Liberty Northwest Ins. Corp. v. Koitzsch

964 P.2d 1071, 155 Or. App. 494, 1998 Ore. App. LEXIS 1384

• Court: Court of Appeals of Oregon
• Decided: August 26, 1998
• Docket: WCB 96-01318; CA A98570
• Status: Published

Opinions

DEITS, C. J.

Employer seeks review of a Workers’ Compensation Board order that increased claimant’s earlier permanent partial disability (PPD) award, based on the Board’s conclusion that an intervening statutory change in the PPD rate applies retroactively to the award. We affirm.

In 1989, claimant filed a claim for an occupational disease. The Board issued an order awarding PPD to her. Claimant sought our review, contending that the Board erred in establishing the number of degrees of PPD. We reversed and remanded to the Board for reconsideration of that issue. Koitzsch v. Liberty Northwest Ins. Corp., 125 Or App 666, 866 P2d 514 (1994). Following our remand, the Board issued a second order in November 1994, which increased the number of degrees of PPD, awarded an out-of-compensation attorney fee and awarded an attorney fee to be paid by the carrier directly to claimant’s attorney. Employer’s insurer paid the PPD award at the rate of $145 per degree, the statutory rate in effect when claimant filed the claim. See former ORS 656.214(2) (1987) (establishing the rate).

Employer petitioned for judicial review of the 1994 order. Its contentions to us were directed only at the carrier-paid attorney fee award, and neither claimant nor employer raised any issue regarding the award of PPD. We reversed and remanded to the Board regarding the attorney fee issue in July 1995. Liberty Northwest Ins. Corp. v. Koitzsch, 135 Or App 524, 899 P2d 724 (1995). Some time after our second remand, claimant requested that the Board increase the PPD award, because the 1995 legislature had changed the PPD rate to $347.51 per degree, ORS 656.214(2), and had provided that the amended statute was to be applied retroactively. Or Laws 1995, ch 332, §§ 17, 66(1).¹ The Board concluded that a ruling regarding the applicable rate was “premature” at that time and that

“[slhould claimant disagree with the insurer’s actions in paying the permanent disability awarded in this case, she may seek a hearing concerning that matter. See ORS 656.283(1). The issue would he ripe at that time.” (Emphasis supplied.)

In February 1996, claimant sought a hearing regarding the applicable rate. Both the ALJ and the Board agreed that the higher statutory rate applies retroactively because judicial review of the 1994 order was pending when the new law went into effect in June 1995. The Board explained:

“Although the insurer’s appeal [in the Court of Appeals] was limited to the attorney fee issue, the * * * 1994 order nevertheless was not ‘final’ within the meaning of ORS 656.295(8) and section 66 of the 1995 Act. A Board order is not ‘final’ so long as ‘one of the parties’ timely appeals to the court for judicial review. Thus, the fact that the insurer’s appeal was limited to the attorney fee issue is immaterial to the finality of the Board’s order. Due to the insurer’s appeal of the Board’s order, the order did not become final until after the effective date of the Act.”

Employer seeks review of the Board’s order and assigns error to its ruling that the increased PPD rate applies. The issue is whether the provision in chapter 332 that increased the rate applies retroactively to this claim. Section 66(1) of chapter 332 provides:

“Notwithstanding any other provision of law, this Act applies to all claims or causes of action existing or arising on or after the effective date of this Act, regardless of the date of injury or the date a claim is presented, and this Act is intended to be fully retroactive unless a specific exception is stated in this Act.”

However, section 66(5)(a) creates the following exception to the act’s retroactive operation:

“The amendments to statutes by this Act and new sections added to ORS chapter 656 by this Act do not apply to any matter for which an order or decision has become final on or before the effective date of this Act.”

Also relevant is ORS 656.295(8), which provides:

“An order of the board is final unless within 30 days after the date of mailing of copies of such order to the parties, one of the parties appeals to the Court of Appeals for judicial review pursuant to ORS 656.298. The order shall contain a statement explaining the rights of the parties under this subsection and ORS 656.298.”

In Volk v. America West Airlines, 135 Or App 565, 899 P2d 746 (1995), rev den 322 Or 645 (1996), we interpreted sections 66(1) and (5)(a), in context with ORS 656.295(8), and concluded that the

“legislature intended the changes in the law to apply to Board orders for which the time to appeal had not yet expired on the effective date of the Act or, if the case had been appealed, to any case that was still pending before the court on the effective date of the legislation.” Id. at 569.

