Arvidson v. Liberty Nw. Ins. Corp. (In re Arvidson)

• Decision Date: 16 July 2020
• Docket Number: SC S066746
• Citation: 467 P.3d 741,366 Or. 693
• Parties: In the MATTER OF the COMPENSATION OF Danny E. ARVIDSON, Claimant. Danny E. Arvidson, Petitioner on Review, v. Liberty Northwest Insurance Corporation and Beall Transport Equipment, Respondents on Review.
• Court: Oregon Supreme Court

366 Or. 693

467 P.3d 741

In the MATTER OF the COMPENSATION OF Danny E. ARVIDSON, Claimant.Danny E. Arvidson, Petitioner on Review,

v.Liberty Northwest Insurance Corporation and Beall Transport Equipment, Respondents on Review.

SC S066746

Supreme Court of Oregon, En Banc.

Argued and submitted January 15, 2020.

July 16, 2020

Julene M. Quinn, Portland, argued the cause and filed the briefs for petitioner on review.

Christo de Villiers, Portland, argued the cause and filed the brief for respondents on review.

Theodore P. Heus, Preston Bunnell, LLP, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.

GARRETT, J.

This workers’ compensation case concerns the availability of attorney fees under ORS 656.382(2). After claimant received an award of permanent total disability, insurer Liberty Northwest Insurance Corporation (insurer) requested a hearing before an administrative law judge (ALJ) to review the award. The ALJ dismissed insurer's hearing request as time-barred. The question on review is whether that dismissal entitled claimant to attorney fees under ORS 656.382(2), which provides that, if an insurer initiates review of a compensation award and the reviewing body "finds that * * * all or part of the compensation awarded * * * should not be reduced or disallowed," the insurer shall pay the claimant's attorney a "reasonable attorney fee." The ALJ determined that the statute applied to the dismissal of insurer's claim and awarded fees to claimant. The Workers’ Compensation Board (board) reached a different conclusion and reversed that decision. The Court of Appeals affirmed without opinion. We allowed review and now reverse.

I. LEGAL BACKGROUND

"In workers’ compensation cases, an award of attorney fees can be made only pursuant to statutory authorization." SAIF v. Allen , 320 Or. 192, 200, 881 P.2d 773 (1994). One statute that authorizes attorney fees is ORS 656.382(2).¹ It provides, in part:

"If a request for hearing, request for review, appeal or cross-appeal to the Court of Appeals or petition for review to the Supreme Court is initiated by an employer or insurer, and the Administrative Law Judge, board or court finds that * * * all or part of the compensation awarded by a reconsideration order issued under ORS 656.268 should not be reduced or disallowed, the employer or insurer shall be required to pay to the attorney of the claimant a reasonable attorney fee * * * for legal representation by an attorney for the claimant at and prior to the hearing * * *."

ORS 656.382(2). Thus, "[o]n its face, ORS 656.382(2) imposes three requirements for an award of attorney fees: (1) a claimant must have received an award of benefits; (2) an employer or insurer must have initiated one of the listed forms of requests for review; and (3) one of the listed tribunals must have concluded that the award of compensation should not be disallowed or reduced." SAIF v. DeLeon , 352 Or. 130, 133-34, 282 P.3d 800 (2012) (footnote omitted).

This case concerns the meaning of the third statutory predicate, which this court has construed twice before. First, in James v. SAIF , 290 Or. 849, 851, 626 P.2d 881 (1981), the insurer sought review of a Court of Appeals decision affirming the claimant's compensation award. This court allowed review and remanded to the Court of Appeals with instructions to make a finding regarding the causation of the claimant's condition. Id. The claimant then petitioned this court for attorney fees, arguing that she was entitled to fees under ORS 656.382(2) (1979). Id. In a three-paragraph per curiam opinion, we disagreed, stating that, even assuming other statutory conditions were met, in remanding to the Court of Appeals, "this court did not find ‘that the compensation awarded to * * * claimant should not be disallowed or reduced * * *.’ We did not decide either of those issues but remanded the case." Id. (quoting ORS 656.382(2) (1979) (ellipses in James )).

Subsequently, in SAIF v. Curry , 297 Or. 504, 507, 686 P.2d 363 (1984), the insurer unsuccessfully sought this court's review of a Court of Appeals decision affirming the board's determination that the claimant was permanently and totally disabled. After we denied review, the claimant petitioned for attorney fees under ORS 656.382(2) (1983). Id. at 507, 686 P.2d 363. The insurer opposed that fee petition, arguing that, in denying a petition for review, we did not find that the compensation awarded should not be disallowed or reduced and, therefore, we lacked authority to award fees to the claimant. Id. at 508, 686 P.2d 363. As discussed in greater detail below, 366 Or. at 706-07, ––– P.3d at –––– – ––––, we agreed with the insurer, concluding that ORS 656.382(2) (1983) did not allow attorney fees to be awarded when we deny an insurer's petition for review. Curry , 297 Or. at 511, 686 P.2d 363.

