Bradley G. Garber’s Board Case Update for 08/15/16


by Bradley G. Garber Wallace, Klor & Mann, P.C.


Board Case Update: 08/15/2016

Roberto S. Aranda, 64 Van Natta 2340 (2012)

(ALJ Jacobson)

Claimant requested review of that portion of the ALJ’s Order that declined to address the compensability of a new/omitted medical condition claim for cervical radiculopathy.

Here are the important underlying facts:

“On June 24, 2010, claimant requested a hearing for a de facto denial of a new/omitted medical condition claim for cervical radiculopathy. His hearing request specifically identified the issues as the compensability of a de facto denial or cervical radiculopathy, along with penalties, attorney fees, and costs. This hearing request was consolidated with an earlier request concerning a March 31, 2010 denial of various new/omitted medical conditions claims.img-2-a

The employer did not file a response to claimant’s hearing request. See OAR 438-006-0036.” (emphasis added).

At the hearing, on July 15, 2010, the parties agreed that the issues to be determined arose out of a March 30, 2010 denial of various conditions, the de facto denial of cervical radiculopathy, penalties and attorney fees. The employer stated that it had no “cross-issues.”

The record was left open, after hearing, for multiple depositions. Then, the parties presented closing arguments by written briefs. After claimant submitted his initial brief, the employer requested, for the first time, that claimant’s hearing request on the compensability of the cervical radiculopathy claim be dismissed as “premature.”

In doing so, the employer contended that the evidentiary record did not include a claim for that condition.

A telephone conference was held to address the late raising of the premature request for hearing issue. During the conference, the employer alleged that it had no obligation to specify its position on the alleged de facto denial issue until its closing argument because it was claimant’s burden to establish all elements of the de facto denial. The employer also objected to claimant’s request to admit evidence that a claim had been filed.

On review, claimant argued that the employer had an obligation to raise the premature hearing/dismissal issue before closing arguments. Citing OAR 438-006-0031 and OAR 438-006-0036, the Board found that the employer did not file a Response to Issues, pursuant to its rule. Moreover, “during the hearing,” the employer did not provide a “response specifying [its] position on the issues raised and relief requested” by claimant. In short, the employer never raised a cross-issue with regard to the alleged premature nature of claimant’s de facto denial claim, until it submitted its argument, by written brief, after the record had been closed.

Not surprisingly, the Board wrote as follows:

“ * * * We have previously determined that an issue first raised in closing arguments is not raised ‘during the hearing,’ within the meaning of OAR 438-006-0036; thus, such issues are ordinarily not considered. Robert S. Masters, 61 Van Natta 997, 999 (2009); Lawrence E. Millsap, 47 Van Natta 2112, 2112-13 (1995).
We find no reason to apply an exception to that rule in this case.” Reversed on that issue.

The employer, then, took the issue up to the Court of Appeals. In Farmers Ins. Co. v. Aranda, 279 Or App 36 (2016), the Court affirmed the Board’s Order on Review with regard to the evidentiary issue.

TIP: Follow the Board’s rules and file a Response to Issues, pursuant to OAR 438-006-0036. And, remember, you can always amend that response at the hearing.

Tommy S. Arms, 68 Van Natta 1230 (2016) (Order on Remand)

This matter was on remand from the Court of Appeals. Arms v. SAIF, 268 Or App 761 (2015). The Court reversed the Board’s Order that affirmed an Opinion & Order that upheld SAIF’s denial of claimant’s medical services claim for a C6-7 discectomy and fusion surgery. The matter was remanded to the Board.

Claimant had an accepted C5-6 disc condition. He underwent surgery for that condition in 2003. Subsequently, surgery was performed at C6-7 and claimant tried to make the case that the C6-7 disc condition was a consequence of the accepted C5-6 disc condition. The ALJ determined that ORS 656.225 did not govern the medical services dispute because the C6-7 surgery was not “solely directed to a preexisting condition.” The ALJ also determined that the surgery was not compensable under ORS 656.245(1)(a), as a medical service for a “consequential condition,” because the C6-7 degeneration was not caused, in major part, by the injury. The Board, on review, affirmed the ALJ’s Order.

Claimant took the issue up to the Court of Appeals, arguing that the surgery at C6-7 was compensable under ORS 656.225, conceding that the surgery was not compensable as directed to a “consequential condition” pursuant to ORS 656.245.
The Court explained that ORS 656.245(1)(a), not ORS 656.225, directs carriers to provide medical services benefits. ORS 656.225 creates limitations on compensation, rather than entitlement to medical services. The Court concluded that, if disputed medical services are for a condition the was “caused in material part” by a compensable injury, img-3the next step is to evaluate the applicability of the limitations set forth in ORS 656.245(1)(a).

