337
Argued and submitted February 25, affirmed October 21, 2020,
petition for review allowed March 4, 2021 (367 Or 668)
See later issue Oregon Reports
In the Matter of the Compensation of
Carl S. Ward, Claimant.
SAIF CORPORATION
and Robert S. Murray,
Petitioners,
v.
Carl S. WARD,
Respondent.
Workers’ Compensation Board
1703591; A171025
477 P3d 429
Petitioners seek judicial review of a final order of the Workers’ Compensation
Board in which the board concluded that claimant, a driver for a for-hire carrier,
was a subject worker of that carrier under the Workers’ Compensation Act, ORS
chapter 656. Petitioners argue on appeal that ORS 656.027(15), which provides
an exemption from the requirement that employers provide workers’ compensation coverage, applies when a for-hire carrier leases equipment to a driver for the
sole purpose of furnishing, maintaining, and operating that equipment in the
service of the carrier. Held: ORS 656.027(15) requires an ownership or leasehold
interest that is separate from and in addition to the furnishing, maintaining,
and operating of the equipment. Thus, the interest must be, at minimum, an
interest that would allow the lessee sufficient authority over the equipment to
possess and use that equipment in some way other than furnishing, maintaining,
and operating it in service of the lessor. The lease agreement in this case did not
convey such an interest. Accordingly, the board did not err when it found that
claimant was a subject worker.
Affirmed.
David L. Runner argued the cause for petitioners. On the
briefs was Julie Masters.
Craig T. Miller argued the cause and filed the brief for
respondent.
Before Lagesen, Presiding Judge, and Powers, Judge, and
Kamins, Judge.
KAMINS, J.
Affirmed.
338 SAIF v. Ward
KAMINS, J.
This workers’ compensation case presents the question of whether a truck driver (claimant) who sustained injuries while driving a truck that he leased from a trucking
company for the sole purpose of driving for that company
is a “subject worker” such that the company must provide
workers’ compensation insurance coverage for his injuries.
Petitioners, SAIF Corporation (SAIF) and Robert S. Murray,
the owner of Bob Murray Trucking (BMT), a for-hire carrier,
seek review of a final order by the Workers’ Compensation
Board in which the board concluded that claimant, a driver
for BMT, was a subject worker of BMT under the Workers’
Compensation Act, ORS chapter 656. For the reasons
described below, we affirm the board’s order.
We review the board’s order pursuant to ORS
656.298(7)1 and ORS 183.482(8).2 Akins v. SAIF, 286 Or App
70, 71,
398 P3d 463, rev den,
362 Or 94 (2017). Accordingly,
we review the board’s order for legal error, and we state the
facts in accordance with the board’s factual findings, which
adopted the earlier findings of an administrative law judge
(ALJ) and are not disputed.
Claimant worked as a truck driver for BMT between
May and August 2016. BMT is a for-hire carrier in the
business of hauling wood, steel, and general commodities.
1
ORS 656.298(7) provides, “The review [of an order of the Workers’
Compensation Board] by the Court of Appeals shall be on the entire record forwarded by the board. Review shall be as provided in ORS 183.482(7) and (8).”
In relevant part, ORS 183.482(7) provides that the “[r]eview of a contested case
shall be confined to the record, and the court shall not substitute its judgment for
that of the agency as to any issue of fact or agency discretion.”
2
ORS 183.482(8) provides, in relevant part:
“(a) The court may affirm, reverse or remand the order. If the court finds
that the agency has erroneously interpreted a provision of law and that a
correct interpretation compels a particular action, the court shall:
“(A) Set aside or modify the order; or
“(B) Remand the case to the agency for further action under a correct
interpretation of the provision of law.
“…
“(c) The court shall set aside or remand the order if the court finds that
the order is not supported by substantial evidence in the record. Substantial
evidence exists to support a finding of fact when the record, viewed as a
whole, would permit a reasonable person to make that finding.”
