FREDENBURG v. MENTAL HEALTH DIV., 107 Or. App. 425 (1991)

812 P.2d 432

Dwight FREDENBURG, Stephen Davison, Richard Allen and Dorris Derrick, Appellants, v. MENTAL HEALTH DIVISION, Respondent.

89C-11042, 89C-11086, 89C-11087, 89C-11088; CA A64530Oregon Court of Appeals.Petition for reconsideration filed April 17, 1991 Reconsideration denied August 14, 1991
Petition for review allowed September 24, 1991

Appeal from Circuit Court, Marion County.

Albin W. Norblad, Judge.

Robert C. Joondeph, Portland, for petition.

Before Warren, Presiding Judge, and Riggs and Edmonds, Judges.

Page 426

EDMONDS, J.

Petition for reconsideration allowed; opinion modified and adhered to as modified.

Page 427

EDMONDS, J.

Appellants have petitioned for review of our opinion. 106 Or. App. 337, 807 P.2d 812 (1991). We treat the petition as one for reconsideration, ORAP 9.15(1), allow it, modify our opinion and adhere to it.

Appellants assert that we erred in holding that Division’s consideration of their Social Security benefits did not violate 42 U.S.C. § 407(a).[1] They argue that we improperly relied on the present version of ORS 179.653, rather than on the version that was in effect on the date of the administrative orders relevant to this case.

Division’s orders were issued May 12, 1989, when ORS 179.653
provided:

“If any person at a state institution or the estate of the person refuses to pay for the cost of that person as ordered by the division under ORS 179.640, the amount unpaid and interest thereon shall be a lien in favor of the State of Oregon upon the property and rights to the property, whether real or personal, belonging to the person. The lien shall arise as each payment is due under the order and shall continue until the liability with interest is satisfied.”

On June 13, 1989, that provision was amended to provide, in part:

“(1) If any person or authorized representative refuses to pay for the cost of care as ordered by the division under ORS 179.640, the amount unpaid plus interest shall be a lien in favor of the State of Oregon. The lien shall arise as each payment is due under the order and shall continue until the liability with interest is satisfied. * * *
“(2) * * * [T]he lien shall only be valid against:

“* * * * *

“(c) Assets subject to lien held by any person or entity having actual knowledge of the ability-to-pay order or the lien.” Or Laws 1989, ch 348, § 4. (Emphasis supplied.)

Page 428

Our opinion improperly relied on the amended version of ORS 179.653. Nonetheless, we conclude that Division did not violate 42 U.S.C. § 407(a) when it considered petitioners’ Social Security benefits in calculating their ability to pay for care. As we said:

“Because Social Security benefits are exempt from ‘execution, levy, attachment, garnishment or other legal process’ under 42 U.S.C. § 407(a), they cannot be the subject of a lien under ORS 179.653. It follows that the consideration of petitioners’ Social Security benefits in determining their liability for the cost of their care cannot have the effect of transferring or assigning the benefits to Division.” 106 Or App at 342.

The same reasoning applies under the applicable version of ORS 179.653.

Petition for reconsideration allowed; opinion modified and adhered to as modified.

Page 429