Tri-Met, Inc. v. Wolfe

86 P.3d 111, 192 Or. App. 556, 2004 Ore. App. LEXIS 313

• Court: Court of Appeals of Oregon
• Decided: March 24, 2004
• Docket: 01-01278; A117374
• Status: Published

Opinions

ARMSTRONG, J.

Employer seeks review of an order of the Workers’ Compensation Board (board), contending that the board erred in awarding claimant insurer-paid attorney fees pursuant to ORS 656.382(1). We affirm.

The facts are undisputed. Employer delayed its acceptance of claimant’s work-related arm injury beyond the 90 days authorized by statute for acceptance or denial of a claim, ORS 656.262(6)(a).¹ Claimant requested a hearing, asserting a de facto denial and seeking penalties and attorney fees. Employer accepted the claim several days later. By that time, claimant had incurred medical bills for which payment was due within 14 days of acceptance. OAR 436-009-0030(4).² Because of a processing error, the bills were not paid until a week before the hearing, a period of three months. The parties stipulated at the hearing that the claim had not been timely accepted and that the medical bills had been paid late. The administrative law judge (AU) assessed a penalty for employer’s late payment of claimant’s medical bills, pursuant to ORS 656.262(ll)(a). He further found that, in light of the medical record, employer’s belated acceptance of the claim had been unreasonable and that, in light of the existence of outstanding medical bills, the delay was an unreasonable resistance to the payment of compensation. The AU assessed attorney fees pursuant to ORS 656.382(1). The board affirmed.

On review, employer does not challenge the penalty based on the late payment of medical bills. It contends only that the board erred in awarding claimant attorney fees, asserting that, because there were no amounts due at the time of its delayed acceptance of the claim, that delayed acceptance cannot constitute an unreasonable resistance to payment of compensation.

ORS 656.262(11)(a) provides, in part:

“If the insurer or self-insured employer unreasonably delays or unreasonably refuses to pay compensation, or unreasonably delays acceptance or denial of a claim, the insurer or self-insured employer shall be liable for an additional amount up to 25 percent of the amounts then due. * * * If the worker is represented by an attorney, the worker shall be paid one-half the additional amount and the worker’s attorney shall receive one-half the additional amount in lieu of an attorney fee.”

The penalty described in ORS 656.262(11)(a) is assessed on “amounts then due.” Because the penalty is “in lieu of an attorney fee,” an insurer may not be assessed both a penalty under ORS 656.262(11)(a) and attorney fees under ORS 656.382(1) for a single act of misconduct. See SAIF v. Allen, 320 Or 192, 881 P2d 773 (1994); Martinez v. Dallas Nursing Home, 114 Or App 453, 836 P2d 147, rev den, 315 Or 271 (1992).

Here, as the board noted, a penalty was assessed for employer’s untimely payment of medical bills, so attorney fees cannot also be assessed for that conduct. In employer’s view, because the existence of the unpaid medical bills provided the justification for the board’s conclusion that employer had “resisted” payment of compensation, the board’s assessment of attorney fees is merely a disguised second penalty for the belated payment of medical bills. We disagree.

As employer has pointed out, the outstanding medical bills were not “due” at the time that employer belatedly accepted the claim. The bills did not become payable until employer accepted the claim, and payment was required within 14 days of acceptance. However, for the reasons explained below, we agree with the board that the existence of the outstanding bills could nonetheless provide a factual basis for the board’s determination that the belated acceptance of the claim was an unreasonable resistance to the payment of compensation.

ORS 656.382(1) provides, in part:

“If an insurer or self-insured employer refuses to pay compensation due under an order of an Administrative Law Judge, board or court, or otherwise unreasonably resists the payment of compensation, except as provided in ORS 656.385, the employer or insurer shall pay to the claimant or the attorney of the claimant a reasonable attorney fee as provided in subsection (2) of this section.”

(Emphasis added.) A claimant is entitled to an insurer-paid attorney fee under ORS 656.382(1) when the insurer (1) refuses to pay compensation due under an order of an ALJ, board, or court, or (2) “otherwise unreasonably resists payment of compensation.”

This case does not involve the first category, because there has been no refusal to pay compensation due under an order and, as we have noted, no compensation was “due” at the time of the belated acceptance. Rather, the issue is whether the board erred in concluding that employer’s late acceptance of the claim was an unreasonable resistance to the payment of compensation. See Boehr v. Mid-Willamette Valley Food, 109 Or App 292, 818 P2d 1297 (1991). That, in turn, depends on whether the board correctly concluded that the phrase “resists the payment of compensation” in ORS 656.382(1) encompasses a delay in the acceptance of a claim when, as here, there are medical bills outstanding but no compensation is “due” at the time of the late acceptance.

