State v. J. M. Marson Co.

949 P.2d 318, 151 Or. App. 355, 1997 Ore. App. LEXIS 1755
CourtCourt of Appeals of Oregon
DecidedNovember 19, 1997
Docket96C-10203; CA A94639
StatusPublished

This text of 949 P.2d 318 (State v. J. M. Marson Co.) 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.

Bluebook
State v. J. M. Marson Co., 949 P.2d 318, 151 Or. App. 355, 1997 Ore. App. LEXIS 1755 (Or. Ct. App. 1997).

Opinion

JOSEPH, S. J.

The director of the Department of Consumer and Business Services (DCBS) brought this action pursuant to ORS 656.054 to recover reimbursement from defendants as noncomplying employers for amounts paid relating to a workers’ compensation claim filed by an employee of defendants. Plaintiff was awarded a summary judgment for the full amount claimed. Defendants appeal.

Defendant corporation was a California corporation authorized to do business in Oregon; defendant individuals were its president and secretary, respectively. On August 16, 1990, the corporation was working on an apartment project in Portland. An employee reported to the superintendent that another employee, Talley, had fallen from a ladder and broken his wrist. The superintendent told defendant Michael DeMarie about the report. Talley saw a doctor the same day. He hired a lawyer, who notified DeMarie that he would file a compensation claim. DeMarie notified the corporation’s Arizona compensation carrier but was told that the Oregon claim was not covered. Talley’s attorney then requested that the Oregon Workers’ Compensation Division investigate the corporation’s compliance with the Oregon workers’ compensation law.

On October 25,1990, the division issued a proposed and final order finding Talley to be a subject employee and the corporation to be a noncomplying employer because it did not meet the self-insured or carrier-insured requirements of ORS 656.017. The order also contained a notice of the right to request a hearing. The corporation requested a hearing on the notice but withdrew the request, and the order became final.

Meanwhile, on December 20, 1990, SAIF, to which the claim had been referred pursuant to the then existing version of ORS 656.054, accepted the claim, despite the fact that the file contained information that Talley had told his first doctor that he had suffered his injury playing sandlot football and only later changed his story to claim that he had fallen from a ladder at work. Defendants did not request a [358]*358hearing on the acceptance. SAIF made all the required payments on the claim. Under the statute, DCBS was required to reimburse SAIF for the claim costs. In this action, defendants denied knowing about Talley’s differing stories about the accident until DCBS initiated efforts to obtain reimbursement under ORS 656.054(3).

In their reply brief, defendants state their case fairly succinctly:

“Defendants have not placed compensability in issue. To avoid having to reimburse DCBS defendants do not have to prove that Talley’s injury was not compensable, only that SAIF paid compensation as a result of improper claims processing or that compensability was questionable and the rationale for acceptance was not reasonably documented in accordance with generally accepted claims management procedures. ORS 656.054(4). If either fact is proven, DCBS has violated the statute and reimbursed SAIF as a volunteer, and cannot recover from defendants.
“There is no statutory or case authority preventing a noncomplying employer from disputing DCBS’s right to reimbursement. Nothing in ORS chapter 656 precludes a noncomplying employer from contesting a reimbursement claim by DCBS. To be sure, a noncomplying employer may not later dispute the extent of the worker’s injury or the amount of compensation to which he was entitled, but defendants are not raising such issues here.” (Emphasis defendants’; citation omitted.)

To state it even more succinctly, defendants claim that, by contesting their obligation to DCBS, they may obtain a judicial examination of how DCBS administered its obligation to reimburse SAIF.

When Talley was injured in 1990, and during the time when SAIF was processing his claim and DCBS was incurring its initial liability to reimburse SAIF’s claim costs, ORS 656.054 did not contain a provision like subsection (4), on which defendants rely. The first version of that subsection and subsection (5) were added in 1991. Or Laws 1991, ch 679, § 1. They provided:

“(4) Periodically the director shall audit the files of the State Accident Insurance Fund Corporation to validate the [359]*359amount reimbursed pursuant to subsection (3) of this section. Reimbursement shall not be allowed, if upon such audit, any of the following are found to apply:
“(a) Compensation has been paid as a result of untimely, inaccurate, or improper claims processing;
“(b) Compensation has been paid negligently for treatment of any condition unrelated to the compensable condition;
“(c) The compensability of an accepted claim is questionable and the rationale for acceptance has not been reasonably documented in accordance with generally accepted claims management procedures;
“(d) The separate payments of compensation have not been documented in accordance with generally accepted accounting procedures; or
“(e) The payments were made pursuant to a disposition agreement as provided by ORS 656.236 without the prior approval of the director.
“(5) The State Accident Insurance Fund Corporation may appeal any disapproval of reimbursement made by the director under this section pursuant to ORS 183.310 to 183.550 and such procedural rules as the director may prescribe.”

After the 1995 amendments, the subsections now provide:

“(4) Periodically, or upon the request of a noncomplying employer in a particular claim, the director shall audit the files of the State Accident Insurance Fund Corporation and any assigned claims agents to validate the amount reimbursed pursuant to subsection (3) of this subsection. The conditions for granting or denying of reimbursement shall be specified in the contract with the assigned claims agent. The contract at least shall provide for denial of reimbursement if, upon such audit, any of the following are found to apply:
“(a) Compensation has been paid as a result of untimely, inaccurate, or improper claims processing;
“(b) Compensation has been paid negligently for treatment of any condition unrelated to the compensable condition;
[360]*360“(c) The compensability of an accepted claim is questionable and the rationale for acceptance has not been reasonably documented in accordance with generally accepted claims management procedures;

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Related

§ 183.310
Oregon § 183.310
§ 656.017
Oregon § 656.017
§ 656.054
Oregon § 656.054(3)
§ 656.236
Oregon § 656.236
§ 656.262
Oregon § 656.262

Cite This Page — Counsel Stack

Bluebook (online)
949 P.2d 318, 151 Or. App. 355, 1997 Ore. App. LEXIS 1755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-j-m-marson-co-orctapp-1997.