SAIF Corp. v. DeLeon (In re Comp. of DeLeon)

• Decision Date: 28 June 2012
• Docket Number: (WCB 0803173,CA A142932,SC S059509).
• Citation: 352 Or. 130,282 P.3d 800
• Parties: In the Matter of the Compensation of Crystal L. DeLeon, Claimant. SAIF CORPORATION and Oregon Child Development Coalition, Respondents on Review, v. Crystal L. DeLEON, Petitioner on Review.
• Court: Oregon Supreme Court

352 Or. 130

282 P.3d 800

In the Matter of the Compensation of Crystal L. DeLeon, Claimant.SAIF CORPORATION and Oregon Child Development Coalition, Respondents on Review,

v.Crystal L. DeLEON, Petitioner on Review.

(WCB 0803173; CA A142932; SC S059509).

Supreme Court of Oregon, En Banc.

Argued and Submitted Jan. 9, 2012.

Decided June 28, 2012.

On review from the Court of Appeals.^*

Matthew L. Roy, Dunn & Roy, Salem, argued the cause and filed the brief for petitioner on review.

David L. Runner, SAIF Corporation Appellate Counsel, Salem, argued the cause and filed the brief for respondent on review.

James S. Coon, Portland, filed a brief for amicus curiae Oregon Trial Lawyers Association.

Before BALMER, Chief Justice, and DURHAM, DE MUNIZ, WALTERS, KISTLER, and LANDAU, Justices.^**

WALTERS, J.

In this case, we consider the authority of the Workers' Compensation Board (board) to award attorney fees to an injured worker in the circumstance in which the worker's insurer initiated review of an award of benefits to the worker and ultimately was unsuccessful in that effort. We hold that ORS 656.382(2) (2007)¹ provides statutory authority for that award, and, for the reasons that follow, we reverse the contrary decision of the Court of Appeals.

Crystal L. DeLeon (claimant) sought workers' compensation benefits for a work-related injury to her back, neck, and one shoulder. SAIF Corporation, claimant's insurer (insurer), accepted the claim but awarded only temporary partial disability; insurer did not award claimant permanent partial disability. Claimant sought reconsideration, and the Department of Consumer and Business Services (department) awarded her an 11 percent permanent partial disability for her shoulder.

Insurer then initiated review of the department's award and requested a hearing before an administrative law judge (ALJ). Insurer was successful at that stage of the proceedings. The ALJ agreed with insurer and reduced the permanent partial disability award to zero. Claimant then requested review by the board. Claimant won at that stage of the proceedings. The board reversed the ALJ and reinstated the 11 percent permanent partial disability award. The board awarded claimant an attorney fee of $2,500, payable by insurer, for the attorney's services before the ALJ, who had rendered a decision in favor of the insurer that the board later reversed. The statute on which the board relied for its award was ORS 656.382(2), the statute at issue in this case, which provided:

“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 the compensation awarded to a claimant should not be disallowed or reduced, the employer or insurer shall be required to pay to the claimant or the attorney of the claimant a reasonable attorney fee in an amount set by the Administrative Law Judge, board or the court for legal representation by an attorney for the claimant at and prior to the hearing, review on appeal or cross-appeal.”

Insurer sought reconsideration of the fee award, arguing that ORS 656.382(2) permitted an award of fees only if the insurer was unsuccessful in the review that it requested and that, in this case, insurer had requested review by the ALJ and had been successful at that stage of the proceedings. Insurer contended that, under the terms of the statute, the fact that claimant had later requested review by the board and the board had reversed that ALJ's decision was immaterial.

The board rejected insurer's argument, and insurer sought judicial review limited to the issue of whether the board had correctly awarded claimant attorney fees. The Court of Appeals reversed, relying primarily on two prior Court of Appeals decisions: SAIF v. Santos, 194 Or.App. 289, 94 P.3d 906 (2004)( Santos III ), and Santos v. Caryall Transport, 171 Or.App. 467, 17 P.3d 509 (2000), rev. den.,332 Or. 558, 34 P.3d 1176 (2001)( Santos II ).SAIF v. DeLeon, 241 Or.App. 614, 618, 251 P.3d 794 (2011). The court held that insurer had been successful on its request for review by the ALJ and, therefore, even though claimant had later prevailed on the issue that insurer had raised before the ALJ, claimant was not entitled to fees under ORS 656.382(2).

