Title: Plaintiff v. Defendant
Citation: N/A
Docket Number: S46750
State: Oregon
Issuer: Oregon Supreme Court
Date: July 25, 2002

FILED: JULY 25, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON
In the Matter of the Compensation of
Diane H. Kurcin, Claimant.
SAIF CORPORATION
and OREGON HEALTH SCIENCES UNIVERSITY,
Petitioners/Respondents on Review,
v.
DIANE H. KURCIN,
Respondent/Petitioner on Review.
(WCB 96-03838; CA A98272; SC S46750)
	On review from the Court of Appeals.*
	Argued and submitted November 2, 2000.
	Edward J. Harri, Salem, argued the cause and filed the
petition for respondent/petitioner on review.  With him on the
briefs was Martin L. Alvey, Portland.
	Julene Quinn, Salem, argued the cause and filed the response
for petitioners/respondents on review. 
	Before Carson, Chief Justice, and Gillette, Durham, Leeson,
and Riggs, Justices.**
	DURHAM, J.
	The decision of the Court of Appeals is reversed.  The order
of the Workers' Compensation Board is affirmed.
	*Judicial Review from the Workers' Compensation Board. 160 Or App 489, 981 P2d 1277 (1999).
	**Van Hoomissen, J., retired December 31, 2000, and did not
participate in this decision.  Kulongoski, J., resigned June 14,
2001, and did not participate in this decision.  De Muniz and
Balmer, JJ., did not participate in the consideration or decision
of this case.
	DURHAM, J.
	In this workers' compensation proceeding, the issue is
whether the Workers' Compensation Board (Board) correctly decided
that the Board's administrative law judge (ALJ) permissibly
exercised his discretion in granting a continuance of a hearing. 
The ALJ's decision held the hearing record open, after completion
of the testimony of insurer's expert, to receive the written
rebuttal testimony of claimant's expert.  After receiving and
considering that additional evidence, the ALJ set aside insurer's
denial of claimant's claim.  On review, the Board determined that
the ALJ did not abuse his discretion in granting the continuance
and affirmed the ALJ's order.  The Court of Appeals reversed,
concluding that claimant had failed to demonstrate that she was
entitled to a continuance because she had not shown the requisite
due diligence of the necessity of a continuance.  SAIF v. Kurcin,
160 Or App 489, 494, 981 P2d 1277 (1999).  We allowed claimant's
petition for review.  We reverse the decision of the Court of
Appeals and affirm the Board's order.
	The parties do not dispute the relevant facts. 
Claimant filed a claim for workers' compensation for a herniated
disc.  Insurer denied the claim, and claimant requested a
hearing.  Before the hearing, insurer notified claimant that its
medical expert would testify and provided claimant with a copy of
the expert's medical reports.  At the outset of the hearing,
claimant's attorney stated that, after employer's expert had
given his anticipated testimony, claimant might request a
continuance so that her expert could review and rebut insurer's
expert's testimony.  In support of that position, claimant argued
that, under the Board's administrative rules, claimant had the
right to present the final evidence because she has the burden of
proof.  Insurer objected, arguing that claimant should explain
why she previously had not requested the continuance because,
four weeks before the hearing, insurer had informed claimant that
it intended to call its expert.  Insurer also had provided
claimant, before the hearing, with copies of the expert's two
medical reports.  Claimant's attorney responded:  "It may well be
that after I hear [insurer's expert] testify that I don't need to
exercise that right.  I, at least, want to have the opportunity." 
The ALJ stated, in reference to the Board's rules, that claimant
"has the last opportunity to rebut" and added that, if "[s]he
hasn't heard the testimony, [s]he can't rebut it." 
	The last evidence submitted during the hearing was the
testimony of insurer's expert.  At the close of that testimony,
claimant notified the ALJ that she would "exercis[e] [her] right
to have [her expert] provide rebuttal evidence" and agreed that
insurer would have an opportunity, if it wished, to cross-examine
claimant's expert.  The ALJ held the record open and received the
rebuttal report into evidence at a later date.  As noted above,
the Board, on review, held that the ALJ had not abused his
discretion in granting a continuance.
	ORS 656.298(7) provides that judicial review of an
order of the Board "shall be as provided in ORS 183.482(7) and
(8)." (1)  The issue in this case concerns the Board's
interpretation and application of the administrative rules that
pertain to the evidentiary hearing that took place before the
ALJ.  We begin by setting out the relevant statutes and rules.
