Iowa Workers' Compensation

Court of Appeals Affirms Award of Alternate Medical Care

2012-01-22T17:21:00.000-06:00

In Tomlinson Cannon v. Whited, No. 1-878 (Iowa App. Jan. 19, 2012), the court affirmed a decision of the agency which had concluded that claimant was entitled to alternate medical care. Claimant had originally seen Dr. Neiman for his injuries, and later filed an alternate medical care proceeding to allow him to continue care with Dr. Neiman. During the course of the case, Dr. Neiman recommended that claimant see a podiatrist for a foot injury he had developed. Defendants had earlier indicated that claimant should see another physician, but claimant declined to see that physician. On the alternate medical care proceeding, claimant argued, and the agency held, that since Dr. Neiman was the authorized treating physician, the employer was not entitled to interfere with his recommendations for care. The finding of the agency was consistent with the agency's general rule that the recommendations of the authorized treating physician cannot be contravened by the employer.

Defendants argued on appeal that there was no showing that the care they had authorized was less extensive or inferior than that requested by claimant. Claimant argued that under agency precedent, if any employer failed to follow the recommendation of an authorized treater, this alone was a failure to provide reasonable treatment. Defendants also noted that its referral to its doctor came before Dr. Neiman's referral. The court found that the fact that Dr. Neiman wished to send claimant to a podiatrist rather than a general medicine physician made the timing argument unimportant as the care sought by claimant was more effective. The court affirmed the decision of the agency.

The court did not explicitly affirm the commissioner's practice of noting that defendants cannot interfere with the care recommendations of the authorized treating physician. In a footnote, the court noted that the controlling legal standards are those in the statutes and the decisions of the court, not in the commissioner's decisions. The court did note, however, that the agency could not reverse prior precedent absent credible reasons to indicate a fair and reasonable basis for the inconsistency. Thus, although it would have been helpful to have an explicit affirmance of agency policy, the result of the court's decision is supportive of that policy, and would require the agency to have cogent reasons for changing that policy.

Court Affirms Denial of Review-Reopening Benefits

2012-01-22T16:42:00.000-06:00

In Kremenak v. Steiner Construction, No. 1-875 (Iowa App. Jan. 19, 2012), the court affirmed a commissioner decision finding that claimant had not proven his right to additional benefits in a review-reopening proceeding. The case had previously been remanded for a determination in light of the Kohlhaas case which found that the expectations of the parties (the "contemplation standard") was not a consideration in determining whether review-reopening was appropriate.

The agency concluded that even without the contemplation standard, claimant had failed to prove his case on review-reopening. Claimant appealed, arguing that the decision of the commissioner had simply regurgitated the earlier opinion. The court of appeals found that its earlier decision had not presupposed that simply because there was an error in applying the contemplation standard, the claimant would prevail. The agency considered the evidence and concluded, based on the expert testimony and the claimant's testimony, that claimant had not demonstrated he was entitled to additional benefits. The court of appeals affirmed the denial of benefits.

Court of Appeals Affirms Reversal of Agency Denial of Benefits

2012-01-22T16:26:00.000-06:00

In Cozad v. Russell Corp., No. 1-864 (Iowa App. Jan. 19, 2012), the Court of Appeals issued an interesting decision affirming a decision of the district court, which had reversed the agency action denying benefits. The remarkable aspect of this decision is the fact that Cozad was decided only weeks after the Supreme Court's decision in Pease, in which the court had indicated its reaffirmance of the importance of substantial evidence in workers' compensation cases.

Cozad involved a fairly straightforward back injury, in which the claimant reported an acute injury at work. She had previously had a significant history of back problems, but all of the doctors who opined on the issue of causation found that the injury arose out of and in the course of employment and caused a permanent impairment. The agency found that claimant had suffered only a temporary impairment as a result of the injury. The decision was based on the fact that the doctors who opined on causation were not fully aware of the past history of back problems.

The district court and court of appeals reversed, finding that this was not a battle of the experts as in Pease because there was no expert testimony finding that claimant's injury did not lead to a permanent impairment. The court indicated that if the commissioner rejects uncontroverted medical testimony, he must do so with specificity. The court also noted that it was reluctant to allow the rejection of medical testimony which was the only evidence presented. Although two of the doctors (Boulden and Nelson) gave opinions only as to the possibility of causation, Dr. Palit clearly found that causation and permanency had been established. There was said to be no evidence that Dr. Palit was not aware of the severity of claimant's earlier impairment. Based on these factors, the decision of the commissioner was reversed.

Commissioner Godfrey Files Lawsuit Against Governor for Reduction of Salary

2012-01-22T15:33:00.000-06:00

As previously reported, the Governor reduced Commissioner Godfrey's salary to the lowest level for the position after the commissioner refused to resign, as the Governor had requested. The commissioner had noted at that time that his term was for six years, and was not a political appointment, as are those of so many other government officials. The Governor then reduced the salary based on his assertion that under the commissioner's tenure, Iowa's workers' compensation system had suffered. The commissioner noted that his performance reviews had been exemplary.

On January 11, 2012, the commissioner filed a lawsuit against the governor and the state, alleging that defendants had engaged in defamation, harassment, sexual discrimination and extortion. The documents can be found at http://blogs.desmoinesregister.com/dmr/index.php/2012/01/11/iowa-workers-compensation-commissioner-files-1-million-lawsuit-against-the-state/.

The state tort law claims relate to the manner in which the commissioner was treated in the press, with his job performance being impugned. The extortion claims are based on the fact that the governor's office attempted to force the commissioner to resign by reducing his salary. Also included are claims that the actions taken against the commissioner were based on his sexual orientation, as the commissioner is gay. Defendants generally denied the claims, and alleged in the press that they did not know that the commissioner was gay.

Regardless of the outcome of the lawsuit, the actions that have taken place unnecessarily politicize the workers' compensation system, and make it more difficult to assure that the work of the commissioner's office can be completed as efficiently as could be expected. Had the legislature wished the commissioner's office to be subject to political forces such as these, it would not have made the commissioner's term independent of that of the governor. The commissioner should be applauded for not bowing to pressure and continuing to perform the activities of the office to which he was appointed.

Court of Appeals Affirms Decision Finding Tinnitus Related to Work; Credits Dr. Tyler Over Dr. Hoisington

2012-01-22T15:09:00.000-06:00

The case of Square D Company v. Plagmann,No. 1-869 (Iowa App. Dec. 21, 2011) addressed an issue that does not appear frequently before the appellate courts - the question of tinnitus. In Plagmann, the court concluded that the decision of the deputy commissioner who found that claimant's tinnitus was related to work was supported by substantial evidence.

Dr. Tyler concluded that claimant's work with Square D had resulted in hearing loss and tinnitus, and provided a 4.5% impairment rating. Dr. Tyler also found, incorrectly, that claimant had not worn hearing protection until he had worked with the employer for fourteen years (claimant had testified that even though there was no hearing protection program, he had worn hearing protection). Dr. Hoisington concluded that claimant's hearing loss and tinnitus were not related to his work, in part because his hearing loss continued to worsen after he left work. The deputy who heard the case sided with Dr. Hoisington, but refused to allow a late report submitted by Dr. Hoisington. On appeal, the deputy deciding the case found that Dr. Tyler's experience and credentials were superior to those of Dr. Hoisington, and concluded that claimant's injuries had led to a 10% industrial disability.

On appeal, the employer appealed the finding that hearing loss and tinnitus were related to employment, the extent of disability and the failure to admit Dr. Hoisington's late submitted report. On the main question, the court found that the appeal decision was supported by substantial evidence, notwithstanding the fact that Dr. Hoisington's report may have been based on a more accurate reading of the history. On the extent of disability issue, the court found although claimant had retired from Square D and moved to Florida, he was looking for work there and had not disengaged from the workplace.

On issue of the exclusion of the Hoisington report, it is somewhat unusual that the deputy excluded the report, which was submitted two weeks before the hearing. The experience of most practitioners is that such a report would not have been excluded. Nonetheless, in this case the report was excluded, and the court indicated that there was no abuse of discretion in excluding the report.

Supreme Court Reverses Court of Appeals on Substantial Evidence Issue

2012-01-06T07:32:00.001-06:00

In one of the more detailed discussions of substantial evidence in workers' compensation cases, the Iowa Supreme Court, in Cedar Rapids Community School District v. Pease, No. 09-0724, 2011 WL 6270708 (Iowa Dec. 16, 2011), reversed the decision of the Iowa Court of Appeals that had denied benefits to claimant. Pease is a classic example of the weighing of the medical evidence that the commissioner must do in reaching a conclusion. In Ms. Pease's case, the agency concluded that claimant's claim of altered gait, back injuries, and depression were supported by the evidence, and awarded permanent total disability. The district court affirmed on these issues, but the court of appeals reversed, finding that substantial evidence did not support the findings of the agency.

Ms. Pease's original injury was to her right ankle, and she complained that this injury caused her to have an altered gait, contributing to injuries to her back and left ankle. She also alleged that as a result of these injuries, she suffered from depression. Pease presented testimony from physicians indicating that her back problems had become worse as a result of her ankle injury, that she had developed depression as a result of the injury, and that she was no longer employable. Defendants offered evidence that claimant's injuries were less substantial than claimed, and offered evidence that claimant's depression was not related to the work injury. The psychiatrist who indicated that the depression was not work related also asserted that claimant was malingering. The decision of the court of appeals was based on its belief that the reliance of Dr. Miller, claimant's physician, was misplaced because the history provided by the claimant was flawed, and because surveillance undermined claimant's credibility.

The Supreme Court began its opinion by noting that "our decision is controlled in large part by the deference we afford to decisions of administrative agencies." The court noted that medical causation was a question of fact that was "vested in the discretion of the workers' compensation commission." The court noted that its review of the record was to be "fairly intensive" and indicated that the agency's findings of fact should not simply be rubber stamped. The court then stated that evidence was not insubstantial merely because different conclusions could be drawn from the evidence. Evidence may be substantial even though the court may have drawn a different conclusion from the fact finder. The task of the court is "to determine whether substantial evidence, viewing the record as a whole, supports the findings actually made."

In applying this standard to the facts before them, the court noted that the real issue was the extent to which expert testimony constituted substantial evidence in a workers' compensation case. The court noted that medical causation was "within the domain of expert testimony" and that the "commissioner, as trier of fact, has a duty to weigh the evidence and measure the credibility of witnesses." Although expert opinions are not necessarily binding on the commissioner if based on an incomplete history, the determination of whether to accept or reject such testimony is "within the 'peculiar province' of the commissioner."