We noted further in Volk that, to whatever extent the text and context might not be conclusive, “the legislative history supports the same interpretation.” Id. We emphasized the following comments by the sponsor of chapter 332 that we quoted from the legislative history:

“ ‘There’s only one part of the implementation dates, I think, probably needs a real flat statement on the record and that is that the retroactivity also applies to cases in which a final order has not yet issued in litigation. There’s a bunch of cases in the system right now that have been decided by different factfinders under two or three different versions of the law depending on whether the Board interpretation or the Court of Appeal’s interpretation or the Supreme Court interpretation was in effect at that time and this says ‘this law applies to everything no matter where it is unless you have already been to court, had it decided and there’s a decision been rendered and the decision is not subject to being appealed anymore.’ Otherwise, except with the exceptions here, this is the law for everybody and we’ll go out and apply it whether it’s pro-worker or pro-employer.

‡ ‡ ‡ ‡

“ ‘[T]he amendment, sub-5 will be “the amendments to this chapter do not apply to any matter for which an order or decision has become final as of the date of passage of this Act”—the old concept of res judicata-, you litigate it, it’s over, we’re not going back and reopening litigation.’ ” Id. at 570-72.

Based on the foregoing, we concluded in Volk that the chapter 332 provisions that related to the issue in the case applied retroactively to it, “because review of the Board’s order was sought, but was not finally resolved by the courts at the time of the effective date of the Act[.]” Id. at 573.

Employer contends that this case differs from Volk in a critical respect; namely, that although the Board’s 1994 order was on appeal to this court at the time of the act’s effective date, the parties presented no question in the appeal about the resolution of the PPD issue in that order. Employer reasons that the PPD award was therefore a “matter” as to which the 1994 order had become final, notwithstanding the fact that the order itself had been appealed, and that the PPD award accordingly comes within the exception to retroactivity set forth in section 66(5)(a). Hence, according to employer, the increase in the PPD rate under chapter 332 cannot be applied retroactively to the 1994 award.

Claimant responds that the proper inquiry is whether the 1994 order had become final, and that, under Volk, the fact that the appeal from it was pending on the effective date means that it had not. According to claimant, particular issues that are addressed in a Board order do not become “final,” within the meaning of section 66(5)(a), independently of the order itself. Therefore, if the order was on appeal when chapter 332 took effect, the order as a whole was not final at that time, and it is immaterial to the retroactivity question under chapter 332 that no specific challenge was made in the appeal to any particular ruling or issue addressed in the order.

We agree with claimant. Employer’s argument hinges on its understanding that the word “matter” in section 66(5)(a) refers to a component part of the Board’s disposition of a claim and signifies that that part can achieve “finality” independently of the order that contains it. That understanding is contrary to the language of section 66(5)(a) itself. The section does not refer to matters that have become final, but to any matter for which an order or decision has become final.”² (Emphasis supplied.) The emphasized phrase would have been superfluous if the legislature had meant that “matters” within orders can become final separately and independently of the orders that contain or rule on them.

The statutory context is also contrary to employer’s understanding. ORS 656.295(8) provides that a Board order is final unless an appeal from it is taken to this court within the statutorily specified period. Thus, if an order is appealed, the order itself does not become final until there is a final decision on appeal. ORS 656.295(8) supports the view that “finality” is a property of the order, not parts of the order. Further, ORS 656.295(8) makes it clear that the order is the thing that is appealable to this court. As in other appellate contexts, e.g., appeals from circuit court judgments, this court obtains jurisdiction over the entire case when an appeal is taken from the judgment or order. As a general proposition, as long as an appeal is pending, finality does not attach piecemeal to the parts of a judgment or order that are not placed in direct controversy by the parties’ assignments or arguments in the appeal; it attaches to the case as a whole after the appellate process is complete.³

That that general proposition holds true in workers’ compensation cases is demonstrated by the Supreme Court’s statement in Drews v. EBI Companies, 310 Or 134, 149, 795 P2d 531 (1990), that, for purposes of issue or claim preclusion:

“A claim determination is not final until hearing and judicial review rights are barred or exhausted. The statutory scheme indicates that the finality requisite for claim or issue preclusion, against the worker, occurs only when a worker fails to timely request a hearing after a claim denial, a determination order, or a notice of claim closure, ORS 656.319, or by failure to file a timely appeal to the Board, ORS 656.289(3), or the courts. ORS 656.295(8).”

Hence, under Drews, the PPD award in the 1994 Board order, which employer argues became a final “matter” under section 66(5)(a) independently of the order itself, could not even have been final for purposes of issue preclusion once employer appealed from the order and as long as the appeal was pending. For the reasons discussed earlier, however, section 66(5)(a) does not create that anomaly: It makes the finality of the “order” essential to the finality of the “matters” it contains and is therefore fully consistent with Drews and the other related statutory and judicial authority we have discussed.⁴

Ultimately, this case turns on a precise understanding of terms that entail somewhat subtle shades of meaning and that are often used colloquially in ways that differ from their precise meaning. For example, employer states that

“the permanent disability award matter was finally resolved and not on appeal. Only the attorney fee matter was on appeal.”

