State Farm Insurance v. Lyda

939 P.2d 1181, 148 Or. App. 424, 1997 Ore. App. LEXIS 760
CourtCourt of Appeals of Oregon
DecidedJune 11, 1997
Docket95-13520; CA A94571
StatusPublished
Cited by1 cases

This text of 939 P.2d 1181 (State Farm Insurance v. Lyda) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Farm Insurance v. Lyda, 939 P.2d 1181, 148 Or. App. 424, 1997 Ore. App. LEXIS 760 (Or. Ct. App. 1997).

Opinion

LEESON, J.

Insurer seeks review of an order of the Workers’ Compensation Board (Board) holding that, pursuant to former OAR 436-60-025(5)(j), the Director of the Department of Consumer and Business Services (director) correctly calculated the rate of claimant’s temporary total disability (TTD) based on his assumed annual wage of $18,000.1 Insurer contends that the rule impermissibly deviates from the requirement of ORS 656.210(2)(c) that TTD benefits be based on the wage at the time of injury. We review to determine if the Board’s interpretation of an inexact term is consistent with the statute, England v. Thunderbird, 315 Or 633, 638, 848 P2d 100 (1993), and affirm.

The facts are not in dispute. Claimant, a real estate broker, is president and sole shareholder of employer, Harry Lyda Realty. At the time of employer’s incorporation in 1976, claimant elected workers’ compensation insurance for himself as a subject worker. ORS 656.128. Each year, he paid an annual premium based on his estimated annual income, a figure that claimant provided when he applied for coverage. From July 25,1981, to July 25,1983, that figure was $18,155. Insurer used $18,000 as claimant’s “assumed wage” and calculated claimant’s annual premium based on that figure.

On March 10, 1983, claimant suffered a compensa-ble, nondisabling injury. Pursuant to former OAR 436-60-025(5)(j), Department of Consumer and Business Services (DCBS) ordered that claimant’s TTD rate be calculated on the basis of the assumed wage of $18,000. However, a subsequent audit revealed that, at least for tax purposes, claimant had received no wage income from employer from July 25, 1982, to July 25, 1983. In December 1983, claimant declared that his total wage income from employer during the 1983 fiscal tax year was $6,000. In 1994, insurer notified [427]*427claimant that it was reducing his TTD benefits because it was going to begin calculating the rate on an annual wage of $6,000, rather than the $18,000 assumed wage.2 Claimant disputed the reduction, and the dispute was referred to DCBS. On November 29,1995, DCBS issued a Proposed and Final Order On Weekly Wage For Computing Temporary Disability Rate that required insurer to calculate claimant’s TTD based on his assumed wage of $18,000. Insurer requested a hearing, contending that former OAR 436-60-025(5)(j) impermissibly deviates from the statutory requirement that TTD benefits be based on the wage at the time of injury. The administrative law judge concluded that the rule was consistent with the statute, and the Board affirmed.

ORS 656.210(2) provides, in pertinent part:

“(b) For the purpose of this section:
“(A) The benefits of a worker who incurs an injury shall be based on the wage of the worker at the time of injury.
«‡ % ‡ # *
“(c) * * * For workers not regularly employed and for workers with no remuneration or whose remuneration is not based solely upon daily or weekly wages, the Director of the Department of Consumer and Business Services, by rule, may prescribe methods for establishing the worker’s weekly wage.”

Based on the authority delegated in ORS 656.210(2)(c), the director promulgated former OAR 436-60-025(5)(j), which provided:

“For workers who are sole proprietors, partners or officers of corporations insurers shall use the assumed wage on which the employer’s premium is based.”

(Emphasis supplied.)

Insurer’s first assignment of error is that former OAR 436-60-025(5)(j) “fails to fulfill legislative intent” and exceeds the statutory parameters of ORS 656.210(2)(c). [428]*428According to insurer, in promulgating the rule, the director inappropriately incorporated language from ORS 656.128(1). That statute provides:

“Any person who is a sole proprietor * * * may make written application to an insurer to become entitled as a subject worker to compensation benefits. Thereupon, the insurer may accept such application and fix a classification and an assumed monthly wage at which such person shall be carried on the payroll as a worker for purposes of computations under this chapter.”

(Emphasis supplied.) Insurer further contends that our analysis in Hadley v. Cody Hindman Logging, 144 Or App 157, 925 P2d 158 (1996), is instructive in analyzing the director’s error in promulgating former OAR 436-60-025(5)(j).

Claimant responds that ORS 656.210(2)(c) delegates broad authority to the director to prescribe the “method” for approximating the wage amount at the time of injury for those workers who are not employed regularly. Claimant argues that the director’s rule is within the range of discretion allowed by the general policy of ORS 656.210(2)(c).

We need not consider insurer’s argument that the director relied on ORS 656.128(1) in promulgating former OAR 436-60-025(5)(j), because that argument was not made below. Before the Board, insurer argued that the rule is an “unenforceable extension” of ORS 656.210. Insurer’s argument regarding ORS 656.128(1) related only to claimant’s failure to provide corroborative evidence of his wage at the time of injury, which is the subject of the second assignment of error. Arguments not raised in an administrative forum will not be considered on judicial review unless they concern errors apparent on the face of the record. Kessler v. Board of Parole, 145 Or App 584, 590, 931 P2d 801 (1997). We therefore turn to insurer’s argument that former OAR 436-60-025(5)(j) is inconsistent with our holding in Hadley.

Hadley involved interpretation of the phrase “extended gaps” in former OAR 436-60-025(5)(a),3 which also [429]*429was adopted pursuant to ORS 656.210(2)(c). We reversed the Board’s holding that defined “extended gaps” as a change in the employment relationship. We held that the Board’s interpretation impermissibly added a requirement to OAR 436-60-025(5)(a). Hadley, 144 Or App at 162.

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Cite This Page — Counsel Stack

Bluebook (online)
939 P.2d 1181, 148 Or. App. 424, 1997 Ore. App. LEXIS 760, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-insurance-v-lyda-orctapp-1997.