Stephanie M. DOWELL, individually and on behalf of others similarly situated, Petitioner on Review,
OREGON MUTUAL INSURANCE COMPANY, an Oregon corporation, Respondent on Review.
and submitted March 8, 2016
review from the Court of Appeals.[*] CC 1205-06486; CA A153170
Charles Robinowitz, Law Offces of Charles Robinowitz,
Portland, argued the cause and fled the briefs for petitioner
on review. Also on the briefs was Genavee Stokes-Avery.
M. Christ, Cosgrave Vergeer Kester LLP, Portland, argued the
cause and fled the briefs for respondent on review.
Van Vactor, Portland, fled the brief for amicus curiae Oregon
Trial Lawyers Association.
decision of the Court of Appeals and the judgment of the
circuit court are affrmed.
Walters, J., dissented and fled an opinion, in which Baldwin,
J., and Brewer, J., joined.
Summary: In 2008, plaintiff was injured in a motor vehicle
accident. Among the costs she incurred as a result were
$430.67 in transportation expenses accrued in the course of
traveling to various medical appointments and picking up
medications. Plaintiff applied for PIP medical benefts under
her Oregon automobile insurance policy, and defendant
insurance company paid for the medical care she had received
from her healthcare providers. Defendant, however, declined
to pay for the transportation costs associated with obtaining
that care. Plaintiff subsequently fled an action against
defendant, arguing that medical expenses under ORS
742.524(1)(a) included, as a statutory matter, transportation
costs and that as a result, defendant had breached its
contract with her by failing to reimburse her for those
expenses. On defendant's motion for summary judgment,
however, the trial court dismissed plaintiff's action and
the Court of Appeals went on to affrm that judgment in a
written decision. In scrutinizing the statutory phrase
"expenses of medical * * * services" as it was used
in ORS 742.524(1), the Court of Appeals examined the text and
context of the statute, opining that the phrase meant
"something that is expended to secure a beneft relating
to work that is performed by another, when that work involves
the practice of medicine[.]" After thus narrowing the
meaning of that phrase, the Court of Appeals concluded that
it could not be read to include transportation expenses
related obtaining medical services. Held: The
decision of the Court of Appeals and the judgment of the
circuit court are affrmed. After examining the text, context,
and legislative history of ORS 742.524(1) the Court concludes
that the legislature intended the phrase "expenses of
medical * * * services" to encompass costs that
originate with, or arise by virtue of, the rendering of
medical treatment or the work performed by a physician. Such
costs would include the medications, medical supplies, and
equipment prescribed by a physician for treatment of the
injured person. The legislature did not intend, however, for
ordinary transportation expenses incurred in the course of
obtaining medical treatment or medications to qualify as a
covered PIP beneft.
decision of the Court of Appeals and the judgment of the
circuit court are affrmed.
insurers in Oregon must provide personal injury protection
(PIP) benefits to their insureds for certain automotive
injury-related expenses, regardless of who is at fault in an
accident. ORS 742.520(1). The PIP medical benefits at issue
in this case "consist of the following payments for the
injury or death of each person" covered: "All
reasonable and necessary expenses of medical, hospital,
dental, surgical, ambulance and prosthetic services incurred
within one year after the date of the person's injury,
but not more than $15, 000 in the aggregate for all such
expenses of the person." ORS 742.524(1)(a)
(2007). On behalf of herself and others similarly
situated, plaintiff contended in her action against defendant
Oregon Mutual Insurance Company that insurers must pay
transportation costs incurred to obtain medical care as part
of PIP medical benefits. The trial court concluded that the
PIP statutes, ORS 742.518 to 742.542, do not require insurers
to pay for transportation costs and granted summary judgment
for defendant. Plaintiff appealed, and the Court of Appeals
affirmed. Powell v. Oregon Mutual Ins. Ca, 268
Or.App. 672, 343 P.3d 283 (2015).
question on review is whether the PIP medical benefit in ORS
742.524(1)(a) includes the insured plaintiff's
transportation costs to receive medical care. We hold that
PIP benefits for the "expenses of medical * * *
services" do not include an insured's transportation
costs for traveling to receive medical care. Therefore, we
affirm the decision of the Court of Appeals and the judgment
of the trial court.
relevant facts are not in dispute. Plaintiff had an Oregon
auto insurance policy issued by defendant. In 2008, plaintiff
was injured in a motor vehicle accident. Among other
expenses, plaintiff incurred $430.67 in transportation costs
to attend medical appointments and to obtain medication. She
then applied for PIP medical benefits under her insurance
policy. Defendant paid for plaintiff's medical care, but
it declined to pay for her transportation expenses to obtain
her medical care.
