Court Opinion

ID: 9900471
Source: CourtListenerOpinion
Date Created: 2023-11-18 22:13:32.942367+00
Date Added: 2024-06-11T09:21:05.706100
License: Public Domain

566                    April 26, 2023                No. 219

         IN THE COURT OF APPEALS OF THE
                 STATE OF OREGON

           In the Matter of the Compensation of
                Vern E. Giltner, Claimant.
                    Vern E. GILTNER,
                        Petitioner,
                             v.
                  SAIF CORPORATION
          and Dirt & Aggregate Interchange Inc.,
                       Respondents.
               Workers’ Compensation Board
                    2001930; A176021

   Argued and submitted October 25, 2022.
   Jodie Anne Phillips Polich argued the cause for peti-
tioner. Also on the reply brief was Law Offices of Jodie Anne
Phillips Polich, P. C.
   Michelle L. Shaffer argued the cause and filed the brief
for respondents.
  Before Shorr, Presiding Judge, and Mooney, Judge, and
Pagán, Judge.
   PAGÁN, J.
   Affirmed.
Cite as 325 Or App 566 (2023)                                               567

            PAGÁN, J.
        Claimant seeks judicial review of an order of the
Workers’ Compensation Board (board) determining that the
SAIF Corporation (SAIF) was not required to make a lump
sum payment of permanent partial disability (PPD) pursu-
ant to ORS 656.230(1).1 That statute addresses four circum-
stances when an insurer is not required to make a lump
sum payment. We agree with SAIF that the board correctly
interpreted the statute when it concluded that, even though
claimant had waived his right to appeal the adequacy of the
award, SAIF was not required to make a lump sum payment
until expiration of the time to appeal the notice of closure.
Accordingly, we affirm.
         The relevant facts are procedural. In response to
claimant’s workers’ compensation claim, SAIF mailed a
notice of closure on March 20, 2020, awarding claimant PPD
in the amount of $28,602.84. The notice stated that claim-
ant was entitled to 34 percent loss of the whole person for
impairment to his hearing. The date of injury was approxi-
mately seven years earlier, on April 10, 2013.
         Under ORS 656.268(5)(e), the insurer has seven
days from the date of the notice of closure to request recon-
sideration and the worker has 60 days to do so. SAIF did not
request reconsideration of the award. Instead, on March 31,
2020, SAIF issued a letter specifying the monthly payment
schedule for the award and enclosing the first payment. On
April 6, claimant applied for approval of a lump sum pay-
ment, and he waived his right to appeal the adequacy of the
award. On April 8, SAIF denied the request, because the
award had not become final by operation of law. On April 14,
   1
       ORS 656.230 provides:
        “(1) When a worker has been awarded compensation for permanent par-
   tial disability, and the worker requests payment of all or part of the award in
   a lump sum payment, the insurer shall make the payment requested unless
   the:
         “(a) Worker has not waived the right to appeal the adequacy of the award;
         “(b) Award has not become final by operation of law;
      “(c) Payment of compensation has been stayed pending a request for
   hearing or review under ORS 656.313; or
       “(d) Worker is enrolled and actively engaged in training according to
   rules adopted pursuant to ORS 656.340 and 656.726.”
568                                                        Giltner v. SAIF

