North Clackamas School Dist. v. White

• Decision Date: 17 February 1988
• Citation: 750 P.2d 485,305 Or. 48
• Parties: , 45 Ed. Law Rep. 335 In the Matter of the Compensation of Dawn White, Claimant. NORTH CLACKAMAS SCHOOL DIST., Respondent on Review, v. Dawn WHITE, Petitioner on Review. WCB 83-09151, CA A36411, SC S34192.
• Court: Oregon Supreme Court

Page 485

750 P.2d 485

305 Or. 48, 45 Ed. Law Rep. 335

In the Matter of the Compensation of Dawn White, ClaimantNORTH CLACKAMAS SCHOOL DIST., Respondent on Review, v.Dawn WHITE, Petitioner on Review.

WCB 83-09151, CA A36411, SC S34192.

Supreme Court of Oregon In Banc.

Argued and Submitted Oct. 7, 1987.

Decided Feb. 17, 1988.

Donald E. Beer, of Galton, Popick & Scott, P.C., Portland, argued the cause, for petitioner on review.Alan M. Scott, Portland, filed the petition for review.

Jerald P. Keene, of Roberts, Reinisch & Klor, P.C., Portland, argued the cause and filed a response to the petition, for respondent on review.

PETERSON, Chief Justice.

The question in this workers' compensation case is whether the claimant's assertion of a medical expenses claim and an aggravation claim are precluded by an earlier ruling of the Workers' Compensation Board(Board).The Court of Appeals held that the claims were precluded.North Clackamas School Dist. v. White, 85 Or.App. 560, 737 P.2d 649(1987).We hold that the claims are not precluded.

This case concerns rules commonly referred to as the rules of res judicata, long established in Oregon common law jurisprudence.The term "res judicata" has been used to refer to the preclusive effect on the claim.See, e.g., Taylor v. Baker, 279 Or. 139, 144, 566 P.2d 884(1977);Dean v. Exotic Veneers, Inc., 271 Or. 188, 194, 531 P.2d 266(1975).The term "collateral estoppel" referred to the preclusive effect on issues.See, e.g., Jones v. Flannigan, 270 Or. 121, 124, 526 P.2d 543(1974);Gaul v. Tourtellotte, 260 Or. 14, 17, 488 P.2d 416(1971).The editors of the Restatement, in Restatement (Second) of Judgments (1980), now refer to the preclusive effect on the claim as "claim preclusion" and the preclusive effect on an issue as "issue preclusion."SeeRestatement (Second) of Judgments, Introductionat 1-5(1980).Those terms better describe the rules for which they are shorthand.In this opinion we will use those terms as well.As do the editors, we will refer to the law of res judicata or to the rules of res judicata.These terms include both issue preclusion and claim preclusion.

In State Farm Fire & Cas. v. Reuter, 299 Or. 155, 158, 700 P.2d 236(1985), we described the common-law doctrine as follows:

"If a person has had a full and fair opportunity to litigate a claim to final judgment, most courts(including this one) hold that the decision on a particular issue or determinative fact is determinative in a subsequent action between the parties on the same claim (direct estoppel).See, e.g., Waxwing Cedar Products v. Koennecke, 278 Or 603, 610, 564 P2d 1061, 1064-65(1977);Bahler v. Fletcher, 257 Or 1, 4, 474 P2d 329, 331(1970).The judgment generally is conclusive as well in a different action between parties as to issues actually litigated and determined in the prior action if their determination was essential to the judgment (collateral estoppel)."

Application of res judicata rules prevents harassment by successive proceedings and promotes economy of resources in the adjudicatory process.Dean v. Exotic Veneers, Inc., supra, 271 Or. at 192, 531 P.2d 266.

ORS 43.130¹ makes court judgments, decrees and final orders conclusive upon parties and their successors in interest.The statute is not applicable here because the statute requires the first proceeding to be "before a court or judge."The first proceeding ended at the Board, which is not a "court or judge."

This is the first time that we have been asked to determine whether res judicata is applicable where an administrative agency is faced with a second proceeding involving the same parties and, arguably, the same claim.²The Oregon Court of Appeals has recognized the doctrine in workers' compensation cases.See, e.g., Million v. State Acc. Ins. Fund, 45 Or.App. 1097, 610 P.2d 285(1980);Reed v. Del Chem. Corp., 40 Or.App. 599, 595 P.2d 1291(1979);Bowser v. Evans Prods. Co., 17 Or.App. 542, 522 P.2d 1405(1974).³

Although judge-made res judicata rules may not be applicable to all administrative proceedings, we should apply them where they facilitate prompt, orderly and fair problem resolution.Professor Davis states this view:

"As a matter of principle, it is completely clear that the reasons behind the doctrine of res judicata as developed in the court system are fully applicable to some administrative proceedings.The reasons against a second litigation between the same parties of the same claims or issues are precisely the same for some administrative determinations as they are for most judicial determinations.The sound view is therefore to use the doctrine of res judicata when the reasons for it are present in full force, to modify it when modification is needed, and to reject it when the reasons against it outweigh those in its favor."

