2006 UT 58
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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Florida Asset Financing
No. 20040802
Corporation, a Florida corporation,
Petitioner,
v.
Utah Labor Commission; Employers'
Reinsurance Fund; and Robert W.
F I L E D
Williams, an individual,
Respondents.
September 29, 2006
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Third District, Salt Lake
The Honorable Dennis Frederick
No. 040920270
Attorneys: Mark R. Gaylord, Craig H. Howe, Matthew L. Moncur,
Salt Lake City, for petitioner
Alan Hennebold, Salt Lake City, for respondents
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On Certiorari to the Utah Court of Appeals
DURHAM, Chief Justice:
INTRODUCTION
¶1
In this case, Petitioner Florida Asset Financing
Corporation (Florida Asset) seeks to force Respondent Utah Labor
Commission (the Commission) to send disability compensation
payments owed to Robert W. Williams (Williams) to a trust
established by Williams and in which Florida Asset holds a
beneficial interest. We accepted certiorari to address the
proper interpretation and application of section 34A-2-422 of the
Utah Code (section 422), which governs disability compensation
payments. We hold that section 422 does not prohibit an employee
entitled to disability compensation payments from requesting that
the Commission direct his or her payments to a trust in which a
third-party creditor is the beneficiary. However, if the
employee asks the Commission to redirect the disability

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compensation payments to him or her, the Commission must comply
because section 422 requires that the Commission pay only the
employee. Accordingly, a third-party creditor cannot compel the
Commission to direct an employee's payments against the
employee's wishes.
BACKGROUND
¶2
In 1990, Williams was injured in an accident during the
course of his employment as a truck driver, suffering serious
injuries to his head, back, shoulders, and knees. In 1994, the
Commission awarded Williams permanent disability benefits, which
entitled him to receive monthly disability compensation payments
for the rest of his life or until otherwise determined by the
Commission.
¶3
In 1995, Williams took a series of steps toward
obtaining a loan from Florida Asset. Williams first created the
Robert W. Williams Irrevocable Trust (the Trust). He then sent
an "Irrevocable Letter of Direction" to the Commission requesting
that the Commission send his disability compensation payments
directly to the Trust. An employee of the Commission signed the
Irrevocable Letter of Direction and drafted a document stating
that the Commission would honor Williams' request. Williams also
signed a promissory note in favor of Florida Asset in exchange
for a loan of $68,706.06. To secure the note, Williams signed a
security agreement assigning his beneficial interest in the Trust
and the Irrevocable Letter of Direction to Florida Asset. The
terms of the note required Williams to pay back the loan in
monthly installments until April of 2012.1 The Commission
asserts-­and the record appears to support-­that the sum of the
monthly payments would equal $236,624.78. Finally, Williams
stipulated to a "Consent Final Judgment" (First Florida Judgment)
filed in the Alachua County Florida Circuit Court that required
him to specifically perform in accordance with the Irrevocable
Letter of Direction until he paid the note in full.
¶4
Over the next four years, the Commission sent Williams'
compensation payments directly to the Trust. In 1997, Williams
defaulted on the promissory note and the security agreement.2 As
a result, a Florida court entered a "Second Amended Final

