Court Finds Fraud Allegation not Barred by Worker's Comp Law

March 29, 2010 ( – The Oregon Court of Appeals has ruled that an injured worker’s lawsuit alleging his employer committed fraud is not barred by the exclusive remedy provision of Oregon’s worker's compensation law.

The appellate court found that the Patrick J. Merten’s fraud allegations did not arise from the course of his employment, and the alleged fraud could not be compensated by the worker’s comp system, according to Business Insurance. The court also ruled that “a reasonable juror could find that the plaintiff reasonably relied on the defendant’s misrepresentations,” the news report said.      

The appellate court reversed a trial court decision dismissing the fraud assertion, and remanded the case for further consideration.      

The case Patrick J. Merten vs. Portland General Electric Co. arose from an April 2003 work accident in which Merten fell from a power pole. He filed a worker’s comp claim, which the employer denied, telling Merten it would open the claim once he submitted medical records documenting his injuries from the fall.       

However, once Merten’s right to request a hearing on the claims denial expired, Portland General Electric refused to open the claim even though he submitted the medical records.   

Merten sued for fraud, alleging his employer never intended to open his injury claim and only told him it would do so to prevent him from making a timely request for a hearing on the claims denial.       

A trial court granted the employer’s request for summary judgment, agreeing that the workers comp exclusive remedy barred the claim.