Rash v. McKinstry Co.

• Decision Date: 28 April 1999
• Docket Number: TP-97009
• Citation: 981 P.2d 343,160 Or.App. 131
• Parties: In the Matter of the Compensation of Benny H. Rash, Claimant. Benny H. RASH, Petitioner, v. McKINSTRY COMPANY and Liberty Northwest Insurance Corporation, Respondents. (; CA A100576)
• Court: Oregon Court of Appeals

Page 343

981 P.2d 343

160 Or.App. 131

In the Matter of the Compensation of Benny H. Rash, Claimant Benny H. RASH, Petitioner, v. McKINSTRY COMPANY and Liberty Northwest Insurance Corporation, Respondents.

(TP-97009; CA A100576)

Court of Appeals of Oregon.

Argued and Submitted on

Oct. 16, 1998.

Decided April 28, 1999.

Robert K. Udziela, Portland, argued the cause for petitioner. With him on the brief were Gregory A. Bunnell, and Pozzi, Wilson & Atchison.

Alexander D. Libmann argued the cause and filed the brief for respondents.

Before EDMONDS, Presiding Judge, and DEITS, Chief Judge, ^* and ARMSTRONG, Judge.

EDMONDS, P.J.

Claimant seeks review of a Workers' Compensation Board (Board) order ruling that insurer's lien rights, pursuant to ORS 656.580 and 656.593, on claimant's third-party settlement proceeds were not resolved by the parties' Claim Disposition Agreement (CDA). We review for errors of law, ORS 656.298(7) and 183.482(8), and affirm.

On June 16, 1994, claimant injured his neck and back while in the course and scope of his employment. Employer's insurer accepted the neck and back injuries as work-related and provided benefits to claimant. In July 1996, after claimant began a tort action against a third party involved in the cause of the injuries, insurer and claimant entered into a CDA. The CDA did not specifically preserve insurer's lien rights against any recovery that claimant might receive in the tort action. After claimant settled with the third party for $400,000, insurer sought to recover $124,716.73 from the proceeds, the amount that it had paid on claimant's claim.

The Board, concluded that in the absence of an express waiver in the CDA of the insurer's lien rights under ORS 656.580 ¹ and 656.593, ² insurer had a statutory right to recover what it had paid on behalf of claimant. Claimant's sole assignment of error is that the Board erred in holding that, "in the absence of an express waiver in the CDA of the [insurer's] lien rights under ORS 656.580 and 656.593, the parties' CDA does not deprive the [insurer] of its statutory right to recover from the third party proceeds." Claimant argues that an amendment made to ORS 656.236(1)(a) by Oregon Laws 1995, chapter 332, section 24, requires an insurer expressly to reserve its lien rights in a CDA. Insurer argues that the only rights released in the CDA belonged to claimant and that the amendment did not affect its statutory lien rights.

In interpreting a statute, our task is to discern the intent of the legislature. We look first to the text and context of the statute to ascertain its meaning. ORS 656.236(1)(a) provides, in part:

"The parties to a claim, by agreement, may make such disposition of any or all matters regarding a claim, except for medical services, as the parties consider reasonable, subject to such terms and conditions as the Workers' Compensation Board may prescribe. For the purposes of this section, 'matters regarding a claim' includes the disposition of a beneficiary's independent claim for compensation under this chapter. Unless otherwise specified, a disposition resolves all matters and all rights to compensation, attorney fees and penalties potentially arising out of claims, except medical services, regardless of the conditions stated in the agreement. Any such disposition shall be filed for approval with the board. If the worker is not represented by an attorney, the worker may, at the worker's request, personally appear before the board. Submission of a disposition shall stay all other proceedings and payment obligations, except for medical services, on that claim." (Emphasis indicates language added by Oregon Laws 1995, chapter 332, section 24.)

Claimant focuses on the language "all matters and all rights to compensation" in the statute to support his argument. Insurer counters that its third-party lien is not related to claimant's right to receive compensation and that, therefore, plaintiff's lien rights are not governed by ORS 656.236(1)(a).

ORS 656.005(8) defines compensation for purposes of the Workers' Compensation Statutes as including "all benefits, including medical services, provided for a compensable injury to a subject worker or the worker's beneficiaries by an insurer or self-insured employer pursuant to this chapter." The phrase "all rights to compensation" in ORS 656.236(1)(a) by definition relates only to claimant's rights. It is less clear whether the words "all matters" in ORS 656.236(1)(a) refer to rights other than those relating to claimant's compensation or are intended to encompass only the rights of claimants. The "doctrine of the last antecedent" provides:

"Referential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent. The last antecedent is 'the last word, phrase, or clause that can be made an antecedent without impairing the meaning of the sentence.' " State v. Webb, 324 Or. 380, 386, 927 P.2d 79 (1996) (quoting Norman J. Singer, 2A Sutherland Statutory Construction § 47, 33, at 270 (5th ed 1992)).

