SAIF v. Ward

384

Argued and submitted September 14, 2021, decision of Court of Appeals and

order of Workers’ Compensation Board affirmed March 24, 2022

In the Matter of the Compensation of

Carl S. Ward, Claimant.

SAIF CORPORATION

and Robert S. Murray,

Petitioners on Review,

v.

Carl S. WARD,

Respondent on Review.

(WCB 17-03591) (CA A171025) (SC S068179)

506 P3d 386

Claimant, who leased a truck from Bob Murray Trucking (BMT) for the

exclusive purpose of driving the leased truck to haul loads for BMT, was in an

accident and filed a workers’ compensation claim seeking coverage for his inju-

ries. SAIF denied coverage after determining that claimant was a nonsubject

worker under ORS 656.027(15). The Workers’ Compensation Board reversed after

finding that claimant was a subject worker and did not qualify for the exemption

in ORS 656.027. SAIF sought judicial review of that decision. Held: Claimant did

not have a sufficient interest in the leased equipment to furnish the equipment,

did not qualify for the nonsubject worker exemption in ORS 656.027(15), and was

entitled to workers’ compensation coverage.

The decision of the Court of Appeals and the order of the Workers’

Compensation Board are affirmed.

On review from the Court of Appeals.*

Beth Cupani, Appellate Counsel, SAIF Corporation, Salem,

argued the cause and filed the briefs for petitioners on

review.

Craig Miller, Miller Law, LLC, Portland, argued the

cause and filed the brief for respondent on review.

Theodore P. Heus, Quinn & Heus, LLC, Beaverton, filed

the brief for amicus curiae Oregon Trial Lawyers Association.

______________

* On judicial review of a final order of the Workers’ Compensation Board. 307

Or App 337, 477 P3d 429 (2020).

Cite as 369 Or 384 (2022) 385

Before Walters, Chief Justice, and Balmer, Flynn, Duncan,

Nelson, and Garrett, Justices.**

NELSON, J.

The decision of the Court of Appeals and the order of the

Workers’ Compensation Board are affirmed.

Garrett, J., dissented and filed an opinion, in which

Balmer, J., joined.

______________

** Nakamoto, J., retired December 31, 2021, and did not participate in the

decision of this case. DeHoog, J., did not participate in the consideration or deci-

sion of this case.

386 SAIF v. Ward

NELSON, J.

This workers’ compensation case requires us to

decide whether a truck driver (claimant) who sustained

injuries while driving a truck that he leased directly from

a trucking company, with restrictions that prohibited him

from driving the truck for the use of any other company, is

a “subject worker” within the meaning of ORS 656.027 such

that the trucking company is required to provide workers’

compensation insurance coverage for claimant’s injuries.

SAIF and Robert S. Murray, the owner of Bob Murray

Trucking (BMT), a for-hire carrier, seek review of the Court

of Appeals’ opinion affirming the final order of the Workers’

Compensation Board (board). In that order, the board concluded

that claimant was a subject worker of BMT under the workers’

compensation laws and did not qualify for the exemption to

“subject worker” status contained in ORS 656.027(15)(c). For

the reasons described below, we agree with the board that

claimant is a “subject worker” who did not qualify for the

exemption in ORS 656.027(15)(c) and, accordingly, was enti-

tled to workers’ compensation coverage provided by BMT. We

affirm the decision of the Court of Appeals and the Workers’

Compensation Board’s final order.

I. FACTS

We take the facts from the board’s findings, as set

out in its final order. Those include the earlier findings of

an administrative law judge (ALJ), as adopted by the board

alongside its own factual summary.

BMT is a for-hire, interstate motor carrier that is

in the business of hauling wood, steel, and general com-

modities. BMT is licensed by the federal Department of

Transportation and its trucking operations are regulated

by the Federal Motor Carrier Safety Administration. BMT

is owned by Robert S. Murray.

Claimant worked as a truck driver for BMT between

May and August 2016. To begin driving for BMT, claim-

ant leased a tractor truck directly from BMT. Claimant

signed a document entitled “Operator Lease/Independent

Contractor Agreement.” That agreement specifically stated

that claimant “has not acquired, nor will [he] acquire by this

Cite as 369 Or 384 (2022) 387

acceptance of the Lease Agreement, any proprietary right,

security interests or equity in the lease vehicle.” The agree-

ment also provided that the lease payments, occupational

insurance fees, and maintenance fees were to be deducted

directly from claimant’s paycheck.1 In exchange, the agree-

ment granted claimant the right to use BMT’s truck to haul

loads but “only in interstate trucking in the United States

on behalf of [BMT].”

For hauling loads for BMT, claimant was compen-

sated at a rate of 37 cents per mile. In addition to the lease

agreement, claimant also signed an acknowledgement that

he received a copy of the BMT “Driver’s Manual,” which

provided additional rules and regulations for the use of the

truck, including safety rules, rules of personal conduct and

dress, and various additional restrictions. One such restric-

tion prohibited carrying any additional passengers in the

truck without first obtaining permission from BMT.

The lease agreement and manual not only outlined

claimant’s interest in the leased truck, they also provided

additional information about BMT’s compensation incen-

tives, primarily based on claimant’s adherence to the rules

outlined by BMT, timely submission of paperwork docu-

menting mileage and vehicle inspections, accurate mileage

sheets and reporting logs, daily inspection reports, frequent

communication with BMT dispatch, customer service and

professional demeanor when hauling loads for BMT, avail-

ability, truck cleanliness and appearance standards, and

safe driving records.

BMT also monitored claimant’s use of the truck

by requiring that he only drive assigned routes and ques-

tioning claimant if he deviated from the route or made an

unscheduled stop at a rest stop. BMT paid and provided

for the following resources and expenses: liability insur-

ance, fuel, and various equipment (including a radio, tools,

1

Under the terms of the agreement, the lease payments and insurance fees

were required to be paid to BMT; the truck maintenance was the responsibility

of the driver, though the driver could opt into paying additional fees to BMT for

maintenance as part of its incentivized in-house service plan. The ALJ’s findings

indicate that claimant elected to participate in that program and, accordingly,

maintenance fees were also deducted from claimant’s paycheck.