The phrase “resists the payment of compensation” is inexact, so we attempt to discern its meaning as a matter of law. See Coast Security Mortgage Corp. v. Real Estate Agency, 331 Or 348, 353, 15 P3d 29 (2000); Springfield Education Assn. v. School Dist., 290 Or 217, 227, 621 P2d 547 (1980) (discussing “exact,” “inexact,” and “delegative” terms used in statutes). In examining the text of ORS 656.382(1), we see that, in contrast with the first category for an award of attorney fees (nonpayment of “compensation due”), an award of attorney fees under the second category is not dependent on compensation being due or on a nonpayment of compensation. The statute requires only a “resistance” to the payment of compensation. The commonly understood meaning of the word “resists” is “to exert oneself to counteract or defeat : strive against : oppose [.]” Webster’s Third New Int’l Dictionary 1932 (unabridged ed 1993). One can strive against or counteract payment of compensation by manipulating the processing of a claim so as to delay its due date. See, e.g., Ellis v. McCall Insulation, 308 Or 74, 78, 775 P2d 316 (1989) (failure to deny claim for medical bills unrelated to compensable injury); see also Morgan v. Stimson Lumber Company, 288 Or 595, 604, 607 P2d 150 (1980) (delay in providing discovery will tend to obstruct or delay a proper disposition and payment of a claim); Aetna Casualty Co. v. Jackson, 108 Or App 253, 257, 815 P2d 713 (1991) (failure to provide discovery can interfere with the payment of compensation); Eastmoreland Hospital v. Reeves, 94 Or App 698, 703, 767 P2d 97 (1989) (unreasonable delay in furnishing medical records). The question is whether a delay in the acceptance of a claim can be viewed as resistance to the payment of compensation when the compensation is payment for medical bills that are not yet due.

Our opinion in Meier & Frank Co. v. Smith-Sanders, 115 Or App 159, 836 P2d 1359 (1992), modified on recons, 118 Or App 261, 846 P2d 1194, rev den, 316 Or 142 (1993), involved a similar situation. There, the claimant sought attorney fees under ORS 656.382(1) based on the employer’s delay in accepting or denying his claim and failing to pay for his surgery pending acceptance or denial of the claim. The claim was ultimately determined not to be compensable. We held that, because medical expenses are not considered to be “compensation” pending acceptance or denial of a claim, see ORS 656.262(6), the failure to pay medical bills pending acceptance or denial of a claim was not an unreasonable resistance to payment of compensation.

Because the claim in Meier & Frank Co. was ultimately held not to be compensable, our holding in that case was correct. The delayed processing of a noncompensable claim cannot be an unreasonable resistance to payment of compensation. However, we depart from our analysis in Meier & Frank Co. to the extent that it suggests that, when only medical bills are outstanding, a delay in the processing of a compensable claim can never be an unreasonable resistance to the payment of compensation. The fact that medical bills are not “compensation” pending acceptance or denial of a claim does not preclude the board’s reliance on the existence of outstanding medical bills as a justification for the conclusion that an employer’s belated acceptance of a claim is an unreasonable resistance to payment of compensation. The bills become compensation once the claim is accepted. For that reason, a delayed acceptance of a claim can indeed delay the payment of compensation by delaying its due date. The facts of this case provide an illustration: If employer had accepted the claim within the 90-day period authorized by statute, employer would have been required to pay claimant’s medical bills no later than the one hundred fourth day after the claim was filed. Employer’s belated acceptance of the claim delayed the due date for payment of the medical bills by the number of days beyond the 90-day deadline that it took to accept the claim.³

We conclude that resistance to the payment of compensation encompasses conduct that unreasonably delays the processing of a claim and thereby postpones, “counteracts,” or “strives against” the payment of compensation, and that the term “resists” does not require that compensation be due at the time of the misconduct. The board therefore correctly interpreted ORS 656.382(1) to permit an award of attorney fees for an unreasonable delay in the processing of a claim when there were medical bills outstanding.

Affirmed.

1 At the relevant time ORS 656.262(6)(a) provided, in part:

“Written notice of acceptance or denial of the claim shall be furnished to the claimant by the insurer or self-insured employer within 90 days after the employer has notice or knowledge of the claim.”

The statute was amended by the legislature in 2001, shortening the period to 60 days. Or Laws 2001, ch 865, § 7. The 90-day period is applicable to this case.

2 OAR 436-009-0030(4) provides, in part:

“Payment of medical bills is required within 14 days of any action causing the service to be payable, or within 45 days of the insurer’s receipt of the bill, whichever is later.”

3 The dissent takes us to task for “ignorting] the board’s finding” that the cause of the delay in payment of benefits was a processing error and not the delayed acceptance of the claim. 192 Or App at 566. We have not ignored the board’s finding. It simply is not relevant to our conclusion that the delay in acceptance was an unreasonable resistance to payment of compensation. Contrary to the dissent’s view, the actual cause of the delay in payment of compensation does not bear on whether the delayed acceptance of the claim was a resistance to payment of compensation. The late acceptance in and of itself was resistance because it unreasonably delayed the processing of the claim, not because the late acceptance in fact caused a delay in the payment of compensation.