The court of appeals had rejected the opinions of Dr. Miller, one of claimant's experts, on the grounds that he miscited another doctor's opinion and relied on a "questionable" history provided by the claimant. The Supreme Court noted that the agency had found claimant's testimony credible and further noted that credibility determinations are within the domain of the commissioner as trier of fact. The court noted that Dr. Miller had not relied solely on claimant's history, but had performed a physical exam and reviewed medical records concerning her case. The court also noted that Dr. Miller's opinion did not change after seeing video surveillance footage.

With respect to video surveillance, the court noted that this evidence was hardly a smoking gun. The court cited to Professor Larson in noting that surveillance evidence "must be used with great caution." The court cited to decisions from other jurisdictions which pointed to the limitations of surveillance evidence, largely based on the fact that it demonstrates only a limited time period of activity, and not the whole of claimant's activity or inactivity. Ultimately, the court again found that since the commissioner had rejected the contention that the surveillance undercut claimant's credibility, substantial evidence supported the conclusions of the commissioner.

The court also affirmed the decision of the agency on substantial evidence grounds relating to allegations of depression. The court noted that there was evidence on both sides of this issue and indicated that the commissioner was free to rely on either party's witness, and the court was "not at liberty to accept contradictory opinions of other experts in order to reject the finding of the commissioner." The court noted that the decision of the commissioner was sufficiently detailed to show the path the agency took through the conflicting evidence, citing Terwilliger and Catalfo.

Other issues were also presented by the parties. The court indicated that the commissioner had performed a de novo review. The court also found that the permanent total disability finding was supported by substantial evidence. The court rejected the argument of the employer that Pease's other injuries prevented her from returning to employment, not her work injuries. This, according to the court, was an attempt to resurrect an apportionment claim which had not been preserved because it had not been raised before the deputy. Finally, the court found that defendants were responsible for payment of certain medical bills.

Although Pease addresses issues of substantial evidence that have been discussed in detail in the past, the court makes clear that in any case in which the question involves a battle of the experts, the decision of the commissioner will be affirmed. Practitioners have long attempted to find a legal issue for the courts to decide so that the court's judgment could be substituted, and Pease will encourage this trend, and hopefully make it less likely that cases that are premised on the facts will not be taken up on judicial review. The discussion of surveillance in the case is must reading for any practitioner who is faced with either attempting to introduce surveillance video or defend against such a video.

Court of Appeal Affirms Denial of Benefits; Refuses to Address Issue of Whether Deputy Acted as an Advocate for Claimant

2011-12-10T16:33:00.000-06:00

In Estness v. Prairie Meadows Racetrack & Casino, No. 1-832 (Iowa App. Dec. 7, 2011), the court agreed with the assessment of the commissioner (per Deputy Walleser) that claimant's shoulder injury was not related. The deputy (Heitland) had initially concluded that the injury was related to repetitious work pushing chairs at Prairie Meadows, and provided a 10% industrial disability finding, but this conclusion was reversed by the commissioner, who found that claimant did not perform any repetitive work for the employer. On review, the commissioner's decision was affirmed by the court of appeals.

The district court affirmed, and addressed a question raised by the employer of whether the deputy's questioning of the claimant and an employer representative violated due process because the deputy allegedly acted as an advocate for the claimant. The court found that the employer's due process rights had not been violated. The Court of Appeals affirmed the decision of the agency on substantial evidence grounds. Because the court affirmed the decision of the agency, it concluded that it was not necessary to address the due process question raised by the employer.

Court of Appeals Refuses to Stay Bad Faith Action Pending Resolution of Workers' Compensation Claim

2011-11-11T16:21:00.000-06:00

In Leliefeld v. Liberty Mutual Ins., No. 1-636 (Iowa App. Nov. 9, 2011), the Court of Appeals affirmed the district court ruling which had declined to stay a bad faith action pending resolution of the underlying workers' compensation case. The district court had held that although it was reasonable to delay a trial in the bad faith claim until the workers' compensation claim had been resolved, there was no reason to stay discovery in the bad faith action. The court noted that Reedy v. White Consolidated Industries, 503 N.W.2d 601 (Iowa 1993) had addressed a similar question, and had concluded that a stay was not always necessary and that the court should follow a discretionary abstention policy that would delay the consideration of the issues by the court. This did not mean, however, that actions that were preliminary to a determination by the court should necessarily be stayed, and the Court of Appeals noted that Reedy had not mandated that a stay be granted or that all proceedings be stayed.

In Leleifeld, the action had already been presented for disposition to the agency, and the discovery granted in the civil case would not affect the workers' compensation action. The district court ruling also assured that trial in the bad faith action would not occur before a decision in the workers' compensation case. On these facts, the court concluded that the district court had not abused its discretion.

Court of Appeals Rejects Gross Negligence Claim

2011-11-10T07:37:00.000-06:00

In another example of how difficult it is to successfully pursue a gross negligence claim, the Court of Appeals affirmed the dismissal of such a claim in Whitacre v. Brown, No. 1-509 (Iowa App. Oct. 19, 2011). Plaintiff had been taught to clean the rollers on a machine in a certain manner, and this same technique for cleaning the machine had been used in the past without incident. A Manual that was in proximity to the machine advised workers not to put their hands by the revolving rolls and not to wipe the rollers while they were turning. The Manual's instructions were contrary to the method in which plaintiff was instructed, in which the rollers were cleaned while they were turning. Mr. Whitacre was injured using the cleaning procedures he had been taught.

Whitacre filed against defendants based on gross negligence, and his claim was dismissed on summary judgment by the district court because he had not demonstrated any of the elements of gross negligence. On appeal, the court noted that a plaintiff must prove "wanton neglect" on the part of the defendants. This standard is "somewhere between mere unreasonable risk of harm in ordinary negligence and intent to harm." According to the court, the "wantonness" standard severely restricted the reach of gross negligence actions. Wantonness involved a "realization of imminent danger" along with "a reckless disregard or lack of concern for the probable consequences of the act." A plaintiff must prove that injury is probable, not merely possible, and also must prove that there was a conscious decision to avoid the peril.

Against these standards, and the history of a lack of injuries while cleaning the machine, the court found that gross negligence had not been established. The court note that in determining the "probable" consequences, the defendants must be aware of an imminent danger to plaintiff, such that plaintiff would more likely than not be injured. Here, the cleaning procedure had been used for 20 years with no injuries. The defendants themselves had used the same procedures without incident. Because injury was not a probable consequence of the actions of plaintiff, gross negligence was not established.

Judge Doyle dissented. He believed that a jury question was presented on the issue of gross negligence, and that the case should not have been dismissed on summary judgment. He discussed the testimony of Whitacre's experts, who had stated that there was clearly a significant hazard involved in cleaning the rollers while they were running. He also found it important that because the rollers were new, they were stickier than they would otherwise have been, and no special precautions were taken or training provided in this circumstance. Although Judge Doyle indicates that the stringent gross negligence standard was something that Whitacre may not have met in any event, he believed that this was a question for the jury and was not appropriate for summary judgment.

Court of Appeals Affirms District Court Opinion Reversing Commissioner and Finding That Claimant Proved a Second Qualifying Loss

2011-10-06T08:37:00.000-05:00

In Buttrey v. Second Injury Fund of Iowa, No. 1-678 (Iowa App. Oct. 5, 2011), the court of appeals affirmed the action of the district court, which had reversed the decision of the commissioner and found that claimant had established a second qualifying injury for second injury fund purposes. The district court had concluded that the commissioner's election to give more weight to one of two competing expert opinions was based on facts that were incorrect and not supported by the record. The district court had specifically found that additional reasons would need to be given for choosing Dr. Reagen's opinion over that of Dr. Koenig.

The court of appeals discusses the facts in the case in some detail, and recites the district court's decision finding that Dr. Koenig had clearly indicated that the second injury was work related, while Dr. Reagen had only found that there was no causation based on a description of claimant's symptoms from defendants' attorney. The court of appeals concluded that although evidence should not be considered insubstantial simply because the court may draw different conclusions from the record, just an expert's opinion is not binding on the commissioner when it is based on an incomplete history, "the commissioner's opinion grounded upon inaccurate facts does not warrant the deference normally accorded." The court appeals affirmed the decision of the district court remanding the case to the agency for further proceedings.

Court of Appeals Affirms Holding that Claimant is Permanently Totally Disabled Under Odd Lot Doctrine

2011-09-28T07:11:00.000-05:00

In Western Provisions v. Betz, No. 1-533 (Iowa App. Sept. 21, 2011), the court of appeals affirmed the decision of the agency that claimant was permanently totally disabled, and that permanent total disability benefits were appropriate under the odd lot doctrine. Claimant was a truck driver who was injured when another vehicle crashed into him. Claimant had neck and back surgery as a result of the work injury. Following these surgeries, an FCE placed him in the "modified medium" work category. Claimant was provided with a 25% impairment rating to the neck and a 21% impairment rating to the back. The restrictions imposed by the treating physician (40 pounds) precluded claimant from performing his former job.

Vocational specialists were hired by both parties. Defendants' expert (Michelle Holtz) did not meet with claimant, and found that he retained the skills and capabilities for jobs paying from $8.00 to $14.50. Claimant's expert (Rick Ostrander) found that claimant had a 100% loss of employability. He noted that entry level positions were significantly problematic for an individual of claimant's age who has a work disability. Ostrander criticized Holtz's report, stating that she did not adequately understand the concept of transferable skills.

The arbitration decision found that claimant was permanently totally disabled. The odd lot finding was added on appeal to the commissioner. Before the court of appeals, defendants argued that the findings of the agency were not supported by substantial evidence. Because there was clearly evidence to support the findings made by the agency, the decision was affirmed on substantial evidence grounds. The court did not specifically address the odd lot doctrine in the decision.

Supreme Court Denies Public Policy Exception to At Will Employment for Employee Who Files Personal Injury Lawsuit Against Employer

2011-09-27T07:20:00.000-05:00

The Iowa Supreme Court declined to create a public policy exception to the general rule of at will employment in Berry v. Liberty Holdings, No. 10-0094 (Iowa Sept. 9, 2011). Berry involved an employee who was injured when a concrete pumper truck struck and injured him while he was on his way home from work. Plaintiff worked for Liberty Holdings and the truck which struck him was owned by Premier. Berry filed suit against Premier and settled the case within the policy limits. Nine months after the settlement, he was fired by Liberty.

