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IN THE MATTER OF THE COMPENSATION OF DENNIS R. LEWIS, CLAIMANT
 
Case:
WCB CASE NO. 94-02018 WCD FILE NO. A727190 CLAIM NO. 7789299L
 
Location:
OREGON WORKERS' COMPENSATION BOARD
 
Date:
DOI: NOVEMBER 2, 1993
NOVEMBER 29, 1994
 
Attorneys:
BISCHOFF & STROOBAND, ATTYS, P.O. BOX 1848, EUGENE, OR 97440
 
Court:
REVIEWED BY BOARD MEMBERS NEIDIG AND GUNN
 

ORDER ON REVIEW:

THE SAIF CORPORATION REQUESTS REVIEW OF THOSE PORTIONS OF REFEREE LIVESLEY'S ORDER WHICH: (1) SET ASIDE ITS PARTIAL DENIAL OF CLAIMANT'S LOW BACK INJURY CLAIM; (2) ASSESSED A 25 PERCENT PENALTY FOR ITS ALLEGEDLY UNREASONABLE FAILURE TO PROPERLY CLASSIFY CLAIMANT'S ACCEPTED SHOULDER AND CERVICAL CLAIM AS DISABLING; (3) DIRECTED SAIF TO RECALCULATE CLAIMANT'S TEMPORARY DISABILITY; AND (4) ASSESSED A 25 PERCENT PENALTY FOR AN ALLEGEDLY UNREASONABLE FAILURE TO PAY TEMPORARY DISABILITY. ON REVIEW, THE ISSUES ARE COMPENSABILITY, CLAIM PROCESSING, AND PENALTIES. WE AFFIRM IN PART AND MODIFY IN PART.

FINDINGS OF FACT

WE ADOPT THE REFEREE'S FINDINGS OF FACT. WE ALSO OFFER THE FOLLOWING SUMMARY OF THE RELEVANT FACTS.

CLAIMANT INJURED HIS RIGHT SHOULDER ON NOVEMBER 2, 1993 AND WAS PLACED ON MODIFIED WORK BY HIS EMPLOYER AT HIS REGULAR WAGE. ON NOVEMBER 9, 1993, CLAIMANT SOUGHT MEDICAL TREATMENT FOR RIGHT SHOULDER COMPLAINTS AND WAS DIAGNOSED WITH RIGHT SHOULDER TENDONITIS AND MUSCLE STRAIN. DR. FELDMAN RELEASED CLAIMANT FOR MODIFIED WORK. CLAIMANT'S EMPLOYMENT WAS TERMINATED ON NOVEMBER 10, 1993 WHEN HE FAILED A DRUG TEST. HE SUBSEQUENTLY BEGAN REPORTING LOW BACK COMPLAINTS. CLAIMANT'S INJURY CLAIM WAS EVENTUALLY ACCEPTED AS A NONDISABLING RIGHT SHOULDER AND CERVICAL STRAIN ON JANUARY 17, 1994.

ON FEBRUARY 16, 1994, THE DEPARTMENT ISSUED AN ORDER DENYING ASSESSMENT OF A PENALTY PURSUANT TO ORS 656.262(10) AFTER CLAIMANT ALLEGED THAT SAIF UNREASONABLY FAILED TO PAY TEMPORARY DISABILITY. ON FEBRUARY 21, 1994, CLAIMANT REQUESTED A HEARING REGARDING THE DEPARTMENT'S ORDER BEFORE THE HEARINGS DIVISION. HOWEVER, SINCE THE DEPARTMENT'S ORDER WAS NOT APPEALED PURSUANT TO THE REVIEW PROCEDURES OF ORS 656.704(2), IT BECAME FINAL.

ON MARCH 28, 1994, SAIF RECLASSIFIED CLAIMANT'S INJURY CLAIM AS DISABLING. ON MARCH 29, 1994, CLAIMANT FILED A SUPPLEMENTAL HEARING REQUEST, RAISING THE ISSUES OF PENALTIES FOR FAILURE TO PAY TEMPORARY DISABILITY AND PENALTIES AND Counsel FEES FOR FAILURE TO PROPERLY CLASSIFY THE CLAIM. CLAIMANT'S LOW BACK CONDITION WAS DENIED ON APRIL 1, 1994, WHICH CLAIMANT CONTESTED AT THE APRIL 4, 1994 HEARING.