However, issues (or matters) are not appealed; orders are appealed, and issues are simply a matter for assignments and arguments within the appeal after it has been brought. The appellate courts directly consider only the issues that the parties raise, but their decision nonetheless entails a disposition of the entire order from which the appeal is taken. See, e.g., ORS 183.482(8); ORS 656.298(1), (7).

Similarly, the term “finality,” as used in connection with issues, orders and their disposition on appeal, also has a precise meaning that differs from the one posited in employer’s argument. Employer uses the term in a sense that is synonymous with “conclusive” or even “preserved.” That would be a correct understanding of the term if the question here were whether claimant could have relitigated the original 1994 PPD award before the Board, upon our remand of the order; further, the answer to that question would probably be “no,” because the PPD issue was not raised in the appeal to us from that order, and our remand to the Board did not encompass the issue. However, that is not the question presented here. Rather, the question is whether the Board’s ruling on the issue became dispositionally final before the appeal from the entire order was decided. The answer to that question is also “no.”

Employer also relies on Price v. SAIF, 296 Or 311, 675 P2d 479 (1984), in support of its thesis that an order can be final as to one issue but not another. In that case, the claimant sought compensation for a back condition and for a putatively related heart condition. SAIF issued a partial denial for the heart condition. The Board affirmed that denial but, in the same order, it remanded the issue of the extent of disability for the accepted back condition to the hearings officer. The Supreme Court held that the Board’s disposition of the heart condition issue was final and appealable to the Court of Appeals, even though the other ruling in the order was not.

Claimant argues, and the Board concluded, that Price is inapposite, because it dealt with whether part of an order can be final for purposes of appealability, not with the different question involved here, of whether an order can be dispositionally final in part and nonfinal in part when a proper appeal has been taken from it. We agree that the questions are different. In addition, however, this case differs from Price in that there is no partial denial issue here. In Dean v. SAIF, 72 Or App 16, 695 P2d 90, rev den 298 Or 822 (1985), and Lindamood v. SAIF, 78 Or App 15, 18, 714 P2d 1057 (1986), we concluded that “Price was limited to the partial denial situation and did not otherwise change existing law regarding what is a final order.”⁵ Price is not relevant to the issue presented in this case.

We conclude, based on the text and context of the relevant provisions, that an issue or “matter” does not become “final,” within the meaning of section 66(5)(a) of chapter 332, until the Board order dealing with the matter or the appellate review of the order becomes final. It follows that the PPD award in the 1994 order was not final when chapter 332 took affect and that the Board was correct in increasing the award pursuant to that act.

Affirmed.

1 In the remainder of this opinion, we will generally refer to the 1995 Act as “chapter 332.”

2 Employer’s argument makes no point about the word “decision” in the quoted statutory language. However, the legislative history that we quoted in Volk and have reiterated here indicates that the word refers to a final judicial decision in an appeal from an order.

3 In the workers’ compensation setting, as in others, the underlying proceedings can have certain effects that continue during or are not affected by the taking of an appeal, e.g., interim compensation. However, that is not the same issue as the one this case presents.

4 Our mention of issue and claim preclusion is intended to serve only the illustrative purpose set out in the text. Unlike the dissent, we do not regard either form of preclusion to be a decisive issue in this case. Indeed, employer does not raise the preclusion doctrines at all, much less seek reversal on the basis of them. In any event, the dissent’s discussion of preclusion does not seem to us to advance its position. Insofar as it relies on the 1994 order and/or claimant’s not challenging the PPD award in it, the dissent appears to be transposing the “finality” requirement of the preclusion doctrines and the “finality” exception to retroactivity under chapter 332. At best, the dissent’s preclusion discussion in connection with the 1994 order begs the real question, i.e., the meaning of the statute. Further, insofar as the dissent relies on the Board’s November 15,1995, order on remand as having a preclusive effect, it does not explain how an order that refuses to rule on an issue on grounds of prematurity can have any preclusive effect on a subsequent adjudication of the issue.

5 We summarized the “existing law” in Mendenhall v. SAIF, 16 Or App 136, 138, 517 P2d 706, rev den (1974), where we said that, to be final for purposes of appealability, a Board order “must be one which determines the rights of the parties so that no further questions can arise before the tribunal hearing the matter.”