Cite as 307 Or App 337 (2020) 339
In order to begin driving for BMT, claimant leased a tractor truck from BMT and signed an “Operator Lease/
Independent Contractor Agreement” that allowed claimant
to drive the truck solely for BMT. The agreement provided
that claimant “has not acquired, nor will [he] acquire by this
acceptance of the Lease Agreement, any proprietary right,
security interests or equity in the lease vehicle.” Under the
agreement, lease payments, occupational insurance fees,
and maintenance fees were deducted from claimant’s paychecks.3 Claimant was compensated at a rate of 37 cents per
mile. Claimant also signed an acknowledgment of receipt
of a BMT “Driver’s Manual,” which included safety rules,
rules of personal conduct and dress, and restrictions, including a prohibition on carrying passengers without BMT’s
permission.
BMT required that claimant drive prescribed routes
and monitored his progress, inquiring with him if he deviated from his route or made an unscheduled stop at a rest
stop. BMT paid for, among others, the following expenses for
the truck: liability insurance; fuel; and equipment, including a radio, tools, flashlight, camera, and fire extinguisher.
BMT placed its logo on the truck to “identify the equipment
as being in [BMT’s] service” and prohibited claimant from
placing his own signage on it. For the duration of the lease,
claimant was entitled to use the vehicle “only in interstate
trucking in the United States on behalf of [BMT] ….” BMT
also reserved the right to “disqualify any driver provided
by [claimant] who is determined to be unsafe by [BMT] in
[BMT]’s sole discretion.”
Claimant suffered severe injuries while hauling a
load when he had braking difficulties that caused his truck
to flip over. SAIF denied his claim for injuries, relying on
ORS 656.027(15), which provides that a claimant “who
has an ownership or leasehold interest in equipment and
who furnishes, maintains and operates [it]” is not a subject worker. SAIF concluded that, because claimant had a
leasehold interest in the truck and furnished, maintained,
3
The lease payments and insurance fees were required under the agreement; the maintenance fees were part of BMT’s incentivized in-house service
plan.
340 SAIF v. Ward
and operated it, he was not a subject worker under the statute. An ALJ agreed with SAIF’s contention and upheld the
denial. The Worker’s Compensation Board reversed, determining that claimant was not able to “furnish” his truck
to BMT because he did not have a transferable interest in
it, and claimant was therefore a subject worker under ORS
656.027(15).
On judicial review, the parties present competing
arguments about what ORS 656.027(15) means. The legislature’s intended meaning of ORS 656.027(15) and whether
claimant is a subject worker of BMT is an issue of statutory construction. In resolving that question, we consider
the text, context, and any helpful legislative history of the
statute, 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.” State v. Gaines, 346 Or 160, 171,
206 P3d 1042
(2009) (internal quotation marks and citations omitted).
Generally, “all workers” are subject workers unless
an exemption applies. ORS 656.027. The exemption contained in ORS 656.027(15) has two requirements: (1) the
worker must have “an ownership or leasehold interest in
equipment,” and (2) the worker must “furnish[ ], maintain[ ],
and operate[ ]” that equipment. The statute’s conjunctive
structure suggests that those two requirements are separate and independent from each other—that is, that the
ownership or leasehold interest in the equipment must be
in some way distinct from the furnishing, maintaining, and
operating of that equipment. See Crystal Communications,
Inc. v. Dept. of Rev., 353 Or 300, 311,
297 P3d 1256 (2013)
(“As a general rule, we construe a statute in a manner that
gives effect, if possible, to all its provisions.”); 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.”).
Thus, the resolution of this case requires us to
determine the meaning of each of the requirements of ORS
656.027(15), keeping in mind that they mean different
things. Because there is no dispute that claimant “operates”
and “maintains” the truck, the critical terms are “leasehold
Cite as 307 Or App 337 (2020) 341
interest” 4 and “furnish.” In order to be a nonsubject worker,
claimant must both “furnish” the truck and have a “leasehold interest.”
The parties here provide competing interpretations
of those requirements. Both parties focus their arguments
on the meaning of the term “furnish.” Claimant contends
that “furnish” means that a driver must have a transferable
interest in the equipment in order to furnish it. Petitioners,
in turn, argue that “the equipment is furnished when it
is made available to haul the loads dispatched by the carrier, and no transferable interest is required.” As explained
below, the definition of furnish, by itself, does not resolve the
inquiry, but rather must be construed in conjunction with
the “leasehold interest.”
