Ligatich v. Liberty Northwest Ins. Corp.

• Decision Date: 08 January 2003
• Citation: 185 Or.App. 555,60 P.3d 1143
• Parties: In the Matter of the Compensation of Matthew P. Ligatich, Claimant. Matthew P. LIGATICH, Petitioner, v. LIBERTY NORTHWEST INSURANCE CORPORATION and City of Lake Oswego, Respondents.
• Court: Oregon Court of Appeals

60 P.3d 1143

185 Or.App. 555

In the Matter of the Compensation of Matthew P. Ligatich, Claimant.

Matthew P. LIGATICH, Petitioner, v. LIBERTY NORTHWEST INSURANCE CORPORATION and City of Lake Oswego, Respondents.

00-01879; A113167.

Court of Appeals of Oregon.

Argued and Submitted September 23, 2002.

Decided January 8, 2003.

James W. Moller argued the cause and filed the briefs for petitioner.

David O. Wilson argued the cause and filed the brief for respondents.

Before EDMONDS, Presiding Judge, and KISTLER and SCHUMAN, Judges.

EDMONDS, P.J.

Claimant petitions for review of a final order of the Workers' Compensation Board (board) that upheld respondents' denials of the compensability of bulges in his intervertebral discs at several lumbar spaces and of a disc protrusion at the L5-S1 space. The issues on review involve the L5-S1 disc protrusion. We hold that the board failed to consider claimant's argument that respondent Liberty Northwest Insurance (insurer) had agreed to accept his claim for that protrusion. We therefore reverse and remand.

We state the underlying facts in accordance with the board's findings, supplemented by the undisputed evidence in the record. Claimant has been a firefighter for respondent City of Lake Oswego for over 20 years. During that period, he occasionally suffered low back pain at work. In November 1994, he injured his back while helping to remove a large man from a car in order to perform cardio-pulmonary resuscitation. He did not seek treatment at that time. On February 26, 1995, he again injured his back while helping to carry an outboard boat motor as part of a river rescue. He first sought treatment from Dr. Nicholson on March 14, 1995. In May, Nicholson ordered an MRI, and claimant filed a workers' compensation claim. The MRI showed disc bulges at several lumbar spaces and a large central disc protrusion at the L5-S1 space. Nicholson commented that L5-S1 was the source of claimant's symptoms and referred him to Dr. Franks, a neurosurgeon. Franks noted that the MRI scan was significantly abnormal and recommended continued conservative treatment. He ordered a second MRI in January 1997; it showed a slight increase in the L5-S1 disc protrusion.

On June 23, 1995, insurer formally accepted claimant's claim as a nondisabling lumbar strain. On February 28, 1996, after receiving additional information from Franks, it amended its acceptance to change the claim classification to "disabling." It closed the claim by a determination order on July 2, 1996, that awarded two percent unscheduled permanent disability. Claimant sought reconsideration. A medical arbiter panel reduced the award to one percent; claimant and insurer subsequently settled the dispute by a stipulated order that increased the award to three percent.

Claimant continued to experience some back pain but worked without restrictions until January 27, 1999, when he was injured pulling a fire hose around corners up a staircase during a training exercise. He was off work for three weeks. He had another MRI on February 9; the radiologist saw no change from the previous MRI. Thereafter, claimant saw Dr. Wayson, a neurosurgeon. Wayson concluded from examining claimant and the MRI that the 1999 MRI, unlike the 1997 one, showed a focal disc protrusion centrally at L5-S1 that compromised the spinal canal; Wayson suspected that it was the source of claimant's complaints. He later gave his opinion that the 1999 MRI showed a herniated lumbar disc, that that condition was a pathological worsening of claimant's condition, and that the January injury had caused the worsened condition.

After the January 1999 injury, claimant filed both an aggravation claim and a new injury claim. Insurer denied the new injury claim, and claimant sought a hearing on the denial. It is not clear from the record what action insurer took on the aggravation claim. Before the hearing, the parties agreed to settle the dispute, and an administrative law judge (ALJ) approved the settlement stipulation on August 16, 1999. The crucial provisions of the stipulation are:

"Claimant filed a claim alleging he incurred a lumbar strain, sustained on February 26, 1995. This claim was accepted, processed, and closed under claim number C604-466654.

"Thereafter, claimant filed a new claim for his low back, as a result of a January 27, 1999 injury. This claim was assigned claim number C604-588974. Liberty Northwest Insurance Corporation denied claimant's new low back claim on March 8, 1999.

"Claimant filed a Request for Hearing to appeal the denial and raise other issues.

"The parties agree to settle all issues raised or raisable as of the time this stipulation is approved by the administrative law judge as follows:

"Liberty Northwest Insurance Corporation rescinds its denial, agrees to accept claimant's claim for aggravation, and to pay compensation according to law. This claim will be accepted and processed under claim number C604-466654. Claimant agrees to dispose of claim number C604-588974 by withdrawing it and combining it with his old claim (C604-466654)."

On October 25, 1999, after the execution of the stipulation, insurer issued a notice of acceptance of a disabling lumbar strain. On November 12, it closed the claim by an updated notice of acceptance without an award of additional permanent disability. On January 27, 2000, claimant notified insurer that he believed that it had omitted several conditions from its notice of acceptance. He asked insurer to amend the notice of acceptance to include lumbar disc bulges, the disc protrusion at L5-S1, and a herniated lumbar disc.¹ Insurer delayed deciding whether to accept the conditions until it received additional information from Nicholson, who did not respond to its initial requests. In the absence of a reply from Nicholson, insurer did not issue a formal denial or acceptance of the conditions. Claimant treated insurer as has having made a de facto denial of his claim and sought a hearing. In preparation for the hearing, insurer asked Dr. Thompson to review the file. Thompson concluded that the February 1995 incident may well have caused, or at least worsened, the L5-S1 protrusion but that, at the time of the review, claimant's symptoms were primarily due to his ongoing degenerative back condition. Nicholson then concurred with that conclusion.

After receiving Nicholson's concurrence, insurer issued a modified acceptance, changing the accepted condition to a lumber strain that combined with a preexisting degenerative condition at L5-S1. It denied the other lumbar bulges. It then issued a denial of claimant's current condition on the ground that the major contributing cause was...