We allowed claimant's petition for review and begin our examination of the authority provided by ORS 656.382(2) with its text. See State v. Gaines, 346 Or. 160, 171, 206 P.3d 1042 (2009) (so requiring). On 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; ² and (3) one of the listed tribunals must have concluded that the award of compensation should not be disallowed or reduced.

The dispute here focuses on whether, to meet the requirements for an award of attorney fees, the listed tribunal that concludes that the award of compensation should not be disallowed or reduced must be the same tribunal before which the insured initiates a request for review, or whether it can be the tribunal that makes the final decision that the award of compensation should not be disallowed or reduced. Claimant's position is that it is the decision of the tribunal that makes the final decision in the proceedings that is determinative. Claimant contends that, if the insurer initiates review of an award of benefits at any level of the proceedings and the tribunal that ultimately resolves that challenge decides that the award should not be disallowed or reduced, then the claimant is entitled to an award of attorney fees “for legal representation * * * at and prior to” that final level of review. Insurer's position is that a claimant's entitlement to attorney fees is separately determined at each level of review initiated by the insurer. Insurer contends that, if the decision of the tribunal before which the insured initiates a request for review favors the insurer, then that decision is controlling as to the claimant's entitlement to fees at that level of review, regardless of whether that decision is upheld by the final decision-maker. However, if the decision of the tribunal before which the insured initiates a request for review favors the claimant, it is not controlling as to the claimant's entitlement to fees at that level of review unless it also is affirmed by the final decision-maker. Then, if a claimant is successful at both the initial and the final levels of review, a claimant is entitled to an award of attorney fees “for legal representation * * * at and prior to” the hearing.

Thus, claimant essentially argues that we should interpret ORS 656.382(2) to provide:

“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 [ that enters the final decision in the case ] finds that the compensation awarded to a claimant should not be disallowed or reduced, the employer or insurer shall be required to pay to the claimant or the attorney of the claimant a reasonable attorney fee in an amount set by the Administrative Law Judge, board or the court for legal representation by an attorney for the claimant at and prior to the hearing, review on appeal or cross-appeal.”

Insurer essentially argues that we should interpret ORS 656.382(2) to provide:

“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 [ before which the employer or insurer initiated the request ] finds that the compensation awarded to a claimant should not be disallowed or reduced, the employer or insurer shall be required to pay to the claimant or the attorney of the claimant a reasonable attorneyfee in an amount set by the Administrative Law Judge, board or the court for legal representation by an attorney for the claimant at and prior to the hearing, review on appeal or cross-appeal[, unless the tribunal that enters the final decision in the case finds that the compensation awarded to a claimant should be disallowed or reduced.]”

As those interlineations indicate, the text of the statute is ambiguous as to the tribunal whose decision is determinative, and further analysis is necessary to determine the legislature's intent.

The statute is not, however, ambiguous with respect to the legislature's overall purpose. It is obvious from the text of ORS 656.382(2) that the legislature intended to permit a claimant to recover attorney fees when a claimant is awarded compensation and an insurer challenges that award and is unsuccessful in having it disallowed or reduced.

A preliminary review of insurer's interpretation of ORS 656.382(2) indicates that that interpretation is directly at odds with that legislative purpose. First, instead of permitting fees in the event of an unsuccessful challenge by an insurer, insurer's interpretation of ORS 656.382(2) would deny attorney fees to a claimant when an insurer is ultimately unsuccessful in having an award of compensation disallowed or reduced, as long as the insurer was successful at an interim stage of the proceedings. Second, as noted, insurer interprets ORS 656.382(2) to provide that, if the claimant prevails at an intermediate tribunal but loses before the tribunal making the final decision in the case, then the ruling by the final tribunal is the ruling that determines the claimant's right to fees. However, if the insurer prevails at an intermediate tribunal but loses before the tribunal making the final decision in the case, then the ruling by the intermediate tribunal is determinative as to the award of attorney...