then filed a complaint for breach of contract, both for
herself and on behalf of others similarly situated. She
alleged that her claim for medical expenses under ORS
742.524(1)(a) included her transportation costs and that
defendant had breached its contract by failing to reimburse
her for those expenses. Defendant responded by moving for
summary judgment, arguing that ORS 742.524(1)(a) did not
require it to pay for transportation costs. After a hearing,
the trial court granted defendant's motion and entered a
judgment in defendant's favor.
appeal, the Court of Appeals narrowed the case to a single
question: Does the phrase "expenses of medical * * *
services" in ORS 742.524(1)(a) require an insurer to pay
an insured's expenses for transportation to attend
medical appointments and to obtain medication?
Dowell, 268 Or.App. at 675. The Court of Appeals
answered that question by considering the statute's text
and context. After examining dictionary definitions of
the four words in the phrase "expenses of medical * * *
services, " the Court of Appeals concluded that,
considered as a whole, the phrase meant "something that
is expended to secure a benefit relating to work that is
performed by another, when that work involves the practice of
medicine (the maintenance of health, and the prevention,
alleviation, or cure of disease)." Id. at 677.
After considering the phrase's context, particularly the
remaining text of the statute and other PIP provisions
pertaining to payments to "providers" of medical
services, the Court of Appeals concluded that the legislature
had not intended the statute to include expenses of
transportation to obtain medical services. 268 Or.App. at
allowed plaintiff's petition for review to address the
interpretation of ORS 742.524(1)(a). On review, plaintiff
contends that two statutes, ORS 731.008 and ORS 731.016,
serve as the starting point for construing the phrase
"expenses of medical * * * services." According to
plaintiff, the legislature's declarations in those two
statutes require us to liberally construe ORS 742.524(1)(a),
and, read in that light, the phrase at issue should be
understood as a reference to "the costs to obtain
medical services, " including the costs for
transportation to a doctor's office or hospital to obtain
medical advice and treatment. Consequently, plaintiff asserts
that transportation costs to obtain medical services qualify
as PIP benefits.
plaintiff argues that the Court of Appeals decision conflicts
with the purpose and policy of the PIP statutes, which is to
reduce litigation and to ensure prompt payment of claims.
Because health care is not available without traveling to a
doctor or hospital, plaintiff argues, those travel costs are
especially burdensome to rural residents who may have to
travel a significant distance. Plaintiff also asserts that
the reasoning of the Court of Appeals will encourage
insurance companies to deny injured persons payment for
medication, medical supplies, and medical equipment.
plaintiff contends that sources of law outside the PIP
statutes are persuasive authority in favor of her
interpretation of the statute. She relies on decisions from
courts in other jurisdictions that have held that the PIP
benefits in those jurisdictions include the reasonable cost
of travel to a health care provider.
responds that the text and context of the statute limit
payment to the cost of services expressly listed in ORS
742.524(1)(a) that are performed by a "provider, "
that is, a licensed healthcare provider. Noting that the
statute refers only to ambulance services and not to other
transportation, and that it contains a presumption concerning
payments for healthcare providers, defendant argues that PIP
benefits are not meant to cover "providers of
n.on.-health care services, " such as a taxicab or bus
service, or services that insureds perform for themselves,
such as driving to the doctor's office. (Emphasis in
original.) Defendant also contends that the out-of-state
authorities cited by plaintiff are not helpful because of
differences in the relevant statutes and case law.
measure of legislative intent takes into account the
legislative history of the PIP benefit statute, in addition
to its text and context. As explained below, we ultimately
conclude that the Oregon Legislative Assembly did not intend
to include the expenses of transportation to obtain medical
services as a PIP medical benefit in ORS 742.524(1)(a), but
we arrive at that conclusion after rejecting both
parties' rationales for their divergent readings of ORS
issue presented involves statutory construction, which we
resolve by applying familiar principles set out in PGE v.
Bureau of Labor and Industries, 317 Or 606, 610-12, 859
P.2d 1143 (1993), and State v. Gaines. 346 Or 160,
171-72, 206 P.3d 1042 (2009). To discern the meaning of the
statute most likely intended by the legislature that enacted
it, we examine the text and context of the statute and, where
appropriate, legislative history and pertinent canons of
construction. State v. Walker. 356 Or 4, 13, 333
P.3d 316 (2014); Gaines, 346 Or at 171-72.