Plaintiff alleged that in filing his claim against Premier, he was engaged in a protected activity, and he brought a wrongful termination suit against Liberty. Liberty filed a motion to dismiss, indicating there was no clearly defined public policy right that was violated by the termination. The district court granted the motion to dismiss, but this action was reversed by the court of appeals, and the claim was remanded to the district court.

The court first noted that Iowa was an at will employment state, but that there was a narrow public policy exception to the general rule of at will employment. The court indicated that there must be a clearly defined and well recognized public policy of the state in order to trigger the public policy exception. Berry relied on Iowa's comparative fault statute as the underpinning of a public policy which protected employees from termination when they sought redress from the courts for negligent actions of others. The court seemingly had little difficulty in finding that the comparative fault statute, although it was a comprehensive and far-reaching modification of Iowa's tort laws, was not a statement of public policy protecting employees from discharge when they filed personal injury actions. The court found that the statute regulated private conduct and did not implicate public policy concerns. Based on this conclusion, the dismissal of the action by the district court was reinstated.

Court Reverses Agency Decision Denying Benefits

2011-09-24T08:41:00.000-05:00

Bensley v. Dee Zee, No. 1-638 (Iowa App. Sept. 8, 2011) is a case in which benefits were initially denied to claimant's at the arbitration level, a conclusion that was affirmed on appeal. Claimant alleged elbow and shoulder problems, and in the arbitration decision, the finding was made that claimant had not established how her shoulder injury had occurred, and dismissed that claim. The district court (Judge Rosenberg) reversed, finding that the evidence was "overwhelmingly" in favor of causation.

On appeal to the court of appeals, the decision of the agency is reversed, and the decision of the district court adopted. The employer argued that claimant's injury was preexisting and not caused by claimant's work activities. The court concludes that the issue of causation is largely a determination based on the medical evidence. The court finds it "clear" that the evidence did not support the conclusions made by the commissioner. The court notes that the medical experts reported, "ad nauseam", that the work at Dee Zee was repetitive in nature and resulted in the shoulder problems claimant described. The court found that under Catalfo, the agency failed to explain its rejection of the three medical opinions that supported claimant's contention that her shoulder injury was related to work. The court noted that the employer takes the claimant as they are found, subject to any infirmities that they may have. The decision of the agency was reversed and the claim remanded to the commissioner.

A special concurrence by Judge Vogel notes her concern that the agency provided no specific credibility findings, which may have influenced the decision on appeal. She noted that it was not clear in the decision why the decisions of the doctors, specifically Dr. Neff, were rejected by the commissioner. Had there been a credibility finding and the agency's decision more clearly explained, the result may have been different on appeal.

Court Affirms Permanent Total Disability Award

2011-09-24T08:01:00.000-05:00

In Quaker Oats v. Dobbe, No. 1-536 (Iowa App. Sept. 8, 2011), the court affirms a permanent total disability award. Defendants made three arguments in the case: 1) whether the commissioner applied an erroneous causation standard to the facts; 2) whether the causation findings are supported by substantial evidence; and 3) whether the commissioner's permanent total disability award was supported by substantial evidence. The court finds in favor of the claimant on all of these points. The court specifically finds that the commissioner set forth the correct causation standards and applied those standards appropriately. Permanent total disability benefits were affirmed.

Court Affirms Permanent Total Award

2011-09-24T07:54:00.001-05:00

In Hutton & Co. v. White, No. 1-538 (Iowa App. Aug. 10, 2011), the court, in a one paragraph decision, affirms the award of permanent total disability to claimant.

Court Affirms That Second Dismissal of Case is Without Prejudice

2011-09-24T07:45:00.001-05:00

The court in Wal-Mart v. Henle, No. 1-554 (Iowa App. Aug. 10, 2011) addressed a situation which occurs with some frequency in workers' compensation claims. In Henle, claimant had voluntarily dismissed and then refiled her claim. The case was set for hearing, but by the time of the date set for hearing, permanency had not been determined and claimant requested a continuance. Rather than grant a continuance, the agency dismissed the case, specifically indicating that this dismissal was without prejudice. Defendant argued that under the Iowa Rules of Civil Procedure, the dismissal was with prejudice, and claimant could not refile her claim (which she had done by the time of the decision in the case). The court found that rules 1.943 and 1.946 were applicable to workers' compensation proceedings, as the parties had not argued otherwise.

The court noted that claimant did not file the second motion for dismissal, but that the case had been dismissed by the agency. Recall that the claimant had simply sought a continuance. The court found that under an exception in 1.943, which allowed dismissals without prejudice when in the interests of justice, the second dismissal was without prejudice, and the third action could proceed.

Court of Appeals Affirms Denial of Benefits on Substantial Evidence Grounds

2011-09-24T07:31:00.000-05:00

In Arrowood v. Maytag, No. 1-445 (Iowa App. Aug. 10, 2011), the court affirmed the denial of benefits to claimant in the face of claimant's argument that the agency erred in not considering claimant's testimony. Claimant argued that his injury was work-related, in the face of records from Dr. Boarini and Dr. Thurston that the claim was not related to Mr. Arrowood's work activities. The agency accepted the opinions of Dr. Boarini and Dr. Thurston over that of claimant's doctors and his own testimony. On substantial evidence grounds, the court affirms.

Court of Appeals Criticizes Agency Decision, Remands Case to Agency

2011-08-24T11:04:00.001-05:00

In Beef Products, Inc. v. Rizvic, No. 1-442 (Iowa App. Aug. 24, 2011), the court addressed a situation where the hearing deputy (Seeck) had concluded that claimant had no permanent disability, and the deputy assigned to write the appeal decision (Walshire) had reversed the arbitration decision and provided a 60% industrial award. Claimant alleged a shoulder injury, and Dr. McMains indicated that there was no causation and no permanency, based in part on the alleged inconsistency of pain drawings completed by claimant at the time of the injury and one year later. Dr. Manshadi found causation and a 10% rating.

Although this would seem to bring the case before the court on a substantial evidence standard, the district court concluded that the appeal decision should be reversed because it was "irrational, illogical and wholly unjustifiable." The district court found that the commissioner embellished the significance of a handful of events and ignored relevant evidence in the record. The court found that the deputy lacked objectivity and overstepped his role as an impartial arbiter of facts and became an advocate for claimant's position. The case was remanded to the agency for a determination of whether claimant sustained a permanent impairment as a result of her injury.

An initial issue presented was whether the defendants had preserved error on the issue of whether claimant's injury arose out of and in the course of employment. The district court had premised its opinion on the question of whether there was a permanent impairment, not whether there was an injury attributable to the employment. Because the defendants did not raise this issue, the court found that it was conclusively determined that claimant suffered a work related injury.

On the permanency issue, the district court reversed because of the "flawed methodology" of the appeal decision. The decision rested in large part on the deputy's conclusion that the pain drawings were consistent rather than inconsistent. The Court of Appeals indicated that rather than being a case of flawed methodology, the district court had improperly re-weighed the evidence. The court found that the deputy's conclusions regarding the pain drawings were not indicative of his alleged lack of objectivity. Nonetheless, the court found that the deputy had inaccurately criticized McMains, and also stated that they were "troubled by the commissioner's inaccuracy in the recitation of the facts." The court also finds that the reliance on Dr. Manshadi was misplaced, as he had provided "little to support his finding" of a 10% upper extremity impairment. Ultimately, the court concluded that it could not say that the determination of whether claimant suffered a permanent impairment as a result of her work injury could be established as a matter of law. The case was remanded to the agency for a determination of this issue. The court also found that the permanency decision was unsupported by the record, and thus was "illogical, irrational or wholly unjustifiable."

Judge Sackett concurred specially, and takes the deputy to task for his alleged lack of objectivity. She finds a lack of objectivity in the deputy's interpretation of pain drawings, his finding for the reasons for claimant's termination, and his credibility findings about claimant's supervisor. This opinion specifically notes that there was no medical evidence finding that the pain drawings were consistent, only the deputy's views of this issue. Judge Sackett indicates that Deputy Walshire lost his objectivity in reviewing the case on appeal and went out of his way to find fault with the employer. She agreed with the majority that the decision should be reversed.

The Rizvic case is one of the few cases where a decision of the agency is found to be illogical, irrational or wholly unjustifiable. Although the majority of the court finds that the deputy's objectivity was not compromised, this alleged lack of objectivity colors the entire decision, and the concurring opinion brings this into even sharper focus. The case does not appear to allow the deputy to base his or her decision on past experiences with various players in the system, which may tend to negate the expertise of the agency in adjudicating its cases. The case makes vulnerable those decisions where a deputy has relied on his or experience to reach a conclusion.

Court of Appeal Affirms Decision Against Claimant on Substantial Evidence Grounds

2011-07-25T07:03:00.000-05:00

In Yanouskiy v. O'Holloran Int'l, Inc., No. 1-436 (Iowa App. July 13, 2011), the court concluded that the decision of the commissioner ruling that claimant was entitled to no further benefits was supported by substantial evidence. Claimant alleged arm and back and neck injuries, and was paid temporary and permanent benefits, with the permanency amounting to approximately 15%. At hearing, the deputy found claimant not credible, and indicated that claimant had distorted his restrictions in talking with the doctors. The deputy found, and the commissioner upheld, that claimant was not entitled to further benefits, and that his back and neck injuries were not related to his work. The court of appeals affirmed the decision of the commissioner on substantial evidence grounds.

Court of Appeals Decides Rate Case Favorably to Claimant

2011-07-24T16:16:00.000-05:00

In Mercy Medical Center v. Healy, No. 1-338 (Iowa App. June 29, 2011), the court decided a rate issue concerning the use of paid sick and vacation time. Claimant was hired to work 35 hours a week for Mercy Medical Center in Dubuque, but seldom worked this many hours, due to illnesses and vacations. Under the terms of her employment, she was paid for the vacation and sick time, and the commissioner found that because she was hired to work 35 hours a week, these were her customary hours. The rate was accordingly based on a 35 hour weeks at claimant's rate of pay.

