Greenbriar Ag Management v. Lemus

LINDER, J.,

dissenting.

In my view, this is a very different case from Ebbtide Enterprises v. Tucker, 303 Or 459 , 738 P2d 194 (1987), and the outcome should be different as well. In Ebbtide, the insurer accepted a claim knowing the relevant facts involving the claimant’s prior injury to her back and knowing that claimant attributed most of her back problems to a prior 1982 injury. What the insurer did not know was that the claimant previously had injured her back not just in 1982, but also in 1977. The Workers’ Compensation Board, in determining whether the insurer’s decision “could reasonably have been affected” by knowledge of the prior injury, concluded that there was no reason to believe that the insurer would have investigated further based on the 1977 incident, when the 1982 injury to which most of the back problems were ascribed had not prompted any further inquiry on the insurer’s part. Id. at 464 . The Oregon Supreme Court agreed. Id.

Here, insurer was aware in a general way that claimant had made prior claims based on allegedly work-related injuries to his back. Insurer also believed that claimant may have misrepresented his medical history to the examining physician, and insurer therefore wrote the physician to determine if that was the case. At the time of acceptance, insurer was attempting to investigate the prior claims and the full scope of claimant’s representations to the examining physician. That state of facts is in marked contrast to the facts in Ebbtide, where the insurer had the claimant’s acknowledgment of a prior compensable injury to the same body part and undertook no investigation whatsoever on the basis of that prior injury. Insurer here did not have most, or even a significant, share of the essential information or documentation — indeed, it incorrectly thought one prior claim *508 had been denied, and it did not know the outcome of the other. That claimant’s misrepresentation reasonably could bear on the employer’s decision is evident, if not by common sense alone, then certainly by the fact that the employer was making reasonable efforts to obtain actual documentation of the prior claims and to confirm with the physician that in fact claimant had not given an accurate medical history.

The majority’s real focus seems to be less on the materiality of the misrepresentation and more on the insurer’s conduct in accepting the claim prematurely — that is, with three weeks remaining in which the insurer might have acquired the sought-after documentation and confirmation from the physician. The insurer’s acceptance of the claim at that point may have been inadvertent, negligent, or simply cautious. 1 We do not know. The majority concludes that, without providing an explanation, the insurer could not carry its burden here. 156 Or App at 504-05. That approach turns the policy embodied in ORS 656.262(6)(a) on its head. The statute requires only that the insurer have accepted the claim in good faith. No one disputes that in this case, the insurer did so. Beyond that, the statutory policy places a premium on full and fair disclosure by a claimant. The net effect of the majority’s holding in this case is that a claimant may flagrantly misrepresent his or her medical history without consequence if the insurer suspected or had sketchy but undocumented and incomplete information about the misrepresentation, was attempting to obtain more information, and in good faith accepted the claim before the insurer’s investigative efforts bore fruit. The statute is seriously dis-served by that result. I would reverse. 2

Accordingly, I dissent.

An insurer is subject to penalty for unreasonably delaying acceptance or denial of a claim. ORS 656.262(11).

At a minimum, given the majority’s determination that an insurer must demonstrate not only its good faith, but “on what basis” the insurer initially accepted the claim, I would remand this case to give the insurer the opportunity to make that demonstration.