1 While the promissory note is not included in the record on
appeal, neither party disputes its existence or content.

2 The record does not discuss the nature of the breach or to
what extent Florida Asset had received funds in the Trust at this
time.
No. 20040802
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Judgment" (Second Florida Judgment) against Williams, ordering
him to pay $216,933.71 then due under the note and $1100 in
attorney fees.3 In 1999, Williams instructed the Commission to
stop paying the Trust and send the payments directly to him. The
Commission followed Williams' instructions. Florida Asset then
sought to enforce the First and Second Florida Judgments by
filing suit in Utah in the Fifth Judicial District Court of
Washington County. Williams did not appear at the scheduled
court hearings, and the court issued a bench warrant for his
arrest. Subsequently, Williams was arrested and incarcerated for
contempt. The court ultimately ordered Williams to sign a letter
directing the Commission to send his compensation payments to the
Trust.
¶5
Florida Asset presented the court-ordered letter to the
Commission. The Commission, however, refused to redirect
Williams' payments to the Trust because Williams had since filed
for bankruptcy and a statutorily imposed automatic stay was in
place. In August of 2001, Florida Asset received an order
granting relief from the automatic stay from the bankruptcy
court, and it again presented the court-ordered letter to the
Commission. The Commission notified Florida Asset that it would
comply with Williams' directions and send his payments to the
Trust, but that it would not do so until December of 2001 because
it had given Williams a six-month advance on his compensation
payments. However, in November of 2001 the Commission notified
Florida Asset that Williams had once again directed the
Commission to send his payments directly to him and that the
Commission intended to honor his request.
¶6
In July of 2002, Florida Asset filed an action against
Williams and the Commission in the Third Judicial District Court
of Salt Lake County. In its complaint, Florida Asset asserted
claims for breach of contract, promissory estoppel, and
enforcement of its security interest. Williams did not respond
to the complaint, and the court entered a default judgment
against him. With respect to the Commission, the court granted
Florida Asset's motion for partial summary judgment and ordered
the Commission to send Williams' benefit payments to the Trust.
¶7
The Commission appealed the district court's judgment
to the Utah Court of Appeals. The court of appeals reversed,
holding that Florida Asset could not force the Commission to pay
the Trust. Fla. Asset Fin. Corp. v. Utah Labor Comm'n, 2004 UT
App 273, ¶¶ 24-25, 98 P.3d 436. The court of appeals noted that

3 While the Second Florida Judgment is likewise not included
in the record, neither party disputes its existence or content.
3
No. 20040802

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section 422 does not specifically prohibit the assignment of
compensation benefits. Id. ¶ 14. However, the court held that
the Commission must follow Williams' instructions regarding his
disability compensation payments because section 422 directs the
Commission to make payments only to the employee entitled to
them. Id. ¶ 23. Therefore, the court concluded that Florida
Asset could not force the Commission to direct Williams' payments
to the Trust, but must instead proceed against Williams directly.
Id. ¶ 24. We accepted certiorari to review the court of appeals'
decision, which we now affirm. We have jurisdiction pursuant to
Utah Code section 78-2-2(3)(a) (2002).
STANDARD OF REVIEW
¶8
"On certiorari, we review the decision of the court of
appeals, not the trial court." John Holmes Constr., Inc. v. R.A.
McKell Excavating, Inc., 2005 UT 83, ¶ 6, 131 P.3d 199 (citing
Salt Lake County v. Metro W. Ready Mix, Inc., 2004 UT 23, ¶ 11,
89 P.3d 155). As the decision of the court of appeals rests on
questions of statutory interpretation, we review it for
correctness, affording no deference to the court of appeals'
legal conclusions. R.A. McKell Excavating, Inc. v. Wells Fargo
Bank, N.A., 2004 UT 48, ¶ 7, 100 P.3d 1159 (citing Stephens v.
Bonneville Travel, Inc., 935 P.2d 518, 519 (Utah 1997)).
ANALYSIS
¶9
We granted certiorari in this case to consider two
issues: (1) whether section 34A-2-422 of the Utah Code
proscribes payments to a trust employed to facilitate an
assignment of those payments to a creditor, and (2) whether the
Labor Commission may be obligated to direct payments to a trust
for subsequent transfer to a creditor. The resolution of both
issues turns on the proper interpretation of Utah Code section
34A-2-422 (2001). Section 422 states that "[c]ompensation before
payment shall be exempt from all claims of creditors, and from
attachment or execution, and shall be paid only to employees or
their dependents."4 Id. Under our established rules of
statutory construction, we look first to the plain meaning of the
pertinent language in interpreting this section; only if the