388 SAIF v. Ward

flashlight, camera, and fire extinguisher). In addition, BMT

placed its logo onto the truck to “identify the equipment

as being in [BMT’s] service” and prohibited claimant from

making any changes to the appearance of the truck, partic-

ularly from placing his own signage anywhere on the truck.

Although the lease agreement allowed claimant to identify

other drivers who may be able to operate the truck for BMT,

BMT reserved the right to “disqualify any driver provided

by [claimant] who is determined to be unsafe by [BMT] in

[BMT’s] sole discretion.” As noted above, the truck was to be

used exclusively to haul loads for BMT.2

On August 9, 2016, claimant was operating the

truck pursuant to the lease agreement by hauling a load

for BMT. As required by the lease agreement, claimant had

obtained BMT’s permission for his girlfriend to ride in the

passenger seat. During the drive, claimant began to expe-

rience difficulty with the truck’s brakes and, eventually,

claimant was unable to stop the truck. The truck flipped

over. Claimant’s girlfriend was killed, and claimant sus-

tained serious physical injuries.

Claimant filed a workers’ compensation claim with

SAIF seeking benefits for the injuries that he sustained

in the accident. SAIF denied that claim. Relying on ORS

656.027(15), which provides that an individual “who has an

ownership or leasehold interest in equipment and who fur-

nishes, maintains, and operates the equipment” does not

qualify as a subject worker who is entitled to workers’ com-

pensation benefits, SAIF determined that claimant was not

eligible for workers’ compensation benefits from BMT. An

ALJ agreed with SAIF’s contention and upheld its decision

to deny claimant benefits.

2

There is some dispute in the record, particularly in the testimony of the

parties involved, as to whether claimant could use the truck for personal pur-

poses. The language in the lease agreement makes clear that the truck was only

to be used for “interstate trucking in the United States on behalf of [BMT]” but

BMT gave some indication in its evidence that claimant could use the truck for

limited personal purposes, if needed. We need not decide that factual dispute

because the possibility of limited personal use of the truck is not dispositive here.

For clarity, however, we note that references in this opinion to claimant’s “exclu-

sive” use refer to the prohibition in the lease agreement that prevented claimant

from using the equipment to haul loads for any company other than BMT. We do

not use “exclusive” as a way of deciding any factual dispute between the parties.

Cite as 369 Or 384 (2022) 389

The claim came before the Workers’ Compensation

Board which disagreed with the ALJ and reversed the deci-

sion. In doing so, the board determined that claimant was

unable, under the terms of the lease agreement between

him and BMT, to “furnish” the truck to BMT because he had

no transferable interest in the truck. Accordingly, the board

held that claimant did not qualify for the exemption in ORS

656.027(15)(c) and was a subject worker entitled to workers’

compensation benefits.

SAIF and BMT (collectively, SAIF) sought judicial

review, arguing that claimant was not a subject worker

of BMT and that he was exempt from workers’ compensa-

tion coverage under ORS 656.027(15)(c). In response to the

board’s conclusion, SAIF argued that a truck is “furnished”

under that exemption when a driver makes the equipment

available to haul loads of goods for the carrier, regardless of

whether the driver makes that same equipment available to

other carriers, and that no transferable interest is required

under the statute. SAIF contended that claimant met the

terms of the exemption in ORS 656.027(15)(c) because he

had a leasehold interest in the truck, as evidenced by the

lease agreement between the parties, and he furnished the

truck to BMT when he hauled goods for them. In response,

claimant asserted that the board had correctly decided that

a driver must have a transferable interest in the equipment

(here, the truck) in order to “furnish” it and, thus, claimant

did not qualify as a nonsubject worker under the exemption

and was entitled to workers’ compensation insurance cover-

age from BMT.

The Court of Appeals affirmed the order of the

Workers’ Compensation Board. SAIF v. Ward, 307 Or App

337, 347, 477 P3d 429 (2020). To reach that conclusion, the

Court of Appeals took a comprehensive approach to eval-

uating the workers’ compensation statutory framework

and the requirements for the subject worker exemption

described in ORS 656.027(15). As a preliminary matter,

the Court of Appeals explained that, in its view, the text

of ORS 656.027(15) contains two independent and sepa-

rate requirements: (1) that the worker has an ownership or

leasehold interest in the equipment; and (2) that the worker

must furnish, maintain, and operate the equipment. Ward,

390 SAIF v. Ward

307 Or App at 340. That court noted that the phrasing of

the statute indicates that the first requirement—the own-

ership or leasehold interest—is distinct from the second

requirement—furnishing, maintaining, and operating the

equipment. Id. Then, that court began to examine the spe-

cific language in ORS 656.027(15) by first defining the terms

in the statute, “furnish” and “leasehold interest,” to resolve

the statutory construction question presented in this case.

Id. at 340-41.

The Court of Appeals first defined “furnish.” That

court concluded that, under the statute, a driver furnishes

equipment “by providing or supplying that equipment to a

for-hire carrier.” Id. at 341. That court next turned to the

meaning of the phrase “leasehold interest,” explaining that

“a leasehold interest, at a minimum, means that the claim-

ant must have the ‘right to possession and use.’ ” Id. at 343.

Then, that court considered how the terms relate to each

other within the statute itself, concluding that the use of

both of the terms in ORS 656.027(15) implied that an inter-

est beyond the mere right to possess and use the equipment

was required to qualify for the exemption:

“[U]nder the plain meaning of the statutory text, a driver

can ‘furnish’ equipment to a carrier by providing the equip-

ment in service of the carrier—here, by producing the

equipment to haul loads for the carrier. A driver can have

a ‘leasehold interest’ in the equipment if the driver has the

right to possess and use it. However, if the leasehold inter-

est conveys no right of possession, use, or control beyond

allowing the driver to furnish, maintain, and operate the

equipment in service of the carrier, the lease is no more

than a paper trail to give form to what is in substance actu-

ally the use of company equipment by a subject employee.”