	ORS 656.726(5) provides in part:
		"The board may make and declare all rules which
are reasonably required in the performance of its
duties, including but not limited to rules of practice
and procedure in connection with hearing and review
proceedings and exercising its authority under ORS
656.278.  The board shall adopt standards governing the
format and timing of the evidence.  The standards shall
be uniformly followed by all Administrative Law Judges
and practitioners. * * *"
		ORS 656.283(7) provides in part:
		"Except as otherwise provided in this section and
rules of procedure established by the board, the
Administrative Law Judge is not bound by common law or
statutory rules of evidence or by technical or formal
rules of procedure, and may conduct the hearing in any
manner that will achieve substantial justice.  * * *"
	Under the authority granted in ORS 656.726(5), the
Board has promulgated administrative rules that govern hearing
procedures and the admission of evidence.  OAR 438-007-0023
provides:
	"The party bearing the burden of proof on an issue in a
hearing has the right of first and last presentation of
evidence and argument on the issue." 
	OAR 438-006-0091 provides:  
		"The parties shall be prepared to present all of
their evidence at the scheduled hearing.  Continuances
are disfavored.  The Administrative Law Judge may
continue a hearing for further proceedings.  The
Administrative Law Judge shall state the specific
reason for the continuance:
		"(1) If the time allocated for the scheduled
hearing is insufficient to allow all parties to present
their evidence and argument;
		"(2) Upon a showing of due diligence if necessary
to afford reasonable opportunity to cross-examine on
documentary medical or vocational evidence;
		"(3) Upon a showing of due diligence if necessary
to afford reasonable opportunity for the party bearing
the burden of proof to obtain and present final
rebuttal evidence or for any party to respond to an
issue raised for the first time at a hearing; or
		"(4) For any reason that would justify
postponement of a scheduled hearing under OAR 438-006-0081." 
(Emphasis added.)
	Insurer argues that the ALJ violated the Board's rules
regarding a continuance.  According to insurer, OAR 438-006-0091(3) grants the ALJ discretion to continue the hearing, but
only if the ALJ first makes findings, from evidence in the
record, that claimant has shown due diligence and that a
continuance is necessary.  Insurer contends that claimant did not
demonstrate that she exercised due diligence or needed a
continuance and that the ALJ made no findings on those factual
issues. 
	The parties' disagreement concerns the propriety of the
ALJ's decision to continue the hearing.  However, this is a
judicial review proceeding under ORS 656.298, and that statute
subjects the order of the Board, not the ALJ, to judicial review. 
Therefore, the logical starting point for our analysis is the
Board's order.
	The Board determined that OAR 438-006-0091(3) granted
discretion to the ALJ to continue the hearing and that the Board
must review the ALJ's decision to continue the hearing for abuse
of discretion.  The Board stated the following reasons for
concluding that the ALJ had not abused his discretion in allowing
claimant's request to continue the hearing:
		"At hearing, counsel for SAIF objected to
claimant's request for a continuance in order for
claimant's [expert and] treating physician, Dr.
Calhoun, to review the expert testimony at hearing
provided by [insurer's expert] Dr. Gambee.  The ALJ
found that claimant had exercised due diligence, and
that it would not have been possible for claimant to
have known the substance of Dr. Gambee's testimony
prior to hearing.  The ALJ further noted that claimant
had the right to produce final rebuttal evidence. 
Finally, there was no opposition to SAIF's request to
cross-examine Dr. Calhoun.
		"Under the circumstances, we conclude that it was
not an abuse of discretion for the ALJ to continue the
hearing in order for claimant to obtain final rebuttal
evidence from Dr. Calhoun.  Although SAIF argues, on
review, that claimant should have been able to
anticipate the substance of Dr. Gambee's testimony and
to provide rebuttal evidence without leaving the record
open, we find such an argument to be speculative. 
Accordingly, we conclude that the ALJ did not abuse his
discretion by granting claimant's motion for a
continuance."
	The Board's explanation for its decision demonstrates
that the Board reviewed the ALJ's exercise of discretion as if
the Board were an appellate court reviewing a discretionary
decision by a lower court.  The Board did not purport to review
de novo the facts on which the ALJ relied in making his decision
or claim authority to do so.  The Board did not announce what
choice the Board would have made if the Board itself had faced
the question whether to continue the hearing on the basis of the
facts found by the ALJ.  No party contests the right of the Board
to proceed in that manner.  Because the Board did not purport to
exercise discretion of its own, ORS 183.482(8)(b), which
describes this court's standard of review regarding an "agency's
exercise of discretion[,]" does not state the standard of review
that applies here.  Instead, ORS 183.482(8)(a), under which this
court reviews the Board's order to determine whether "the agency
has erroneously interpreted a provision of law[,]" states the
standard of review that applies here.
