Providence Health System Oregon v. Joy M. Walker

This is the second time that we are asked to review an

order of the Workers’ Compensation Board relating to claimant’s

entitlement to a penalty under former ORS 656.268(5)(d)

(2009), renumbered as ORS 656.268(5)(f) (2015),1 and attorney

fees under ORS 656.382(1), for employer’s failure to

close her claim within 10 days of her September 30, 2009,

request for closure.

In its first order addressing the issue, the board

rejected claimant’s request for a penalty, determining that

there were no amounts “then due” on which to base a penalty

at the time employer closed the claim on November 5,

2009. In our judicial review of that order in Walker v.

Providence Health System Oregon, 254 Or App 676, 298 P3d

38, rev den, 353 Or 714 (2013) (Walker III), we disagreed

with the board’s reasoning. We held, first, that any penalty

that might be due claimant under former ORS 656.268(5)(d)

(2009) as a result of employer’s de facto refusal to close

claimant’s claim on October 10, 2009 (i.e., within 10 days of

claimant’s September 30, 2009, request for closure), must be

based on the amount of compensation that claimant would

have been entitled to be paid if employer had closed the claim

on that date. Walker III, 254 Or App at 684. That amount

was 35 percent permanent partial disability. Id. at 685.

We further explained, however, that whether

employer’s de facto failure to close the claim entitled claimant

to any penalty at all also depended on whether employer

had a “legitimate doubt” as to its obligation to close the claim.

Id. Claimant had argued that employer did not have a legitimate

doubt about its duty to close the claim on October 10,

2009, because, by that date, it had “sufficient information”

on which to base a closure of the claim, as required by ORS

656.268(1)(a) (providing that an employer generally must

1 Former ORS 656.268(5)(d) (2009) provided:

“If an insurer or self-insured employer has closed a claim or refused to

close a claim pursuant to this section, if the correctness of that notice of closure

or refusal to close is at issue in a hearing on the claim and if a finding

is made at the hearing that the notice of closure or refusal to close was not

reasonable, a penalty shall be assessed against the insurer or self-insured

employer and paid to the worker in amount equal to 25 percent of all compensation

determined to be then due the claimant.”

Cite as 284 Or App 251 (2017) 253

close a claim when the claimant “has become medically stationary

and there is sufficient information to determine permanent

disability”). The board had not addressed that contention,

determining instead that the fact that claimant’s

right to payment of compensation had been “suspended”

gave employer a legitimate doubt as to its duty to close the

claim. We rejected that reasoning, Walker III, 254 Or App at

688-89, explaining that former ORS 656.268(5)(b) (2009),

renumbered as ORS 656.268(5)(d) (2015),2 provided an

“unambiguous mandate” to close a claim within 10 days of

a worker’s request for closure (when the claim is otherwise

subject to closure under ORS 656.268) and the fact that benefits

had been suspended did not alter that obligation. Id. We

therefore remanded the case for the board to address in the

first instance claimant’s contention that employer did not

have a legitimate doubt as to its duty to close the claim on

October 10, 2009, because it had “sufficient information” on

which to base claim closure under ORS 656.268(1)(a).

On remand, employer contended that, in light of

claimant’s failure to comply with the requested independent

medical examination, the record lacked sufficient information

on October 10, 2009, to determine the extent of claimant’s

permanent disability due to the newly accepted conditions

of major depression and panic disorder3 and, therefore,

employer had a legitimate doubt as to its obligation to close

the claim. The board disagreed. The board reasoned that,

because the medical record on November 5, 2009—the date

2 At the relevant time, former ORS 656.268(5)(b) (2009) provided:

“If the insurer or self-insured employer has not issued a notice of closure,

the worker may request closure. Within 10 days of receipt of a written request

from the worker, the insurer or self-insured employer shall issue a notice of

closure if the requirements of this section have been met or a notice of refusal

to close if the requirements of this section have not been met.”

