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Department of Consumer and Business Services v. Zurich American

Summarized by: 

Date Filed: 05-02-2012
Case #: A142315
Armstrong, P.J. for the Court.; Haselton, C.J.; and Duncan, J.
Full Text Opinion: http://www.publications.ojd.state.or.us/Publications/A142315a.pdf

Administrative Law: The Department of Consumer and Business Services does not possess authority to compel payment from a private insurance company based on the failure of the insurance company's client to file notice of a working-leasing arrangement with the DCBS.

The Department of Consumer and Business Services (DCBS) petitioned for reconsideration of the Appeals Court decision in DCBS v. Zurich American. An employee had filed a compensation claim with On-Time, which had a contract with Northwest Staffing Services (NW Staffing), a work leasing company. Because On-Time lacked insurance, the DCBS declared On-Time to be a noncomplying employer. An Administrative Law Judge concurred, holding Zurich American Insurance (ZMI), NW Staffing's insurance company, responsible for compensation payment. On appeal, the board held that On-Time was not a non-complying employer, and that ZMI was responsible for the payment. The board further ruled that DCBS did not have authority to compel reimbursement from ZMI to Segwick Claims Management Services (SCMS). The Appeals Court affirmed the board's ruling. On reconsideration, the Appeals Court modified its holding, ruling that the DCBS did not possess alternative authority under ORS 656.307(3) to order ZMI to reimburse SCMS. Reconsideration allowed; former opinion modified.