The Board discussed the analysis behind determining compensability of a “consequential condition” as follows:

“The distinguishing feature of a ‘consequential condition’ is that it is not directly caused by the ‘work-related injury incident,’ but instead is a separate condition that arises as a consequence of an injury or condition caused directly by the ‘work-related injury incident.’ Allen v. SAIF, 279 Or App 135, 138 (2016); English v. Liberty Northwest Ins. Corp., 271 Or App 211, 215 (2015). An illustrative example would be a back strain caused by an altered gait resulting from a compensable foot injury. Fred Meyer, Inc. v. Crompton, 150 Or App 531, 536 (1997); Albany Gen. Hosp. v. Gasperino, 113 Or App 411, 415 n 2 (1992). Thus, to determine whether a condition should be analyzed under “consequential condition” standards, we must determine whether the causal relationship, between the work injury and the condition to which the proposed C6-7 surgery is directed, is indirect.”

The Board found that, based on the medical evidence, the work injury to C5-6 did not directly cause any portion of claimant’s C6-7 degeneration; instead, the work injury at C5-6 contributed to the worsened preexisting condition, indirectly, as a consequence of the C5-6 herniation and resultant fusion. To prove compensability of a consequential condition, the major contributing cause standard applied. Based on the medical evidence, the Board found that the surgery at C6-7 was not compensable. Affirmed

Martin Burnette, 68 Van Natta 1250 (2016)

(ALJ Ogawa)

Claimant requested review of the Judge’s Order that: (1) allowed the insurer to amend the issues to include a “combined condition” theory for its denial; (2) admitted a “redacted” copy of the nurse case manager’s computer notes and reports to the insurer’s claim administrator; (3) admitted, in their entirety, a physician’s deposition and another physician’s report, both of which addressed a “combined condition”; (4) upheld the insurer’s denial of claimant’s injury claim for a right foot/toe condition; and (5) declined to award penalties/attorney fees for allegedly unreasonable claim processing. I write to address the evidentiary issues.

Claimant sustained a foot injury on October 7, 2013. His foot became swollen and he thought he had sprained his ankle. Eleven days later, he went to an urgent care clinic because he was bleeding from the bottom of his foot. He was diagnosed with extensive cellulitis with abscess over a fracture dislocation of the right mid-foot, and was directed to go to the emergency department. He called the insurer, stating that he did not have a primary care physician and did not know what he should do. The insurer gave him a claim number, directed him to go to the emergency department, and told him he would hear from a claim adjuster.img-4

On October 21, 2013, the claim adjuster interviewed claimant. Claimant told the adjuster that he had diabetes and could not feel his feet. The adjuster referred the claim to a nurse case manager, “Ms. Versteeg.”

Things got worse. Claimant’s physician found a deep infection in his right fifth toe which resulted in an amputation. On December 3, 2013, the insurer’s claim adjuster issued a claim denial, asserting that the work incident was not a material contributing cause of claimant’s disability and need for treatment. Claimant requested a hearing.img-5

Prior to hearing, the parties had a conference call with the Judge. During the conference, the insurer’s counsel asserted a “combined condition” defense based on an earlier deposition of claimant’s attending physician.
There was no objection to this from claimant’s counsel. At the hearing, on the following day, the ALJ allowed the insurer’s oral amendment to its denial, raising the “combined condition” defense, over claimant’s objection on the record. Claimant’s counsel did not request a continuance or postponement.

In addition, the Judge admitted a “redacted” copy of Ms. Versteeg’s computer notes and reports (over claimant’s objection). On review, claimant maintained that the insurer’s pre-denial actions, and those of Ms. Versteeg, resulted in a defacto acceptance of his claim and that the December 3 denial constituted an impermissible back-up denial. The Board agreed that the nurse case manager was not the insurer’s agent and that neither her acts, nor those of the claim adjuster, resulted in an acceptance of the claim or estopped the insurer from denying the claim.

Claimant also objected to defense counsel’s supplementation of issues for hearing by raising the “combined condition” issue, asserting that a denial can only be legally effective if it is in writing, served by registered or certified mail, and with a notice of appeal rights, pursuant to OAR 438-005-0055(1) and OAR 438-005-0065.