4 Section 422 was amended in 2004 to include the language
"except as provided in Sections 26-19-5 and 34A-2-417." These
two sections address the recovery of medical assistance from
third parties under the Medical Benefits Recovery Act. Utah Code
Ann. §§ 26-19-1 to -196 (1988 and Supp. 2006). Because these
sections are not at issue in this case, the amended language does
not affect our analysis.
No. 20040802
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language is ambiguous do we consider other sources for its
meaning. See J. Pochynok Co. v. Smedsrud, 2005 UT 39, ¶ 15, 116
P.3d 353 (citing Stephens v. Bonneville Travel, 935 P.2d 518, 520
(Utah 1997)). Moreover, we interpret the plain language of this
section "in harmony with other statutes in the same chapter and
related chapters." Mountain Ranch Estates v. Utah State Tax
Comm'n, 2004 UT 86, ¶ 11, 100 P.3d 1206 (quoting Miller v.
Weaver, 2003 UT 12, ¶ 17, 66 P.3d 592). Our overall goal "is to
give effect to the legislative intent, as evidenced by the
[statute's] plain language, in light of the purpose the statute
was meant to achieve." Foutz v. City of S. Jordan, 2004 UT 75,
¶ 11, 100 P.3d 1171 (quoting State v. Burns, 2000 UT 56, ¶ 25, 4
P.3d 795). With these rules in mind, we consider the first
issue.
¶10
Section 422 does not, on its face, prohibit a trust
arrangement designed to facilitate the assignment of disability
compensation benefits to a creditor, such as the arrangement at
issue here. Rather, section 422 merely prevents creditors from
claiming a right to an employee's compensation payments before
those payments are made to the employee by forbidding creditors
to attach or execute on these payments. The plain meaning of
this language indicates that section 422 is designed to prevent
creditors from garnishing an employee's compensation payments.5
However, nothing in section 422 prevents an employee entitled to
compensation payments from asking the Commission to send the
payments to a trust. In such a situation, the employee is merely
exercising the right to control the disposition of the payments.
This type of arrangement does not run counter to the plain
meaning of section 422 because the payments are, pursuant to the
employee's directions, being "paid only to employees." Id.
Moreover, this conclusion does not change if the employee then

5 We note that the legislature has further evidenced this
protective attitude by passing the Structured Settlement
Protection Act contained in Utah Code sections 78-59-101 to -108
(2002). See, e.g., Utah Code Ann. § 78-59-104 ("Direct or
indirect transfer of structured settlement payment rights may not
be effective and a structured settlement obligor or annuity
issuer may not be required to make any payment directly or
indirectly to any transferee of structured settlement payment
rights unless the transfer has been approved in advance in a
final court order."). This protective attitude is also reflected
in a Utah Labor Commission administrative rule providing "[a]ny
entity issuing compensation checks or drafts must make those
checks/drafts payable directly to the injured worker and must
mail them directly to the last known mailing address of the
injured worker." Utah Admin. Code r. 612-1-6(A) (2006).
5
No. 20040802

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assigns the beneficial interest in the trust to a creditor
because the creditor is a third party to the relationship between
the employee and the Commission. The creditor receives
compensation after payment to the employee and not "compensation
before payment." Id. (emphasis added). The employee still
retains beneficial use and control of the payments, and has
simply chosen to assign the payments after receipt, to a
creditor. Thus, we conclude that the plain meaning of section
422 does not prohibit employees entitled to disability
compensation payments from requesting that the Commission send
their payments to a trust and then assigning these trust benefits
to a creditor.
¶11
Our conclusion is bolstered by the case law of states
with similar statutes. Although many states have chosen to
specifically prohibit the assignment of compensation benefits,6
Utah is one of a few states that does not. See also N.M. Stat.
§ 52-1-52A (2003) ("Compensation benefits shall be exempt from
claims of creditors and from any attachment, garnishment or
execution and shall be paid only to such worker or his personal
representative."); Ohio Rev. Code Ann. § 4123.67 (2001)
("[C]ompensation before payment shall be exempt from all claims
of creditors and from any attachment or execution, and shall be
paid only to the employees or their dependents."). Courts in
states with similar statutes have upheld the assignment of
compensation benefits based on the absence of statutory language
specifically prohibiting assignments. See, e.g., Romero v. Earl,
810 P.2d 808, 811 (N.M. 1991) (holding that an injured worker's
assignment of compensation proceeds to a doctor was enforceable
because the New Mexico statute did not specifically address
assignments). Similarly, section 422 prohibits the attachment
and execution of compensation benefits but does not specifically
prohibit assignments. We therefore decline to read a prohibition
of assignments into section 422 when the plain language and

