S057190, Opinion — Liberty Northwest Ins. Corp., Inc. v. Watkins

687
Argued and submitted November 2, 2009, decision of Court of Appeals reversed;
order of Director of Department of Consumer and Business Services affirmed
February 19, 2010
LIBERTY NORTHWEST INSURANCE
CORPORATION, INC.,
and Western Cedar, Inc.,
Respondents on Review,
v.
JohnL. WATKINS,
Respondent,
and
DEPARTMENT OF CONSUMER
AND BUSINESS SERVICES,
Petitioner on Review.
(0500147H; CAA134305; SC S057190)
227P3d1134

688 	Liberty Northwest Ins. Corp., Inc. v. Watkins
En Banc
On review from the Court of Appeals.*
Judy C. Lucas, Senior Assistant Attorney General, Salem,
argued the cause for petitioner on review. With her on the
petition were Erika L. Hadlock, Acting Solicitor General, and
John R. Kroger, Attorney General. With her on the brief were
Jerome Li dz, Solicitor General, and John R. Kroger, Attorney
General.
David 0. Wilson, Johnson Nyburg & Andersen, Eugene,
argued the cause and filed the brief for respondent on review.
DE MUNIZ, C. J.
The decision of the Court of Appeals is reversed. The order
of the Director of the Department of Consumer and Business
Services is affirmed.
* On judicial review from final order of the Department of Consumer and
Business Services. 224 Or App 599, 198 P3d 960 (2008).

Cite as 347 Or 687 (2010) 	689
DE MUNIZ, C. J.
In this workers' compensation case, the Department
of Consumer and Business Services (department) petitions
for review of a Court of Appeals decision reversing and
remanding a final order by the Director of the Department of
Consumer and Business Services (director) that awarded
attorney fees to claimant's attorney stemming from proceed-
ings brought by claimant to resolve a medical services dis-
pute. Liberty Northwest Ins. Corp., Inc. v. Watkins, 224 Or
App 599, 198 P3d 960 (2008). The Court of Appeals concluded
that the director's award of attorney fees was improper,
because a claim disposition agreement (CDA) previously
agreed to by claimant and insurer included a release of claim-
ant's right to attorney fees. For the reasons that follow, we
reverse the decision of the Court of Appeals and affirm the
final order of the director awarding attorney fees.
We take the facts from the record, the final order,
and the Court of Appeals opinion. On June 13, 2000, claimant
suffered a compensable back injury resulting in partial paral-
ysis of his lower extremities; he was later determined to be
permanently 	wheelchair 	dependant. 	In 	February 	2001,
claimant and insurer entered into a CDA pursuant to ORS
656.236, set out post at 347 Or at 691-92. In exchange for
monetary compensation specified in the CDA, 	claimant
released
"all rights to all workers' compensation benefits allowed by
law, including temporary disability, permanent disability,
vocational rehabilitation, aggravation rights to reopen
claim, attorney fees, penalties, and survivor's benefits
potentially arising out of this claim, and any subsequent
claim for new medical conditions, except for medical
services***."
(Emphasis in original.) In addition, the CDA provided check-
boxes to indicate whether, for each category of benefits, the
release would be a "full" or "partial" release. For each cate-
gory, including a category entitled "Penalties and Attorney
Fees," the checkbox indicating a full release was marked. The
CDA also stated that the CDA did not "limit [claimant's] stat-
utory medical rights pursuant to ORS 656.245" 1 and that
1 ORS 656.245 relates to medical services and provides, in part, that for every
compensable injury, employers are responsible for providing medical services
"caused in material part" by the injury.

690 	Liberty Northwest Ins. Corp., Inc. v. Watkins
claimant "retain[ed] his right to medical services[.]" The
Workers' Compensation Board (board) later approved the
CDA.
In January 2005, claimant, with the assistance of
counsel, requested administrative review of insurer's refusal
to provide him with a wheelchair-accessible van. The medical
review unit (MRU) found that a van was reasonable and
appropriate for claimant's condition and subsequently issued
an order that required insurer to purchase the wheelchair-
accessible van and to pay a fee to claimant's attorney pur-
suant to the mandatory attorney fee 	provision in ORS
656.385(1), set out post at 694. Insurer filed a request for a
contested case hearing with the department. The sole issue
at the hearing was the portion of the order awarding attorney
fees. In November 2006, the department issued an order
affirming the award of attorney fees, and insurer sought judi-
cial review in the Court of Appeals.
The Court of Appeals reversed and remanded, con-
cluding that ORS 656.236(1)(a) provides a default rule to the
effect that, unless otherwise specified, a CDA resolves all
rights pertaining to a claimant's entitlement to attorney fees,
including attorney fees that could potentially arise out of a
medical services dispute, and that the terms of a CDA control
whether attorney fees may be awarded. The court reasoned
that any right that claimant may have asserted to attorney
fees was resolved by the CDA, which applied to "all rights to
attorney fees that could potentially arise out of the claim."
Liberty Northwest Ins. Corp., Inc., 224 Or App at 612 (empha-
sis in original).
As noted, 	the department petitioned for review,
asserting that the CDA entered into in this case did not and
could not release claimant's right to an attorney fee in a
future medical services dispute. We allowed review to deter-
mine whether, through a CDA entered into in accordance
with ORS 656.236, a claimant may release the right to attor-
ney fees that are derivative of a successful medical services
claim.
We begin with a brief summary of the statutory
scheme applicable to medical services. ORS 656.245(1)(a)