claimant requested a hearing on SAIF’s denial of his request
for a lump sum payment. SAIF made a second monthly pay-
ment around the end of April and paid the remainder of
claimant’s award in full on May 20, the sixty-first day after
the notice of closure.
         After a hearing on SAIF’s denial of claimant’s
request for a lump sum payment, an administrative law
judge (ALJ) decided in claimant’s favor. Interpreting and
applying ORS 656.230(1) and OAR 436-060-0060(1),2 the
ALJ determined that when claimant waived his right to
appeal the adequacy of the award, and once SAIF’s seven-
day window to request reconsideration had expired, the
notice of closure became final by operation of law. According
to the ALJ, “final by operation of law” meant
   “the expiration of both parties’ rights to appeal—which
   could be accomplished by the passage of sixty days, or the
   passage of seven days coupled with claimant’s waiver of
   his right to challenge the adequacy of the award. SAIF’s
   refusal to pay claimant’s permanent disability as a lump
   sum until May 20, 2020, forty-four days after SAIF received
   claimant’s request, was unreasonable.”
The ALJ assessed a 25 percent penalty against SAIF and
awarded claimant $4,797 in attorney fees.
         SAIF appealed the ALJ’s order. The board reversed.
Interpreting ORS 656.230(1), the board determined that
claimant’s waiver of his right to appeal the adequacy of the
award did not automatically render the award final by oper-
ation of law, because “SAIF could have validly rescinded
its closure notice and reclosed the claim, pursuant to OAR
436-030-0023,” and claimant “could still request reconsid-
eration and allege that his claim was prematurely closed, a
   2
       OAR 436-060-0060(1) provides, in part:
       “The insurer may only deny the request for lump sum payment if any of
   the following apply:
      “(a) The worker has not waived the right to appeal the adequacy of the
   award;
         “(b) The award has not become final by operation of law;
      “(c) The payment of compensation has been stayed pending a request for
   hearing or review under ORS 656.313; or
       “(d) The worker is enrolled and actively engaged in an authorized train-
   ing plan under OAR 436-120.”
Cite as 325 Or App 566 (2023)                              569

finding which could result in an order rescinding the Notice
of Closure and its permanent disability award.” Under
those circumstances, the board determined that SAIF was
not required to immediately make the lump sum payment.
The board reversed the penalty and attorney fee award.
Claimant now seeks our review of the board’s order.
         “We review the board’s statutory interpretation for
errors of law.” Baker v. Liberty Northwest Ins. Corp., 257 Or
App 205, 210, 305 P3d 139, rev den, 354 Or 597 (2013) (citing
ORS 183.482(8)(a)(B)). We attempt to discern the meaning
of the statute intended by the legislature, examining the
text in context and any relevant legislative history. State
v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009). When
interpreting the board’s administrative rules, “[w]e will
defer to the board’s plausible interpretation of its own rule,
including an interpretation made in the course of applying
the rule, if it is not inconsistent with the text of the rule,
its context, or any other source of law.” McGuire v. SAIF,
317 Or App 629, 634-35, 507 P3d 317, rev den, 370 Or 197
(2022).
           ORS 656.230(1), the statute at issue, states that the
insurer shall make a requested lump sum payment of PPD
“unless” certain circumstances apply. The related adminis-
trative code provision, OAR 436-060-0060(1), provides that
the insurer may deny a request for a lump sum payment of
PPD “if any” of those same four conditions applies. The con-
ditions include when the worker “has not waived the right
to appeal the adequacy of the award,” and when the award
“has not become final by operation of law.” ORS 656.230
(1)(a), (b); OAR 436-060-0060(1)(a), (b).
        On review, claimant argues that the board erred in
interpreting and applying ORS 656.230(1) and OAR 436-
060-0060(1). He argues that when he waived his right to
appeal the adequacy of the award, he “met the require-
ment” of ORS 656.230(1)(a). Relying on Cayton v. Safelite
Glass Corp., 231 Or App 644, 220 P3d 1190 (2009), claimant
argues that his waiver of the right to appeal the adequacy
of the award was sufficient to trigger SAIF’s obligation to
make a lump sum payment. SAIF argues that Cayton is
distinguishable, because it interpreted an earlier version
570                                                         Giltner v. SAIF

