EBI Companies v. Cooper
This text of 785 P.2d 380 (EBI Companies v. Cooper) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
EBI seeks review of a Workers’ Compensation Board order that held that claimant was entitled to rescind his election, made pursuant to ORS 656.591, to assign his third party action to EBI and that the proceeds of the third party settlement should be redistributed pursuant to ORS 656.593(1). 1 We affirm.
Claimant suffered a compensable injury in November, 1981. In June, 1982, he was involved in an off-the-job accident that caused increased pain and new symptoms. He pursued an aggravation claim and elected to assign his third party rights arising from the accident to EBI, pursuant to ORS 656.591. 2 EBI settled that action in April, 1986, and *249 the proceeds were distributed pursuant to ORS 656.591(2). In the distribution, claimant received nothing.
In October, 1987, claimant petitioned the Board for a third party order pursuant to ORS 656.593 to redistribute the recovery in the third party action. Claimant contended that EBI had induced him to assign his claim by fraud or misrepresentation. The Board concluded that the assignment was invalid and ordered redistribution of the proceeds as if claimant had maintained his own third party action pursuant to ORS 656.593.
Although it is not raised by the parties, we decide as a threshold issue whether the Board had jurisdiction and the authority to order that claimant’s election be rescinded and the proceeds be redistributed. This dispute involves “matters concerning a claim under ORS 656.001 to 656.794,” because the worker’s right to receive compensation is directly in issue. ORS 656.704(1), (3). The paying agency’s right to distribution of third party recoveries is derived from its responsibility for compensation, and the amount distributed is determined in part by the amount of compensation paid. See Schlect v. SAIF, 60 Or App 449, 455, 653 P2d 1284 (1982). ORS 656.591 gives the Board jurisdiction over the parties and the subject matter of an election by a worker to assign his third party claim to a paying agency. The Board’s authority to order rescission of an election fraudulently obtained flows from the exercise of that jurisdiction, because an election that was induced by fraud is, in fact, no election.
The Board stated:
“In Ebbtide Enterprises v. Tucker, 303 Or 459, 464[, 738 P2d 914] (1987), the Court held that, in order to support a recision of an earlier acceptance, the insurer must show that the decision to accept the claim ‘could reasonably have been affected’ if the true facts had been known. The insurer is not required to show that it in fact would have denied the claim *250 with the correct information. Newport Elks Club v. Hays[, 92 Or App 604, 607, 759 P2d 327, rev den 307 Or 245 (1988)].’
“Applying this standard to the third party matter before us, we conclude that claimant need only show that the election form was misleading and that his decision to assign his rights to the paying agency ‘could reasonably have been affected’ if the true facts had been known. Claimant need not prove that he was, in fact, misled into assigning his third party action to the paying agency. See Newport Elks Club v. Hays, supra, 92 Or App at 607.
“We find that the election form is misleading. Option ‘A’ and Option ‘B’, read together, strongly imply that in order to continue receiving benefits under his compensable claim, claimant had to elect Option ‘B’. Both parties agree that this is not a correct statement of the law. Moreover, it is readily apparent that claimant’s election could have been influenced by the knowledge that he did not need to assign his third party action to the paying agency in order to continue to receive his workers’ compensation benefitsJ 3 We conclude that, absent a defense on the part of the paying agency, claimant is entitled to rescind his prior election.” (Emphasis supplied.)
EBI does not argue that the Board applied the wrong legal standard when it held that the claimant must show that his election could reasonably have been affected by the misleading language in the notice. Rather, it argues that the Board erred in refusing to resolve an underlying credibility dispute between claimant and the claims representative and in basing its decision on the language of the election form, because claimant did not rely on it. It points to the fact that claimant called petitioner after receiving the election form notice. Petitioner’s claims representative and claimant disagree about what the representative said in that conversation. Petitioner suggests that OAR 438-11-045(2), which provides that testimonial evidence in third party disputes shall be by “deposition, affidavit or written interrogatories,” and ORS *251 656.593(3) 4 require the Board to resolve the credibility dispute as a matter of law.
Nothing in ORS 656.593(3) or OAR 438-11-045(2) prohibits the Board from considering the conflicting testimony of the claimant and the claims representative to be in equipoise or from relying on the election notice language as the determinative factor. There is substantial evidence to support the Board’s finding that the election notice could have affected claimant’s election. Although claimant testified that, after receiving the election form, he called the claims representative and “asked what the letter meant,” thereafter he signed the election form and returned it to petitioner. It is just as reasonable to infer that the conversation with the claims representative did not obviate the misleading language of the election form as it is to infer that it did. Therefore, the Board did not err. 5
Affirmed.
Related
Cite This Page — Counsel Stack
785 P.2d 380, 100 Or. App. 246, 1990 Ore. App. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ebi-companies-v-cooper-orctapp-1990.