Although “furnish” is not defined in Oregon chapter
656, there is no indication in the applicable or surrounding
provisions that the legislature intended that term to have
any meaning other than its ordinary one. “Furnish” is used
in ORS 656.027(15) as a transitive verb, so the most relevant
definition is “to provide or supply with what is needed, useful,
or desirable: EQUIP[.]” Webster’s Third New Int’l Dictionary
923 (unabridged ed 2002); see State v. Glushko, 351 Or 297,
311,
266 P3d 50 (2011) (“[W]hen consulting dictionaries for
the ordinary meanings of statutory terms, it is important to
examine the definition of the part of speech actually used in
the statute at issue.”). According to the plain meaning of the
term, then, a driver “furnishes” equipment for the purposes
of ORS 656.027(15) by providing or supplying that equipment to a for-hire carrier. There is no dispute that the driver
here provides or supplies equipment to BMT (the truck that
BMT already supplied to him) for purposes of hauling loads.
However, our inquiry does not end there.
The term “leasehold interest” is also not defined
generally in chapter 656. See ORS 656.005. Because “leasehold interest” is a term of art in secured transactions, we
look to the specialized meaning it has in the relevant field.
See Comcast Corp. v. Dept. of Rev., 356 Or 282, 296,
337
P3d 768 (2014) (We determine the meaning of a term of art
4
There is no contention that claimant has an “ownership interest” in the
truck he leased from BMT.
342 SAIF v. Ward
that is drawn from a specialized field “based on how [the
term is] used and understood in the specialized field, trade,
or profession, and using sources that best accord with the
legislature’s intent.”). We have previously considered where
to look to define terms relating to leasing of trucks. In Delta
Logistics, Inc. v. Employment Dept. Tax Section, 279 Or App
498, 507,
379 P3d 783 (2016), aff’d,
361 Or 821,
401 P3d 779
(2017), we were tasked with determining the meaning of
“lease” in the context of a for-hire carrier’s contention that
it was not the “employer” of its owner-operator truck drivers
for the purposes of unemployment insurance taxes under
ORS 657.047, another statute that did not provide a specific
definition. The Employment Department argued that ORS
72A.1020 and ORS 72A.1030(1)5 direct us to use the Uniform
Commercial Code (UCC) definition of “lease” for any transaction that creates a lease unless “context requires otherwise.”
The carrier argued that context did in fact require otherwise,
because federal and state regulations specific to the trucking industry contained their own definitions. Ultimately, we
concluded that it did not matter which definition we used,
because the definitions were consistent with one another.
Id. at 508.
The UCC definition provides that a “leasehold interest” is “the interest of the lessor or the lessee under a lease
contract,” and a “lease” is “a transfer of the right to possession and use of goods for a term in return for consideration.”
ORS 72A.1030(1)(j), (m). Trucking-industry-specific regulations provide that a leasehold interest confers upon the
lessee “the right to exclusive possession, use, and control of
the leased vehicle.” Delta Logistics, Inc., 279 Or App at 508
(internal quotation marks omitted). As was the case in Delta
Logistics, Inc., any difference between those definitions is
5
ORS 72A.1020 provides: “This chapter applies to any transaction, regardless of form, that creates a lease.”
ORS 72A.1030(1)(j) provides:
“As used in this chapter, unless the context otherwise requires:
“…
“ ‘Lease’ means a transfer of the right to possession and use of goods for
a term in return for consideration, but a sale, including a sale on approval or
a sale or return, or retention or creation of a security interest is not a lease.
Unless the context clearly indicates otherwise, ‘lease’ includes a sublease.”
Cite as 307 Or App 337 (2020) 343
immaterial here. Under either definition, a leasehold interest, at a minimum, means that the claimant must have the
“right to possession and use.” 6
So, under 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, and 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.
Accordingly, we conclude that the exemption under ORS
656.027(15) requires a leasehold interest that exceeds the
right to furnish the equipment to the carrier such that the
driver has a right to possess, use, and control the equipment
for purposes other than providing it to the carrier.
Read the way that petitioners suggest, the statutory
requirement that a driver “furnish” the equipment would be
subsumed into the “leasehold interest.” Petitioners contend
that “leasehold interest” means that claimant has the right
to use the truck and “furnish” means that claimant can
supply the truck to BMT for the purpose of hauling goods.