The district court reversed on the rate issue, finding that since claimant never (or seldom) actually worked 35 hours per week, a rate based on these hours of work was not customary. The district court found that the hours "actually worked" were the touchstone for the rate calculation rather than the wages received by the employee.

The court found that the language of section 85.36 (specifically the language that the "weekly earnings" for the "customary hours for the full period") contradicted the district court's finding that the hours actually worked were what should have been considered. The words of the statute do not refer to the hours actually worked, but to the earnings that would have been made had the employee worked the regular hours required by the employer. In this case, that was 35 hours, and accordingly, the rate was appropriately based on this figure. The commissioner's interpretation was found to be consistent with the language of the statute and the spirit of the workers' compensation chapter. The court specifically found that vacation and sick leave payments were not automatically excluded from the rate calculation by the statute. Rather, sick and vacation payments may be excluded if for unrepresentative weeks.

Court of Appeals Affirms Penalty Award, Healing Period Benefits

2011-07-24T09:39:00.000-05:00

In MC&R Pools v. Shea, No. 1-279 (Iowa App. June 15, 2011), the court of appeals affirmed a decision of the commissioner finding that the employer was liable for penalty benefits as well as healing period. Shea involved a claimant who had preexisting conditions, including a 25 pound lifting limit on his activities. He slipped on ice while at work, involving a neck injury and eventual cervical fusion. The treater found that the injury caused an aggravation of Shea's underlying condition, and an medical reviewer concluded that this aggravation was temporary and that Shea had returned to baseline prior to the cervical fusion. The commissioner awarded 40% industrial disability and imposed a penalty on the employer for failure to pay benefits.

On the penalty issue, which involved the failure of the employer to pay any benefits (this issue was based on the penalty law as it existed prior to changes in the law in July of 2009), the court noted that the employer had a continuing duty to reevaluate the claim in light of developing circumstances. The employer argued that the initial opinion of the doctor that this was a temporary aggravation was sufficient to deny penalty. The claimant argued that in light of further developments in the case, including epidural floods, the cervical fusion, and causation opinions from two other doctors (including one hired by defendants), there was a duty to reconsider the denial of benefits.

The court agreed with claimant that under Squealer Feeds v. Pickering, the employer had a continuing duty to act reasonably. Accordingly, the court affirmed the $25,000 penalty (roughly 50% of what was owed) against the employer. The court concluded that after the receipt of the report from Dr. Elkins (defendants' second examiner) there was no objectively reasonable position that would allow the continuing denial of benefits. The court noted that this case was not governed by Blasnitz or Craddock because causation was never an issue in Shea, only the extent of claimant's impairment.

On healing period benefits, the argument was that since claimant's restrictions were actually more than he had prior to the injury (40 versus 25 pounds), that healing period was inappropriate. The court affirmed the award of healing period because the employer had indicated that it had no position available if claimant continued to be under restrictions for bending and twisting, which he was. In light of the fact that the employer did not offer work to the claimant, healing period benefits were appropriate.

Judge Sackett dissented, and would have found that the initial opinion indicating there was a temporary aggravation was enough to support the denial of benefits. Her opinion did not say anything concerning the employer's continuing duty to investigate the case.

Court of Appeals Affirms Two Permanent Total Awards

2011-07-24T09:11:00.000-05:00

In Bethany Lutheran Home v. Boner, No. 1-217 (Iowa App. June 15, 2011) and Swine Graphics Enterprises v. Peterson, No. 1-223 (Iowa App. June 15, 2011), the court of appeals affirmed two agency decisions finding that claimants were permanently and totally disabled. As might be expected, the decisions were premised on the fact that the commissioner's decisions were supported by substantial evidence. Both decisions were summary affirmances, saying little other than that the commissioner's decisions were supported by substantial evidence.

Governor Unilaterally Reduces Commissioner's Salary

2011-07-23T16:56:00.000-05:00

In an action that has been roundly criticized by workers and workers' compensation practitioners, Governor Branstad on July 11 reduced the salary of Chris Godfrey, the workers' compensation commissioner, by over $30,000. This action followed the governor's request that Commissioner Godfrey resign from his office, a request that the commissioner refused.

Unlike department heads in state government, the workers' compensation commissioner does not serve at the pleasure of the governor. In fact, the workers' compensation commissioner was specifically protected from partisan pressure by being provided a six year term of office, independent of that of the governor. The governor's attempt to attempt to force the commissioner to resign by drastically reducing his salary violates both the letter and spirit of the law, and represents a blatant abuse of power.

In the wake of the salary reduction, the governor attempted to argue that Commissioner Godfrey had performance issues on the job, despite the fact that the commissioner's performance reviews had been exemplary. When this argument proved to be unsupported by the evidence, the governor's office sought to tie increased costs in the workers' compensation system (moving from 45th to 36th in terms of costs) to the commissioner's work performance. Of course, this ignored the fact that the largest driver of costs in all workers' compensation systems is medical costs, and the further fact that in Iowa employers control the medical care received by claimants.

Further compounding the politics that was a part of this decision was Governor Branstad's admission during a radio interview that he was asked by the Iowa Association of Business & Industry (ABI) to fire the commissioner. Such an action is particularly inappropriate in light of the fact that the act is to be interpreted liberally in favor of injured workers. No such liberality is to be shown to employers. Although one could assume that the governor, in light of his record, is more likely to favor business interests of the interests of workers, the blatant admission that he was acting at the behest of ABI reflects a lack of balance in overseeing the workers' compensation program.

Commissioner Godfrey has acted courageously in refusing to voluntarily leave his office. Time will tell whether the governor's actions will be reversed.

Court of Appeals Affirms Commissioner's Decision on Costs

2011-06-18T17:06:00.001-05:00

In John Deere Dubuque Works v. Caven, No. 1-286 (Iowa App. 2011), the Court of Appeals interpreted the commissioner's rule on costs, 876 IAC 4.33(6), for the first time. In the underlying decision in Caven, the commissioner concluded that the rule, which allows the hearing deputy, in his or her discretion, to award the "reasonable costs of obtaining no more the two doctors' or practitioners' reports," was not limited to payment of $150.00 for a doctors' or practiioners' report. Prior to the Caven decision, the commissioner's office had interpreted 4.33(6) as being limited to $150.00, similar to 876 IAC 4.33(5), despite the fact that the language of the rule contained no such limitation.

The argument made before the court on appeal was that the commissioner exceeded his authority in allowing payment for the entire cost of obtaining two reports. The Court of Appeals disagreed, finding that section 86.40 of the Code indicates that all costs before the commissioner are to be "taxed in the discretion of the commissioner." This language, according to the court, indicated that the issue of costs was a matter delegated specifically to the commissioner, and could only be overturned if the interpretation was "irrational, illogical or wholly unjustifiable." The court also noted that appropriate deference was given to the commissioner's promulgation of rules.

The court noted that under Boehme v. Fareway Stores, Inc., 762 N.W.2d 142, 146 (Iowa 2009), the commissioner was constrained to follow the plain meaning of its rules. The court concluded that rule 4.33(6) was plain and unambiguous, and allowed payment for the complete costs of the doctors' or practitioners' reports. The court also affirmed, on substantial evidence grounds, a finding that claimant's tinnitus claim had been filed outside of the statute of limitations.

Caven could have a significant impact in favor of claimants, and tends to level the playing field in terms of obtaining doctors' reports when trying a claim. The Caven case was handled by Marty Ozga of Neifert, Byrne & Ozga.

NOTE: The employer asked the Supreme Court to take further review of the case following the decision of the Court of Appeals. This request was denied on August 25, 2011.

Court of Appeals Concludes that District Court Has Jurisdiction to Hear Claims for Fraud and Unjust Enrichment Against Claimant

2011-06-10T10:38:00.000-05:00

In The Cincinnati Insurance Companies v. Kirk, No. 0-950 (Iowa App. May 25, 2011), the Court of Appeals concluded that the district court had jurisdiction to hear claims made against the claimant for unjust enrichment and fraud after claimant allegedly fraudulently received medical and indemnity benefits from the workers' compensation carrier. The facts of the case are unusual, and the decision of the Court of Appeals should be seen in that light.

Claimant suffered an injury to his left arm, and was provided with medical treatment and indemnity benefits. The insurance carrier decided to conduct surveillance when the healing process did not go as smoothly as expected. That surveillance allegedly revealed that claimant, prior to an appointment with his workers' compensation physician, was seen striking his injured left arm repeatedly while sitting in his car. Following this surveillance, the carrier filed claims for fraudulent representation, unjust enrichment, money had an received, and restitution. The carrier sought recovery of $29,000 in medical expenses, indemnity benefits, and administrative expenses.

Claimant filed a motion to dismiss the claims, arguing that the claims were within the exclusive jurisdiction of the workers' compensation commissioner. The district court granted the motion to dismiss, finding that the rights concerning workers' compensation benefits are to be first considered by the commissioner.

On review, the Court of Appeals reversed. The court noted that Iowa has adopted a bad faith tort as an exception to the normal rule of exclusivity. This was premised, in part, on the fact that there was no adequate remedy provided by the workers' compensation act. The court concluded that there was no adequate remedy under the Act to recover the expenses and costs incurred by the carrier in this case. The court noted that sections 85.34(4) and (5) only provide a credit against future benefits, and stated that "if the worker does not want to repay the benefits, neither the commissioner nor the insurance carrier can force the worker to pay." In the case of fraudulent conduct, according to the court, this remedy is inadequate. The court noted this was even more true where an employee no longer worked for the company at which the injury was incurred, as there would be no future claims against which a credit could be applied.

The court also concluded that the inadequacy for the recovery of indemnity benefits was similar to the inadequacy of penalty benefits under section 86.13 to address bad faith claims. The court cited to Boylan v. Am. Motorists Ins. Co., 489 N.W.2d 742, 744 (Iowa 1992), which established bad faith claims in workers' compensation actions, and noted that "just like in Boylan, we find it unlikely the legislature intended the credit provision in section 85.34 to be the sole remedy for insurance carriers where a claimant fraudulently obtains benefits." According to the court, if there were no remedy in court, this would allow workers to commit fraud and the carrier would have no recourse. The court concluded that this remedy encompassed both indemnity and medical benefits.

In terms of the claim for fraud, the court concluded that if fraudulent conduct occurred independent of an subsequent to the work injury (here there was no question that the original injury was work related), the district court and not the commissioner had jurisdiction to hear the case. If the fraud is extrinsic and collateral to the matter decided by the commissioner, the district court properly had jurisdiction.

