Oregon Court of Appeals Offers New Guidance on Back Up Denials under ORS 656.262(6)(a)
In a rare instance, the Oregon Court of Appeals affirmed the Board’s conclusion that SAIF provided substantial evidence to support a backup denial under ORS 656.262(6)(a). The court held substantial evidence supported the Board’s conclusion that SAIF could have reasonably come to a different conclusion regarding initial compensability if it had known of claimant’s second fall at home, even if claimant had also suffered a fall at work. Alvarez v. SAIF Corporation, 345 Or App 632 (2025).
Claimant originally filed a workers’ compensation claim for injuries allegedly sustained in a fall at work and SAIF accepted the claim. However, after accepting the claim, SAIF obtained reports indicating claimant had suffered a serious fall at his home after falling off his roof and sustained serious injuries on the same day as the alleged fall at work. SAIF issued a backup denial pursuant to ORS 656.262(6)(a), based on substantial evidence claimant’s initial claim was “procured by fraud, misrepresentation, or other illegal activity.”
ORS 656.262(6)(a) allows an insurer or self-insured employer to revoke acceptance and issue a “back up” denial when the denial is for fraud, misrepresentation or other illegal activity by the worker. See Ebbtide Enterprises v. Tucker, 303 Or 459, 461, n 1 (1987) (back-up denial is “a retroactive denial of a previously accepted claim”). However, the insurer must establish that the misrepresentation was material by showing that its decision to accept the claim “could reasonably have been affected” if the true facts had been disclosed. Id. at 464.
The Board relied on an ambulance report and determined claimant’s claim that he was injured in a workplace accident was a material misrepresentation. The claims adjuster testified she made “probably five attempts” to obtain a legible copy of the ambulance report before receiving it after the claim had been accepted, and that she did not receive a transcript or recording of the 9-1-1 call until after the claim had been accepted. The claims adjuster testified both the ambulance report, and the 9-1-1 call would have affected her decision to accept the claim. Claimant argued SAIF failed to meet its burden of proof because SAIF knew there was conflicting information about the cause of claimant’s injuries before it issued its acceptance.
The Board concluded that based on the totality of circumstances SAIF met its burden to prove that claimant had misrepresented the cause of his injury by failing to disclose that he had a significant fall from the roof of his home and that SAIF’s decision to accept the claim could reasonably have been affected had claimant disclosed the cause of his injury.
While the Board and the Court of Appeals have been reluctant to uphold backup denials, it appears in this case that the extensive injuries claimant received at home on the same day as the work injury, without notifying the insurer, illustrated a material misrepresentation. Additionally, the many attempts made by the claims adjuster to receive the emergency reports showed insurer’s effort to process the claim in good faith. Finally, the likelihood that evidence of claimant falling off the roof of their home on the same day of a work injury would impact a decision to accept or deny a claim illustrates a high burden to uphold a backup denial claim.
While Alvarez is a helpful decision for employers and insurers, navigating potential litigation claims is still complex, and often requires the assistance of a civil litigation attorney. If you have any questions regarding back up denials, you can contact me at or at (503) 595-6101.
Posted by Kate Schultehenrich.
