Stoltz v. Liberty Northwest Insurance Corp.

393 P.3d 239, 284 Or. App. 575, 2017 Ore. App. LEXIS 430
CourtCourt of Appeals of Oregon
DecidedMarch 29, 2017
Docket1300021H; A155701
StatusPublished
Cited by2 cases

This text of 393 P.3d 239 (Stoltz v. Liberty Northwest Insurance Corp.) 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
Stoltz v. Liberty Northwest Insurance Corp., 393 P.3d 239, 284 Or. App. 575, 2017 Ore. App. LEXIS 430 (Or. Ct. App. 2017).

Opinion

ORTEGA, P. J.

In this workers’ compensation case, claimant seeks judicial review of a final order by the Director of the Department of Consumer and Business Services (DCBS) denying claimant’s request for attorney fees and penalties against insurer, Liberty Northwest (Liberty). Claimant sought sanctions after Liberty failed to timely deliver payment on his workers’ compensation claim, which had been settled under a claim disposition agreement (CDA). Liberty contends, as it did below, that claimant is not entitled to attorney fees and penalties because he waived his right to them under ORS 656.236(l)(a) and the terms of the CDA.1 Reviewing the final order for legal error, Rash v. McKinstry Co., 331 Or 665, 667, 20 P3d 197 (2001), we affirm.

The relevant facts are mostly procedural and undisputed. In 2011, claimant suffered a compensable injury, which was settled through a CDA. Under the terms of that agreement, claimant was to receive a lump sum of $154,875, payment of which was to be “made no later than the fourteenth day after the [Workers’ Compensation] Board mails notice of its approval of the agreement to the parties [.] ” The board approved the CDA on January 9, 2013. Claimant did not receive the funds until February 7, 2013, several days after the 14-day deadline.

As a result, claimant sought penalties against Liberty under ORS 656.262(ll)(a) for “failure to timely pay settlement proceeds.”2 The sanctions unit of the Workers’ Compensation Division declined to impose penalties on Liberty under that statute, finding that Liberty did not unreasonably delay payment.

Claimant then sought a hearing on the matter before an administrative law judge (ALJ). At the hearing, [577]*577Liberty asserted two arguments as to why attorney fees and penalties were not warranted. First, Liberty argued that claimant had waived his right to seek penalties under the terms of the CDA. Second, Liberty contended that it had not delayed payment. The ALJ rejected both arguments, concluding, in part, that claimant had not waived his right to seek penalties because a CDA only waives future benefits (i.e., temporary and permanent disability, vocational benefits, and medical services), not benefits related to payment of the CDA itself. Further, the ALJ concluded that Liberty unreasonably failed to timely pay claimant’s settlement award. Accordingly, the ALJ awarded attorney fees and penalties.

Liberty, in turn, requested that DCBS review the ALJ’s order. The director reversed the order, concluding that, under ORS 656.236(l)(a) and the CDA, claimant had waived his right to request attorney fees and penalties for a delayed payment. In the final order, the director relied on ORS 656.236(l)(a) and the Supreme Court’s interpretation of that statute in Rash to conclude that, as a matter of law, “a CDA waives all rights, other than to medical services, unless those rights are expressly reserved.” Further, the director determined that, in this case, the CDA did not include language allowing claimant to retain the right to obtain attorney fees and penalties. The director did not determine whether the delay in payment of funds was reasonable.

On judicial review of the director’s final order, claimant argues that the director erred by concluding that claimant “released his rights to hold [Liberty] liable for a penalty and attorney fee[s] for late payment of the compensation due under the CDA” where “[Liberty] failed to pay the compensation which formed the consideration of that settlement agreement [.] ” He raises several arguments challenging the director’s conclusion. First, claimant contends that ORS 656.236, the statute that governs CDAs generally, is silent about whether the right to enforce a CDA is waived through that same agreement. Claimant suggests that, under the workers’ compensation statutory scheme, a CDA cannot be read as waiving the right to attorney fees and penalties because those are the only mechanisms for [578]*578enforcing the terms of a CDA.3 Second, claimant argues that, under contract principles, claimant did not waive his right to enforce the terms of the CDA because Liberty failed to fully perform under the terms of the agreement. On that point, he argues that, because Liberty did not make a timely payment, waiver of his right to fees and sanctions was not “triggered.” That is, claimant contends that he “is not considered to have released his rights to complain about the late payment, when [Liberty] * * * breached the agreement by untimely payment.” Finally, in claimant’s view, if attorney fees and penalties are not allowed in this case, then he and others similarly situated have no way of enforcing prompt payment under a CDA.

For its part, Liberty contends that, under ORS 656.236(l)(a) and Rash, the director properly concluded that claimant had waived his right to demand penalties and attorney fees under the CDA. In particular, Liberty argues that, under ORS 656.236(l)(a), a CDA waives or resolves all matters that could arise out of a claim, not just those currently known to arise out of the claim. Accordingly, Liberty suggests that, because claimant’s request for sanctions and attorney fees arose out of the very claim that was resolved in the CDA, that request is waived by the CDA. Further, Liberty contends that, under the CDA, claimant may still complain about a late payment; he is only precluded from collecting attorney fees and penalties.

At the outset, we reject claimant’s second argument based on contract principles—that, due to Liberty’s failure to fully perform the terms of the CDA by not making timely payment, waiver of the right to attorney fees and penalties was not triggered—because it is unpreserved. Although the issue of waiver was litigated below, claimant’s argument based on the effect of Liberty’s alleged breach of the CDA on claimant’s release of his right to attorney fees and penalties was not. Because neither the ALJ nor the director had an opportunity consider those arguments, we do not address [579]*579them. See Thomas Creek Lumber v. Board of Forestry, 188 Or App 10, 30, 69 P3d 1238 (2003) (“[Preservation requirements apply not only to appeals of trial court judgments but also to petitions for judicial review of agency action.”); Sheridan v. Johnson Creek Market, 149 Or App 44, 48, 941 P2d 1063 (1997) (“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”).

Thus, we focus our discussion on the issue of whether the director erred by concluding that claimant waived his right to seek attorney fees and penalties by settling his claim through a CDA. In doing so, we examine ORS

Related

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400 P.3d 1012 (Court of Appeals of Oregon, 2017)
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391 P.3d 914 (Court of Appeals of Oregon, 2017)

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Bluebook (online)
393 P.3d 239, 284 Or. App. 575, 2017 Ore. App. LEXIS 430, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stoltz-v-liberty-northwest-insurance-corp-orctapp-2017.