The court also concluded that the district court had interpreted Zomer v. West River Farms, Inc., 666 N.W.2d 130, 135 (Iowa 2003) in too broad a fashion. Zomer involved the reformation of an insurance policy, and the Supreme Court concluded that the commissioner had jurisdiction to decided this issue because this was necessary to a determination of liability under the workers' compensation statute. The Court of Appeals concluded that Zomer did not apply, because the issue of whether claimant fraudulently received workers' compensation benefits was not an essential prerequisite to a determination of compensability.

Finally, the court found that both the commissioner and the district court would need to hear evidence and reach factual findings to determine whether fraudulent misconduct had occurred. The court found that the fact that there was the possibility of inconsistent or contradictory findings does not mean that the district court did not have jurisdiction. Instead, the issue should be addressed using preclusion principles and stays of proceedings. In this case, the court indicated that the district court proceedings could be stayed pending conclusion of the workers' compensation claim, and issue preclusion could be applied to prevent inconsistent results.

Although the facts of the Kirk case may be unusual, the decision could potentially have broad application to any situation where an insurance carrier wished to allege fraud against the claimant. The case creates a new cause of action in favor of the workers' compensation carrier, and although partially analogous to a bad faith claim, the fact that the workers' compensation law is to be interpreted liberally in favor of the claimant and not the insurer creates a distinction between Kirk and Boylan. In light of the potentially broad reach of the decision, it would not be surprising if the Supreme Court were to grant further review.

Second Injury Fund Case Involving Injuries to Same Extremity Decided Favorably to Claimant

2011-06-09T16:08:00.001-05:00

The case of Second Injury Fund of Iowa v. Armstrong, No. 1-280 (Iowa App. May 25, 2011), although discussing primarily the question of whether claimant's injury extended into the body as a whole, potentially broadens the scope of Fund claims to include claims involving the same extremity, such as a right hand and right arm or left foot and left leg. These types of injuries, under Anderson v. Second Injury Fund of Iowa, 262 N.W.2d 789 (Iowa 1978), had previously been found not compensable by the Supreme Court.

In Armstrong, claimant's first injury was to the left foot. In 2005, his left leg was crushed, resulting in further injury. The treating doctor also found that there was a skin injury, but this doctor later opined that this injury was confined to the lower extremity. There had also been a finding that claimant had a neuropathy, but again the treating doctor and IME doctor found that this did not extend into the body as a whole.

The Fund argued that claimant's injuries extended into the body as a whole and stated that under Collins v. Dept. of Human Services, 529 N.W.2d 627 (Iowa App. 1995), that this was not a scheduled member. The Court of Appeals found that Collins was factually distinguishable because claimant here did not suffer from any systemic condition extending beyond his left lower leg. The court found that this finding was supported by substantial evidence and thus there was a claim against the Fund. A finding of permanent and total disability was also affirmed on substantial evidence grounds. The court rejected the Fund's argument that because the FCE also discussed other body parts, the Gregory decision precluded an award of permanent total disability. The court, however, found Gregory distinguishable because in that case compensation for BAW injuries had been made by the employer. Here, no such payments had been made.

As noted above, Armstrong would seem to be inconsistent with the Anderson decision. In Anderson, the court stated: "We do not believe the language of the statute . . . the loss of or loss of use of another such member or organ . . . means separate parts of the same arm or leg." 262 N.W.2d at 792. Armstrong did not discuss Anderson, which would seem to lead to the conclusion that Anderson was not argued. Nonetheless, the fact that the Court of Appeals provided Fund benefits in such a situation may broaden the range of cases in which benefits against the Fund are possible.

Court of Appeals Decides Case Pitting Workers' Compensation Against the Longshore Act

2011-06-09T15:45:00.000-05:00

The case of Bluff Harbor Marina v. Wunnenberg, No. 1-095 (Iowa App. May 25, 2011), presented an issue that is not common, but can have major consequences for claimants. This involved the competing jurisdiction for a work injury under the Longshore and Harbor Workers' Compensation Act (LHWCA) and Iowa's Workers' Compensation statute.

Claimant suffered a tragic accident that led to his death. He was the manager of a marina along the Mississippi, and decided to remove a torn canopy using the bucket and boom of a mini-excavator. He positioned the excavator by driving it along ramps, which slipped, spilled the excavator into the water, and killed the claimant. Claimant filed an action under Iowa's workers' compensation laws.

Defendants argued that jurisdiction was appropriate under the LHWCA, and urged that the claim be dismissed. The commissioner rejected this argument and found in favor of the claimant on the death claim. In addressing this issue, the court noted that the LHWCA covered disability or death occurring upon the navigable waters of the United States, including adjoining piers or docks. Claimant argued that the exception in the LHWCA for persons "employed by a marina . . . who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance.)"

The court found that the agency had no expertise in interpreting the LHWCA, but also found that the decision of the commissioner concluding that claimant was engaged in routine maintenance was supported by substantial evidence. The court described claimant as a "paradigmatic routine maintenance worker" and awarded benefits under Iowa's workers' compensation statute.

Court of Appeals Decides Cumulative Injury, Manifestation Case

2011-06-09T15:20:00.000-05:00

In ABCM Corp. v. Manning, No. 1-225 (Iowa App. May 25, 2011), the court addressed the issue of cumulative injuries, and the further question of when those injuries became manifest. Claimant suffered injuries to her knees and low back, which ultimately led to knee replacement surgery. The commissioner found that claimant was not aware of the compensable nature of her injuries until after she had left employment, and rejected defendants' arguments that they had improper notice and that the statute of limitations had run.

The court noted that the questions of the nature, seriousness and possible compensable character of the injury under Herrera was a question of fact under Midwest Ambulance v. Ruud. Here, the commissioner had a substantial degree of latitude in determining when the claimant should have known, as a reasonable person, when her injuries were compensable. There was no error of law in finding that claimant did not know about compensability earlier, as claimant had returned to work without restriction, and continued to work until she was fired.

A secondary issue was presented concerning the award of PTD benefits to claimant and her firing by the employer. The employer argued that claimant would have continued working but for the disciplinary issues that led to her firing. The court indicated that substantial evidence supported the commissioner's decision that claimant, given her injuries, was unable to compete for any positions for which she was trained, and rejected defendants' argument.

Court of Appeals Affirms Permanent Total Disability Award Based on Substantial Evidence

2011-04-29T07:38:00.000-05:00

In Love's Enterprises, Inc. v. Love and Second Injury Fund of Iowa, No. 10-1131 (Iowa App. April 27, 2011), the court affirmed a finding of permanent total disability, declining the employer's request to the court to reweigh the evidence and reverse the finding of permanent total disability. Claimant was the owner and operator of Love's Enterprises. Claimant had a traumatic injury to his ankle, and cumulative injuries to his back, neck, knee and bilateral wrists. Claimant's treater, Dr. Delbridge, found that the ankle, knee, neck and wrist injuries were related to claimant's work. He opined that there was a 20% body as a whole injury. A vocational expert (Roger Marquardt) stated that because claimant lacked the capability of performing even sedentary work, he was eliminated from consistently working and earning money in the competitive labor market. Following his injuries, claimant performed no more construction work, and eventually turned over the business to his two sons.

At the agency level, the deputy noted that Dr. McMains had concluded that none of claimant's injuries were related to his work. The deputy rejected this conclusion, and accepted the opinions of Dr. Delbridge and two other doctors. The deputy fixed the date of injury as the date the claimant engaged in activity that resulted in the left ankle injury, and concluded that claimant was permanently and totally disabled. Penalties were denied. The district court affirmed, and found that the agency had properly applied the manifestation test of Oscar Mayer Foods v. Tasler. The court also concluded that substantial evidence supported the commissioner's conclusions, including the conclusion that claimant was permanently and totally disabled.

The court of appeals agreed with the district court on all issues, finding that the decision of the agency was supported by substantial evidence as to the existence of various impairments, the fact that those impairments arose out of and in the course of employment, the applicability of the cumulative injury rule (including the determination of the manifestation date), and the determination of permanent total disability. The court noted that the fact that "Love focused on his most pressing physical condition before addressing other conditions does not negate the commissioner's manifestation-date determination."

Another issue addressed by the court was whether the district court had abused its discretion in denying the employer's application for stay of agency action, which had been filed at the time of judicial review. Because the employer had secured a bond on appeal, this issue was found to be moot by the court.

Love is yet another example of the importance of the hearing stage of the workers' compensation proceedings, as the courts are seldom willing to overturn the factual decisions of the agency.

Court of Appeals Issues Short Form Decision Affirming Award of Industrial Benefits

2011-04-28T15:17:00.000-05:00

In Swift Pork Co. v. Garcia-Diaz, No. 10-1805 (Iowa App. April 27, 2011), the court of appeals, in a single paragraph, affirmed the decision of the agency that claimant had demonstrated that claimant's injury was to the body as a whole. In the underlying decision before the agency, Dr. Stoken had indicated that claimant had Complex Regional Pain Syndrome (CRPS) despite meeting only five of the eight criteria in the AMA Guides. Dr. Pollack had found that there was no CRPS. The court of appeals, based on this factual dispute, and the credibility finding by the agency, affirms the agency's permanent total disability finding.

Decision in Kone, Inc. v. Harrison Highlights Importance of Agency's Final Decisoin

2011-04-04T09:08:00.000-05:00

In Kone, Inc. v. Harrison, No. 08-891 (Iowa App. Feb. 23, 2011), the Iowa Court of Appeals addressed a situation where the deputy found the claimant not to be credible, and concluded that claimant had failed to establish a permanent impairment. The commissioner reversed the decision on compensability, finding that the medical evidence supported the contention that there was a permanent impairment. Also presented were issued of whether claimant retired because of his injuries or because of a planned retirement, and whether penalty was appropriate. The commissioner concluded, contrary to the hearing deputy, that claimant was entitled to both healing period and penalty benefits. The district court reversed the agency's decision on all three issues.

The court noted the in determining whether substantial evidence supported the agency's decision, it was the agency's decision that was being reviewed, not the decision of the hearing deputy. Although the district court was required to consider the deputy's credibility determination, "even when credibility is involved, the agency, not the hearing officer, is charged with the authoritative responsbility to decide what the evidence means under the governing statute." Citing Iowa State Fairgrounds Sec. v. Iowa Civil Rights Comm'n, 322 N.W.2d 293, 295 (Iowa 1982). According to the court, the veracity determination of the hearing deputy was one factor to consider in determining whether substantial evidence supported the agency's decision.