Id. at 343. Accordingly, the Court of Appeals concluded that

ORS 656.027(15) “requires a leasehold interest that exceeds

the right to furnish the equipment to the carrier such that

the driver has a right to possess, use, and control the equip-

ment for purposes other than providing it to the carrier.” Id.

(emphasis added).

After it laid out the applicable definitions and legal

principles, the Court of Appeals applied those principles to the

facts of this case to decide if claimant met the requirements

Cite as 369 Or 384 (2022) 391

of the statutory exemption in ORS 656.027(15). That court

reiterated that the lease limited claimant’s possession and

use of the truck to a substantial degree through its require-

ment that the truck be used to haul loads exclusively for

BMT. Id. at 344. In that court’s view, the leasehold interest

in the truck did not transfer sufficient rights in the truck to

meet the requirements of the ORS 656.027(15) exemption.

Id. at 347. Although the agreement between claimant and

BMT purported to be a “lease” by its title, it “did not confer

any interest in the leased vehicle beyond the authority to

use it in BMT’s service and under BMT’s direction.” Id. at

346-47. Without a sufficient leasehold interest, the Court of

Appeals concluded that claimant was a subject worker and

was entitled to workers’ compensation benefits. Id. at 347.

SAIF petitioned for review before this court, argu-

ing that the plain text of the statute and the legislative

history support its view that claimant was exempted from

workers’ compensation coverage under ORS 656.027(15).

Claimant filed a response. We allowed review to consider

whether the exemption in ORS 656.027(15) removes claim-

ant from qualification as a “subject worker” for purposes of

the workers’ compensation statutes.

II. ANALYSIS

A “subject worker” is a worker who is subject to the

workers’ compensation statutes. Former ORS 656.005(28)

(2019), renumbered as ORS 656.005(28)(c) (2021). There are

two steps involved to determine whether an individual

qualifies as a “subject worker.” The first step is to determine

whether the individual qualifies as a worker. Under former

ORS 656.005(30) (2019), a “worker” is “any person, includ-

ing a minor whether lawfully or unlawfully employed, who

engages to furnish services for a renumeration, subject to the

direction and control of an employer.”3 If an individual does

not meet the definition of a “worker” in that statute, then

the inquiry ends and that individual is not subject to the

workers’ compensation laws. S-W Floor Cover Shop v. Natl.

3

The definition of “worker” was later renumbered to ORS 656.005(28)(a)

(2021) and the language was slightly amended. The amendment to the language

does not impact this case and we cite to the statutory language as in effect at the

time of this case.

392 SAIF v. Ward

Council on Comp. Ins., 318 Or 614, 621, 872 P2d 1 (1994).

Here, SAIF concedes that claimant meets the requirements

to be considered a “worker,” subject to the direction and con-

trol of BMT. Thus, the focus turns to whether claimant is a

“subject worker” within the scope of the workers’ compensa-

tion statutes. That question is answered by moving to the

second step of the “subject worker” inquiry.

The second step of the analysis requires a determi-

nation about whether a “worker” is subject to the workers’

compensation laws. As a general rule, all workers are con-

sidered subject workers, unless an exemption applies. See

ORS 656.027 (“All workers are subject to this chapter except

those nonsubject workers described in the following subsec-

tions[.]”). Some of the exemptions include a worker employed

as a domestic servant in a private home, sole proprietors

that qualify as independent contractors, newspaper carri-

ers, or persons performing services primarily for board and

lodging for religious, charitable, or relief organizations. See

generally ORS 656.027 (setting out a list of exemptions from

subject worker status). The exemption at issue in this case is

found in ORS 656.027(15) and identifies a nonsubject worker

as

“[a] person who has an ownership or leasehold interest

in equipment and who furnishes, maintains and operates

the equipment. As used in this subsection ‘equipment’

means:

“(a) A motor vehicle used in the transportation of logs,

poles or piling.

“(b) A motor vehicle used in the transportation of

rocks, gravel, sand, dirt or asphalt concrete.

“(c) A motor vehicle used in the transportation of prop-

erty by a for-hire motor carrier that is required under ORS

825.100 or 825.104 to possess a certificate or permit or to be

registered.”

This case considers whether a worker qualifies for the

exemption laid out in ORS 656.027(15) when the worker

leases equipment from the lessor subject to the restriction

that the equipment must be used exclusively for the lessor’s

purposes.

Cite as 369 Or 384 (2022) 393

SAIF argues that the plain text of the statute sets

forth only two requirements to qualify as a nonsubject

worker: (1) the worker must have a leasehold interest in

equipment, which SAIF defines as the right to possess and

use the equipment, and (2) the worker must furnish, main-

tain, and operate said equipment. SAIF contends that the

Court of Appeals acknowledged that claimant is within the

scope of the exemption if the court only looked to the individ-

ual plain meaning of the terms at issue—“leasehold inter-

est” and “furnish”—but nevertheless incorrectly inferred

more restrictive meanings for those terms than the legisla-

ture intended by requiring that the “leasehold interest” in

question be transferable, or provide proprietary rights that

extend beyond mere possession and use. In SAIF’s view, the

board and the Court of Appeals erred in concluding that

claimant fell outside of the scope of the exemption in ORS

656.027(15) and, instead, argues that claimant should be

classified as a nonsubject worker.

Claimant, on the other hand, contends that he did

not have a sufficient leasehold interest that granted him the

ability to furnish the truck, as required to qualify for the

subject worker exemption in ORS 656.027(15). According

to claimant, the board and the Court of Appeals correctly

determined that he was a subject worker under the workers’

compensation laws. Claimant argues that, because he could

not transfer ownership of the truck, and had no rights to

drive the truck or haul goods for any company other than

BMT, he did not have the right to possess, use, or control

the truck beyond the ability to furnish it exclusively for

BMT, the lessor. As claimant explains his situation, BMT’s

agreement was a “sham lease” that the Court of Appeals

properly described as “no more than a paper trail to give

form to what [was] in substance actually the use of company

equipment by a subject employee.” See Ward, 307 Or App

at 343. Without a sufficient leasehold interest that provides

the ability to furnish the truck for someone other than the

lessor, claimant contends that he was a “subject worker” and

entitled to workers’ compensation coverage.

