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In re Compensation of Sather

Supreme Court of Oregon, En Banc

April 9, 2015

In the Matter of the Compensation of Gary D. Sather, Claimant.
v.
SAIF CORPORATION and Polk County Farmers-AG West Supply, Respondents on Review Gary D. SATHER, Petitioner on Review,

Argued and Submitted January 13, 2015

Agency No. 10-01494; CA A149547. On review from the Court of Appeals. [*]

Sather v. SAIF Corp. (In re Sather), 262 Or.App. 597, 325 P.3d 819, (2014)

The decision of the Court of Appeals is reversed, and the case is remanded to tat court for a determination of the merits of the petition for judicial review.

Donald M. Hooton, Hooton Wold & Okrent, LLP, Beaverton, argued the cause and filed the briefs for petitioner on review.

Holly C. O'Dell, Appellate Counsel, SAIF Corporation, Salem, argued the cause and filed the brief for respondents on review.

Sara Ghafouri, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association. With her on the brief was Jodie Phillips Polich, Milwaukie.

OPINION

Page 327

[357 Or. 124] BREWER, J.

The question before us in this workers' compensation case is whether, under ORS 656.218(3) and (5),[1] claimant's estate is authorized to pursue a request for hearing seeking an award of permanent partial disability (PPD) benefits that claimant filed before his death, when the cause of his death was unrelated to the work injury. The Court of Appeals held that claimant's estate, through his personal representative, was not authorized to pursue the claim to final determination under ORS 656.218(3) on the grounds that (1) the estate is not one of the " persons" described in 656.218(5), and (2) the phrase " unpaid balance of the award" in the second sentence of subsection (5) restricts an estate's entitlement to PPD benefits that were awarded before a 4worker's death. Sather v. SAIF, 262 Or.App. 597, 325 P.3d 819 (2014). The court therefore denied the motion for substitution and dismissed the petition for judicial review. We review those determinations for errors of law, ORS 183.482(8), and, for the reasons explained below, we reverse the decision of the Court of Appeals and remand to that court for a determination of the merits of the petition for judicial review.

FACTS AND PROCEDURAL HISTORY

In 2009, claimant sought workers' compensation benefits for a work-related injury. Before the date of his injury, claimant had preexisting multilevel degenerative disc disease and a history of intermittent low back pain with some bilateral radiation to his legs. SAIF, the employer's workers' compensation insurer, accepted a claim for a lumbar strain. Claimant subsequently sought acceptance of a combined condition, which SAIF ultimately denied on the ground that the accepted injury was no longer the major contributing cause of the combined condition. Claimant filed a request for hearing on the denial under ORS 656.283(1), which authorizes parties to file requests for hearings on matters concerning a claim.[2] The Workers' [357 Or. 125] Compensation Board upheld SAIF's denial, and claimant sought judicial review in the Court of Appeals. Before that court, claimant conceded that the accepted lumbar strain was no longer the cause of his combined condition. However, claimant contended that, in determining the compensability of his claim, the board erroneously had framed the inquiry in terms of whether the accepted condition continued to be the major contributing cause of his disability or need for treatment. In claimant's view, the proper inquiry was whether his accidental injury continued to be the major contributing cause of his combined condition. Claimant contended that there was no evidence that that injury was no longer the major contributing cause of his disability or need for treatment.

While judicial review was pending before the Court of Appeals, claimant died of causes unrelated to his workplace injury, without a surviving spouse or other beneficiary entitled to a death benefit under ORS 656.204. See also ORS 656.005(2) (defining " beneficiary" to mean " an injured worker, and the husband, wife, child or dependent of a worker, who is entitled to receive payments under this chapter" ). After claimant's death, SAIF moved to dismiss the petition for judicial review; in response, the personal representative of claimant's estate sought to be substituted as the real party in interest for purposes of judicial review. SAIF objected to the proposed substitution on the ground that claimant's estate is not a " person" entitled to pursue a claim under ORS 656.218(3).

As discussed, the Court of Appeals agreed with SAIF and dismissed the petition for judicial review. That court initially observed that, under the pre-2009 version of the statute, it had held in several cases that the persons entitled to pursue a claim under ORS 656.218(3) after a worker's death were

Page 328

the same persons entitled to receive death benefits under ORS 656.204, and did not include the worker's estate or personal representative. See, e.g., Cato v. Alcoa-Reynolds Metals Co., 210 Or.App. 721, 729-30, 152 P.3d 981, rev den, 343 Or. 115, 162 P.3d 988 (2007) ( former ORS 656.218(3) and (5) limited the right to pursue a hearing after the death of a worker to persons entitled to death benefits under ORS 656.204).

[357 Or. 126] The Court of Appeals concluded that a 2009 amendment to ORS 656.218 did not fundamentally alter the analysis:

" [T]the only amendment of ORS 656.218 in 2009 was to subsection (5), by the replacement of the subsection's former second sentence ('In the absence of persons so entitled, a burial allowance may be paid not to exceed the lesser of either the unpaid award or the amount payable by ORS 656.204.') with a new second sentence--'In the absence of persons so entitled, the unpaid balance of the award shall be paid to the worker's estate.'"

Sather, 262 Or.App. at 604. The court reasoned:

" ORS 656.218(3) continues to describe the persons who may pursue a claim as 'the persons described in subsection (5).' The first sentence of ORS 656.218(5) continues to state that the payments required by the statute are to be made to 'the persons who would have been entitled to receive death benefits[.]' The most straightforward reading of the text is that those are the 'persons' to whom ORS 656.218(3) refers, and they do not include the worker's estate or personal representative. The new second sentence's requirement that, in the event that there are no 'persons so entitled,' 'the unpaid balance of the award' is to be paid to the estate does not alter our conclusion. That sentence reveals two factors central to its application: (1) an estate is not among the 'persons so entitled,' and (2) there exists a previous award with an 'unpaid balance,' that is, the worker's entitlement to benefits has been previously determined. In other words, the second sentence is applicable when the deceased worker's eligibility for benefits or the amount of benefits has been determined--when there has been an award. In the absence of persons entitled to receive death benefits, the estate receives the remaining unpaid balance of an award previously determined. But, contrary to the dissent's reasoning, that sentence does not provide independent authority for the estate to pursue a claim that has not yet been determined."

Id. at 605.

The Court of Appeals also noted that, when the 2009 legislature amended subsection (5) by eliminating the provision for a burial allowance and authorizing a worker's estate to receive unpaid awards, it made a similar change [357 Or. 127] to ORS 656.204(1)(b), which previously had provided for payment of the cost of " burial." Id. at 606. According to the court, " Those changes, together with the amendment to ORS 656.218(5), reflect a consistent intention that, when an award has been made and there are no surviving statutory beneficiaries of the worker as defined in ORS 656.204, the estate must receive any previously awarded benefits." Id. (emphasis added).

In sum, the Court of Appeals' holding hinged on two legal conclusions: First, for purposes of subsection (3), " the persons described in subsection (5)" include only the " persons" described in the first sentence of subsection (5), not a worker's estate under the second sentence of subsection (5); and second, the phrase " unpaid balance of the award" in the second sentence of subsection (5) restricts an estate's entitlement to PPD benefits that were awarded before a worker's death.[3] ...


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