of the statute, ORS 656.230(1) (2005), which was amended
by Oregon Laws 2007, chapter 270, section 1. In addition,
SAIF argues that it makes little sense to immediately make
a lump sum payment, because waiver of a worker’s right to
appeal the amount of the award does not waive the work-
er’s right to challenge other aspects of the notice of closure
within 60 days.
         We agree with SAIF. In Cayton, 231 Or App at 646,
we interpreted ORS 656.230(1) (2005), which did not list
exceptions to the requirement to make a lump sum payment
of PPD.3 We construed the statutory phrase “waiver of the
right to appeal its adequacy,” and we determined that only
the claimant, not the insurer, could challenge an award’s
adequacy or amount. Id. at 649-50. As a result, “the claim-
ant’s waiver of his or her right to seek an increase in the
amount awarded” was sufficient to trigger the insurer’s obli-
gation to make a lump sum payment. Id. at 651.
         The current structure of the statute is signifi-
cantly different. It provides that the insurer must make the
requested lump sum payment, “unless” paragraphs (a) to
(d) apply, which indicates that they state exceptions to the
requirement. ORS 656.230(1); see Canales-Robles v. Laney,
314 Or App 413, 422, 498 P3d 343 (2021) (“By its use of the
word ‘unless,’ the statute creates an exception to the require-
ment * * *.”). The four exceptions are stated in the disjunc-
tive, which means that if any one of them applies, then the
requirement does not. See Viking Industries v. Gilliam, 118
Or App 183, 185, 846 P2d 1207, rev den, 316 Or 529 (1993)
(When statutory provisions articulating exceptions to a
requirement are stated in the disjunctive, then “[a]ny one
of them provides an adequate basis for” concluding that the
requirement does not apply.).

   3
       ORS 656.230(1) (2005) provided, in part:
       “Where a worker has been awarded compensation for permanent partial
   disability, and the award has become final by operation of law or waiver of the
   right to appeal its adequacy, the insurer shall upon the worker’s application
   pay all or part of the remaining unpaid award to the worker in a lump sum,
   unless the insurer disagrees with payment, in which case the insurer, within
   14 days, will refer the matter to the Director of the Department of Consumer
   and Business Services to determine whether all or part of the lump sum
   should be paid.”
Cite as 325 Or App 566 (2023)                                              571

         The first exception to the requirement to make a
lump sum payment applies when a worker has not waived
the right to appeal the adequacy of the award, and the sec-
ond exception applies when the award “has not become final
by operation of law.” ORS 656.230(1)(a), (b). “Operation of
law” refers to “[t]he means by which a right or a liability is
created for a party regardless of the party’s actual intent.”
Black’s Law Dictionary 1124 (8th ed 2004).4 An insurer’s
request for reconsideration “must be made within seven days
of the date of the notice of closure,” and a worker’s request
“must be made within 60 days of the date of the notice of clo-
sure.” ORS 656.268(5)(e). Thus, an award of PPD in a notice
of closure generally becomes final by operation of law “60
days after its issuance.” SAIF v. Coburn, 159 Or App 413,
415, 977 P2d 412 (1999).
          Here, the award of PPD, which appeared in the
notice of closure dated March 20, 2020, had not become final
by operation of law on April 6, when claimant applied for
approval of a lump sum payment. Considering the text of
the statute in context, it supports the board’s conclusion
that the second exception applied, and that SAIF was not
required to immediately make the lump sum payment. See
Gaines, 346 Or at 171 (when interpreting a statute, we look
first to the statute’s words in context).
         In arguing otherwise, claimant contends that we
can rely on Cayton’s interpretation of the earlier version
of the statute, because the legislative history of House Bill
(HB) 2218 (2007), the bill that resulted in the 2007 amend-
ments to ORS 656.230, shows that it was merely a “regu-
latory streamlining bill,” and that its “sole purpose” was
to eliminate the director of the Workers’ Compensation
Division from the lump sum approval process. Therefore,
according to claimant, the intent of the statute remained
the same despite its restructuring. Claimant relies on the
testimony of John Shilts, a former director of the Workers’
Compensation Division, from the first public hearing on the
bill.
    4
      The phrase “by operation of law” is not defined in ORS 656.005, the statute
that provides definitions that govern the Workers’ Compensation Law. Nor is it
defined in Webster’s Third New Int’l Dictionary (unabridged ed 2002).
572                                            Giltner v. SAIF