Before this court, the parties present competing

arguments that focus primarily on the meaning of “leasehold

394 SAIF v. Ward

interest” in the statute. To resolve the question of statutory

construction before us, we follow the established statutory

interpretation framework laid out in PGE v. Bureau of Labor

and Industries, 317 Or 606, 610-12, 859 P2d 1143 (1993), and

State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009).

When interpreting statutory provisions, our pri-

mary goal as a court is to determine the intent of the legisla-

ture at the time it enacted the relevant statute. See Gaines,

346 Or at 171 (“This court remains responsible for fash-

ioning rules of statutory interpretation that, in the court’s

judgment, best serve the paramount goal of discerning the

legislature’s intent.”). To determine the intent of the legis-

lature, we look to the text, context, and any helpful legisla-

tive history of the statute in question, keeping in mind that

“there is no more persuasive evidence of the intent of the

legislature than the words by which the legislature under-

took to give expression to its wishes.” Id. (internal quota-

tion marks and citations omitted). The context of a statute

includes “other provisions of the same statute and related

statutes, as well as the preexisting common law and the

statutory framework within which the statute was enacted.”

Fresk v. Kraemer, 337 Or 513, 520-21, 99 P3d 282 (2004).

We begin with an examination of the relevant text.

We note from the outset that we agree with the Court of

Appeals that the operative text of the exemption in ORS

656.027(15)—describing a nonsubject worker as “[a] person

who has an ownership or leasehold interest in equipment and

who furnishes, maintains and operates the equipment”—

suggests that the statute contains two separate and distinct

requirements. See Ward, 307 Or App at 341 (“In order to be

a nonsubject worker, claimant must both ‘furnish’ the truck

and have a ‘leasehold interest.’ ”). Because the parties to this

case do not dispute that claimant maintains and operates

the truck at issue here, the primary consideration is the

meaning of the terms “leasehold interest” and “furnishes.”

Neither of those terms are specifically defined in

the workers’ compensation statutes.4 When interpreting a

4

The term “leasehold interest” is defined separately within another subsec-

tion of ORS 656.027. As the Court of Appeals explained, however, that subsection,

which specifically creates an exemption from subject worker status for taxicab

Cite as 369 Or 384 (2022) 395

term or phrase that the legislature has not specifically

defined, this court first considers the “plain, natural, and

ordinary” meaning of the term. DCBS v. Muliro, 359 Or 736,

745-46, 380 P3d 270 (2016). To determine the “plain, natu-

ral, and ordinary” meaning of an undefined term, we will

frequently consider how the term is defined in the dictio-

nary, operating on the assumption that, “if the legislature

did not give the term a specialized definition, the dictionary

definition reflects the meaning that the legislature would

have intended.” Muliro, 359 Or at 746 (citing State v. Murray,

340 Or 599, 604, 136 P3d 10 (2006)).

Neither claimant nor SAIF contends that the Court

of Appeals incorrectly defined the terms in the agreement.

As we understand it, the dispute in this case centers less

around the plain meaning of the terms at issue, and more on

how the legislature intended the two terms to interact with

each other in the statute itself. The question in this case is

not focused on the plain meaning of the terms “furnish” and

“leasehold interest” in isolation, but rather what the legisla-

ture intended when it enacted the statutory exemption and

how to best give meaning to the entire provision. With that

said, the individual definitions are still an important piece

of that consideration and, largely agreeing with the Court of

Appeals, and the parties, as to those meanings, we reiterate

those definitions here.

We begin with the definition of the word “furnish.”

“Furnish” is undefined within ORS 656.027(15). The word

does not carry a specific legal meaning and we found no indi-

cation that the legislature intended the word to have any

meaning beyond its ordinary one. The word “furnish,” as

used in ORS 656.027(15), operates as a verb and means, in

its ordinary usage, “to provide or supply with what is needed,

useful or desirable.” Webster’s Third New Int’l Dictionary 923

(unabridged ed 2002); see State v. Glushko/Little, 351 Or 297,

311, 266 P3d 50 (2011) (“[W]hen consulting dictionaries for

the ordinary meanings of statutory terms, it is important to

and nonemergency medical transport drivers, makes clear both in its text and the

accompanying legislative history that the definition of “leasehold interest” is spe-

cific to the “unique contractual relationship” between cab companies and owner-

drivers of taxicabs. Ward, 307 Or App at 343 n 6. Accordingly, that definition does

not carry meaning in this specific context.

396 SAIF v. Ward

examine the definition of the part of speech actually used in

the statute at issue.”). In this particular context, that defini-

tion implies that a driver can “furnish” a truck by producing

it to haul loads for a carrier.

The plain meaning of the phrase “leasehold inter-

est,” as the legislature would have understood it when it

added that language to the statutory exemption in 1979 is

not as clear. Webster’s defines the word “leasehold” with spe-

cific reference to real property. See Webster’s at 1286 (defining

leasehold as “land held by lease”). That definition is consis-

tent with the meaning identified in Black’s Law Dictionary,

which defines leasehold as “[a] tenant’s possessory estate in

land or premises,” and that same dictionary’s definition of

leasehold interest that explicitly references real property in

the context of eminent domain. Black’s 1027 (10th ed 2009).

Neither of those definitions are particularly helpful in this

context because we have been asked to consider the term as

it applies to equipment—here, the truck leased to claimant

by BMT—and not real property.

The term “leasehold interest” is also a legal term

of art used in the field of secured transactions. “When the

phrase is a term of art, drawn from a specialized field,

courts ‘look to the meaning and usage of those terms in the

discipline from which the legislature borrowed them.’ ” State

v. McNally, 361 Or 314, 322, 392 P3d 721 (2017) (quoting

Comcast Corp. v. Dept. of Rev., 356 Or 282, 296, 337 P3d 768

(2014)). The Court of Appeals looked to Oregon’s Uniform

Commercial Code to define “leasehold interest” based on its

legal meaning within that field. Ward, 307 Or App at 342.