3 Based on that failure, employer lawfully suspended claimant’s benefits pursuant

to ORS 656.325(1). In Walker v. Providence Health Systems Oregon, 267 Or

App 87, 102, 340 P3d 91 (2014), adh’d to as modified on recons, 269 Or App 404,

344 P3d 1115 (2015) (Walker IV), we held that (1) employer was entitled to request

and reasonably requested an independent medical examination (IME) in the process

of evaluating claimant’s impairment for the purpose of claim closure, ORS

656.325(1); (2) claimant was required to submit to the IME unless relieved of

that obligation by the Compliance Section of the Workers’ Compensation Division

of the Department of Consumer and Business Services; and (3) employer lawfully

suspended claimant’s benefits pursuant to ORS 656.325(1) when claimant

refused to attend the IME.

254 Providence Health System Oregon v. Walker

that employer actually closed the claim—was the same as

the medical record on October 10, 2009, employer necessarily

had “sufficient information” on October 10, 2009, on

which to base claim closure.

On judicial review, employer contends that the

board erred. We agree. It is undisputed that the November 5,

2009, closure was an “administrative” closure (based on the

suspension of claimant’s benefits) that had nothing to do

with the existence of “sufficient information” from which to

determine permanent partial disability. See Walker III, 254

Or App at 680 (describing November 5, 2009, closure); OAR

436-030-0034 (providing for administrative closure when a

claimant does not attend a closing examination or when a

suspension order has been issued). Because the November 5,

2009, closure was not based on the board’s consideration of

the medical record, the fact that the record on that date happened

to be the same as the record that existed on October 10,

2009, has no relevance. Put another way, no inference can

be drawn from the November 5 closure that employer had

sufficient information from which to determine permanent

partial disability on October 10, 2009.4 Thus, we conclude

that the board erred in basing its assessment of a penalty

on that rationale.

We further conclude that, in light of claimant’s continued

refusal on October 10, 2009, to attend employer’s lawfully

requested independent medical examination (IME),

employer did have a legitimate doubt as to its legal obligation

to close the claim under ORS 656.268. We addressed

this issue in our opinion in Walker IV, decided after the

board’s order on remand in this case. In Walker IV, claimant

challenged the board’s determination that employer’s refusals

to close the claim in response to claimant’s requests for

closure on March 25 and March 31, 2009, did not warrant

4 The Director of the Department of Business and Consumer Services has

adopted an administrative rule explaining what constitutes “sufficient information”

in different circumstances. At the relevant time, OAR 436-030-0020 (2009)

provided that, when the record reveals that there is permanent impairment

attributable to the accepted condition, “sufficient information” requires

“[a] closing medical examination and report when there is a reasonable

expectation of loss of use or function, changes in the worker’s physical abilities,

or permanent impairment attributable to the accepted condition(s)

based on evidence in the record or the physician’s opinion.”

Cite as 284 Or App 251 (2017) 255

a penalty under former ORS 656.268(5)(d) (2009), because

employer’s refusals to close the claim were not unreasonable,

in light of claimant’s refusal to attend the requested IME. In

Walker IV, we affirmed the board’s order on that issue, holding

that employer reasonably requested the IME and that

claimant was required to attend. 267 Or App at 103. We

said that “employer was entitled to request the IME in the

process of evaluating claimant’s impairment for the purpose

of claim closure,” id. at 101, and that, in light of claimant’s

continued refusal to attend the IME, employer’s failure to

respond to requests for closure were not unreasonable. Id. at

103. The same rationale applies here. Although, as we held

in Walker III, the suspension of claimant’s benefits based on

her failure to attend the IME did not, itself, provide employer

with a legitimate doubt as to its obligation to close the claim

under former ORS 656.268(5)(b) (2009), 254 Or App at 689,

in light of the fact that employer was statutorily entitled

to request an IME before claim closure, we conclude that

claimant’s refusal to submit to the IME allowed employer

reasonably to conclude that it did not have sufficient information

from which to determine claimant’s permanent disability

attributable to her compensable injury and provided

legitimate doubt as to its obligation to close the claim. We

therefore reverse the board’s order assessing a penalty and

attorney fees. Our resolution of the petition resolves the

issue in claimant’s cross-petition—that she is entitled to an

additional attorney fee under ORS 656.382(1)—against her.

Reversed on petition; affirmed on cross-petition.