Scott v. Liberty Northwest Ins. Corp.

Summarized by:

  • Court: Oregon Court of Appeals
  • Area(s) of Law: Workers Compensation
  • Date Filed: 10-12-2016
  • Case #: A160128
  • Judge(s)/Court Below: Tookey, J. for the Court; Sercombe, P.J.; & DeHoog, J.
  • Full Text Opinion

Under 656.26(11) a person is entitled to compensation for temporary total disability, penalties, and attorney fees when “an objectively reasonable insurer” would understand medical reports as releasing an employee from work.

On a second appeal, Scott appealed the Workers’ Compensation Board’s denial of Scott’s requested penalty and attorney fees on the basis that Liberty had a legitimate doubt as to its liability for temporary disability benefits. Scott argued that the Board’s finding that a reasonable provider would understand that Scott was excused from work based on the medical results precluded any legitimate doubt about its legal obligation to pay temporary disability benefits, and so Liberty should pay a penalty for failing to do so. Liberty responded that despite the legal obligations to pay temporary disability, there was a “legitimate doubt” as to when the medical records “triggered an obligation to pay.” The Court of Appeals previously held that a physician does not need to expressly authorize benefits to trigger an insurer’s obligation to pay time loss. An insurer’s obligation to pay begins when “an objectively reasonable insurer” would understand medical reports approving a person’s release from work. Based on the finding that a reasonable provider would understand that Scott was excused from work, Liberty’s failure to pay justifies a penalty. Reversed and remanded. 

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