Liberty Northwest Insurance v. SAIF Corp.

Citations: 99 Or. App. 729; 784 P.2d 123; 1989 Ore. App. LEXIS 2016Docket: WCB 87-17907; CA A49975

Court: Court of Appeals of Oregon; December 19, 1989; Oregon; State Appellate Court

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Petitioner Liberty Northwest Insurance Corporation (Liberty) sought review of a contested case order from the Department of Insurance and Finance that denied its request for reimbursement of $1,360.87 from SAIF. This amount represented interim compensation Liberty paid to a worker before denying responsibility for his injury, which occurred on June 27, 1986, while the worker was employed by Gold Dust, insured by SAIF. The worker was temporarily employed at Cornett Lumber Company, insured by Liberty, and incorrectly identified Cornett as his employer when seeking medical treatment. Liberty paid interim compensation from July 11 to August 29, 1986, and continued until September 26, 1986, while the worker also filed a claim against Gold Dust. SAIF did not initially pay interim compensation but later made payments directly to the worker without notifying Liberty, resulting in double payments.

Liberty's request for reimbursement was denied by the department, which cited a lack of authority to order reimbursement without an ORS 656.307 order determining responsibility. Liberty argued that the department had the authority to order adjustments between insurers under ORS 656.307, regardless of whether it made a determination of responsibility, since SAIF had accepted responsibility before the determination was required. The court concluded that the department could order monetary adjustments between insurers even without its own determination, as the necessary determination was made when SAIF accepted responsibility. The statute allows for adjustments once a determination is made, emphasizing the promotion of the overall policy of the statute.

The interpretation of ORS 656.307 aligns with the workers’ compensation policy promoting a "pay-and-then-ask" approach to claims, fostering cooperation among insurers, and imposing sanctions for delays or unreasonable denials of benefits while preventing double recovery by claimants. The department is authorized to instruct SAIF to reimburse Liberty for $1,360.87 in interim compensation. Under ORS 656.726(3), the director oversees the administration of the relevant statutes, delegating authority to the Workers’ Compensation Division. Former ORS 656.307(1) outlines the director's role in determining the responsible party for compensation claims, addressing issues such as multiple employers or insurers. Payments should commence as stated in ORS 656.262(4). Once a responsible party is identified, the director will facilitate necessary financial adjustments among involved parties. Failure to secure reimbursement can be taken from the Administrative Fund. Additionally, the administrative rules allow for mutual determination of responsibility between parties without requiring a departmental order, as stated in OAR 436-60-190(2) and (4).