2 Davis, Administrative Law Treatise 548, § 18.02(1958)(footnote omitted; emphasis in original).

The American Law Institute agrees.Section 83(1) of Restatement (Second) of Judgments states:

"(1) Except as stated in Subsections (2), (3), and (4), a valid and final adjudicative determination by an administrative tribunal has the same effects [as in civil cases] under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court."

We see no reason why the rules of res judicata should not apply in this case.The same quality of proceedings and opportunity to litigate is present in both proceedings.If the incentive to litigate the question is substantially the same, the procedural requisites for application of the issue preclusion rule would appear to exist.SeeRestatement (Second) of Judgments, Introductory Note toCh 6 at 265(1980).The forum--the Board--is the same in both cases.Therefore, we need not further consider the relative competence and responsibility of the two forums.

The case before us involves issue preclusion, not claim preclusion.⁴The rule of issue preclusion, derived from our earlier decisions, is as stated in State Farm Fire and Casualty v. Reuter, supra: If a claim is litigated to final judgment, the decision on a particular issue or determinative fact is conclusive in a later or different action between the same parties if the determination was essential to the judgment.299 Or. at 158, 700 P.2d 236.

We turn then to an examination of the issues decided by the Board in the first hearing.The claimant sustained an injury to her hips on October 26, 1981, when she slipped on some steps at work.She asserted a claim.The employer's insurer paid medical benefits.Her claim was closed by determination order with an award of time-loss benefits on April 9, 1982.The claimant challenged the award, arguing that her claim was prematurely closed, or in the alternative, that she was entitled to permanent partial disability compensation.On June 15, 1982, a referee affirmed the closure and rejected the claim for permanent partial disability.With respect to the issue of premature closure, the referee not only concluded that the claimant was medically stationary but went on to state:

"The relationship of claimant's current disability to her industrial injury is a medical question, and claimant has not sustained her burden of showing a medical connection between her present condition and her industrial injury.I therefore find that her claim was properly closed and she is not entitled to have her claim reopened."

With respect to her claim of entitlement to permanent partial disability, the referee found that the claimant did not sustain "her burden of proving that she has lost any earning capacity as a result of her industrial injury."

The Board affirmed and adopted the referee's opinion and order "subject to one comment":

"The referee stated that 'One of Dr. Torres' main concerns seems to be claimant's fatty nodules, which he said are not related to claimant's bilateral hip discomfort.'A more accurate assessment of Dr. Torres' opinion is that he is unable to determine to what extent the nodules are related to the hip discomfort and the industrial injury.This clarification is important in the context of this case because claimant's pain has continued since the injury but the etiology of the continuing pain problem has yet to be diagnosed."(Emphasis added.)

No appeal was taken from the Board's decision.The employer's insurer continued to pay medical benefits for over a year after the hearing before the referee.On July 23, 1983, after receiving additional medical information, the insurer issued a partial denial for medical conditions diagnosed as sacroiliitis, fibrositis, chronic back pain and bilateral hip girdle pain.

The claimant requested a hearing on the partial denial and further alleged that her injury had worsened.The referee upheld the partial denial with respect to the sacroiliitis, fibrositis and the chronic back pain; however, the referee directed the insurer to continue to pay for medical care and treatment of the claimant's ongoing hip girdle pain.The referee dismissed the claimant's aggravation claim because she had failed to show that the hip girdle condition had worsened since the last award or arrangement of compensation.

The Board affirmed, adopting the referee's opinion and order as its own.The insurer appealed, arguing that the doctrine of res judicata barred the claim and that "the Referee and the Board necessarily relitigated and inconsistently decided medical issues of causation previously determined in a final, litigated order."

In order to determine whether res judicata applies, we must first examine in greater detail what was decided in the first adjudication.The claims asserted and the Board's first decision in the 1982 injury were these:

5.ORS 656.262(9) provides that "[m]erely paying or providing compensation shall not be considered acceptance of a claim * * *."ORS 656.262(6) requires that the insurer or self-insured employer furnish a claimant w...