Erck v. Brown Oldsmobile

• Decision Date: 24 September 1991
• Docket Number: No. 86-05134,86-05134
• Citation: 311 Or. 519,815 P.2d 1251
• Parties: In the Matter of the Compensation of Ernest F. Erck, Claimant. Ernest F. ERCK, Petitioner on Review, v. BROWN OLDSMOBILE and EBI Companies, Respondents on Review. WCB; CA A47689; SC S36203.
• Court: Oregon Supreme Court

Page 1251

815 P.2d 1251

311 Or. 519

In the Matter of the Compensation of Ernest F. Erck, Claimant.

Ernest F. ERCK, Petitioner on Review, v. BROWN OLDSMOBILE and EBI Companies, Respondents on Review.

WCB No. 86-05134; CA A47689; SC S36203.

Supreme Court of Oregon.

Argued and Submitted Nov. 2, 1989.

Decided July 25, 1991.

Reconsideration Denied Sept. 24, 1991.

Robert K. Udziela, Portland, argued the cause for petitioner on review. With him on the petition were Phil Goldsmith, Donald R. Wilson, and Pozzi, Wilson, Atchison, O'Leary & Conboy, Portland.

Randy G. Rice, Portland, argued the cause and filed the response for respondents on review.

Before PETERSON, C.J., and LINDE, ^* CARSON, JONES, ^** GILLETTE, VAN HOOMISSEN and FADELEY, JJ.

CARSON, Justice.

The issue in this workers' compensation case is how the Workers' Compensation Board (Board) must treat a referee's express credibility finding on review of the referee's order. The Court of Appeals, concluding that the Board's order was supported by substantial evidence, and otherwise was proper, affirmed the Board order reversing the referee's award of permanent total disability. Erck v. Brown Oldsmobile, 95 Or.App. 400, 768 P.2d 946 (1989). We allowed review to address the requirements for a Board order that reverses an order of a referee, when the latter includes a credibility finding. We affirm the decision of the Court of Appeals.

Background

Claimant was 62 years old and had a ninth grade education at the time of the hearing before the referee. He had worked as an automobile body painter since 1947--virtually his entire adult life. In 1984, claimant was diagnosed with isocyanate asthma, a form of pulmonary disease caused by exposure to certain chemicals in the automobile paint used in his work. He filed a claim for workers' compensation benefits. In 1985, a workers' compensation referee found that claimant was permanently partially disabled. At the time of the hearing in this case, claimant had not worked since leaving his job as an auto-body painter.

From February to October 1985, claimant received statutorily required "return-to-work" assistance from Orion Rehabilitation Service, Inc. ¹ His case then was referred to Hetfield Associates, Inc., another provider of vocational rehabilitation services. Claimant testified that the vocational counselor at Hetfield did nothing to help him return to work. The counselor maintained that claimant did not cooperate in her efforts to provide vocational assistance, as claimant had no desire to return to work. After some effort to provide claimant with return-to-work assistance, and after several letters to him warning that his failure to cooperate would lead to termination of the assistance, his vocational assistance was discontinued in April 1986. ²

Meanwhile, claimant's claim was closed by a determination order in February 1986, awarding 30 percent (96 degrees) unscheduled permanent partial disability. Claimant requested a hearing on the extent of his disability, asserting that he was permanently totally disabled. ORS 656.268(9) (formerly 656.268(6)). The referee considered the hearing testimony both of claimant and of the Hetfield vocational counselor regarding the extent of claimant's cooperation in the vocational assistance. ³ The referee concluded "Given the impact on claimant of his substantial loss of pulmonary function and his ouster from his only known trade and skill, as well as his lack of education and training, it would appear that he participated in vocational rehabilitation efforts about as far as he was able.

"It is my observation that claimant was an honest, credible witness in his own behalf, and I conclude that the lack of motivation is an unfair charge * * *."

The referee issued an opinion and order concluding that claimant was permanently totally disabled. The insurer requested Board review of the referee's order. The Board reversed the referee's order and awarded claimant 45 percent (144 degrees) permanent partial disability in addition to the 30 percent awarded by the 1986 determination order. The Board explained:

"We disagree with the Referee's analysis. Claimant's treating doctor indicated that he was capable of light work on a full-time basis. The vocational counselor who attempted to help him opined that he was employable. Although there is evidence that claimant is reserved and noncommunicative, there is no indication that these difficulties were so severe as to excuse claimant's failure to maintain contact with the vocational counselor. He had no apparent difficulty communicating with his doctors or at the hearing. We conclude that claimant, in essence, refused vocational assistance and that he has failed to establish that he is willing to seek regular gainful employment or that he has made reasonable efforts to obtain such employment. ORS 656.206(3). He, therefore, is not entitled to an award of permanent total disability."