Oregon's PIP Statutory Scheme
our discussion, we begin with a brief overview of the PIP
statutory scheme. PIP is a form of no-fault insurance
mandated by Oregon law to be included in any motor vehicle
liability policy. ORS 742.520(1). PIP coverage is governed by
ORS 742.518 to 742.544. PIP benefits "consist of
payments for expenses, loss of income and loss of essential
services as provided in ORS 742.524." ORS 742.520(3).
insurer must pay PIP benefits "promptly after proof of
loss has been submitted to the insurer." ORS 742.520(4).
We have explained that "the obvious purpose of [the PIP
statutes] is to provide, promptly and without regard to
fault, reimbursement for some out-of-pocket losses
resulting from motor vehicle accidents." Perez v.
State Farm Mutual Ins. Co., 289 Or 295, 300, 613 P.2d 32
(1980) (emphasis added). Indeed, since their creation, in
general, PIP benefits have consisted of payments for
"medical expenses and loss of income." Kessler
v. Weigandt, 299 Or 38, 40 n 3, 699 P.2d 183 (1985)
(discussing the predecessors of ORS 742.520 and ORS 742.524,
namely, former ORS 743.800, renumbered as
ORS 742.520 (1989), and former ORS 743.805,
renumbered as ORS 742.524 (1989)).
case involves the PIP medical benefit in ORS 742.524(1)(a),
which requires payment for
"[a]ll reasonable and necessary expenses of medical,
hospital, dental, surgical, ambulance and prosthetic services
incurred within one year after the date of the person's
injury, but not more than $15, 000 in the aggregate for all
such expenses of the person."
statute also contains a presumption that expenses of medical
and other listed services claimed by a "provider"
on behalf of an insured are reasonable and necessary, unless
the insurer timely denies the claim:
"Expenses of medical * * * services shall be presumed to
be reasonable and necessary unless the provider is given
notice of denial of the charges not more than 60 calendar
days after the insurer receives from the provider notice of
the claim for the services."
term "provider" is statutorily defined. ORS
742.518(10) (stating that "provider" has the
meaning given to that term in ORS 743.801). As used in the
presumption described in ORS 742.524(1)(a), a
"provider" is "a person licensed, certified or
otherwise authorized or permitted by laws of this state to
administer medical or mental health services in the ordinary
course of business or practice of a profession." ORS
743.801(13). A number of other provisions in the PIP statutes
refer to payments to providers. See, e.g., ORS
742.525, ORS 742.528.
insurer may deny a PIP claim for medical expenses; however,
the "potential existence of a cause of action in tort
does not relieve an insurer from the duty to pay [PIP]
benefits." ORS 742.520(5). Disputes over PIP payments
may be adjudicated in either of two forums. If the parties
mutually agree, they can use binding arbitration. ORS
742.520(6). Or, like plaintiff, an insured who
contends that the insurer wrongly denied PIP benefits may
choose to file a civil action against the insurer.
Text and Context of ORS 742.524(1)(a)
that overview, we turn to construe ORS 742.524(1)(a). We
begin with the text of the statute. Sanders v. Oregon
Pacific States Ins. Co., 314 Or 521, 527, 840 P.2d 87
(1992). The phrase directly at issue contains four terms:
"expenses, " "of, " "medical, "
and "services." In construing those terms, we pay
careful attention to "the exact wording of the
statute." State v. Vasquez-Rubio, 323 Or 275,
280, 917 P.2d 494 (1996). That is because the text provides
the best evidence of the legislature's intent and the
starting point for our analysis. PGE, 317 Or at 611;
see also Whipple v. Howser, 291 Or 475, 480, 632
P.2d 782 (1981) (stating that there is "no more
persuasive evidence of the purpose of a statute than the
words by which the legislature undertook to give expression
to its wishes").
the statutory terms set out above are defined by statute, nor
are they legal terms of art. Therefore, our task is to
determine the intended meaning of those words, applying the
ordinary tools of statutory construction. When the
legislature has not defined a word or a phrase, we assume, at
least initially, that the word or phrase has its "plain,
natural, and ordinary" meaning. PGE, 317 Or at
611; accord Wrisht v. Turner. 354 Or 815, 827, 322
P.3d 476 (2014). This court frequently consults dictionary
definitions in such cases on the assumption that, if the
legislature did not provide a specialized definition for a
term, the dictionary will help to shed light on its meaning
as intended by the legislature. State v. Murray. 340
Or 599, 604, 136 P.3d 10 (2006).
dictionary definition of "expense" is
straightforward. "Expense" means "2 a:
something that is expended in order to secure a benefit or
bring about a result" or "b: the financial burden
involved typically in a course of action or manner of living:
cost." Webster's Third Int'l Dictionary
800 (unabridged ed 2002) (boldface in original). Thus, in
ordinary usage, the word "expenses" means something
that is expended, a cost, to secure a benefit or bring about
part, Webster's defines "of to mean "5
b: from as the place of birth, production, or distribution:
having as its base of operation, point of initiation, or
source of issuance or derivation." Id. at 1565.