If the doctrine is applied to ORS 656.236(1)(a), "to compensation" would only qualify "all rights" and not "all matters." However, the context of ORS 656.236(1)(a) leads us to a different conclusion, i.e., that the legislature intended that the "matters" released in a CDA, unless otherwise specified, are claimant's, not insurer's.

ORS 656.576 to ORS 656.596 govern the interaction between the workers' compensation system and recovery against third parties and noncomplying employers. Throughout those statutes, a distinction is made between damages recovered from third parties and benefits received by an injured worker under the workers' compensation system. In ORS 656.593, the legislature uses the term "proceeds" in describing the monies recovered from a third-party tortfeasor. In contrast, the legislature uses the terms "compensation" and "benefits" when it refers to the expenditures made by the insurer that are recoverable from third party proceeds. ORS 656.593(1)(c) and, (2). Similarly, the legislature uses the terms "release of the claim" or "claim release" in providing that a worker may elect to release the insurer from liability for purposes of workers' compensation. ORS 656.593(6) and (7). It uses "cause of action" or "right of action" in referring to the ability of a claimant to seek recovery from a third party. ORS 656.580, 656.587, 656.591(1). Nowhere in ORS 656.236 do the terms "action" or "proceeds" appear. Rather, the terms "claim" ³ and "compensation" are used in the sentences proceeding the language in dispute and in the language itself. In context, it appears that "all matters and all rights to compensation" refers to benefits and claims of claimants and not to the lien rights of insurers.

Whatever ambiguity is left is resolved by the legislative history. It does not contain anything that indicates that the legislature contemplated that third party actions be presumptively included in a CDA. Instead, the legislative history reveals that the legislature's concern was that the rights involving a claim or compensation would be presumptively resolved. ⁴ To the extent that the language of the statute is redundant, that fact does not change the legislature's focus on claimant's rights and its silence about insurer lien rights. Therefore, we hold that the Board did not err in finding that insurer did not release its rights to a lien on third-party proceeds through the CDA because plaintiff failed to expressly preserve those rights in the agreement.

Affirmed.

ARMSTRONG, J., dissenting.

The majority concludes that an insurer entering into a claim disposition agreement under ORS 656.236(1)(a) does not need to include in the agreement a reservation of its lien rights in order to enforce those rights in the event that the claimant later recovers damages from a third-party tortfeasor. Because I believe that that conclusion is contrary to the express language of the statute, I respectfully dissent.

When asked to construe a statute, our task is to discern the intent of the legislature. PGE v. Bureau of Labor and Industries, 317 Or. 606, 610, 859 P.2d 1143 (1993). The text of the statute is the best evidence of the legislature's intent, and it is only if the text, in context, is ambiguous that we go beyond it. Id. at 610-11, 859 P.2d 1143. The statutory text at issue here is:

"Unless otherwise specified, a [claim] disposition [agreement] resolves all matters and all rights to compensation, attorney fees and penalties potentially arising out of claims, except medical services, regardless of the conditions stated in the agreement." ORS 656.236(1)(a) (emphasis added).

The majority concludes that "all matters" doesn't really mean all matters but, rather, means only those matters pertaining to a claimant's right to compensation. It reaches that conclusion by examining other provisions of the Workers' Compensation Law and by looking to the legislative history of the amendment creating the provision at issue. In doing so, the majority ignores the plain, unambiguous text of the statute itself. I am at a loss to see how the phrase "all matters," given its plain, natural and ordinary meaning, PGE, 317 Or. at 611, 859 P.2d 1143, could be read to mean anything other than all matters. By concluding otherwise, the majority has effectively erased that phrase from the statute. If, as the majority holds, the legislature intended "all matters" to mean only those matters that involve a claimant's rights to compensation, then it did not need to refer in the statute to "all rights to compensation, attorney fees and penalties." Under the majority's interpretation of the statute, the phrases "all matters" and "all rights to compensation, attorney fees and penalties" are redundant of each other. Of course, that interpretation runs afoul of the direction to us in ORS 174.010 to construe statutes, if possible, in such a way as to give...