In upholding the Board's order, the Court of Appeals concluded: "The Board's order is sufficient for review, there is substantial evidence to support its findings, and its reasoning connects those findings to the conclusion." Erck v. Brown Oldsmobile, supra, 95 Or.App. at 401, 768 P.2d 946.

The Claims Process

A worker's claim for benefits under the Workers' Compensation Law potentially is subject to several levels of review. The injured worker first must give written "notice of an accident resulting in an injury" to the employer. ORS 656.265. This is treated as notice of a claim. The employer or its insurer must either accept or deny the claim within the statutory time period (60 days at the time the claim was filed in this case). ORS 656.262(6). If the claim is denied, the worker may request a hearing on the denial within 60 days after notice of the denial is mailed. ORS 656.262(8); 656.319; 656.283(3). The referee who presides over the hearing is required to issue an order deciding the matter within 30 days of the hearing. ORS 656.289(1). Either party may then request Board review of the referee's order within 30 days. ORS 656.289(3).

Review by the Board is based upon the record developed before the referee and oral or written argument by the parties. ORS 656.295(5). "The board may affirm, reverse, modify or supplement the order of the referee and make such disposition of the case as it determines to be appropriate." ORS 656.295(6). That is, the Board reviews de novo. See Sahnow v. Fireman's Fund Ins. Co., 260 Or. 564, 491 P.2d 997 (1971) (description of this scope of review as de novo ). Either party then may request judicial review of the Board's order by the Court of Appeals, ORS 656.298(1) which review is "on the entire record forwarded by the board." ORS 656.298(6). The Court of Appeals reviews the Board order under the standards set forth in ORS 183.482(7) and (8), ⁴ part of which includes a review to determine whether the Board erroneously interpreted a provision of law and whether the Board's order is supported by "substantial evidence in the record." Id. Following a decision by the Court of Appeals, either party may petition this court for review of the Court of Appeals' decision. ORS 2.520.

The point of the recitation above is that a worker's claim for benefits may be evaluated as many as five times; the first three (the employer/insurer, the referee, and the Board) may include factfinding, ⁵ while the last two (the Court of Appeals and this court) are reviews of legal issues under the standards set forth in ORS 183.482(7) and (8).

IClaimant's Position

Claimant does not contend that a referee must in all cases make credibility findings. Rather, he argues that when a referee does make express findings regarding a witness's credibility (as was the case here), the Board either must adopt those findings or explain why it departed from them. He argues that failure to do so constitutes an erroneous interpretation of a provision of law, requiring that the Court of Appeals remand the case under ORS 183.482(8)(a)(B). Alternatively, he argues that the Court of Appeals "misapplied the substantial evidence rule" when it affirmed the Board order. See ORS 183.482(8)(c).

Under the provisions of ORS 183.482(8) relevant to this case, the Court of Appeals (1) may reverse or remand a Board order if the Board has erroneously interpreted a provision of law, and (2) shall reverse the Board order if it is not supported by substantial evidence in the record. Claimant argues that the Board's failure to explain its "rejection" of the referee's credibility findings requires reversal and remand under either of the foregoing provisions. For the reasons discussed below, we do not believe the statutory scheme for Board review of a referee's decision contains such a requirement.

Erroneous Interpretation of a Provision of Law

The crux of claimant's first argument is that our cases relating to the deference to be given a factfinder upon review constitute a "provision of law," ORS 183.482(8)(a), that requires the Board to justify its rejection of a referee's explicit credibility findings. To support this position, claimant relies on cases from this court, from the Court of Appeals, and from the federal courts, all stating that a factfinder's credibility assessments are to be given deference upon review.

Claimant is correct in his argument that on de novo review, a reviewing entity normally gives deference to findings made below, especially when they relate to witness credibility. For example, in Ryf v. Hoffman Construction Co., 254 Or. 624, 631, 459 P.2d 991 (1969), this court--on de novo review of a workers' compensation award--stated: "[W]e * * * have to give some weight to the fact that the Hearing Officer, and he alone, has the opportunity to observe the claimant and other witnesses, a factor which we have regarded as highly significant in reviewing other cases on appeal." See also Haines Com'l Equip. Co. v. Butler, 268 Or. 660, 664, 522 P.2d 472 (1974...