Shortly after Curry , the Court of Appeals considered whether its dismissal of an insurer's petition for judicial review triggered the attorney fee provision. Agripac, Inc. v. Kitchel , 73 Or. App. 132, 134, 698 P.2d 69 (1985). The Court of Appeals held that, "when an employer or insurer's petition for judicial review is dismissed without a finding that the compensation awarded to a claimant should not be disallowed or reduced, the claimant is not entitled to an award of attorney fees." Id. at 135, 698 P.2d 69 (internal quotation marks omitted). In reaching that decision, the court reasoned that it was "unable to find any meaningful distinction between the issue [presented] and [the issue] in Curry ." Id.

With that background in mind, we turn to the facts of this case.

II. FACTS

Claimant sustained a compensable injury to both of his shoulders. In June 2016, insurer issued a Notice of Closure, awarding claimant 91 percent unscheduled permanent partial disability. Claimant sought reconsideration of that Notice of Closure, and, in a subsequent order dated November 21, 2016, the Appellate Review Unit (ARU) of the Department of Consumer and Business Services awarded him permanent total disability.

On December 27, 2016, the board received the insurer's request for a hearing before an ALJ to review the ARU's compensation award. Claimant moved to dismiss that hearing request as untimely under ORS 656.268(6)(g) and ORS 656.319(4),² which require that a request for hearing be filed within 30 days after the copies of the reconsideration order are mailed to the parties. Claimant also requested an assessed attorney fee pursuant to ORS 656.382(2).³

Following a hearing limited to the issue of timeliness, the ALJ issued an Order and Opinion granting claimant's motion to dismiss and awarding him attorney fees. First, the ALJ found that "insurer failed to request a hearing within 30 days of the date of mailing of the Order on Reconsideration," as required by ORS 656.268(6)(g) and ORS 656.319(4). "Consequently, the Order on Reconsideration [was] final by operation of law, and the insurer's request for hearing [was] dismissed." As to attorney fees, the ALJ explained that ORS 656.382(2)

"does not distinguish between a hearing on the merits and a dismissal based on an untimely request for hearing. The only requirements are that the insurer initiate a request [for] a hearing and that claimant's compensation is neither reduced nor disallowed. Since the insurer initiated a request for hearing and claimant's compensation has not been reduced or disallowed, I conclude that claimant is entitled to an assessed attorney fee in this case."

Insurer then appealed to the board. The board affirmed the ALJ's dismissal of the hearing request, but it reversed the attorney fee award. Danny E. Arvidson , 69 Van Natta 1434 (2017). In doing so, the board relied on its reasoning in Timothy L. Williams , 46 Van Natta 2274 (1994), which, in turn, had relied on the Court of Appeals decision in Agripac, Inc. , 73 Or. App. 132, 698 P.2d 69. See Williams , 46 Van Natta at 2276 ( Agripac, Inc. "supports the proposition that, when a request for [b]oard review is dismissed without a decision on the merits, we are without authority to award attorney fees under ORS 656.382(2)"). The board explained that, under Williams , "to constitute a finding that the compensation awarded to the claimant should not be disallowed or reduced for purposes of [ ORS 656.382(2) ], such a finding must be made on the merits of the claim." Arvidson , 69 Van Natta at 1435 (internal quotation marks omitted).

The board then explained that, because the insurer's hearing request was dismissed as untimely, "no finding was made on the merits [of] claimant's compensation award[ ]," and claimant therefore was "not entitled to an attorney fee under ORS 656.382(2)." Id. at 1436.

Claimant petitioned for judicial review, and the Court of Appeals affirmed without opinion.

Arvidson v. Liberty Northwest Ins. Corp. , 297 Or. App. 192, 440 P.3d 685 (2019).

Claimant sought review, which we allowed.

III. DISCUSSION

As noted earlier, the dispute below concerned two issues: first, whether insurer's request for hearing was untimely, and second, if it was, whether claimant was entitled to attorney fees under ORS 656.382(2) for successfully obtaining the dismissal of insurer's request. On review, the first issue is not before us. The only question presented to this court is whether the dismissal of insurer's request on timeliness grounds falls within the statutory phrase "finds that * * * all or part of the compensation awarded * * * should not be reduced or disallowed" in ORS 656.382(2). Put another way, the question is whether the board was correct in holding that such a dismissal does not qualify for fees because it is not a decision "on the merits." We interpret the board's use of the phrase "on the merits" to refer to a decision that deals with the facts and substantive law underlying the compensation award, as opposed to a decision resolving the matter on a purely procedural ground.

The parties’ arguments on review turn on the meaning of the word "fi...