6 See, e.g., Ariz. Rev. Stat. Ann. § 23-1068 (Supp. 2005)
("Compensation, whether determined or not, is not, prior to the
delivery of the warrant therefor, assignable."); Cal. Lab. Code
§ 4900 (West 2003) ("No claim for compensation . . . is
assignable before payment . . . ."); Fla. Stat. Ann. § 440.22
(West 2005) ("No assignment, release, or commutation of
compensation or benefits due or payable . . . shall be valid
. . . ."); Ky. Rev. Stat. Ann. § 342.180 (LexisNexis 2005) ("No
claim for compensation under this chapter shall be assignable
. . . ."); Nev. Rev. Stat. § 616C.205 (2000) ("[C]ompensation
payable or paid . . . whether determined or due, or not, is not,
before the issuance and delivery of the check, assignable
. . . .").
No. 20040802
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apparent purpose indicates that the legislature did not intend to
include such a prohibition.7 Accordingly, our holding with
respect to the first issue on certiorari is that Williams was
free to request that the Commission send his disability
compensation payments to the Trust and to assign his beneficial
interest in the Trust to Florida Asset.
¶12
Implicit in our holding on the first issue is the plain
language of section 422 which requires that the Commission pay
disability compensation benefits "only to employees." Utah Code
Ann. § 34A-2-422. This language likewise governs our holding on
the second issue, whether Florida Asset can compel the Commission
to continue sending Williams' disability compensation to the
Trust. While the Commission may send an employee's benefit
payments to a trust when so directed by the employee, it does not
follow that the Commission can be forced to send payments to a
trust against the wishes of the employee. Such a result would be
counter to the plain meaning and purpose of section 422. It
would effectively allow third-party creditors to circumvent the
statute, thereby receiving disability compensation payments
intended for the employee before they are paid to the employee.8
Moreover, the plain language of section 422 places only one
responsibility on the Commission: to pay the employee. The
result that Florida Asset seeks is clearly outside the
Commission's powers.9 Thus, we agree with the court of appeals
that the Commission must direct the compensation payments
according to the employee's directions because
[a]ny other result places the Commission in
an untenable position of trying to determine
the validity of an assignment or agreement
made by the worker, and forces the Commission

7 Of course, if the Utah Legislature wishes to prohibit
arrangements such as that at issue here, an amendment to the
statutes could easily accomplish that purpose.

8 Florida Asset contends that paying the Trust is equivalent
to paying Williams because Williams voluntarily signed the
irrevocable letter of direction. However, according to the plain
language of the statute, paying the Trust is not paying Williams
if Williams, the sole person to whom the Commission owes a
statutory obligation, directs otherwise.

9 "No outside agreement or even court order can give a
compensation board power to order payment of [workers'
compensation] benefits to anyone but the persons specified in the
statute." 4 Larson's Workers' Compensation Law § 89.07 (2005).
7
No. 20040802

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to discern the legitimacy of a third party's
claim to the benefits. This is contrary to
the plain language of section 34A-2-422 and
the public policy embodied therein.
Fla. Asset, 2004 UT App 273, ¶ 23. Therefore, it is clear that a
creditor cannot compel the Commission to direct an employee's
disability compensation payments to a trust for subsequent
transfer to the creditor; the Commission's only statutory
obligation is to the employee entitled to payment.
¶13
In summary, we hold that section 422 does not prohibit
Williams from requesting that the Commission send his disability
compensation payments to the Trust, even if he has chosen to
assign his beneficial interest in the Trust to a creditor like
Florida Asset. Such an arrangement does not violate the plain
meaning or purpose of section 422; the Commission is, in effect,
still paying Williams, and Florida Asset is receiving the funds
only after payment to Williams. However, the Commission cannot
be forced to continue paying the Trust if Williams has asked to
be paid otherwise since the Commission's only statutory
obligation is to pay Williams. Accordingly, Florida Asset cannot
enforce its arrangement with Williams against the Commission.
¶14
Of course, Florida Asset is not without recourse in
this matter. The proper remedy for an aggrieved assignee or
creditor is to bring suit against the defaulting assignor or
employee rather than against the Commission. If Williams has
breached an assignment contract with Florida Asset, Florida Asset
has a contract remedy against Williams; however, this is in no
way relevant to the Commission's statutory obligation. Further,
if there is a court order directing Williams to have his payments
sent to Florida Asset, Williams runs the risks attendant upon
noncompliance. Nevertheless, the Commission cannot be bound to
do anything other than what the statute requires, which is to
send the payments according to Williams' directions. The
Commission has no contractual relationship with Florida Asset,
and thus Florida Asset has no recourse against the Commission.
We therefore uphold the decision of the court of appeals that the
proper remedy in this case is for Florida Asset to enforce its
several judgments against Williams directly. Id. ¶ 24.
CONCLUSION
¶15
Utah Code section 34A-2-422 is clear and unambiguous on
its face; it requires the Commission to pay Williams' disability
benefits to him. Williams was free to direct the Commission to
pay him by paying the Trust. However, the Commission was
statutorily obligated to stop paying the Trust and send Williams'
No. 20040802
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payments directly to him when he requested it to do so.
Accordingly, Florida Asset's only remedy is to enforce its
contractual rights and court judgments against Williams directly.
The decision of the court of appeals is affirmed.
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¶16
Associate Chief Justice Wilkins, Justice Durrant, and
Justice Parrish concur in Chief Justice Durham's opinion.
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NEHRING, Justice, dissenting:
¶17
I agree with half of the majority's opinion. Section
34A-2-422 of the Utah Code (2005) (section 422) permits
Mr. Williams to direct payments from the labor commission to his
trust. I disagree, however, with its ultimate conclusion that
section 422 forbids employees, like Mr. Williams, to give up the
right to change their minds about the direction of their
payments.1 I find nothing in the language of section 422 that
suggests that an employee's control of payments should be
restricted in this way.
¶18
The majority reasons that section 422 allows an
employee to direct payments to a trust because the decision to do
so is a manifestation of the employee's right to "control" the
disposition of payments. I am not persuaded, however, that
section 422 bars employees from exercising their control over the
direction of payments to a trust in the form of an irrevocable
decision. A persuasive analytical rationale for prohibiting an
employee from making an irrevocable choice to direct payments to
a trust might be crafted, but not with the concept of employee
"control" at its core.