The agency rejected the opinion of Dr. Cobb and relied on the opinion of Dr. Manshadi and claimant's testimony. The court found that the agency's determination concerning functional impairment was supported by substantial evidence. With respect to the credibility determination, this primarily affected the issue of whether claimant was entitled to healing period benefits. Claimant argued that his knee and shoulder injuries were considerations in determining whether he would retire. The hearing deputy found that because claimant made the decision to retire on January 15, 2007, before his shoulder injury of March 14, 2007, claimant had removed himself from the workplace and was not entitled to healing period benefits after his official retirement date of April 1, 2007. The agency rejected this, finding that claimant was not locked in to retirement by a date certain, and testified that his knee and shoulder injuries were considerations in determining whether to go through with his retirement. The court concluded that there was substantial evidence to support the commissioner's rejection of the adverse credibility determination. Because claimant later had surgery due to the work injury, healing period benefits were also found appropriate by the Court of Appeals.

The penalty benefit issue involved a delay in payment for claimant's left knee claim. The commissioner provided a 50% penalty for the delay in payment. Defendants did not provide any evidence that justified a delay in payment of these benefits. The court rejected defendants contention that because claimant had not specifically indicated a delay penalty benefits were not appropriate.

The Kone decision reinforces the primacy of the decision of the agency as opposed to the arbitration decision. Although a credibility determination made by the hearing deputy needs to be considered on judicial review, if that determination has been rejected by commissioner on review, and the commissioner's decision is supported by substantial evidence, the decision will be affirmed.

Court of Appeals Decision in Westling v. Hormel Foods

2011-04-01T17:01:00.001-05:00

The Westling case, decided on February 9, 2009, addressed the issue of whether claimant's work injury resulted in a permanent partial disability. Claimant suffered an injury to his right shoulder while working for the employer, and had a debridement and acromionectomy. He was returned to work without restrictions, worked for a few months, and retired from Hormel, where he had worked for thirty years.

The deputy found that claimant had failed to establish a causal connection between his shoulder injury and permanent disability. This decision was upheld by the commissioner, and Westling filed a rehearing request, asking the commissioner to decide whether the definition of permanent impairment in the AMA Guides was synonymous with the judicial definition of functional disability. The commissioner denied the request for rehearing, finding that the agency had relied on undisputed medical evidence that the claimant's work was not a cause of a permanent shoulder condition. The district court affirmed, finding that there was no medical evidence supporting the existence of an impairment.

Before the Court of Appeals, claimant argued that the term "impairment" in the Guides was synonymous with the statutory term "disability" when it is used in the sense of functional disability. Because claimant's surgery removed a portion of his anatomy, he argued there was a derangement, and thus an impairment and a permanent partial disability as a matter of law. The court rejected this argument because under 876 IAC 2.4, the Guides are only a guide, and are not dispositive.

Claimant also argued that substantial evidence did not support the findings of the commissioner. The Court of Appeals noted that claimant's IME doctor had concluded that claimant's injury to his shoulder was most likely arthritic in nature. Westling's treating physician also indicated that there was no permanent impairment attributable to the work injury. In light of this evidence, and the lack of any contrary evidence, the court found that substantial evidence supported the decision of the agency.

Court of Appeals Decision in Traco v. Dumler

2011-04-01T16:15:00.000-05:00

This Court of Appeals case, decided on February 9, 2011, addresses an issue of permanent total disability. Although the commissioner found that claimant had sustained permanent total disability based on an odd lot theory, the district court reversed, finding that the claimant had failed to demonstrate that his injury was work related and also failed to prove he was an odd lot employee. The Court of Appeals reverses, concluding that the district court improperly weighed the evidence in overruling the finding that claimant had not established a work related injury. The court also affirmed the odd lot finding of the commissioner.

The evidence demonstrated that claimant reached for pieces of a door while at work, and caught his right leg on a torn fatigue mat, feeling a stinging sensation in his hip. Claimant did not immediately report the incident, and worked the next day. On the second day after his accident, he saw a PA, but the records do not note a work accident. By three days after the accident, claimant had reported the accident to his employer.

Claimant ultimately had a hip replacement. Dr. Boese, the treating surgeon, found that this was a direct result of the work accident. He reiterated this opinion in a letter to defendants' counsel. An FCE limited claimant to sedentary/light work. A vocational evaluation found that claimant was unemployable, given his restrictions. Based on the evidence, the agency found causation, and also found that claimant was an odd lot employee.

The district court reversed, finding that the fact that there was an absence of a reference to a fall at work in the original medical notes was fatal to claimant's claim. The Court of Appeals noted that claimant had testified that he had a fall at work and this testimony was found credible by the agency. The fact that claimant had waited a few days to report the work injury did not defeat his claim. The court found that since the only doctor who had opined on causation had concluded that claimant's injury was related to his fall at work, the decision of the agency was supported by substantial evidence. With respect to the extent of disability, the employer argued that because claimant had a preexisting degenerative condition, it should not have liability. The court noted that claimant was able to perform his work before the injury, and had only missed one day of work. The court noted that the full responsibility rule applied since there was no ascertainable portion of the disability attributable to the preexisting condition. Finally, the odd lot finding was upheld, again based on substantial evidence grounds.

The evidence, as presented by the Court of Appeals, appeared fairly overwhelming, and defendants did not appear to have much in the way of supportive evidence. The fact that the district court reversed the decision of the commissioner was surprising in light of the evidence discussed by the Court of Appeals.

Court of Appeals Affirms Award of Permanency Benefits In Face of Claimant's Failure to Attend 85.39 Exam

2011-01-23T16:59:00.000-06:00

In Wal-Mart Stores v. Johnson, No. 10-0358 (Iowa App. Jan. 20, 2011), the Court of Appeals affirmed the award of permanency benefits awarded by the commissioner. Claimant's treating physician, Dr. Hlavin, had concluded that claimant's neck, shoulder and arm problems were due to her work activities. The employer denied benefits, and sought to have claimant attend a defense medical examination with Dr. Boulden. Claimant refused to attend, arguing that there was no right to an 85.39 examination in a denied claim. The employer filed a motion to compel attendance, and in the meantime, Dr. Boulden denied causation in a records review evaluation.

The deputy denied defendants' request for an 85.39 exam, and a motion to reconsider on the same subject was denied. At hearing, the deputy made an oral ruling that the employer was not entitled to the 85.39 exam. The deputy found a 40% industrial loss. In the written decision, the 85.39 issue was not addressed. The employer appealed, and the commissioner affirmed.

The primary issue before the court was whether the employer had preserved error. The district court had ruled that the employer did not preserve error because it did not raise the issue before the commissioner. The employer's brief, however, had raised this issue. According to the Court of Appeals, the problem was not that the issue was not raised before the commissioner, but that the commissioner had failed to rule on the issue. Having failed to rule on the issue, it was incumbent upon the defendant to file a request for rehearing so that the issue could be addressed. Because the employer did not due so, the employer had failed to preserve error.

On the merits of the case, the court concluded that the 40% award was supported by substantial evidence. The commissioner had reviewed the evidence, and chose to believe Dr. Hlavin's conclusions. Under normal principles of substantial evidence, the decision of the commissioner was affirmed. A subsidiary issue involving the date of injury was also presented and affirmed on substantial evidence grounds.

Court of Appeals Affirms Denial of Benefits in Second Injury Fund Case

2011-01-22T17:28:00.000-06:00

In Hennigar v. Second Injury Fund, No 09-0343 (Iowa App. Jan. 20, 2011), the court concluded that claimant had failed to establish a first injury, and had also failed to demonstrate a second injury, leading to a denial of Second Injury Fund benefits. The commissioner had earlier denied Fund benefits.

Claimant had an eye condition which she alleged as a first injury. Three doctors had concluded that there was no permanent impairment as a result of the eye injury, and a fourth doctor, who had originally concluded that there was a 1% impairment, recanted this opinion when deposed. Claimant presented the testimony of herself and her daughter, both of whom testified that claimant had watering in her eye, and her vision had deteriorated. Testimony was also presented that claimant had difficulty driving.

The commissioner concluded that claimant's eye condition did not result in a permanent disability and loss of use to either eye. Because there was no loss of use, there was no qualifying first injury. Claimant argued that the AMA Guides did not conclusively determine the issue of permanent impairment. The court did not disagree with this argument, but concluded that the agency had considered not only the Guides, but the expert medical testimony, as well as nonmedical evidence of claimant's complaints. Applying normal substantial evidence rules, the court affirmed the decision of the commissioner. Parenthetically, the court stated that even if a first injury had been proved, the commissioner had correctly determined that claimant's contact dermatitis was not a qualifying injury for Fund purposes. In a footnote, the court also noted that words such as "permanent," "disability," "loss" and "loss of use" had been interpreted "fairly and sensibly by the agency and the district court.

Supreme Court Reverses Court of Appeals in Substantial Evidence Case

2011-01-22T16:32:00.001-06:00

In Broadlawns Medical Center v. Sanders, No 08-1643 (Iowa Dec. 23, 2010), Justice Marsha Ternus entered her last workers' compensation decision, reversing the Court of Appeals and concluding that the decision of the commissioner awarding permanent partial disability benefits was supported by substantial evidence. Claimant worked at a group home for the mentally ill, where she was required to clean a room in which a client had committed suicide. As a result of this experience, she began having nightmares, flashbacks and hallucinations, resulting in a diagnosis of PTSD.

One of the physicians permanently restricted claimant from working at the group home where she had formerly worked. She was assigned to work at a different group home, which she was able to do. She earned less in terms of overtime after the reassignment. Because of the work restrictions, the employer indicated it intended to terminate the employment of the claimant. The doctor who had provided the restrictions reluctantly agreed to this, but did not go so far as to say the restrictions were entirely eliminated. A second psychiatrist agreed that claimant would experience difficulties working at the original group home.

The employer denied payment of permanency payments, and the agency awarded 30% in industrial disability benefits. On judicial review, the district court affirmed, but the Court of Appeals found that the record lacked the necessary expert testimony that claimant's injury was permanent and thus reversed the award of PPD benefits.

