ZWAHLEN v. CROWN ZELLERBACH, 67 Or. App. 3 (1984)

676 P.2d 369

In the Matter of the Compensation of Clarence Zwahlen, Claimant. ZWAHLEN, Petitioner, v. CROWN ZELLERBACH CO., Respondent.

81-07457; CA A27610Oregon Court of Appeals.Argued and submitted November 28, 1983 Reversed and remanded February 15, 1983 Reconsideration denied April 27, 1983
Petition for review denied May 30, 1984

Judicial Review from Workers’ Compensation Board.

Robert K. Udziela, Portland, argued the cause for petitioner. On the brief were William H. Schultz, and Pozzi, Wilson, Atchison, O’Leary Conboy, Portland.

Cynthia S.C. Shanahan, Portland, argued the cause for respondent. With her on the brief were Ronald C. Holloway, and Schwabe, Williamson, Wyatt, Moore Roberts, Portland.

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Before Richardson, Presiding Judge, and Van Hoomissen and Newman, Judges.


Reversed and remanded for an order requiring employer to repay amount deducted as an offset.

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In this workers’ compensation case, claimant was overpaid certain amounts of temporary total disability after his vocational rehabilitation program was terminated. Relying on OAR 436-54-320, employer unilaterally began to recover the overpayment by deductions from each temporary total disability payment made after the claim was later reopened. The rule does not validly authorize such unilateral recovery. Forney v. Western States Plywood, 66 Or. App. 155, 672 P.2d 1376 (1983).

Claimant requests penalties and attorney fees. ORS 656.262(10) provides for assessment of attorney fees and penalties against a carrier for “unreasonable refusal to pay compensation,” and ORS 656.382 requires a carrier to pay attorney fees if it “unreasonably resists the payment of compensation.” Assuming that those provisions are applicable, we conclude that attorney fees and penalties are not warranted. Although the rule could not validly authorize employer’s action, until our decision in Forney an employer could have a “legitimate doubt, from a legal standpoint” as to its liability for the full amount of claimant’s temporary total benefits, see Norgard v. Rawlinsons, 30 Or. App. 999, 1003, 569 P.2d 49 (1977), and it was not unreasonable to rely on the rule. Cf. Sandstrum v. SAIF, 46 Or. App. 773, 613 P.2d 96, rev den 289 Or. 677 (1980) (though benefits paid by insurer not subject to wage assignment, carrier acted reasonably in relying on circuit court order and case law).

Reversed and remanded for an order requiring employer to repay amount deducted as an offset.

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