1 I understand that the majority opinion does not explicitly
say that an employee cannot direct funds in perpetuity through an
irrevocable letter of direction. Rather, it concludes that a
third-party beneficiary cannot enforce such a letter. This
distinction is functionally irrelevant because the practical
effect of forbidding the beneficiary of an irrevocable letter of
direction to enforce that agreement is identical to not allowing
the employee to bind himself. Either way, the beneficiary loses
its benefit. This is so because were we to conclude, as I
believe we should, that such an irrevocable letter would be valid
and enforceable, the labor commission would presumably honor it,
and any dispute would necessarily arise between the employee and
the commission or the employee and the third-party beneficiary.
9
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¶19
The conceptual flaw in the majority analysis is exposed
in one key sentence of the opinion. In it, the majority proposes
that "[w]hile the Commission may send an employee's benefit
payments to a trust when so directed by the employee, it does not
follow that the Commission can be forced to send payments to a
trust against the wishes of the employee." Supra ¶ 12 (emphasis
in original). I have no quarrel with this proposition as an
abstraction. It is, however, a proposition of dubious
application to this case. This is so because its conclusion--
that the Commission cannot be forced to direct payments against
the wishes of Mr. Williams--is wholly dependent on the unproven
assumption that Mr. Williams' wishes were not conclusively
expressed in his Irrevocable Letter of Direction. Were the
Commission to act against Mr. Williams' wishes, it would deny him
the control over the direction of his proceeds guaranteed by
section 422. Left unanswered in the majority's analysis is the
question of why Mr. Williams' execution of the Irrevocable Letter
of Direction is a lesser manifestation of his right to control
the direction of proceeds than his later renunciation of the
Letter. If a satisfactory answer to this question exists, I do
not believe it can be found in the plain language of section 422.
¶20
An important aspect of control is the ability to bind
oneself. If, at the time a continuous future stream of
compensation is guaranteed to the employee, he is told that he is
free to direct the payments as he sees fit, but that he cannot do
so irrevocably, then the employee's beneficial use and control
has been restricted. There may be good reasons why the
legislature may wish to limit an employee's choices concerning
the post-receipt disposition of compensation proceeds. The
protections afforded periodic payments in the Structured
Settlement Protection Act, Utah Code Ann. §§ 78-59-101 to -108
(2002), is one example of how additional safeguards against
creditors can be accomplished. Such restrictions on the
employee's range of choices concerning the fate of compensation
proceeds should, in my view, actually appear in unambiguous
statutory language. Try as I might, I am unable to discover them
in section 422.
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No. 20040802
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