         We are not persuaded by claimant’s argument.
Considering Shilts’ testimony as a whole, it actually pro-
vides support for the board’s conclusion that SAIF was not
required to immediately make the lump sum payment.
Shilts testified that the bill “consolidates into one section of
the statute the law * * * identifying those four times when
an insurer can deny a lump sum permanent partial dis-
ability award and it removes the director from the * * * pro-
cess of automatically reviewing all denied lump sum pay-
ments.” Tape Recording, House Committee on Business &
Labor, HB 2218, Jan 26, 2007, Tape 10, Side A (statement
of John Shilts). At a later public hearing, Shilts stated that
the insurer can deny the lump sum payment “for any of four
reasons allowed by the statute.” Audio Recording, Senate
Committee on Commerce, HB 2218, May 7, 2007, at 0:12:30
(comments of John Shilts), https://olis.oregonlegislature.gov
(accessed Apr 9, 2023). Thus, Shilts’ testimony supports the
plain meaning of ORS 656.230(1), which indicates that if
any one of the four exceptions apply, then the insurer is not
required to make a lump sum payment. Here, SAIF was
not required to immediately make a lump sum payment on
April 6, 2020, because the award of PPD had not become
final by operation of law.
         In this case, the ALJ ruled in claimant’s favor based
on the ALJ’s flawed understanding that the award became
“final by operation of law” when the claimant waived his
right to appeal the adequacy of the award “coupled with” the
expiration of the insurer’s right to request reconsideration,
which occurred seven days after the date of the notice of clo-
sure. However, a worker can challenge the notice of closure
in ways other than by appealing the adequacy or amount of
the award. For example, a worker can object to a notice of
closure by arguing that “the notice of closure was premature
and should be rescinded.” Duffour v. Portland Community
College, 283 Or App 680, 682, 389 P3d 1162 (2017). Because
a worker can do so, it makes sense to conclude that an award
of PPD is not final by operation of law until 60 days after the
notice of closure, even when the worker waives the right to
appeal the adequacy of the award.
        “As a general rule, we assume that the legislature
did not intend any portion of a statute to be meaningless
Cite as 325 Or App 566 (2023)                                               573

surplusage.” Cayton, 231 Or App at 650. Claimant also
argues that if ORS 656.230(1)(a) does not apply when a
worker waives the right to appeal the adequacy of the
award, and after the insurer’s seven-day window to seek
reconsideration expires, then it never applies, and it is ren-
dered “meaningless surplusage.”
         We conclude otherwise. In Landriscina v. Raygo-
Wagner, 53 Or App 558, 563-65, 632 P2d 1281 (1981), when
interpreting ORS 656.304,5 we determined that a worker
who requested and received a lump sum payment of an
award did not knowingly waive his right to seek reconsid-
eration of the award. We arrived at that conclusion even
though the worker’s application form contained a warning
about the waiver consequences of accepting a lump sum
payment. Id. at 561. Although those circumstances are not
likely to be common, Landriscina suggests that there can
be instances when a worker requests a lump sum payment
of PPD but does not waive the right to appeal the adequacy
of the award. ORS 656.230(1)(a) addresses those circum-
stances. As a result, even if the exceptions in paragraphs (a)
and (b) overlap, the first exception is not meaningless sur-
plusage.6 We affirm the board’s order reversing the ALJ’s
order.
           Affirmed.

     5
       ORS 656.304 provides, in part, that “[a] claimant may accept and cash any
check given in payment of any award or compensation without affecting the right
to a hearing, except that the right of hearing on any award shall be waived by
acceptance of a lump sum award by a claimant where such lump sum award was
granted as a result of the claimant’s own request under ORS 656.230.”
     6
       Claimant complains that there could never be “a situation where the work-
er’s waiver of the adequacy of the award would allow them to receive a lump sum
payment” before expiration of the 60 days, but that result is simply a function of
the fact that ORS 656.230(1) articulates exceptions to the requirement to make a
lump sum payment. It is also consistent with OAR 436-060-0060(1), which artic-
ulates four circumstances when an insurer can deny a request for a lump sum
payment.