CONCLUSIONS OF LAW AND OPINION

THE REFEREE FOUND THAT CLAIMANT'S LOW BACK CONDITION WAS COMPENSABLE. HOWEVER, THE REFEREE UPHELD THE DENIAL TO THE EXTENT THAT IT DENIED THE COMPENSABILITY OF CLAIMANT'S SPONDYLOLISTHESIS AT L-5 AND HIS L5-S1 DISC BULGE.

THE REFEREE FURTHER CONCLUDED THAT CLAIMANT'S RELEASE TO MODIFIED WORK ON NOVEMBER 9, 1993 REQUIRED THAT THE CLAIM BE CLASSIFIED AS DISABLING. CONSEQUENTLY, THE REFEREE REASONED THAT CLAIMANT WAS ENTITLED TO A 25 PERCENT PENALTY BASED ON "ALL SUMS THEN DUE" FOR SAIF'S UNREASONABLE FAILURE TO PROPERLY CLASSIFY THE CLAIM. THE REFEREE ALSO DETERMINED THAT CLAIMANT WAS ENTITLED TO A COMPUTATION OF TEMPORARY PARTIAL DISABILITY PURSUANT TO TEMPORARY OAR 436-60-030, (WCD ADMIN. ORD. 94-050 EFFECTIVE FEBRUARY 28, 1994), AS WELL AS A 25 PERCENT PENALTY UNDER ORS 656.262(10) FOR FAILURE TO PAY TEMPORARY DISABILITY. COMPENSABILITY

WE ADOPT AND AFFIRM THE REFEREE'S REASONING AND CONCLUSION REGARDING THE COMPENSABILITY OF CLAIMANT'S LOW BACK CONDITION. CLAIM PROCESSING/PENALTIES

CLAIMANT WAS PROVIDED MODIFIED WORK WITH FULL WAGES PRIOR TO HIS TERMINATION FOR REASONS UNRELATED TO HIS INJURY. SAIF CONCEDES THAT THE CLAIM SHOULD HAVE BEEN CLASSIFIED AS DISABLING FROM THE BEGINNING SINCE CLAIMANT WAS PARTIALLY DISABLED BECAUSE OF HIS WORK RESTRICTIONS. SEE SHARMAN R. CROWELL, 46 VAN NATTA 1728 (1994). HOWEVER, SAIF CONTENDS THAT THE REFEREE SHOULD NOT HAVE ASSESSED PENALTIES BECAUSE THERE IS NO PROOF THAT CLAIMANT'S RATE OF TEMPORARY PARTIAL DISABILITY WAS ANYTHING OTHER THAN ZERO. THEREFORE, IT ASSERTS IT COULD NOT HAVE UNREASONABLY RESISTED THE PAYMENT OF COMPENSATION WHEN CLAIMANT WAS NOT ENTITLED TO ANY TEMPORARY DISABILITY.

MOREOVER, SAIF ARGUES THAT FURTHER LITIGATION OF THE PENALTY ISSUES IS BARRED BY RES JUDICATA SINCE THERE WAS A FINAL ORDER ISSUED BY THE DEPARTMENT'S COMPLIANCE SECTION ON FEBRUARY 16, 1994, WHICH DETERMINED THAT CLAIMANT WAS NOT ENTITLED TO A PENALTY PURSUANT TO ORS 656.262(10) FOR SAIF'S FAILURE TO PAY TEMPORARY DISABILITY. INASMUCH AS CLAIMANT DID NOT SEEK REVIEW OF THIS ORDER PURSUANT TO ORS 656.704(2), SAIF ASSERTS THAT THE ORDER IS FINAL AND PRECLUSIVE.

UNDER THE RES JUDICATA DOCTRINE OF ISSUE PRECLUSION, IF AN ISSUE OF FACT OR LAW IS ACTUALLY LITIGATED AND DETERMINED BY A VALID FINAL JUDGMENT AND THE DETERMINATION IS ESSENTIAL TO THE JUDGMENT, THE DETERMINATION IS CONCLUSIVE IN A SUBSEQUENT ACTION BETWEEN THE PARTIES, WHETHER ON THE SAME OR A DIFFERENT CLAIM. DREWS V. EBI COMPANIES, 310 OR 134, 139-40 (1990); NORTH CLACKAMAS SCHOOL DIST. V. WHITE, 305 OR 48, 50, MODIFIED 305 OR 468 (1988).

