Johnson v. SAIF Corp.

369 Or. 579

507 P.3d 1277

Marisela JOHNSON, Respondent on Review,

v.SAIF CORPORATION and the Terrace Corporation, Petitioners on Review.

SC S068208

Supreme Court of Oregon.

Argued and submitted June 24, 2021.

April 21, 2022

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.

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 dispute in this workers’ compensation case concerns the meaning of the word "impairment" within the context 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 industrial injury." This case involves impairment—claim-ant'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 condition, if applicable. SAIF disagrees, arguing that the definition of impairment does not include loss caused by a denied condition because it is not "due to" the "compensable industrial injury."

For the reasons that follow, we conclude that claimant 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 context 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 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 ‘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).

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 the exact conditions that are compensable and a statement of the claimant's rights and responsibilities 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 hearing 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 permanent 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:

"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 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 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) (describing the requirements of the notice of closure, including a statement regarding the claimant's right to request consideration). If the claimant's physical impairment is in dispute on reconsideration, then the Director of Consumer Business and 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 consideration of this same case, Johnson v. SAIF , 291 Or. App. 1, 418 P.3d 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 elevator door. Claimant filed a workers’ compensation claim, and SAIF accepted the claim for contusions to the distal left 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 workplace 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 ratable 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 partial 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 condition 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 rotator 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 impairment related to the accepted left finger contusions and abrasion. The medical arbiter listed his "Impression" of claimant's 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 arbiter documented limited range of motion and decreased grip strength in claimant...