10.22.2018

Risk Pool Had Authority to Assess Former Member for Capitalization Assessment

On October 17, 2018, the Oregon Court of Appeals held that a risk pool had the authority for its assessment of a former member.  In Capital Credit & Collection Serv., Inc. v. Kerr Contractors, Inc., 294 Or App 486 (2018), a workers’ compensation risk pool assessed current and former members in response to the state raising capitalization requirements.  A former member (the “Member”) refused to pay the assessment, contending that the risk pool did not have the authority on two grounds.  First, the Member contended that, under the terms of the pooling agreement, the risk pool’s authority to assess former members was limited to two situations, neither of which was involved:  payments to injured workers; and payments to the Workers’ Compensation Division.  The Oregon Court of Appeal rejected the contention, finding that the assessment authority was broader.  Second, the pooling agreement permitted assessments for former members as follows:  “You are assessable while this agreement is in effect and for three years following its termination.”   (Emphasis added).  Focusing on the word “termination,” the Member contended that it was not subject to the assessment because its participation had been “cancelled” rather than “terminated.”  The court rejected the argument, finding that the pooling agreement used the two words interchangeably.

 

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Posted by Geoff Bedell