In its briefing before this court, SAIF does not appear to

argue against the use of that definition, though it does point

out that Oregon enacted the UCC definition of “lease” and

“leasehold interest” in 1989, after the language was added

to the statutory exemption at issue in this case. Nonetheless,

based on the reliance on the UCC definition below and

the fact that both parties appear to accept that definition,

it makes sense for us to at least consider the meaning of

“leasehold interest” within the UCC as a possible meaning

that the legislature may have considered when it adopted

ORS 656.027(15).

Cite as 369 Or 384 (2022) 397

Oregon’s Uniform Commercial Code on Leases, con-

tained in ORS chapter 72A, governs “any transaction, regard-

less of form, that creates a lease,” including the lease created

in this case. See ORS 72A.1020 (defining the scope of ORS

chapter 72A). The UCC defines a “leasehold interest” as “the

interest of the lessor or the lessee under a lease contract,”

ORS 72A.1030(1)(m), and a “lease” as “a transfer of the right

to possession and use of goods for a term in return for con-

sideration,” ORS 72A.1030(1)(j). In its most basic form, then,

under the UCC, a “leasehold interest” requires that the les-

see have a right to possess and use the equipment.

Claimant also suggests an alternative plain mean-

ing of “leasehold interest.” Under the Oregon Department

of Transportation, Motor Carrier Transportation Division’s

own regulations, a lease must convey “exclusive possession,

use, and control of the leased vehicle.” OAR 740-045-0100(2)(c)

(emphasis added). The administrative rules that refer to

that definition of “lease,” however, only govern vehicles oper-

ated in intrastate commerce within Oregon and, like the

UCC definition, that administrative rule was adopted after

the “leasehold interest” language at issue in this case was

added to the statutory exemption.

Although the plain meaning of “leasehold interest”

is more complicated than the meaning of the word “fur-

nish,” the definitions considered above do carry similar lan-

guage and suggest some themes that the legislature may

have understood when it chose to include that language.

At a minimum, the UCC and the ODOT regulations sug-

gest that a leasehold interest requires “possession and use.”

We agree with both parties then that the “leasehold inter-

est” in this case requires that the lessee (claimant) have

the right to possess and use the equipment leased from

BMT.

After identifying the plain meaning of the terms

within the statutory exemption, we now consider those defi-

nitions in the text of ORS 656.027(15). When we insert those

two definitions into the text of the statute, then a nonsub-

ject worker includes a person who has an interest under a

lease in equipment—that is, an agreement that transfers

the right to possession and use of equipment—and who

398 SAIF v. Ward

provides or supplies said equipment. If we stop the inquiry

here, looking solely to the ordinary usage of the terms in

ORS 656.027(15) to determine the intent of the legisla-

ture in enacting the exemption, we might agree with SAIF

that claimant fit the requirements of a nonsubject worker:

Claimant entered into what purported to be a “lease agree-

ment” with BMT, an agreement that indeed granted claim-

ant the right to possess and use the truck, satisfying the

minimum requirements of the plain meaning of a leasehold

interest, and claimant produced, i.e., “furnished,” the truck

when he provided services hauling products for BMT.

Claimant persuasively argues, however, that merely

inserting the definitions into the statute does not explain

why the legislature included both “leasehold interest” and

“furnishes” in the statutory text. As claimant explains, if

the requirement to “furnish” is satisfied by providing or sup-

plying a piece of equipment that an individual has a mere

right to possess and use for the person they are supplying

the equipment to, then the two requirements are essentially

duplicitous. In other words, a lease that grants a lessee a

right to supply the equipment for exclusive use by the lessor

does not actually grant a sufficient interest in the equip-

ment for the lessee to “furnish” the equipment. Instead,

claimant contends that the leasehold interest must transfer

some legal interest beyond mere use and possession to give

full effect to all of the terms of the statutory exemption—

particularly the word “furnish.”

As a general rule, when we interpret a statute to

determine what the legislature intended, we attempt to do

so in a manner that gives effect to all of the provisions of

the statute where possible. Crystal Communications, Inc. v.

Dept. of Rev., 353 Or 300, 311, 297 P3d 1256 (2013). Said

another way, when construing a statute to determine the

intent of the legislature, this court will generally attempt

to avoid a statutory construction that creates redundancy

in the way that the statute is read. See Blachana, LLC v.

Bureau of Labor and Industries, 354 Or 676, 692, 318 P3d

735 (2014) ([R]edundancy, of course, is a consequence that

this court must avoid if possible.”); State v. Kellar, 349 Or

626, 636, 247 P3d 1232 (2011) (“Defendant’s interpretation

results in a redundancy, something that we seek to avoid in

Cite as 369 Or 384 (2022) 399

interpreting statutes.”). To interpret the statutory exemp-

tion as SAIF proposes takes meaning away from the leg-

islature’s intentional use of both “leasehold interest” and

“furnish.” Instead, we agree with claimant that the con-

junctive nature of the statute suggests that a driver who

has an ownership or leasehold interest in equipment (here,

a truck) must separately be able to furnish that equipment

beyond merely driving it for the lessor in order to satisfy

the conditions of the exemption. That is to say, even if we

accept SAIF’s proposed plain text reading of the statute, the

use of all of the words in the statutory exemption together

leaves us unconvinced that the legislature intended mere

possession and use to grant a leasehold interest sufficient to

furnish that same equipment in satisfaction of the require-

ments of ORS 656.027(15).

