Hilton Hotels Corp. v. Yauger (In re Yauger)

295 Or.App. 330

433 P.3d 411

In the MATTER OF the COMPENSATION OF Basil D. YAUGER, Claimant.

Hilton Hotels Corp. - Hilton Worldwide, Petitioner,

v.Basil D. Yauger, Respondent.

A162758

Court of Appeals of Oregon.

Argued and submitted September 8, 2017.

December 12, 2018

Christo J. de Villiers argued the cause for petitioner. On the briefs was Scott H. Terrall.

Jovanna L. Patrick, Portland, argued the cause and filed the brief for respondent.

Before Armstrong, Presiding Judge, and Tookey, Judge, and Shorr, Judge.

ARMSTRONG, P. J.

The question in this workers’ compensation case is the level of cooperation required to avoid a "noncooperation denial" for a worker whose benefits have been temporarily suspended for noncooperation. See ORS 656.262(15) (setting forth procedures for suspension and denial of benefits based on noncooperation). We conclude that ORS 656.262(15) requires that the worker "reasonably cooperate" with the employer’s investigation. On employer’s petition for judicial review, we conclude that the board erred in its application of the statute in this case because the board applied an "any effort" to cooperate standard. We therefore reverse and remand for reconsideration. ORS 183.482(7), (8) ; ORS 656.298(7).

The pertinent facts as found by the board are largely undisputed. Claimant notified employer on August 9, 2014, that he had sustained an injury during an altercation at work. An injured worker has a duty to cooperate with an employer’s investigation of the worker’s claim for compensation. ORS 656.262(14)(a) provides, as relevant:

"Injured workers have a duty to cooperate and assist the insurer or self-insured employer in the investigation of claims for compensation. Injured workers shall submit to and shall fully cooperate with personal and telephonic interviews and other formal or informal information gathering techniques."

Employer notified claimant of a deposition scheduled for September 4, 2014. Claimant received the notice but did not attend. Employer requested that the Workers’ Compensation Division of the Department of Consumer and Business Services issue an order suspending claimant’s benefits pursuant to ORS 656.262(15), which provides, as relevant:

"If the director finds that a worker fails to reasonably cooperate with an investigation involving an initial claim to establish a compensable injury or an aggravation claim to reopen the claim for a worsened condition, the director shall suspend all or part of the payment of compensation after notice to the worker."

The applicable version of OAR 436-060-0135 (Jan. 1, 2010) also authorizes the suspension of benefits when a worker fails to cooperate with an investigation:

"(1) When the worker refuses or fails to cooperate in an investigation of an initial claim for compensation, * * * the division will suspend compensation under ORS 656.262(15) by order under conditions set forth in this rule."

In response to employer’s request for suspension, on September 16, 2014, and again on September 19, the division sent claimant a notice that his benefits would be suspended after five days if he did not contact the division or employer’s claims administrator, Sedgwick CMS, and cooperate in the investigation of his claim. Claimant had moved and did not receive the notices.

On September 30, 2014, having received no response from claimant, the division issued an order under ORS 656.262(15) suspending claimant’s compensation. The order provided that the division consented to employer’s request to suspend benefits and that the suspension would continue "until the worker cooperates with the insurer’s investigation of the claim by contacting the insurer to arrange and submit to an interview."

If a worker does not cooperate within 30 days of the date of a notice of suspension, the insurer may deny the claim. ORS 656.262(15) provides:

"If the worker does not cooperate for an additional 30 days after the notice, the insurer or self-insured employer may deny the claim because of the worker’s failure to cooperate."

OAR 436-060-0135(9) (Jan. 1, 2010) provided:

"If the worker makes no effort to reinstate compensation within 30 days of the date of the notice, the insurer may deny the claim under ORS 656.262(15) and OAR 436-060-0140(10)."

In the meantime, after claimant failed to attend the scheduled deposition but before employer moved to suspend claimant’s benefits, claimant had initiated an email communication with the department’s Ombudsman for Injured Workers. In an email of September 6, 2014, claimant stated, "I will submit whatever is needed to establish this claim." In a separate email to the ombudsman on the same day, claimant asked, "What is my next step?"

