SAIF v. Bales

ORS 656.386(1)(a) requires the insurer to pay the claimant’s attorney fees in various circumstances, including when the insurer denies a claim for compensation and the claimant’s attorney is instrumental in obtaining rescission of the denial.

SAIF sought review of the Workers' Compensation Board's (WCB) order that awarded claimant a statutory attorney fee. SAIF argued that claimant's attorney did not prevail over or obtain a rescission of SAIF's original denial. Because SAIF did not dispute that claimant's attorney was not instrumental in bringing the change in acceptance, the Court looked at whether there was a denial and whether SAIF's actions constituted a rescission of the denial. A “denied claim” is a claim for compensation which an insurer refuses to pay because the injury is not compensable. A “rescission” for purposes of ORS 656.386(1) “is simply the act of doing away with, taking away, or removing.” The Court determined there was a denied claim because there was a claim for medical services and that SAIF refused to pay them. For the second issue of whether there was a recession, SAIF argued the agreement to pay was not a recession because it followed a "change in circumstances" (request for new/omitted condition for arthritis). The Court disagreed because the statute made no determination on whether there was a change in circumstances, but instead applied to all claims involving a denied condition. Affirmed.