That definition appears to suggest a derivation that is not
necessarily geographical, but, if the dissent is correct that
the definition has only a "locational meaning."
Dowell, 361 Or at(Walters, J., dissenting), other
definitions point in a similar direction. For example,
"of is also defined as being "6-used as a function
word to indicate the cause, motive, or reason by which a
person or thing is actuated or impelled" or
"15-used as a function word to indicate a quality or
possession characterizing or distinguishing a subject."
Id. More broadly, though, "of" is defined
as "11: relating to: with reference to: as regards:
ABOUT." Id. Although there are many other
definitions, none comes as close as the foregoing to address
the problem before us.
word "medical" has two possible definitions in this
context. "Medical" means "1: of, relating to,
or concerned with physicians or with the practice of medicine
often as distinguished from surgery" or "2:
requiring or devoted to medical treatment *** - distinguished
from surgical." Webster's at 1402 (emphasis
the noun "service" also is defined in many ways.
But in this case, the applicable definitions of
"service" are either "2: the performance of
work commanded or paid for by another" or "9 a:
action or use that furthers some end or purpose: conduct or
performance that assists or benefits someone or something:
deeds useful or instrumental toward some object."
Webster's at 2075.
light of those definitions, the phrase "expenses of
medical * * * services" can, as a textual matter,
plausibly be read in different ways. Each of the parties
offers a different understanding of the phrase, but we
conclude that there is a third plausible reading.
strictest reading, which defendant urges, the PIP expenses
authorized for "medical * * * services" are the
costs for the professional work performed by a physician or
other person who renders medical care. Plaintiff objects that
defendant and the Court of Appeals have focused too narrowly
on "services, " which omits from PIP benefits a
variety of nonservice medical costs that are necessary
adjuncts of medical treatment, including medications and
other medical supplies and equipment, such as bandages and
relying on the broader meaning of the word "of, "
plaintiff offers the most expansive view of the phrase
"expenses of medical * * * services." In
plaintiff's view, that phrase refers to a cost that is
related in some way to work that involves medical care or the
practice of medicine. In accordance with that view, plaintiff
contends that transportation to receive medical care is
"related" to the benefit of work performed by a
healthcare provider because, as a practical matter,
transportation usually is needed for the injured person to
obtain medical treatment. Defendant disagrees, arguing that
transportation costs-other than ambulance services-are not
"related" to medical care and instead are
view, however, there is a third reading of the phrase that
neither party proffers. In it, the dictionary definitions
point to costs that have as their source or derivation an
action or use that is devoted or instrumental to medical
treatment. In other words, "expenses of medical * * *
services, " ORS 742.524(1)(a), can refer to costs that
originate with the rendered medical treatment or the
physician's performance of work. That meaning of the
phrase is consistent with PIP benefit coverage for items such
as medications or crutches that injured individuals use as
part of their medical treatment.
light of those alternatives, the text alone does not provide
a definitive answer regarding what the legislature intended
in ORS 742.524(1)(a). But of course, we do not interpret a
statutory phrase solely on the basis of dictionary
definitions. State v. Cloutier. 351 Or 68, 96, 261
P.3d 1234 (2011). Statutory construction in Oregon requires
an examination of word usage in context to determine what the
legislature most likely intended. See, e.g., State v.
Fries. 344 Or 541, 546-50, 185 P.3d 453 (2008)
(considering context to determine which of multiple
definitions was intended by the legislature).
begin with plaintiff's contextual argument. She argues
that we are required by general provisions in the Insurance
Code to liberally interpret insurance law in favor of
insureds. Plaintiff relies on ORS 731.016, which provides:
"The Insurance Code shall be liberally construed and
shall be administered and enforced by the Director of the
Department of Consumer and Business Services to give effect
to the policy stated in ORS 731.008."
policy referred to in ORS 731.016 states that "the
Insurance Code is for the protection of the insurance-buying
public." ORS 731.008. Plaintiff and amicus
curiae Oregon Trial Lawyers Association further contend
that, under Carrigan v. State Farm Mutual Auto. Ins.
Co., 326 Or 97, 104-05, 949 P.2d 705 (1997), the