WE AGREE WITH SAIF THAT THE DEPARTMENT'S FINAL ORDER PRECLUDED CLAIMANT FROM CONTENDING THAT HE IS ENTITLED TO A PENALTY PURSUANT TO ORS 656.262(10) FOR FAILURE TO PAY TEMPORARY DISABILITY THROUGH FEBRUARY 16, 1994 (THE DATE OF THE DEPARTMENT'S ORDER). *FN1 MOREOVER, WE FIND THAT SAIF'S CLAIM PROCESSING WAS REASONABLE AS OF THAT DATE, GIVEN THAT UNDER FORMER OAR 436-60-030(2), CLAIMANT'S TEMPORARY PARTIAL DISABILITY RATE WOULD BE ZERO BECAUSE OF CLAIMANT'S RETURN TO MODIFIED WORK AT FULL WAGES.

HOWEVER, AS REASONED BY THE REFEREE, SAIF HAS A CONTINUING DUTY TO PROCESS A CLAIM. SEE OAR 436-60-010(1) (INSURER SHALL PROCESS CLAIM IN ACCORDANCE WITH CHAPTER 656, WCD ADMINISTRATIVE ORDERS AND BULLETINS). THUS, EFFECTIVE FEBRUARY 28, 1994 (WHEN THE AMENDED RULE BECAME EFFECTIVE), SAIF WAS REQUIRED BY TEMPORARY OAR 436-60-030 TO COMPUTE TEMPORARY PARTIAL DISABILITY IN REFERENCE TO CLAIMANT'S "EARNING POWER AT ANY KIND OF WORK." SEE STONE V. WHITTIER WOOD PRODUCTS, 124 OR APP 117 (1993). SUCH A DIRECTIVE INVOLVES EVALUATING ALL RELEVANT CIRCUMSTANCES THAT AFFECT A WORKER'S ABILITY TO EARN WAGES. UNDER TEMPORARY OAR 436-60-030(2), POST-INJURY WAGES ARE NOT DISPOSITIVE OF THE RATE OF TEMPORARY PARTIAL DISABILITY.

INASMUCH AS THERE IS NO EVIDENCE THAT SAIF RECOMPUTED CLAIMANT'S TEMPORARY DISABILITY IN ACCORDANCE WITH THE AMENDED ADMINISTRATIVE RULE, WE AGREE WITH THE REFEREE THAT SAIF'S CONDUCT WAS UNREASONABLE. CONSEQUENTLY, CLAIMANT IS ENTITLED TO RECOVER A PENALTY FOR SAIF'S UNREASONABLE FAILURE TO PAY TEMPORARY DISABILITY AFTER THE EFFECTIVE DATE OF THE TEMPORARY RULE. MOREOVER, THE REFEREE APPROPRIATELY DIRECTED SAIF TO MAKE THE PROPER CALCULATION OF CLAIMANT'S TEMPORARY DISABILITY IN LIGHT OF THE TEMPORARY RULE AND SAIF'S GENERAL CLAIM PROCESSING RESPONSIBILITIES.

FINALLY, SAIF HAS CONCEDED THAT CLAIMANT'S CLAIM SHOULD HAVE BEEN ORIGINALLY CLASSIFIED AS DISABLING. BECAUSE OF THIS CONCESSION, WE AGREE WITH THE REFEREE THAT SAIF'S CONDUCT IN MISCLASSIFYING THE CLAIM WAS UNREASONABLE. THEREFORE, A 25 PERCENT PENALTY IS APPROPRIATE. THE AMOUNT WILL BE DETERMINED WHEN SAIF CALCULATES TEMPORARY PARTIAL DISABILITY IN ACCORDANCE WITH THE "POST-STONE" ADMINISTRATIVE RULE AND WILL BE BASED ON AMOUNTS "THEN DUE" FROM FEBRUARY 16, 1994 (THE DATE OF THE DIRECTOR'S ORDER DECLINING TO ASSESS A PENALTY) UNTIL SAIF CHANGED THE CLAIM CLASSIFICATION FROM NONDISABLING TO DISABLING ON MARCH 28, 1994. SEE LINDA M. AKINS, 44 VAN NATTA 108, 111 (1992) (PENALTY BASED ON "AMOUNTS THEN DUE" WHEN UNREASONABLE CONDUCT IS CORRECTED).