The ombudsman responded by asking claimant to provide information about his employment so that she could research his claim. On October 1, 2014, the ombudsman emailed claimant a copy of the September 16, 2014, notice, and advised him to contact the Sedgwick claim adjuster, Krech, at a telephone number provided.

On October 1, 2014, and again on October 2, claimant emailed Sedgwick at its corporate headquarters and acknowledged receipt of the September 16, 2014, notice. Claimant misrepresented in his email that he had not been aware of the September 4, 2014, deposition and stated that he had been willing to cooperate with the investigation.

On October 16, claimant signed a medical release that had been forwarded to him by the ombudsman and once again emailed Sedgwick at its corporate headquarters, requesting an update on his claim. He asked, "Is there anything else that a reasonable person could do after being attacked, and injured while on the job? If so—please advise."¹ The ombudsman also communicated directly with Krech, who replied on October 16 that the claim was in "deferral status." The ombudsman communicated that information to claimant. Sedgwick forwarded claimant’s October 16 email to Krech on October 20, 2014.

Rather than respond to claimant’s or the ombudsman’s October 16 email inquiry, Sedgwick sent claimant a noncooperation denial, and claimant filed a request for hearing. Claimant’s attorney conceded at the hearing that claimant had not "fully and completely cooperated" with the investigation. But she contended that, before September 30, claimant’s failure to cooperate had been beyond his control because of cognitive and memory problems, and that, after the September 30 notice of suspension, claimant had attempted to cooperate, but employer had ignored his attempts.

An administrative law judge (ALJ) set aside employer’s noncooperation denial. The ALJ found that, before the September 30 suspension, employer’s demands had been reasonable, claimant had not cooperated, and claimant’s noncooperation before September 30 was not due to any reason beyond his control. But the ALJ found that, by his October 16 email, claimant put employer on notice that he was willing to cooperate. The ALJ found that employer’s decision to ignore claimant’s communications was unreasonable, and he set aside the denial and remanded the claim for acceptance or denial of benefits.

In an en banc order, the board affirmed the ALJ’s order and adopted his findings. The board found that, although claimant’s email of October 16 did not specifically address arranging or submitting to an interview as required by the notice of suspension, the email was sufficient to advise employer that claimant was willing to cooperate.

The order also addressed employer’s failure to respond to claimant’s inquiries. Citing the division’s administrative rules, the board noted that, if a claimant cooperates after a request for suspension, the employer has an obligation to notify the division, OAR 436-060-0135(7). Citing OAR 436-060-0135(9), the board stated that "[i]f the worker makes no effort to reinstate compensation within 30 days of the suspension notice, then a carrier is authorized to deny the claim." (Emphasis in original.) The board found that "employer was aware of claimant’s attempts to cooperate, but elected to wait for the 30 days to expire and issue a ‘noncooperation’ denial instead of responding to his inquiry."

The board’s discussion reflects its view that a claimant cooperates for purposes of ORS 656.262(15) if the claimant makes "any effort" to reinstate benefits. In affirming the ALJ, the board concluded:

"[T]he record persuasively establishes that claimant contacted the employer within 30 days of the [division’s] suspension notice asking what actions he needed to take. Thus, the prerequisites for the issuance of a non-cooperation denial were not satisfied. Accordingly, the employer’s denial is procedurally invalid."

Having determined that the denial was procedurally invalid, the board did not address employer’s contention that claimant had a burden to show that he had "fully and completely" cooperated with employer’s investigation.

On judicial review, employer does not challenge the board’s finding that that employer had failed to respond to claimant’s communications. Rather, employer contends that the board’s finding that claimant had cooperated is not supported by substantial evidence, and its determination that claimant’s cooperation was sufficient cannot be squared with the requirement in ORS 656.262(15) that a noncooperation denial can be overturned only by a showing that "the worker fully and completely cooperated with the investigation." Employer further contends that the provision of OAR 436-060-0135(9) on which the board relied to conclude that a noncooperation denial can be issued only if the worker "makes no effort" to cooperate is not consistent with the statute’s "fully and completely" standard of cooperation. Employer does not argue that a claimant must have actually "fully and completely" fulfilled the requested action within the 30 days, but that, at a minimum, the claimant must have expressed a willingness to fully and completely cooperate, such as by requesting that the deposition or interview be rescheduled. That did not occur here.

The...