Giltner v. SAIF

566

Argued and submitted October 25, 2022, affirmed April 26, petition for review

denied September 14, 2023 (371 Or 333)

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

529 P3d 986

Claimant seeks judicial review of an order of the Workers’ Compensation

Board (board), which determined that the insurer was not required to immedi-

ately make a lump sum payment of permanent partial disability benefits (PPD).

Held: The board correctly construed ORS 656.230(1), which provides that when

a worker requests a lump sum payment of PPD, the insurer shall make the pay-

ment unless an exception applies. Here, the second exception applied, because

the claimant requested a lump sum payment before the award became final by

operation of law, which occurred 60 days after issuance of the notice of closure.

As a result, the board was not required to immediately make the payment. The

statute’s text, and the legislative history of the 2007 amendments to the statute,

support the board’s construction of ORS 656.230(1).

Affirmed.

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.