WE HAVE PREVIOUSLY FOUND THAT CLAIMANT IS ENTITLED TO A PENALTY FOR SAIF'S UNREASONABLE FAILURE TO RECALCULATE CLAIMANT'S TEMPORARY DISABILITY. GENERALLY, WE WOULD ASSESS A PENALTY BASED ON THE TEMPORARY DISABILITY DUE FROM THE DATE OF THE DEPARTMENT'S FEBRUARY 16, 1994 ORDER THROUGH THE APRIL 4, 1994 HEARING. HOWEVER, WE ARE ALREADY ASSESSING SAIF'S "MISCLASSIFICATION" PENALTY FROM FEBRUARY 16, 1994 TO MARCH 28, 1994. INASMUCH AS WE ARE PRECLUDED FROM ASSESSING A 25 PERCENT PENALTY ON THE SAME "AMOUNT THEN DUE" AS A RESULT OF SAIF'S MISCLASSIFICATION CONDUCT, SEE KIM C. HARAGAN, 42 VAN NATTA 311, 313 (1990), CLAIMANT'S PENALTY FOR SAIF'S UNREASONABLE FAILURE TO PAY TEMPORARY DISABILITY WILL INSTEAD BE BASED ON "AMOUNTS THEN DUE" FOR THE PERIOD FROM MARCH 29, 1994 TO THE DATE OF THE APRIL 4, 1994 HEARING.

CLAIMANT'S Counsel IS ENTITLED TO Counsel FEES FOR SERVICES ON REVIEW CONCERNING THE COMPENSABILITY ISSUE. ORS 656.382(2). AFTER CONSIDERING THE FACTORS SET FORTH IN OAR 438-15-010(4) AND APPLYING THEM TO THIS CASE, WE FIND THAT A REASONABLE ASSESSED Counsel FEE FOR CLAIMANT'S COUNSEL SERVICES ON REVIEW REGARDING THE COMPENSABILITY ISSUE IS $1,000, TO BE PAID BY SAIF. IN REACHING THIS CONCLUSION, WE HAVE PARTICULARLY CONSIDERED THE TIME DEVOTED TO THE ISSUE (AS REPRESENTED BY CLAIMANT'S RESPONDENT'S BRIEF), THE COMPLEXITY OF THE ISSUE, AND THE VALUE OF THE INTEREST INVOLVED.

FINALLY, CLAIMANT'S Counsel IS NOT ENTITLED TO AN Counsel FEE FOR HIS SERVICES REGARDING THE PENALTY ISSUES. SEE SAXTON V. SAIF, 80 OR APP 631 (1986).

ORDER

THE REFEREE'S ORDER DATED JUNE 17, 1994 IS AFFIRMED IN PART AND MODIFIED IN PART. IN LIEU OF THE REFEREE'S PENALTY ASSESSMENT, CLAIMANT IS AWARDED: (1) A 25 PERCENT PENALTY FOR SAIF'S UNREASONABLE MISCLASSIFICATION BASED ON THE TEMPORARY DISABILITY DUE BETWEEN FEBRUARY 16, 1994 AND MARCH 28, 1994; AND (2) A 25 PERCENT PENALTY FOR SAIF'S UNREASONABLE FAILURE TO RECALCULATE CLAIMANT'S TEMPORARY DISABILITY BASED ON THE TEMPORARY DISABILITY DUE BETWEEN MARCH 29, 1994 AND APRIL 4, 1994. CLAIMANT'S Counsel SHALL RECEIVE ONE-HALF OF THESE PENALTIES UNDER ORS 656.262(10). FOR SERVICES ON REVIEW, CLAIMANT'S Counsel IS AWARDED AN ASSESSED Counsel FEE OF $1,000, TO BE PAID BY SAIF. THE REMAINDER OF THE REFEREE'S ORDER IS AFFIRMED.

WORKERS' COMPENSATION BOARD

MARY C. NEIDIG, BOARD CHAIR

THOMAS C. GUNN, BOARD MEMBER

 
Notes:

*FN1 THE BOARD IS AUTHORIZED TO ADDRESS A PENALTY ISSUE IF IT IS COMBINED WITH OTHER ISSUES. HOWEVER, THE DIRECTOR HAS EXCLUSIVE AUTHORITY UNDER ORS 656.262(10) IF THE SOLE ISSUE IS ENTITLEMENT TO A PENALTY. SEE ALBERTSON V. ASTORIA SEAFOOD CORPORATION, 118 OR APP 186 (1993). HERE, CLAIMANT CHOSE TO PRESENT THE PENALTY ISSUE TO THE DIRECTOR BEFORE REQUESTING A HEARING WITH THE BOARD. SINCE HE DID SO AND THE DIRECTOR'S ORDER BECAME FINAL, THE BOARD CANNOT ADDRESS THE ISSUE OF A PENALTY FOR SAIF'S FAILURE TO PAY TEMPORARY DISABILITY THROUGH FEBRUARY 16, 1994.