In addition to the conjunctive nature of the lan-

guage in the statute, the context and legislative history of

ORS 656.027(15) assist us in concluding that the legisla-

ture did not understand the exemption to apply in claim-

ant’s situation. See Gaines, 346 Or at 171-72 (describing the

combined role that text and context play in interpreting the

legislature’s intent when enacting a statute). The legisla-

tive history surrounding the creation of the subject worker

exemption contained in ORS 656.027(15) provides import-

ant background information for determining what the legis-

lature intended the exemption to cover and why it was cre-

ated.5 When the exemption at issue here was first enacted,

then only applying to “person[s] who engage[ ] in transpor-

tation by motor vehicles of logs, poles and piling,” the House

Committee on Labor provided a committee summary of the

proposed bill that described its effects as adding “[e]quip-

ment owners/operators (who own and operate equipment

for hire)” to the category of nonsubject workers. Testimony,

5

The statute at issue in this case, ORS 656.027, has been amended many

times since its initial enactment in 1965. The exemption implicated in this case

was first added to the list of nonsubject workers in 1977. See Or Laws 1977, ch 817,

§ 2 (adding “person[s] who engage[ ] in transportation by motor vehicles of logs,

poles and piling” to the list of nonsubject workers contained in ORS 656.027). In

1979, the “leasehold interest” language was added to the exemption. Or Laws

1979, ch 821, § 1. Finally, as relevant to this case, the “for-hire motor carrier” sub-

section was added in a 2005 amendment. See Or Laws 2005, ch 167, § 1 (adding

for-hire carriers to the statutory exemption in ORS 656.027(15)).

400 SAIF v. Ward

House Committee on Labor, HB 2820, May 30, 1977, Ex A

(statement of Rep Bill Markham). Representative Markham

explained the purpose of the statutory exemption in the fol-

lowing statement:

“HB 2820 would classify the log trucker who operates and

maintains his own equipment as an independent contrac-

tor for the purpose of workers’ compensation.

“* * * * *

“The single log truck operator owns and maintains his

equipment. He has the right to select his jobs and may hire

someone to drive his truck under certain circumstances.”

Id.

In 1979, the statute was amended to include the

“leasehold interest” language at issue in this case. Or Laws

1979, ch 821, § 1. At a hearing before the House Committee on

Labor on that amendment, and a potential expansion to add

language to encompass backhoes and similar equipment, a

proponent of the proposed legislation, Jack Kalinoski, repre-

senting the Association of General Contractors testified that

“[t]he Senate * * * felt it was appropriate to include those

relatively few people who own equipment that is used for

that kind of work so that if they contract out their services

with their equipment, owning, maintaining, and operating

their equipment, then no one would construe them to be

employe[e]s of the person with whom they have contracted.”

Tape Recording, House Committee on Labor, HB 2726,

July 2, 1979, Tape 40, Side 1. Senator Groener, a member

of that committee, then asked if the provision, as written,

would allow an employer to lease equipment to an employee

for exclusive use by the employer in an effort to escape pro-

viding workers’ compensation coverage:

“I have a question on that. What would prohibit me as a

backhoe operator from leasing a backhoe from the employer

for the purpose of avoidance of paying workers’ comp? In

other words, I work for Donald Drake. Donald Drake says,

‘Groener, I’ll lease you that backhoe and pay you so much

for operating it,’ and by doing so, it wouldn’t be necessary

for him to pay workers’ comp.”

Id. Kalinoski replied that he “did not feel this would hap-

pen but if it did his association would be the first to say

Cite as 369 Or 384 (2022) 401

the statute was being abused” and that such abuse did not

fall within the terms of the statute. Id. The following dia-

logue between Senator Groener and Kalinoski is especially

informative:

“[KALINOSKI]: Well, the way the statute is worded,

as it came from your committee in the Senate, Senator, is

that he’s required to both furnish, operate and maintain it.

Now, if he were to, it seems to me, that if he were to obtain

it from the same person with whom he is contracting, that

the carrier would see through that immediately and say

that’s nothing but subterfuge.

“But let me * * * try to assist you, Senator. Let’s assume

that I wish to go into the business, and I lease a backhoe

from the Donald M. Drake Company, as you’re talking

about, but use it on a [unintelligible] company project. Is

there anything wrong with that?

“[GROENER]: Is there anything wrong with it if it’s

for the purpose of avoidance of workers’ comp? Who’s going

to take care of that man?”

Id. Then, Kalinoski further clarified why the distinction of

having control over the use of the equipment, rather than

requiring exclusive use of the equipment for the employer

and lessor, matters:

“Well, because I want to be an independent contractor. I

want to, so I go out and I lease a piece of equipment from

where I can get it, under the best terms and conditions

available to me, but I want to use it on another project.”

Id. (emphasis added). Kalinoski’s clarification indicates that

he considered the right to use the equipment for multiple

jobs of the lessee’s choosing to be an important reason why

an individual would choose to work as an independent con-

tractor, rather than an employee of a single company. The

conversation indicates that without such rights, “if [lessee]

were to obtain [the equipment] from the same person with

whom he is contracting,” and is not able to use it for work for

other persons, the lessee would be unable to “furnish” the

equipment as required by the statute.

Following the conversation between Senator Groener

and Kalinoski, the committee members discussed the pos-

sibility of removing the “leasehold interest” language to

402 SAIF v. Ward

address the concerns about the application to a situation

where the worker leases equipment directly from the lessor,

for the lessor’s exclusive use. Kalinoski encouraged the com-

mittee to keep the “leasehold interest” language, however,

because the language would expand the nonsubject worker

status to individuals unable to afford their own equipment,

stating “you know how it is to buy.” Tape Recording, House

Committee on Labor, HB 2726, July 2, 1979, Tape 40, Side 1.

As we understand Kalinoski’s statement, including the

“leasehold interest” language would add an avenue to

extend the exemption to individuals that traditionally would

be unable to afford to operate as an independent contractor

because of the difficulty and expense of purchasing their

own equipment. Ultimately, the exemption was enacted

with the “leasehold interest” language intact.

Although the exchange between Senator Groener

and Kalinoski occurred during a discussion about expand-

ing the subject worker exemption to include equipment other

than trucks, such as a backhoe, the conversation addressed

the precise fact pattern that is presented here: a lease

agreement between an employer and an individual leasing

equipment where the lessee is limited to the exclusive use

of the equipment for the benefit of the employer-lessor. Both

parties to this case point to that interaction to support their

positions.

SAIF contends that the legislative history, and

especially the interaction between Senator Groener and

Kalinoski, supports its plain language interpretation of the

statute. In its view, the fact that the legislature contem-

plated such a situation, and ultimately decided that it did

not need to amend the statutory language despite its con-

cerns, demonstrates that “there is no clear legislative intent

that in order to have a leasehold interest and furnish the

equipment to the for-hire carrier, that the driver must have a

leasehold interest that permits him to use the equipment in

service of someone other than the lessor.” Rather, according

to SAIF, the plain text and legislative history both clearly

suggest that the exemption was meant to apply to persons

who either had a leasehold or ownership interest in equip-

ment and could furnish that equipment in some manner,

Cite as 369 Or 384 (2022) 403

regardless of what limitations existed on that equipment

pursuant to the lease agreement.