Cite as 34 7 Or 687 (2010) 	691
and (b) entitle an injured worker to medical services for con-
ditions caused in material part by a compensable injury, and
require the insurer to provide those medical services for the
life of the worker. ORS 656.245(6) provides that, when a
claim for medical services is denied, an injured worker may
request administrative review by the director. In turn, ORS
656.327(1)(a) provides that, when an injured worker, insurer,
self-insured employer, or the director believes that a pro-
posed medical service is excessive, inappropriate, ineffectual,
or in violation of rules regarding the performance of medical
services, the dissatisfied party must request administrative
review by the director before requesting a contested case
hearing on the issue.
Here, claimant prevailed after a contested case hear-
ing involving a dispute over medical services, and the direc-
tor awarded attorney fees to claimant's attorney. However,
as noted, the Court of Appeals reversed the award of attorney
fees, concluding that the CDA, entered in accordance with
ORS 656.236, unambiguously released claimant's right to all
attorney fees potentially arising from any claim, including a
medical services claim, and that those contractual terms
should 	be 	enforced. 	In our view, 	the 	determination 	of
whether a claimant may release his or her right to attorney
fees that derive from a successful medical services claim in a
CDA depends on the legislature's intent expressed in ORS
656.236. We turn to that statute.
ORS 656.236 provides, in part:
"(l)(a) 	The parties to a claim, by agreement, may
make such disposition of any or all matters regarding a
claim, except for medical services, as the parties consider
reasonable, subject to such terms and conditions as the
Workers' Compensation Board may prescribe.*** Unless
otherwise specified, a disposition resolves all matters and
all rights to compensation, attorney fees and penalties
potentially arising out of claims, except medical services,
regardless of the conditions stated in the agreement.
"* * * * *
"(7) 	* * * Insurers or self-insured employers may be
joined as parties in subsequent proceedings under this
chapter to determine responsibility for medical services for

692 	Liberty Northwest Ins. Corp., Inc. v. Watkins
claim conditions for which disposition is made by an
approved claim disposition agreement, but no order in any
subsequent proceedings may alter the obligations of an
insurer or self-insured employer set forth in an approved
claims disposition agreement, except as those obligations
concern medical services."
(Emphases added.) We begin our analysis with the text
and context of the statute. PGE v. Bureau of Labor and
Industries, 317 Or 606, 610-11, 859 P2d 1143 (1993). As part
of that first level of analysis, this court considers its prior
interpretations of the statute. See State v. Toevs, 327 Or 525,
532, 964 P2d 1007 (1998) (so stating).
This court most recently interpreted and applied
ORS 656.236 in Rash v. McKinstry Co., 331 Or 665, 20 P3d
197 (2001). In that case, a worker was injured and, after he
began a tort action against a third party involved in the cause
of the injuries, the insurer and the worker entered into a
CDA. The CDA did not expressly preserve the insurer's lien
rights against any recovery that the worker might receive in
the tort action. However, after the worker settled with the
third party, the insurer sought to recover from the settlement
the amount that it had paid on the claimant's claim. Id. at
667. The board determined that the insurer's statutory lien
rights survived the parties' CDA. On review, this court first
noted that the lien at issue was not an "attorney fee" or a
"penalty." The court then determined that the words "to com-
pensation," as used in the phrase "a disposition resolves
all 	matters 	and 	all 	rights 	to 	compensation" 	in 	ORS
656.236(1)(a), qualifies only the word "rights," and not the
word "matters." Rash, 331 Or at 671. The court also deter-
mined that the phrase "all rights to compensation" relates
only to a worker's right to benefits, and that the plain and
unambiguous meaning of the word "all" is "every." Id. at 672.
The court stated that "the relevant wording []:'all matters
* * * potentially arising out of claims,' " meant that a CDA
resolves all matters that, in the future, could arise out of a
claim. Id. at 673. The court therefore concluded that "an
insurer's lien against a claimant's third-party recovery is a
'matter[] * * * potentially arising out of claims' within the
meaning of ORS 656.236(1)(a)" and thus was extinguished by
the CDA. Id. at 673.

