171 Or. App. 65 14 P.3d 624

Argued and submitted March 17,

affirmed November 15, 2000

In the Matter of the Compensation of Rhonda M. Sparks, Claimant. LIBERTY NORTHWEST INSURANCE CORPORATION and Westwood Swinerton Construction, Petitioners, v. Rhonda M. SPARKS; Johnston and Culberson, Inc.; Denali Drywall; and Department of Consumer and Business Services, Respondents.

(98-04517 and 98-02823; CA A105068)

14 P3d 624

*66David O. Wilson argued the cause and filed the brief for petitioners.

Judy C. Lucas, Assistant Attorney General, argued the cause for respondents Johnston and Culberson, Inc., and Oregon Department of Consumer and Business Services. With her on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

No appearance for respondents Rhonda M. Sparks and Denali Drywall.

Before Edmonds, Presiding Judge, and Armstrong and Kistler, Judges.

KISTLER, J.

*67KISTLER, J.

Claimant suffered a compensable injury while working at a construction site. The Workers’ Compensation Board ruled that the general contractor, not the subcontractor that employed claimant, was responsible for providing coverage for her injury. The general contractor petitions for review of the Board’s order. We affirm.

Petitioner Westwood Swinerton was the general contractor on a construction project. It entered into a subcontract with Denali Drywall. As part of the subcontracting agreement, Denali promised to provide appropriate insurance certificates before beginning work on the project. Denali provided petitioner with two certificates for workers’ compensation insurance — one with SAIF Corporation, effective from April 1, 1996, to March 31, 1997, and one with Affordable Insurance Concepts, Inc., which showed coverage effective from March 31,1997, to March 31,1998.

Contrary to its certification, Denali did not have workers’ compensation insurance after March 31, 1997. Work on the project began on April 22, 1997. Claimant suffered a compensable injury while working for Denali on July 16,1997.

The Workers’ Compensation Board ruled that petitioner was responsible for claimant’s coverage under ORS 656.029(1).1 That subsection provides that a general contractor is “responsible for providing workers’ compensation insurance coverage for all [nonexempt] individuals * * * who perform labor under the contract unless the person to whom *68the contract is awarded provides such coverage for those individuals before labor under the contract commences.” The Board determined that, because Denali’s coverage ended before work began, responsibility for coverage remained with petitioner under ORS 656.029(1).

Petitioner does not dispute that it remains responsible for providing coverage for claimant unless Denali had “provide[d workers’ compensation coverage to its employees] before labor under the contract commence[d].” ORS 656.029(1); K-Mart Corp. v. Claussing, 162 Or App 558, 561, 986 P2d 1185 (1999). Petitioner, however, advances two reasons why Denali came within the statutory exception and thus relieved it of responsibility for providing claimant’s coverage. Petitioner argues initially that the word “provide” can mean “certify” as well as “supply” and that Denali certified that it had workers’ compensations insurance when it entered into the subcontract. Petitioner argues alternatively that, even if provide means supply, Denali supplied coverage before work began. Petitioner reasons that Denali had coverage in place when it entered into the subcontract even though the coverage lapsed before work started on the project.

The text of the statute does not support petitioner’s first argument. The text uses the same verb form twice in the same sentence; it states that the general contractor is responsible for “providing” workers’ compensation coverage unless the subcontractor “provides” that coverage. If petitioner were correct that a subcontractor’s certification is sufficient to comply with the requirement of providing coverage, then the same rule would presumably apply to the general contractor as well. See PGE v. Bureau of Labor and Industries, 317 Or 606, 611, 859 P2d 1143 (1993). Both the general contractor and the subcontractor could provide coverage merely by certifying that each had coverage regardless of whether either actually had it. Petitioner’s interpretation would defeat the purpose of the statute, which is to ensure that either the general contractor or the subcontractor has workers’ compensation coverage in force when the workers actually begin work on the job.2

*69ORS 656.029(1) is part of a larger statutory scheme that seeks to ensure that workers are, in fact, covered by workers’ compensation insurance. See ORS 656.017(1). The rule has been that general contractors are responsible for providing coverage to all persons working under the contract. See Wood v. Dunn, 109 Or App 204, 211, 818 P2d 979 (1991). The current version of ORS 656.029(1) carves out an exception to that general rule: Unless a subcontractor provides coverage for its own employees when the work on the project begins, the general contractor remains responsible for ensuring coverage of the subcontractor’s employees.3 As we have previously explained, if the general contractor wishes to rely on the subcontractor to provide coverage, “the burden is on the [general contractor] to make sure that the [subcontractor] provides coverage.” Id. The text of ORS 656.029(1) and its larger statutory context establish that “provide” means “supply” rather than “certify.”4

Petitioner’s second argument is a variation on its first. It argues that because the statute requires only that *70Denali provide coverage “before labor under the contract commences,” it is sufficient that Denali had coverage in force when it entered into the subcontract even though the coverage lapsed before work began. Petitioner’s interpretation of the word “before” suffers from the same problem as its interpretation of word “provide.” It overlooks the contextual goal of providing coverage. Whether the subcontractor’s employees are covered at some other point in time or for other jobs is not relevant under this statute. The legislature’s use of the word “before” does not excuse the general contractor from responsibility if the subcontractor’s coverage lapses before work under the contract begins.

Affirmed.

Liberty Northwest Insurance v. Sparks
171 Or. App. 65 14 P.3d 624

Case Details

Name
Liberty Northwest Insurance v. Sparks
Decision Date
Nov 15, 2000
Citations

171 Or. App. 65

14 P.3d 624

Jurisdiction
Oregon

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