Claimant counters that the conversation between

Senator Groener and Kalinoski demonstrates that the leg-

islature’s specific intent was the opposite. In claimant’s

view, the discussion prior to amendment of the statute to

include individuals with a “leasehold interest” in equipment

shows that the legislature did not intend a purported lease

agreement to, by itself, turn an individual into a nonsub-

ject employee. Instead, claimant contends that the excerpts

of the discussion between Senator Groener and Kalinoski

reveal that the legislature recognized that a lease-back

scenario, similar to the situation here, could occur under

the terms of the statute, but was not meant to fall within

what the legislature intended the statute to cover. Moreover,

although Senator Groener did express apprehension about

the possibility of that situation occurring, he was assured by

Kalinoski directly that that would be an abuse by subterfuge.

Claimant argues that the legislative history reveals that the

intent of the statute was to exempt owner-operators—those

who have a proprietary interest in the equipment and then

furnish that equipment to for-hire carriers for transport—

from workers’ compensation and that there is no legislative

intent that suggests the statute was meant to exempt work-

ers in his situation.

We are not persuaded by SAIF’s assertions. The

conversation between Senator Groener and Kalinoski does

demonstrate that the legislature contemplated the situation

that is occurring here and was assured that such a possi-

bility would be subterfuge, or an inappropriate use of the

exemption. In light of the concerns expressed about this

very situation, and the assurance that that was not what

the statutory exemption was intended to cover, it is difficult

to attribute the meaning proposed by SAIF to the legisla-

ture’s decision not to change the language in the statute in

light of its concerns. Ultimately, the legislature did discuss

removing the “leasehold interest” language in the exemp-

tion to address this very possibility, but elected to leave the

language in place because removing the language would

not allow truck drivers the opportunity to lease, rather than

404 SAIF v. Ward

purchase, a vehicle and still maintain status as a nonsub-

ject worker.

The text, context, and legislative history of the sub-

ject worker exemption contained in ORS 656.075(15), when

considered together, indicate that the legislature did not

intend that the exemption cover a situation in which a les-

sor leases equipment to an individual and then maintains

nearly exclusive control over the use of that vehicle. As men-

tioned, the parties’ arguments before this court focused on

the meaning of the term “leasehold interest” within the stat-

ute and whether the lease agreement between claimant and

BMT granted sufficient rights to qualify for the exemption.

We agree that that is a portion of the question that must

be answered in this case but, as claimant points out, that

phrase must be read and considered alongside the entirety of

the statute. When evaluating the text of a statute and inter-

preting what the legislature intended when it enacted that

provision, we seek to give effect to every word, where pos-

sible. Crystal Communications, Inc., 353 Or at 311. To give

effect to every word in the exemption in ORS 656.027(15), we

find that a “leasehold interest” under the exemption must

allow for more rights than simply driving the equipment for

the sole benefit of the lessor in order for the driver to “fur-

nish” that equipment as the provision requires. It is clear

from the text of the statute and its legislative history that

the exemption requires an ownership or leasehold interest

that would permit the lessee to use the equipment in some

way other than furnishing, maintaining, and operating the

equipment for the exclusive use and at the exclusive direc-

tion of the lessor.

Here, claimant entered into a lease agreement with

BMT. Although that lease agreement granted claimant the

right to “possess” the truck, BMT still exercised significant

control over the manner in which claimant could “use” the

truck. In a lease agreement, restrictions on use are cer-

tainly permissible, even common, and they do not render

the agreement to be ineffective. Such restrictions, however,

may necessarily control the ability of the lessee to obtain an

interest in the property sufficient to furnish it to the extent

required to satisfy the exemption in ORS 656.027(15). In this

Cite as 369 Or 384 (2022) 405

situation, the restrictions in the lease agreement between

BMT and claimant did just that. The terms of the lease

agreement between BMT and claimant were so restrictive

that claimant was prohibited from using the truck for any

business purpose other than those purposes requested by

BMT. The lease agreement prevented claimant from being

able to “furnish” the equipment as required by the statute.

Put another way, the agreement between BMT and claimant

placed claimant in nearly the same position as if he was an

employee of BMT and not, as the subject worker exemption

contemplates, an owner (or lessee)-operator with decision-

making ability about who to haul for. As we understand the

requirement to furnish the equipment, based on the entire

text of the statutory exemption, the lessee must have addi-

tional rights beyond the right to make the equipment avail-

able to the lessor at its request. The lease agreement in this

case does not grant claimant the right to furnish the equip-

ment in that way. Therefore, because the agreement does

not grant claimant sufficient authority over the equipment

to possess, use, and furnish the equipment as he chooses,

he does not qualify for the subject worker exemption in ORS

656.027(15).

III. CONCLUSION

In sum, we agree with the Court of Appeals that the

subject worker exemption in ORS 656.027(15) requires an

ownership or leasehold interest that would allow the lessee

sufficient authority or control over the equipment to possess

and use, or “furnish,” that equipment in some way other

than in service of the lessor. The lease agreement between

BMT and claimant did not convey such an interest.

The decision of the Court of Appeals and the order

of the Workers’ Compensation Board are affirmed.

GARRETT, J., dissenting.

I respectfully dissent. I am not convinced that the

text or context of ORS 656.027(15) provide a reason to give

the terms “leasehold interest” and “furnishes” anything

other than their ordinary meanings. The legislative his-

tory, far from showing that the legislature intended those

words to have an unusual meaning, indicates the opposite.

406 SAIF v. Ward

It confirms that the legislature was aware that those words

could encompass the arrangement that occurred in this

case. If that result is undesirable, it is the legislature, not

this court, that should rewrite the statute.