Cite as 347 Or 687 (2010) 	693
Although the court did not examine the meaning of
the phrase "except medical services," the court's conclusions
regarding the legislature's intent are instructive here. As
noted, the court concluded that, in the third sentence of ORS
656.236(1)(a), the words "to compensation" qualified only the
word "rights" and not the word "matters." Thus, the term "all
rights to compensation" is treated separately from "all mat-
ters." Accordingly, that part of the statute should be read "all
rights 	to 	compensation 	* * * 	potentially 	arising 	out 	of
claims." Because the term "all rights to compensation" ("all
rights to compensation, attorney fees and penalties") is fol-
lowed by a comma, the term "attorney fees and penalties"
also qualifies the word "rights," and is properly read as "all
rights to* * *attorney fees and penalties potentially arising
out of claims."
The phrase "except medical services" in the third
sentence in ORS 656.236(1)(a) is set off from the rest of the
sentence by commas, indicating that as a matter of English
that phrase is nonrestrictive; that is, it is not intended to
modify only the immediately preceding noun in the sentence,
which is "claims." See The Chicago Manual of Style § 6.38
(15th ed 2003) (explaining a reading of that kind). The phrase
"except medical services" therefore modifies the phrases "all
matters," and "all rights to compensation * * * potentially
arising out of claims," and "all rights * * * to attorney fees
potentially arising out of claims." Thus, under the statute's
text, a CDA does not resolve a claimant's right to attorney
fees, regardless of the conditions stated in the CDA, when
those fees 	derive 	from a 	subsequent claim for medical
services.
We reach the same conclusion applying the rule of
the last antecedent. In State v. Webb, 324 Or 380, 386, 927
P2d 79 (1996), this court explained that rule as follows:
"Referential and qualifying words and phrases, where
no contrary intention appears, refer solely to the last ante-
cedent. The last antecedent is the last word, phrase, or
clause that can be made an antecedent without impairing
the meaning of the sentence. Thus a proviso usually is con-
strued to apply to the provision or clause immediately pre-
ceding it. * * *

694 	Liberty Northwest Ins. Corp., Inc. v. Watkins
"Evidence that a qualifying phrase is supposed to apply
to all antecedents instead of only to the immediately pre-
ceding one may be found in the fact that it is separated from
the antecedents by a comma."
(Internal quotations omitted.) Here, the phrase "except med-
ical services" is preceded by a comma, indicating that it
applies to all the antecedents. From that sentence structure
we conclude that a claimant cannot dispose of "all matters"
and "all rights to compensation, attorney fees and penalties
potentially arising out of claims" where those matters and
rights involve medical services.
That interpretation is consistent with the legisla-
ture's intent to provide medical services for the life of the
worker, ORS 656.245, and the provision for mandatory attor-
ney fees for claimants that prevail in medical services dis-
putes, ORS 656.385(1). 2 See Davis v. Wasco JED, 286 Or 261,
272, 593 P2d 1152 (1979) ("whenever possible the court
should construe together statutes on the same subject as con-
sistent with and in harmony with each other"). Attorney fees
are derivative of medical services claims, and thus, a success-
ful medical services claim carries with it the right to attorney
fees under ORS 656.385(1). The director's award of attorney
fees to claimant was correct, and the Court of Appeals erred
in concluding otherwise.
The decision of the Court of Appeals is reversed. The
order of the Director of the Department of Consumer and
Business Services is affirmed.
2 As originally enacted in 1995, ORS 656.385(1) required the director to award
a reasonable attorney fee to a prevailing claimant only at the contested case level.
However, in 2003, ORS 656.385(1) was amended to require that the director award
a reasonable attorney fee to a prevailing claimant at any level of review. ORS
656.385(1) currently provides, in part:
"In all cases involving a dispute over compensation benefits pursuant to
ORS 656.245, 656.247, 656.260, 656.327 or 656.340, where a claimant finally
prevails after a proceeding has commenced, the Director of the Department of
Consumer and Business Services or the Administrative Law Judge shall
require the insurer or self-insured employer to pay a reasonable attorney fee to
the claimant's attorney."
(Emphasis added.)