The Supreme Court noted that permanency could not be determined until the claimant's disability had stabilized (when "significant improvement from the injury was not expected."). Any disability that remained after the stabilization of the condition will support an award of permanency benefits, according to the court.
The commissioner had noted that the treating psychiatrist believed the condition was permanent in a number of statements, noting that his response to defendants' counsel "reflects more his hope the condition will improve than it does an opinion it is temporary only." The court noted that it was the responsibility of the commissioner to weigh the evidence, and indicated that substantial evidence support the conclusion that there had been a permanent impairment. Accordingly, the court reversed the decision of the Court of Appeals and reinstated the 30% industrial disability award.

The Sanders case demonstrates the difficulty inherent in many cases involving mental injuries. Psychiatrists and psychologists are often hopeful that a claimant's condition will improve over time, and are reluctant to state that a condition has reached maximum medical improvement, much less provide a rating of impairment. In such cases, the permanent restrictions issued by a psychiatrist or psychologist is of great importance, and the Supreme Court has indicated that the hope that a claimant will improve is not sufficient to overcome a finding of MMI where permanent restrictions have been imposed.

Court of Appeals Issues Decision on Full Responsibility, Healing Period

2011-01-05T07:29:00.002-06:00

In Waldinger Corporation v. Mettler, No. 0-647 (Iowa App. Nov. 24, 2010), the court addressed issues of apportionment in scheduled member cases, healing period issues, and issues involving the Second Injury Fund. Of particular interest is the court's approach to healing period, which appears to deny the possibility of intermittent healing periods.

Claimant was in the military and suffered a number of injuries prior to returning to his work as a plumber at Waldinger. Before starting that employment, claimant was provided a 20% impairment rating from VA for leg injuries, and 10% for right knee injuries. Considering impairments to his spine, as well as tinnitus, claimant was found to have a 70% total impairment, which entitled him to $1100 per month from the VA.

Claimant was able to perform his work with Waldinger when he began working. Over time, he developed more problems with his right ankle, for which he had four surgeries. This injury forced him out of a job as a plumber, and he was ultimately reemployed as a school teacher after he had completed his bachelor's degree. At hearing, the agency awarded a 15% impairment for the right lower extremity, and did not apportion this with the earlier VA injury to the right leg. Healing period benefits were denied because claimant had reached MMI on 4/6/05 (although one of the surgeries was conducted after that date). Claimant was also awarded a 15% industrial award against the Fund, for the right leg injury, and earlier injuries to the arms. The decision found that the disabilities did not appear to have diminished claimant's earning capacity (although his actual salary as a teacher, on a yearly basis, was much less than his wages as a plumber).

On appeal, the commissioner reversed on the healing period issue, awarding benefits from 9/18/07 to 12/18/07. The decision was affirmed on all other issues. The district court found that multiple healing period benefits were possible, and also found that because claimant's earnings as a teacher were less, the level of industrial disability needed to be redetermined. No apportionment for the right leg injury was allowed.

Apportionment. The court first addressed the apportionment issue, finding that an employer must take full responsibility for compensating a workplace injury which aggravated a preexisting condition. The court further found that the employer was not entitled to apportionment unless the preexisting ankle injury produced a discrete and ascertainable degree of disability. The court found that the employer failed to show that a particular percentage of disability would have resulted from the preexisting injuries. Furthermore, the court found that under the familiar holding that the employer takes an employee as they find them (citing Bearce v. FMC Corp., 465 N.W.2d 531, 536 (Iowa 1991)), Walding took Mr. Mettler subject to his preexisting injuries.

Healing Period. Defendants contended on review that under Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 447 (Iowa 1999), claimant was not entitled to healing period following his fourth surgery. Defendants argued that since claimant had earlier reached maximum medical improvement, healing period was not appropriate. The court finds that no evidence was presented to dispute that maximum medical improvement had been reached prior to the fourth surgery, and denied healing period benefits. In reaching this conclusion, the court did not discuss the apparently contradictory opinion of the Supreme Court in Teel v. McCord, 394 N.W.2d 405 (Iowa 1995), in which the court concluded that intermittent healing periods were possible. The court also did not address the factual distinctions between Ellingson and Mr. Mettler's situation, since the claimant in Ellingson did not have surgery following the initial injury, and essentially claimed healing period benefits for days off work following a finding of MMI. Mettler would appear to stand for the proposition that there is no such thing as an intermittent healing period, which is directly contradictory to the law at the agency level.

Fund Benefits. The court found that because the agency had considered the actual income to be earned by claimant, substantial evidence supported the agency's factual conclusions. The court believed that substantial evidence supported the 15% industrial disability finding, and reversed the district court on this issue.

With the exception of the healing period discussion, Mettler does not break any new ground. The healing period discussion is quite troublesome, however, as it would change years of practice before the agency. There is nothing in the statute that indicates that a new healing period cannot be started when a claimant is unable to work due to the original work injury, as Mr. Mettler was following his fourth surgery. Although the achievement of MMI may end an initial healing period, this does not necessarily mean that future healing periods are precluded, and yet this is what the court in Mettler decides. Claimant further review by the Supreme Court and the court granted further review on February 23, 2011. The IAJ Core Group has filed an amicus brief in support of the claimant's position in Mettler, and as of March 14, 2011 it is unknown whether the amicus brief will be considered.

Review-Reopening Case Decided by Court of Appeals

2011-01-04T16:41:00.001-06:00

In Verizon Business Network Services, Inc. v. McKenzie, No. 0-685 (Iowa App. Nov. 24, 2010), the Iowa Court of Appeals wrestled with issues involving review-reopening proceedings that had been addressed in Kohlhaas v. Hog Slat, 777 N.W.2d 387 (Iowa 2009). The question raised in the case was whether the commissioner had used the correct standard in determining whether the claimant was entitled to an increase in benefits.

Claimant suffered a back injury, and was awarded 25% industrial disability benefits at the initial arbitration hearing. Following the hearing, claimant continued to have difficulties with her back, although she had gastric bypass surgery to reduce her weight in the interim. She filed a review-reopening petition, and at the arbitration and appeal levels was found to be permanently and totally disabled. There was a great deal of emphasis in these decisions on whether claimant's continuing problems had been anticipated at the time of the original decision. The decisions also required defendant to pay for claimant's gastric bypass surgery.

The district court affirmed the permanent total disability award, but indicated that the surgery did not need to be paid for by the employer because the claimant's doctor had not been authorized by the employer. The district court also remanded the claim to the agency to determine whether the parties had stipulated to the correct date for commencement of benefits.

The COA noted that Kohlhaas had established that the claimant did not need to prove that the current extent of disability was not contemplated by the commissioner in the arbitration award. The agency is only to look at the situation as it exists as the time the case is originally heard, and not speculate as to the physical condition of the claimant, or the economic situation at some future time. The court found that because the agency had used the older standard of Acuity Insurance v. Foreman rather than the Kohlhaas test, the case should be remanded, even though the Acuity standard was more disadvantageous to claimant than Kohlhaas. The court indicated remand was necessary because the commissioner's decision may have been affected by Acuity, and because the court was not a fact finder. Because of the remand, the court did not address the question of whether the permanent total disability award was supported by substantial evidence.

On the issue of medical expenses, defendants argued that because they had not authorized the gastric bypass surgery, they were not responsible for paying for the surgery. The district court rejected the defendants' argument and ordered payment for the surgery. Following this decision, the Iowa Supreme Court issued its decision in Bell Brothers Heating & Air Conditioning v. Gwinn, 779 N.W.2d 193, 202 (Iowa 2010), in which the court indicated that the agency could order unauthorized care to be paid for by defendants "if it provides a more favorable medical outcome than would likely have been achieved by the care authorized by the employer." The COA found that although the agency found the treatment was reasonable and necessary, it did not address the issue of whether the surgery was beneficial to the work related injury. Accordingly, the court remanded this issue as well.

The final issue before the court was whether the agency erred in adopting the commencement date stipulated to by the parties. Although defendants had raised this issue, they did not provide argument on the issue to the court. Despite this, the COA found that the issue should be heard, and should have been addressed by the agency. The court found that the mere presentation of the issue was sufficient to mandate that the agency consider the issue. Citing Aluminum Co. of America v. Musal, 622 N.W.2d 476, 478 (Iowa 2001).

McKenzie is significant as the first appellate level case to consider the Bell Brothers standard concerning beneficial care. The case also recognizes the significance of Kohlhaas in review-reopening cases. Although the court did not specifically rule on these issues, it is clear that the court considered these issues to be ones where new standards may well have compelled new results under recent Supreme Court caselaw.

Permanent Total Disability Awarded in Court of Appeals Case

2010-12-29T15:56:00.001-06:00

The Iowa Court of Appeals, in Des Moines Public Schools v. Ault, No. 0-753 (Iowa App. Nov. 24, 2010), concluded that claimant was permanently and totally disabled. The claim was handled by Jason Neifert of the NBO law firm.

The issues in Ault included whether the agency's decision finding permanent total disability was supported by substantial evidence and whether claimant's alleged misconduct was sufficient to deny her a permanent total disability award. Claimant injured her back at work and ultimately had surgery for that injury. In the wake of this surgery, she suffered from infection and continuing pain. She developed a major depressive disorder secondary to the physical problems she was having.

Defendants raised issues unrelated to the work injury, including fights in which claimant was involved, drug possession and failure to fully cooperate with treatment. Despite these claims, the commissioner determined that claimant was permanently and totally disabled due to her back and psychological problems.

Employing standard substantial evidence analysis, the court found that there was substantial evidence to support the conclusion that claimant was unable to perform jobs that were available in the community and to realistically compete for those jobs. The court noted that physicians had concluded that claimant had both physical and mental problems that made it difficult for her to work due to the combination of problems.

On the issue of refusal of treatment and negligent behavior, the court rejected defendants' argument that refusal of treatment should bar an award of permanent total disability benefits. The court found that claimant's behavior did not rise to the level of a willful refusal of care. The court also concluded that "unreasonable refusal of care alone does not bar recovery." The court noted that defendants did not argue that the refusal of care somehow broke the chain of causation between the work injury and claimant's physical and mental condition. Similarly, the court rejected the claim that claimant's history of illegal drug use and physical altercations should bar her recovery of benefits. Defendants did not establish that these events were an intervening cause aggravating her injuries, and the failure to do so was fatal to this defense.