	In enacting ORS 656.726(5), the legislature delegated
to the Board the authority to adopt administrative rules
regarding the procedures and standards for continuing hearings to
receive further evidence.  The Board exercised that authority by
adopting OAR 438-006-0091 and OAR 438-007-0023.  OAR 438-006-0091
provides in part:  "The Administrative Law Judge may continue a
hearing for further proceedings."  That is a classic grant of
discretion to the ALJ.  The Board thus did not erroneously
interpret a provision of law in concluding that, under the rule,
the decision to continue a hearing for further proceedings is
committed to the discretion of the ALJ.
	The parties' arguments center on the meaning and effect
of the next sentence in OAR 438-006-0091 and, particularly, its
third subsection.  For ease of reference, we again set out that
rule in part:  
		"The [ALJ] shall state the specific reason for the
continuance:
		"* * * * *
		"(3) Upon a showing of due diligence if necessary
to afford reasonable opportunity for the party bearing
the burden of proof to obtain and present final
rebuttal evidence or for any party to respond to an
issue raised for the first time at a hearing[.]"
	Our objective in construing an administrative rule is
to "ascertain the intent of the body that promulgated it." 
Osborn v. PSRB, 325 Or 135, 145, 934 P2d 391 (1997).  As is the
case with the interpretation of statutes, we begin by examining
the words of the rule and the context in which they appear.  Id.
at 145-46.
	OAR 438-006-0091 commands the ALJ to "state the
specific reason for the continuance."  The four subsections that
follow that command set out the universe of reasons on which an
ALJ may rely in exercising discretion to grant a continuance.  As
noted, the record is clear that the ALJ relied on the reason
described in subsection (3) regarding the presentation of final
rebuttal evidence.
	Contrary to insurer's argument, subsection (3) does not
obligate the ALJ, either expressly or by implication, to enter
findings of fact on the record about whether claimant satisfied
the criteria stated in subsection (3).  When read together,
subsection (3) and the prefatory wording that precedes that
subsection obligate the ALJ only to state one of the listed
grounds for a continuance if, in the opinion of the ALJ, the
record satisfies that ground.  If the ALJ, acting under a
delegation of discretion, grants a continuance on the basis of
subsection (3), then the question before the Board on review is
whether the record supports the ALJ's discretionary choice to
grant a continuance.  If the record would support a decision by
the ALJ either to grant or to deny a continuance, then the Board
on review must conclude that the ALJ's choice is not an abuse of
discretion.
	The Court of Appeals concluded that "[w]hether to grant
a continuance is a matter committed to the discretion of the
Board."  SAIF v. Kurcin, 160 Or App at 492.  In our view, that
conclusion reflects a fundamental legal error.  As the Board
recognized, its rule on continuances delegated the decision
whether to grant a continuance to the ALJ, subject to review by
the Board to determine whether the ALJ abused his or her
discretion.  That is, the rule vests authority to make the
discretionary decision regarding a continuance with the legal
officer who is responsible for the efficient administration of
the evidentiary hearing:  the ALJ. 
	Proceeding from its erroneous premise, the Court of
Appeals concluded that claimant had failed to qualify for a
continuance under OAR 438-006-0091(3) because she had failed to
prove, in accordance with that rule, that she had shown "due
diligence."  The Court of Appeals also concluded that a
continuance was not "necessary to afford reasonable opportunity"
for claimant to obtain and present final rebuttal evidence. (2) 
SAIF v. Kurcin, 160 Or App at 493.  The rule does incorporate
those criteria to guide the ALJ's discretionary decision
regarding a request for a continuance.  We next turn to the
meaning of those criteria.
	The relevant rules do not define "due diligence." 
Under the methodology described in PGE v. Bureau of Labor and
Industries, 317 Or 606, 610-12, 859 P2d 1143 (1993), courts give
words of common usage their plain, natural, and ordinary meaning. 
The term used here -- "due diligence" -- is not a term of common
usage, however.  That term has a special meaning in the law. 
"Due diligence" means "[t]he diligence reasonably expected from,
and ordinarily exercised by, a person who seeks to satisfy a
legal requirement or to discharge an obligation."  Black's Law
Dictionary, 468 (7th ed 1999). We must assume that the Board, in
promulgating the rule, intended the term "due diligence" to
connote its special meaning.
	OAR 438-006-0091(3) also provides, as pertinent to this
case, that an ALJ may allow a continuance 
	"if [a continuance is] necessary to afford [a]
reasonable opportunity for the party bearing the burden
of proof to obtain and present final rebuttal evidence
* * *."