However, the lease here creates an interest so limited that it
allows claimant only to furnish the truck to BMT and does
not allow any other use. That interpretation is not in line
6
The legislature did provide a specific definition of “leasehold interest” with
respect to another exemption from subject worker status, ORS 656.027(28), which
creates an exemption for taxicab and nonemergency medical transport drivers.
However, that provision provides definitions of “lease” and “leasehold” that are
particular to the way those terms are “used in [that] subsection.” Specifically,
that subsection defines a “lease” as “a contract under which the lessor provides a
vehicle to a lessee for consideration,” and a “ ‘leasehold’ includes, but is not limited
to, a lease for a shift or a longer period.” ORS 656.027(28)(a), (b). The legislative
history indicates that those definitions were included in that subsection because
the “stakeholders wanted to make some clarifications” about the “unique contractual relationships” between cab companies and “owner-drivers of taxicabs.”
Audio Recording, House Committee on Business and Labor, SB 688, May 30,
2007, at 1:17:48 (comments of Theresa Van Winkle, Committee Administrator,
and Chris Davie, SAIF Corporation), https://olis.leg.state.or.us (accessed Aug 25,
2020).
344 SAIF v. Ward
with either the conjunctive nature of the statute itself—the
person must have an ownership or leasehold interest in and
furnish the equipment—or our general rule of construction
that, unless there is evidence of legislative intent to the contrary, we give effect to every provision of a statute. When,
as here, the right to possession and control conferred by the
lease is solely the right to use the equipment in service of the
carrier, the leasehold interest is not sufficiently separate to
meet the language of the exemption under ORS 656.027(15).
The legislative history further clarifies that the
legislature intended the leasehold interest to exceed that
of merely being able to furnish the equipment. A committee summary of the bill enacting the exemption describes
its effect as adding “[e]quipment owner/operators (who own
and operate equipment for hire)” to the category of nonsubject workers. Testimony, House Committee on Labor, HB
2820, May 30, 1977, Ex A (statement of Rep Bill Markham).
The original exemption added to the category of nonsubject
workers “[a] person who engages in transportation by motor
vehicles of logs, poles and piling and who both furnishes and
maintains the vehicle used in such transportation.” (Then
ORS 656.027(11)). That original wording of the exemption
indicates that the legislature contemplated the exemption to
apply to an arrangement in which drivers arrive with their
own equipment and furnish that equipment to transport
goods for a for-hire carrier.
The exemption was later amended to expand the
types of applicable vehicles. At a hearing in the House
Committee on Labor discussing a potential expansion to
backhoes and other similar equipment, Jack Kalinoski, representing the Association of General Contractors, testified:
“The 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, 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. When asked if the inclusion
of that equipment “might open the door for construction
Cite as 307 Or App 337 (2020) 345
companies to lease a backhoe to an employe[e], Mr. Kalinoski
replied that he “did not feel this would happen but if it did
his association would be the first to say the statute was
being abused.” Here, BMT is leasing its truck to claimant
in order to qualify for an exemption meant for drivers who
bring their own trucks. That is indistinguishable from the
“abuse” of the statute identified in the legislative hearing.
Our conclusion in this case is consistent with our
analysis of a similarly worded provision in chapter 657,
addressing whether an employment relationship exists subjecting employers to unemployment insurance coverage.
That statute exempts from “employment” a situation where
a person “(1) leases their equipment to a for-hire carrier;
(2) performs transportation services for that for-hire carrier; and (3) personally operates, furnishes and maintains
the equipment.” 3P Delivery, Inc. v. Employment Dept. Tax
Section, 254 Or App 180, 183,
295 P3d 83 (2012) (citing ORS
657.047(1)(b)).7
In 3P Delivery, Inc., we analyzed a similar effort
by the for-hire carrier to escape the responsibilities of an
employment relationship. There, the for-hire carrier leased
its trucks to drivers who then leased those same trucks back
to the for-hire carrier to satisfy that exemption’s requirement that a driver “lease” their own equipment to the carrier. We concluded that that deal between the driver and the
for-hire carrier did not meet the requirements for exemption from employment under ORS 657.047 because, given
the “interrelationship of the [independent contractor agreement, lease agreement, and for-hire carrier’s practices], it
is evident that the lease/lease-back arrangement provides
a paper trail of transactions designed to fulfill the requirement for exemption under ORS 657.047, without a practical basis in fact.” 254 Or App at 189. Despite being “called
7
ORS 657.047 provides, in relevant part, that
“(1) As used in this chapter, ‘employment’ does not include:
“…
“(b) Transportation performed by motor vehicle for a for-hire carrier by
any person that leases their equipment to a for-hire carrier and that personally operates, furnishes and maintains the equipment and provides service
thereto.”
