In thе 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
In the Supreme Court of the State of Oregon
March 24, 2022
369 Or 384 | 506 P.3d 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 injuries. SAIF denied coverage after determining that claimant was a nonsubject worker under
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 Millеr, 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).
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 decision of this case.
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
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 commodities. BMT is licensed by the federal Department of Transportаtion 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, claimant 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
For hauling loads for BMT, claimant was compensated 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 restriction 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 incentives, primarily based on claimant‘s adherence to the rules outlined by BMT, timely submission of paperwork documenting 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, availability, 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 questioning 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 insurance, fuel, and various equipment (including a radio, tools,
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 experience difficulty with the truck‘s brakes and, еventually, claimant was unable to stop the truck. The truck flipped over. Claimant‘s girlfriend was killed, and claimant sustained 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
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’ compensation coverage under
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 evaluating the workers’ compensation statutory framework and the requirements for the subject worker exemption described in
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 claimant 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
“[U]nder the plain meaning of the statutory text, a driver can ‘furnish’ equipment to a carrier by providing the equipment 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 interest 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 actually the use of company equipment by a subject employee.”
Id. at 343. Accordingly, the Court of Appeals concluded that
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
SAIF petitioned for review before this court, arguing that the plain text of the statute and the legislative history support its view that claimant was exempted from workers’ compensation coverage under
II. ANALYSIS
A “subject worker” is a worker who is subject to the workers’ compensation statutes. Former
The second step of the analysis requires a determination about whether a “worker” is subject to the workers’ compensation laws. As a general rule, all workers are considered subject workers, unless an exemption applies. See
“[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 property by a for-hire motor carrier that is required under
ORS 825.100 or825.104 to possess a certificate or permit or to be registered.”
This case considers whether a worker qualifies for the exemption laid out in
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
Before this court, the parties present competing arguments that focus primarily on the meaning of “leasehold
When interpreting statutory provisiоns, our primary goal as a court is to determine the intent of the legislature at the time it enacted the relevant statute. See Gaines, 346 Or at 171 (“This court remains responsible for fashioning 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 legislature, we look to the text, context, and any helpful legislative 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 undertook to give expression to its wishes.” Id. (internal quotation 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
Neither of those terms are specifically defined in the workers’ compensation statutes.4 When interpreting a
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 legislature 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
The plain meaning of the phrase “leasehold interest,” 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 specific reference to real property. See Webster‘s at 1286 (defining leasehold as “land held by lease“). That definition is consistent 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 claimаnt 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
Claimant also suggests an alternative plain meaning 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 operated in intrastate cоmmerce 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 “furnish,” the definitions considered above do carry similar language 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 suggest that a leasehold interest requires “possession and use.” We agree with both parties then that the “leasehold interest” 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 definitions in the text of
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 supplying 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 supрly the equipment for exclusive use by the lessor does not actually grant a sufficient interest in the equipment 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
In addition to the conjunctive nature of the language in the statute, the context and legislative history of
“HB 2820 would classify the log trucker who operates and maintains his own equipment as an independent contractor for the purpose of workers’ compensation.
“*****
“The single log truck opеrator owns and maintains his equipment. He has the right to select his jobs and may hire someone to drive his truck under certain circumstances.”
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, representing 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 providing 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 happen but if it did his association would be the first to say
“[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 contractor, 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 possibility of removing the “leasehold interest” language to
Although the exchange between Senator Groener and Kalinoski occurred during a discussion about expanding 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 contemplated such a situation, and ultimately decided that it did not need to amend the statutory language despite its concerns, 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 equipment and could furnish that equipment in some manner,
Claimant counters that the conversation between Senator Groener and Kalinoski demonstrates that the legislature‘s specific intent was the oppositе. 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 nonsubject 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 workers 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 possibility 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 legislature‘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 exemption 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
The text, context, and legislative history of the subject worker exemption contained in
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 certainly 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
III. CONCLUSION
In sum, we agree with the Court of Appeals that the subject worker exemption in
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
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 property by a for-hire motor carrier that is required under
ORS 825.100 or825.104 to possess a certificate or permit or to be registered.”
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 ordinary 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 concludes 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
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 tо mean. I acknowledge that the exchange between Senator Groener and Jack Kalinoski tends to cast doubt on whether at least some legislators 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 certain types of leases, but that did not happen. What the legislative 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 outсome.
This court has previously recognized, when interpreting 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
“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 language 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 оriginal contemplation of the legislature, 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 construction, 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 narrower 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 draftеrs, we shall take the legislature at its word ***”
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
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 constrained 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
Balmer, J., joins in this dissenting opinion.