That criterion protects, through the procedural device of a
continuance, the right of final presentation of evidence and
argument that OAR 438-007-0023 creates in favor of the party that
bears the burden of proof on an issue in a hearing.  The term
"necessary" in that rule does not stand alone.  Instead, that
term appears in the phrase "necessary to afford a reasonable
opportunity * * *."  Thus, that criterion imposes no requirement
that a continuance be "necessary" in an absolute sense.  Rather,
the rule requires the ALJ to assess whether a continuance is
justified by determining whether, in the absence of a
continuance, the hearing would not afford the requesting party a
reasonable opportunity to obtain and present final rebuttal
evidence.
	Insurer argues that, because it furnished claimant with
a copy of the reports of insurer's expert before the hearing, the
record establishes as a matter of law that claimant had ample
opportunity to prepare any required rebuttal evidence without
requesting a continuance.  Although the factual premise of that
argument -- prehearing delivery of the expert's report -- is
accurate, insurer's asserted conclusion does not follow
necessarily.
	Insurer is correct that the delivery of the written
reports of insurer's expert gave notice to claimant of the
contents of the reports.  However, the evidence that insurer
introduced at the hearing included not only the written reports,
but also the testimony of insurer's expert.  Insurer's objection
to a continuance proceeded from the assumption that the expert's
testimony merely would repeat the written reports.  However, the
ALJ rationally could conclude that insurer's principal reason in
calling the expert to testify was to introduce into the record
favorable evidence that the written reports did not already
contain.  The ALJ also could conclude that claimant's cross-examination of insurer's expert would produce new evidence, such
as additional or different explanations for the expert's
conclusions, that the written reports did not contain.
	When the ALJ held the record open and later received
into evidence claimant's rebuttal testimony, the record included
not only the two written reports prepared by insurer's expert,
but also the expert's oral testimony.  The ALJ was entitled to
conclude that that testimony was inconsistent, at least to some
degree, with the written reports.  For example, the expert opined
in his March 13, 1996, report that it was "unclear" whether
claimant's 1995 workplace injury represented a "true pathologic
worsening or simply an acute exacerbation of symptoms * * *."  By
contrast, the expert testified that he thought that the 1995
injury made claimant's condition "* * * symptomatic.  I don't
think it worsened it."  That inconsistency, and others that we
need not present in detail here, defeat insurer's theory that
claimant made no showing of a need to present rebuttal testimony
because the expert's reports had portrayed the expert's hearing
testimony accurately before the hearing.  The ALJ was entitled to
conclude that claimant had made such a showing and to exercise
his discretion accordingly.
	After reviewing the record, the Board sustained the
ALJ's decision to hold the record open.  The Board acknowledged
SAIF's argument "that claimant should have been able to
anticipate the substance of Dr. Gambee's testimony and to provide
rebuttal evidence without leaving the record open," but concluded
that "such an argument [was] speculative."  As we have explained,
the record justified the ALJ's choice to receive claimant's
rebuttal testimony after the close of the evidentiary hearing. 
The Board recognized that fact in sustaining the ALJ's
discretionary choice.  Under the standard set out in ORS
183.482(8)(a), the Board's ruling was not erroneous.  That is,
the Board correctly applied its rules and did not "erroneously
interpret[] a provision of law," ORS 183.482(8)(a), in concluding
that the ALJ did not abuse his discretion in granting a
continuance.
	The decision of the Court of Appeals is reversed.  The
order of the Workers' Compensation Board is affirmed.



1. 	ORS 183.482(8) provides in part:
		"(a) The court may affirm, reverse or remand the
order.  If the court finds that the agency has
erroneously interpreted a provision of law and that a
correct interpretation compels a particular action, it
shall:
			"(A) Set aside or modify the order; or
			"(B) Remand the case to the agency for
further action under a correct interpretation of the
provision of law.
		"(b) The court shall remand the order to the
agency if it finds the agency's exercise of discretion
to be:
			"(A) Outside the range of discretion
delegated to the agency by law;
			"(B) Inconsistent with an agency rule, an
officially stated agency position, or a prior agency
practice, if the inconsistency is not explained by the
agency; or
			"(C) Otherwise in violation of a
constitutional or statutory provision."


2. 	The Court of Appeals erred to the extent that it
determined that the pertinent facts were different than those on
which the ALJ and the Board had relied.  In this context, the
Court of Appeals' proper course, instead, was to determine
whether the record permitted the ALJ to view the facts as he did.