346 SAIF v. Ward
a ‘lease,’ ” the arrangement did not “create[ ] an interest in
the vehicle that the driver could lease back to the vehicle’s
owner.” Id. The relationship between the drivers and the for-hire carriers gave the drivers no authority over the vehicles “other than the authority to drive the vehicles for [the
for-hire carrier] while the drivers were in compliance with
the [independent contractor agreement].”
Id. Thus, the drivers had no interest that would allow them to lease back or
“furnish” the vehicle to the for-hire carrier. Id.; see also May
Trucking Co. v. Employment Dept.,
279 Or App 530, 539,
379
P3d 602 (2016), rev den,
364 Or 680 (2019) (concluding that
a lease that did not give the driver any transferable interest
in the equipment and prohibited the driver from using the
leased equipment in service of any other carrier did not create the requisite interest to comply with ORS 657.047(1)(b)).8
Like the “lease” in 3P Delivery, Inc., the lease agreement here is too limited to convey an interest sufficient to
meet the requirements of the statutory exemption. Although
the agreement in this case states that claimant “shall have
exclusive possession, control and use of the equipment for
the duration of” the lease, that statement is belied by the
practical considerations of the many restrictions that BMT
placed on claimant’s use of the vehicle, including prescribing routes, requiring that claimant make the vehicle available for inspections and follow BMT’s maintenance directives, and requiring claimant to place signage on the vehicle
identifying it as being in BMT’s service. Indeed, the lease
agreement explicitly required claimant “to use the leased
vehicle only in interstate trucking in the United States on
behalf of [BMT] ….” Similarly, the Driver’s Manual outlined several additional restrictions, such as safety rules,
personal conduct rules, vehicle cleanliness standards, and
prohibitions against carrying passengers without permission. Taken as a whole, despite being called a “lease,” the
agreement between claimant and BMT did not confer any
interest in the leased vehicle beyond the authority to use it
8
Petitioners correctly note that the “furnishing” described in 3P Delivery,
Inc., leasing the truck back to the carrier, is different from the “furnishing” at
issue here, supplying the truck for use. However, the question in both cases is the
same: whether the lease agreement conveyed a sufficient interest to allow the
type of furnishing required by the applicable statute, and we find the reasoning
of 3P Delivery, Inc. instructive.
Cite as 307 Or App 337 (2020) 347
in BMT’s service and under BMT’s direction: the only right
of use and possession conferred by the lease was the right to
furnish the equipment to BMT.
It is clear from the legislative history and the conjunctive nature of the statute—applying to “[a] person who
has an ownership or leasehold interest in equipment and
who furnishes, maintains and operates the equipment”
(emphasis added)—that the statute requires an ownership
or leasehold interest that is separate from and in addition
to the furnishing, maintaining, and operating of the equipment. The interest described in ORS 656.027(15) must be, at
minimum, an interest that would allow the lessee sufficient
authority over the equipment to possess and use that equipment in some way other than furnishing, maintaining, and
operating it in service of the lessor. Here, the lease agreement between BMT and claimant did not convey such an
interest. Accordingly, the board did not err when it found
that claimant was a subject worker.9
Affirmed.
9
Petitioners also contend that the board erred by “characterizing the lease
between claimant and [BMT] as ‘leased and leased-back.’ ” In response, claimant argues that, even if the board erred in that characterization, “the issue of
whether claimant leased his truck back to the employer is not determinative in
this case.” We agree with claimant that the issue of whether the lease is a one-way agreement or a lease-and-lease-back agreement is not dispositive. Because
we conclude that the board correctly determined that the relationship between
claimant and BMT did not satisfy the requirements of the exemption under ORS
656.027(15), even when considered as a one-way lease agreement, we do not further address petitioners’ second assignment of error.
