Oregon Court Penalizes Employer for Untimely and Unreasonable Denial of Latex Claim

Workers’ compensation courts are now requiring employers to act swiftly in awarding benefits to workers who have been sensitized to latex products. An Oregon workers’ compensation appellate panel recently affirmed an award for benefits for a health worker’s latex allergy claim, assessed a fine against the employer for untimely denial of the claim, and awarded the claimant’s attorney a fee of $7,500.00 for counsel’s efforts in the successful prosecution of the case below and an additional $2,000.00 for services on review. 

Pamela J. Peacock was a phlebotomist who was exposed to latex products and developed a latex allergy and an asthmatic condition during her employment which spanned many years. The employer was given notice and knowledge of the claim on October 28, 1998. Under Oregon law an insurance carrier has 90 days to accept or deny a claim. The insurance carrier is liable for a penalty if it “unreasonably delays acceptance or denial of a claim.” ORS 656.262(11)(a). The insurance company waited until the 89th day, January 25, 1999, to have the sensitized worker examined by their medical expert, Dr. Dordevich. The medical expert completed a report but also indicated that further medical records, were required prior to his making a final decision. His preliminary opinion was that Ms. Peacock’s asthma was not attributable to her latex allergy. On March 10, 1999, the employer received the second report from Dr. Dordevich in which he advised the insurance company that, despite the review of additional medical records his expert opinion remained the same as the one he had previously provided in his original report, and that causal relationship between the claimant’s medical condition and her employment was denied. 

The appellate forum affirmed the trial judge’s opinion that the insurance company had failed to issue a timely denial. The court held that delay of the claim was unreasonable based upon the original report of its own expert, Dr. Dordevich dated January 25, 1999. In finding the insurance carrier actions unreasonable, the court also based its opinion on the fact that the insurance company, for an unexplained reason, had delayed its examination of the claimant until only one day before the 90 day deadline. Furthermore, to add insult to injury, the insurance company received the second report from its expert on March 10, 1999, but delayed issuing the denial of the claim until March 23, 1999. A penalty was imposed upon the insurance company for its delay in the denial of the claim. The penalty was based on the amount due the claimant as of the date of the employer’s denial. The claimant’s attorney’s fee was based upon the work performed on the underlying claim as well as the efforts on review concerning the compensability issue. All fees were payable by the employer. In re Pamela J. Peacock, 52 Van Natta 835 (Or. Work.Comp.Bd. 2000), WCB Case No. 99-01081, decided May 15, 2000.

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