With regard to the last minute supplementation of the issues for hearing, the Board observed, as follows:img-6-a

“It is well settled that a carrier may amend its denial at hearing. See SAIF v. Ledin, 149 Or App 94 (1997)(a carrier may amend its denial at hearing); Pamela S. Smith, 51 Van Natta 828, 829 (1999)(rejecting the claimant’s argument that the carrier’s mid-hearing attempt to amend the denial was improper under OAR 438-005-0055). The opportunity to respond to newly raised issues affords due process. OAR 438-006-0036; OAR 438-006-0091; Larry L. Ledin, 50 Van Natta 115, 117 (1998)”

The Board found no abuse of discretion in the Judge’s allowance of the insurer’s amendment of its denial to include a “combined condition” defense. It observed, “In reaching this conclusion, we note that claimant did not seek a continuance of the hearing or other opportunity to respond to the newly raised issues.”

With regard to the nurse case manager’s computer notes and reports to the claims adjuster, claimant argued that the nurse case manager review unredacted note and reports prior to hearing and, thus, waived any “discovery privilege.” On June 17, 2014, in response to claimant’s counsel’s objection to the redactions, the insurer’s counsel sent the Judge copies of the disputed documents, with and without redaction, for an in camera review. After reviewing the documents, the Judge redacted copies of emails between the insurer’s attorney and the claim adjuster, as well as those reflecting the adjuster’s thought processes. See OAR 438-007-0015(7)(materials that are “attorney-client privileged” or reflect the claimant’s or insurer’s mental impressions, case value or merit, plans or thought processes are not discoverable).

There is an open question as to whether Ms. Versteeg would be required to hand over unredacted copies of her computer notes, had claimant subpoenaed that material. Claimant threatened to do that, but did not follow through on the threat. Simply asking for the material, then objecting when it was not provided, was not sufficient. Affirmed

Thomas J. Hammond, DCD, 68 Van Natta 1243 (2016) (ALJ Mills)

Claimant, the deceased worker’s surviving spouse, requested review of the Judge’s Order that upheld the insurer’s denial of the deceased worker’s left leg injury and death benefit claim.

The worker flew to Japan, for business, on February 3, 2013. He fell while walking in his hotel, on February 7, 2013. Before the fall, the worker and his wife both heard a “crack,” and then he fell. An x-ray revealed that the worker’s femur was broken. His leg was casted and her returned home to Oregon, where he was admitted to a hospital on February 9, 2013.

The worker underwent surgery for the femur fracture on February 11, 2013, and ended up on a ventilator in the ICU, after the surgery. He was extubated on February 13, 2013. Then, his condition deteriorated and he died on February 14, 2013 (Valentine’s Day).  (Sorry, just had to…)img-7

Claimant filed a workers’ compensation claim, which the insurer denied. Claimant requested a hearing.

After hearing, the ALJ concluded that the worker was a “traveling employee” who was injured while “in the course of” his employment. But, the ALJ reasoned that the fracture and fall were wholly caused by an idiopathic cause (the worker had, previously been diagnosed with advanced lung cancer, and had already sustained fractures to his left clavicle and left seventh rib). Therefore, the ALJ concluded that the injury did not “arise out of” the worker’s employment.

Ordinarily, under the “traveling employee” doctrine, and injury resulting from the nature of the travel, or originating from some risk to which the travel exposed an employee, would be compensable. SAIF v. Scardi, 218 Or App 403 (2008). The injury, still, must arise out of and in the course of employment.

The Board found that the worker’s injury was the result of a “combined” condition, the fracture combined with the preexisting cancer, and that the major contributing cause of the combined condition was the cancer. Claimant argued that the cancer was not a statutorily recognized “preexisting condition” and could not, therefore, be considered. The Board observed, as follows:

“To establish a preexisting condition, the insurer must demonstrate that the worker was ‘diagnosed with such condition, or has obtained medical services for the symptoms of the condition,’ or suffers from ‘arthritis or an arthritic condition.’ ORS 656.005(24)(a)(A); [Hopkins v. SAIF, 349 Or 348 (2010)]. Additionally, a condition that increases the likelihood that an affected body part will be injured by some other action or process, but does not actively contribute to damaging the body part, is a mere ‘susceptibility,’ not a ‘preexisting condition.’ ORS 656.005(24)(c); Corkum v. Bi-Mart Corp., 271 Or App 411, 422-23 (2015). As explained below, we conclude that the worker’s lung cancer was a legally cognizable ‘preexisting condition.’”

The Board found that the worker’s cancer had been previously diagnosed and treated and, therefore, qualified as a preexisting condition, and the major contributing cause of claimant’s femur fracture. Affirmedimg-8