is determined
to be compensable.
We do not read any of those statutes, however, to
create another limited exception that authorizes appor-
tionment even where the accepted compensable condition
is a material contributing cause of the impairment. Unlike
the combined condition process, we do not understand the
legislature to have adopted or recognized any process that
authorizes apportionment of a claim in cases involving par-
tial denials. Certainly, we agree that, if a denied condition is
the sole cause of a claimant’s impairment, or if the accepted
condition is not even a material cause of the impairment,
then a denied condition operates to cut off compensation.
Cite as 369 Or 579 (2022) 603
But, if the material contributing cause standard is met as to
the accepted condition, the full value of impairment is due.
Our decision today acknowledges that an individu-
al’s impairment may have more than one contributing fac-
tor. Claimant’s situation demonstrates why the material
contributing cause standard exists. Although it is true that
claimant’s denied conditions—the left rotator cuff tear, left
upper arm and elbow sprain, and cervical disc disorder—
contributed to her overall loss of grip strength, that impair-
ment was caused in material part by the accepted, com-
pensable claim that arose from the work-related incident.
Claimant was entitled to the full measure of impairment for
her loss of grip strength and the permanent partial disability
award should not have been reduced due to apportionment.
III. CONCLUSION
Because we agree with claimant that ORS 656.214
entitles an injured worker to compensation for all of the
impairment due in material part to, and resulting in mate-
rial part from, the compensable injury, and because the com-
pensable injury was found to be a material cause of claim-
ant’s impairment, we find that claimant was entitled to the
full value of her total impairment, including the portion of
her loss of grip strength that may have been attributed to
the denied conditions. Apportionment of claimant’s award
for permanent partial disability, based on the percentage of
contribution to impairment by the compensable condition,
was not appropriate in this case. Accordingly, the board’s
decision to reduce claimant’s award based on the extent to
which the denied shoulder condition contributed to the loss
of grip strength was incorrect.
For the reasons discussed above, we agree with the
Court of Appeals that, absent a specifically identified com-
bined condition, claimant is entitled to the full measure of
impairment for her condition.
The decision of the Court of Appeals is affirmed.
The order of the Workers’ Compensation Board is reversed.