Liberty Northwest Insurance v. Frymire

LANDAU, J. Employer and its insurer seek review of an order of the Workers’ Compensation Board (Board) holding that employer is required to pay spousal death benefits to claimant on the basis of a 1987 determination order that employer failed to appeal. The 1987 determination order required employer to pay benefits to “beneficiaries” of a worker, Kenneth Frymire. Employer and insurer now contend, because claimant was not married to Frymire at the time of his death and thus was not a “beneficiary,” they are not precluded from challenging the extent to which she is entitled to continued benefits under the terms of that order. We agree with the Board that employer and insurer are precluded from challenging claimant’s entitlement to continued spousal death benefits and affirm. The facts are not in dispute. Claimant once was married to Vernon Lee Marshall. Claimant and Marshall separated. Some time after that, claimant and Kenneth Frymire began living together. Claimant initiated divorce proceedings, but Marshall “disappeared.” Meanwhile, claimant and Frymire had a child and, not long after, were expecting a second. The parties finally located Marshall and, on November 12, 1986, claimant once again initiated divorce proceedings, asking for expedited consideration given the impending delivery of the second child. On November 24,1986, Frymire was killed in an employment-related accident. Following the accident, employer’s insurer informed claimant that she would be entitled to spousal benefits. Claimant told the insurer that the divorce had not yet become final. Insurer paid spousal benefits anyway. The divorce became final in December 1996, and copies of the dissolution judgment were sent to insurer. Insurer continued paying spousal benefits to claimant. On February 23, 1987, insurer sent a Form 1502 to the Workers’ Compensation Department indicating that the claim for benefits arising from Frymire’s death is “accepted” and that “[wjidow and dependent benefits [are] being paid.” A determination order followed, ordering insurer to pay “to the beneficiaries” benefits for Frymire’s death. Insurer did [425] not appeal that determination order, and, for the next nine years, insurer continued to pay claimant benefits as Frymire’s widow. In February 1996, insurer issued a partial denial, on the ground that claimant never was entitled to spousal death benefits. According to insurer, ORS 656.204 requires the payment of spousal support benefits only “[i]f the worker is survived by a spouse,” and, in this case, Frymire and claimant were not married at the time of Frymire’s death. Thus, although claimant survived Frymire, she did not do so as a spouse and is not entitled to benefits. An administrative law judge (AL J) held that insurer had accepted a claim for spousal death benefits in 1987 and therefore is precluded from denying the claim now. The Board rejected the ALJ’s finding that insurer accepted the claim. It nevertheless held that insurer was precluded from denying the claim, because the 1987 determination order “specifically directed the insurer to pay spousal benefits” to claimant, and insurer failed to appeal that determination order. On review, employer and insurer contend that the Board erred, because the 1987 determination order does not expressly direct insurer to pay spousal benefits, only that insurer pay benefits to Frymire’s beneficiaries. Because the order did not specify the persons who were entitled to benefits, they argue, they are not precluded now from challenging claimant’s right to receive benefits under the terms of that order. We disagree. In the light of the facts undisputedly known to the insurer and the Workers’ Compensation Division (Division) at the time of the issuance of the 1987 determination order — including the Form 1502 that specifically stated to the Division that insurer was paying spousal benefits to claimant — it cannot reasonably be contended that the reference to “beneficiaries” in the order did not include claimant. The fact that insurer itself continued paying spousal benefits to her for the next nine years bears out the point. Given that insurer failed to appeal that determination order, it is precluded from challenging it now. Messmer v. Deluxe Cabinet Works, 130 Or App 254, 257-58, 881 P2d 180 (1994), rev den 320 Or 507 (1995). [426] We note that, during the pendency of this matter, the legislature enacted amendments to ORS 656.262(10) that provide that the failure to appeal or seek review of a determination order that requires the payment of disability benefits “shall not preclude an insurer or self-insured employer from subsequently contesting the compensability of the condition rated therein.” Or Laws 1997, ch 605, § 1. The amendments apply retroactively. Or Laws 1997, ch 605, § 4. See generally Volk v. America West Airlines, 135 Or App 565,899 P2d 746 (1995), rev den 322 or 645 (1996). Employer and insurer, however, do not argue that the amendments apply to this case. In any event, it is clear that the amendments apply only to challenges to the compensability of rated conditions, and death is not a rated condition. Affirmed.