The relevant exemption defines a nonsubject worker

as

“[a] person who has an ownership or leasehold interest

in equipment and who furnishes, maintains and operates

the equipment. As used in this subsection, ‘equipment’

means:

“* * * * *

“(c) A motor vehicle used in the transportation of prop-

erty by a for-hire motor carrier that is required under ORS

825.100 or 825.104 to possess a certificate or permit or to be

registered.”

ORS 656.027(15). The dispute in this case turns on the

meaning of the first paragraph.

There is little to say about the words “leasehold

interest” and “furnish,” because the majority and I agree

on the ordinary meanings of those terms, and the majority

acknowledges that, on their face, they apply to a situation

where a person leases equipment and then “furnishes” it by

providing hauling services to the lessor. 369 Or at 398. The

majority reasons, however, that the legislature must have

intended something different because applying the ordi-

nary meanings here would make the terms “duplicative.” Id.

That conclusion seems to be based on the observation that,

under the terms of the lease, claimant was not permitted to

drive the truck for other companies, so claimant cannot be

said to have “furnished” the truck to the company that was

the exclusive beneficiary of his services. Thus, the majority

frames the question as whether claimant had a “sufficient”

leasehold interest here to “furnish” the truck, and it con-

cludes that he did not, because he had no right to use it for

any purpose other than driving for the lessor. Id. at 404,

405.

The notion of “sufficiency” of the leasehold interest

is an odd one. No one suggests that, if the question arose in

a different legal context, the arrangement in this case would

Cite as 369 Or 384 (2022) 407

be seen as anything other than a lease. Use restrictions are

not uncommon in leases, and claimant retained the ability

to decide whether or not to drive for the lessor. Thus, the

majority is correct that the statute includes two disjunctive

requirements, but both are satisfied here: The leasehold

interest gave claimant a right of possession and use, and he

furnished the truck by exercising that right.1

The majority relies on legislative history to infer

that the words of the statute should be given something

other than their ordinary meanings. Id. at 404. That

analysis confuses the question of what policy objective the

legislature hoped to achieve with the question of what the

legislature understood the words to mean. I acknowledge

that the exchange between Senator Groener and Jack

Kalinoski tends to cast doubt on whether at least some leg-

islators intended to promote arrangements like the one in

this case, where the leased equipment is furnished back to

the lessor. What is more significant is that, after Senator

Groener pointed out that the proposed language could

lead to exactly that result, he was given an assurance by

Kalinoski—an assurance that that result was unlikely, not

that it was beyond the scope of the words being proposed.

The legislative committee then debated whether to change

the language, and it ultimately left the provision intact. It

would have been possible to amend the bill to exclude cer-

tain types of leases, but that did not happen. What the leg-

islative history reveals is that the legislature knew that

the proposed wording could produce a certain outcome that

might (in the views of some) not be desirable, but it declined

to make the further changes necessary to prevent that

outcome.

This court has previously recognized, when inter-

preting statutes, that the legislative record may reveal a

“mismatch—or at least, a potential mismatch—in the text

that the legislature chose for the statute and the policy

that the legislature ostensibly sought to effectuate.” State

v. Walker, 356 Or 4, 21, 333 P3d 316 (2014) (emphasis in

1

If claimant had been compelled to drive for the lessor, a question might

arise whether “furnishing” can consist of compelled action. It is undisputed, how-

ever, that claimant determined on his own whether and how much to drive.

408 SAIF v. Ward

original). That is so, among other reasons, because it is

common for the legislature to act with a particular purpose

in mind but to enact language that reaches more broadly

than that original purpose. As we explained in South Beach

Marina, Inc. v. Dept. of Rev., 301 Or 524, 531, 724 P2d 788

(1986):

“Statutes ordinarily are drafted in order to address some

known or identifiable problem, but the chosen solution may

not always be narrowly confined to the precise problem.

The legislature may and often does choose broader lan-

guage that applies to a wider range of circumstances than

the precise problem that triggered legislative attention.”

Thus, courts are often presented with situations where

broadly worded statutes are applied in ways that may not

have been within the original contemplation of the legisla-

ture, or that may even be in tension with some indicators

of what the legislature was trying to accomplish. In those

cases, while it may be tempting to adopt a narrowing con-

struction, it is rarely appropriate to do so unless the terms

of the statute are genuinely ambiguous and the legislative

history indicates that a particular meaning different than

the ordinary meaning was intended.

Absent those circumstances, we should respect what

we cannot know about the reasons why the legislature chose

the language it did:

“For instance, lawmakers may believe that defining a nar-

rower class for coverage under a statute would cause more

problems in interpretation and administration and would

be less efficient than to use broad, residual language that

avoids such problems. When the express terms of a statute

indicate such broader coverage, it is not necessary to show

that this was its conscious purpose. In the absence of an

affirmative showing that the narrower meaning actually

was intended by the drafters, we shall take the legislature

at its word * * *.”

Id.

Here, we know that legislators were made aware

of the potential reach of the exemption, and that at least

one of them, Senator Groener, was concerned about it. We

know that the committee subsequently considered, but did

Cite as 369 Or 384 (2022) 409

not adopt, narrowing language. What we do not know is

the reason for that. Perhaps the committee concluded that

attempting to narrow the statute would create “problems

in interpretation and administration.” Id. Perhaps the com-

mittee received additional assurances that industry par-

ticipants were unlikely to behave in the way that Senator

Groener feared, making further amendments seem unnec-

essary. Perhaps Senator Groener’s concerns were not shared

by other legislators, who objected to a narrowing amend-

ment on policy grounds.

Given what we know and what we do not, this court

would do well to heed what we said in Walker:

“Particularly where the legislative history demonstrates

that the legislature was aware of the expansive nature of

an enactment’s text, yet chose not to narrow it, we are con-

strained to interpret the statute in a way that is consistent

with that text, which is, in the end, the best indication of

the legislature’s intent.”

356 Or at 22. If the lease arrangement in this case is one

that the legislature does not believe should trigger the

exemption in ORS 656.027(15), the legislature can do what it

did not do in 1979, which is to narrow the statute. I respect-

fully dissent.

Balmer, J., joins in this dissenting opinion.