Injury at Company Sponsored Event - Gazette Communications, Inc. v. Powell

2010-11-03T07:42:00.001-05:00

The Court of Appeals addressed the issue of injuries at a company sponsored event in Gazette Communications v. Powell, No. 0-633 (Oct. 6, 2010). http://www.iowacourts.gov/court_of_appeals/Recent_Opinions/20101006/0-633.pdf. Claimant injured himself while at a bowling event organized by an employee activity committee. This injury occurred on June 11, 2005. Claimant also alleged an injury on June 20, 2005. The commissioner concluded that the employer derived a substantial direct benefit from the participation of the claimant and thus the injury arose out of and in the course of employment. A 50% industrial disability award was made.

The district court reversed, citing Briar Cliff College v. Campolo, 360 N.W.2d 91, 94 (Iowa 1984). The case was remanded to determine the effect of the June 20 injury. The Court of Appeals affirmed the decision of the district court, and focused on the issue of participation in the company event, and the so-called "business related benefit test." Citing Professor Larson, the court noted that when an employer derives substantial direct benefit from the activity "beyond the intangible value of improvement of employee health and morale," the activity can be deemed to arise out of and in the course of employment. In Campolo, a teacher who suffered a heart attack following participation in a student-teacher basketball game was found to be eligible for benefits. This finding was made on the basis that the school prided itself on close relationships between student and faculty, of which participation in the basketball games was a part. Because of this direct benefit from the activity, Mr. Campolo was found to be within the scope of his employment.

The court in Powell found that Larson's conclusion that "morale and efficiency benefits are not alone enough to bring recreation within the course of employment" was consistent with the court's ruling in Campolo. The commissioner in Powell had found that the sole benefit to Gazette was an increase in employee morale. The court was bound by this factual finding, and felt constrained to apply the portion of Campolo which found that an increase in morale was not sufficient to bring the activity within the scope of employment. To do otherwise, according to the court, would "permit complete coverage of all the employer's refreshing social and recreational activities."

Recent legislative sessions have seen bills to constrict the compensability of recreational activities. In light of the decision in Powell, it would certainly seem that legislative action is unnecessary, as many, if not most recreational activities can be said to be primarily for the purpose of increasing employee morale. Thus, in the situation where participation in an event is voluntary, it will be the rare circumstance where compensability will be found. To the extent that the employer can be said to require rather than simply encourage participation, it is more likely that an injury will be said to arise out of and in the course of employment, but in Powell, the decision at the commissioner level makes clear that employees were strongly encouraged to participate. This was not enough for the district court or court of appeals.

The effect of Powell is likely to make it more difficult to recover in a situation involving participation in an employer-sponsored event, and claimant's counsel will need to investigate the benefit of the activity to the employer more vigorously in order for recovery to be possible. Although Powell does not preclude recovery, particularly in light of the reported decision in Campolo, as a practical matter it will likely raise the bar for recovery.

Supreme Court Decision Apportioning Risk in Case Involving Volunteer Firefighter

2010-09-07T08:26:00.001-05:00

In Andover Volunteer Fire Department & Travelers Ins. Co. v. Grinnell Mutual Reinsurance Co., 2010 WL 3186153 (Iowa, No. 08-1628 Aug. 13, 2010), the Supreme Court allocated risk between two insurance companies. The claimant in the underlying case, Justin Faur, was an employee of Johnson Valley Beef as well as a volunteer firefighter for the Andover VFD. On the date of the injury, Justin was attempting to rescue a co-employee who had been overcome by methane fumes at Johnson Valley Beef. At about the same time as Justin was attempting to rescue the co-worker, he was paged by the VFD to the scene of the accident. Both the co-worker and Justin died as a result of the accident.

Grinnell Mutual, which was the insurance carrier for Johnson Valley Beef, paid the claim and sought contribution or indemnity from Travelers, the carrier for the Andover VFD. Grinnell claimed that Justin had been "summoned to duty as a volunteer firefighter" under 85.61(7)(a) of the Code. The hearing deputy concluded that Justin had been summoned prior to his death, and found that Travelers was one-half responsible for the workers' compensation benefits payable. The commissioner did not believe the timing of the summons was critical, as Justin had been summoned by the circumstances themselves, which compelled him to act in an emergency situation. The district court rejected the commissioner's approach, and remanded for further proceedings as to when Justin had been summoned.

As the court has done in a number of recent cases, they being their discussion by noting that since the commissioner had not been clearly vested by the legislature with the authority to interpret the legislative language, in this case the phrase "summoned to duty." Accordingly, no deference was shown the commissioner in his interpretation of that language.

The court indicates that its role is "only to determine the intent of the legislature." Although courts resolve uncertainties in language, it is only done in "a way that captures the will of the legislature." The ambiguity in this case was the phrase "summoned to duty." The court noted that 85.61(7)(a) provided a special "course of employment" rule for volunteer firefighters. That section places the volunteer firefighter in the course of employment at any time from when the firefighter is summoned to duty until the time she or he is discharged from duty by the chief or the chief's designee.

The court noted that the usual going and coming rule was not applicable to volunteer firefighters. The court indicates that the phrase "summoned to duty" indicates that the firefighter is summoned as a member of a group and that the statute also requires that the summons is issued at the request of a person in command of the group of volunteer firefighters. The court found nothing in the context of the statute to reveal an intent "for volunteer firefighters to summon themselves to duty." After considering common meanings of the terms used, the court concludes that the volunteer firefighter must be called to duty by a third party. Any other approach, according to the court, would be contrary to the legislative intent.

The next question is whether the summons must be heard or received by the volunteer firefighter. The court concludes that the language of the statute focused on whether the particular injured volunteer firefighter was summoned, not on whether the summons was sent. The court stated that absurd results could occur if the language were not interpreted to require the receipt of a summons. The court concluded that the summons must be received by the injured firefighter. The court affirmed the decision of the district court and remanded to the agency for further proceedings.

Justices Hecht, Wiggins and Baker concurred specially, premised on a disagreement over whether the firefighter must prove that he or she received the department's call to duty. According to the minority, this interpretation resulted in an embellishment of the words chosen by the legislature. The minority did not see anything illogical, impractical or absurd about commencing the period of "in the course of" employment when an authorized person sounded the call to action. The minority also notes that the majority ignores the principle that the workers' compensation statute is to be applied broadly and liberally.

The minority view correctly notes that the purpose of 85.61(7)(a) was to extend the protections of the statute to volunteer firefighters over and above the normal "course of employment" rules. Although the majority concedes that the section negates the normal "going and coming" rules for volunteer firefighters, it fails to take the next logical step and interpret the section liberally so as not to require proof that the the call to duty was actually received.

Court of Appeals Decides Rate Case

2010-09-03T17:00:00.001-05:00

The appellate courts have had a surfeit of rate cases before them recently, and in Hilltop Care Center v. Burton, 2010 WL 2598373 (No. 0-323 June 30, 2010), the court decided another such case. The rate dispute was premised on a unique factual situation. Ms. Burton was supposed to receive a raise, which amounted to $1,000 per year, but was instead paid an additional $1,000 per month, thus raising her income by $12,000 on a yearly basis. She was allegedly overpaid for the last 15 months she worked for the employer. Apparently, the error was not discovered until Ms. Burton filed unemployment papers following her discharge by the employer.

The deputy concluded that claimant should have been paid on the basis of her actual earnings, not on the basis of what her wages should have been. The commissioner affirmed. On judicial review, the district court reversed, finding that "an accounting error is not tantamount to an entitlement to an elevated wage." The district court also concluded the agency did not provide specific rationale for including a Christmas bonus as a part of claimant's wages, and remanded to the agency on that issue.

On the issue of "entitled" versus "paid" wages, the court noted the fundamental purpose of the statute to benefit injured workers and the liberal interpretation accorded the statute. The court rejected the employer's argument focusing on the second sentence of section 85.36 (weekly earnings means earnings "to which such employee would have been entitled had the employee worked the customary hours"), stating that the employer's argument took the phrase out of context. The court concluded that when read as a whole, the agency's interpretation was correct. The court noted the statute stated that weekly earnings were the earnings "at the time of the injury," and that Ms. Burton was receiving the increased income at the time of the injury. The court further noted that the focus of section 85.36 is on "whether the employee's earnings are 'customary.'" Citing Jacobson Transp. Co. v. Harris, 778 N.W.2d 192, 199 (Iowa 2010). According to Jacobson, customary benefits are those which are "typical," and in Ms. Burton's case, the actual wages paid (at the inflated rate) were the typical wages for her at the time of the injury.

On the bonus issue, the court distinguished Noel v. Rolscreen, 475 N.W.2d 666 (Iowa Ct. App. 1991). In Noel, the court found that a bonus had not been paid in the period specified under 85.36(6), and thus need not be considered. The court also found that the bonus was not a regular bonus because it varied in amount and was not fixed until late in the fiscal year. The court in Burton stated that since the bonus was paid during the applicable wage period, and because the bonus had been received in 2003, 2004 and 2005, there was substantial evidence supporting the conclusion that this was a regular bonus.

Other issues considered by the court included penalty benefits, the degree of functional impairment, apportionment and causation. On the penalty issue, the court reversed the agency's award of a $500 penalty for the rate dispute based largely on the fact that the district court had ruled in favor of the employer on this issue, and that this demonstrates that the employer's legal position was reasonable. The remaining issues were decided primarily on substantial evidence grounds.

Burton demonstrates that the liberal interpretation of the Act can still be a powerful concept for injured workers. When combined with a statutory construction argument that is plausible, injured workers are able to prevail, even in the unusual factual situation that was presented in Burton. An application for further review is pending (as of September 3, 2010) on the Burton case.

Supreme Court Decides Rate Case Addressing the Question of Part-Time Work

2010-08-12T07:37:00.002-05:00

Kent Deutmeyer worked 30 hours a week at Swiss Colony at the time of his workers' compensation injury. That injury ultimately required an amputation to the knee, and complaints of phantom pain after the amputation. During the time he worked at Swiss Colony, claimant also worked 40-45 hours per week at Webber Metals. The questions presented to the court involved the correct rate for claimant, as well as the extent of industrial disability (claimant left work following his injury, again working in two jobs, but for considerably less money). Also involved was the question of whether the employer could obtain credit for alleged overpayments, which involved section 85.34(5) of the statute.

In determining the standard of review, the court noted that it had previously found that interpretation of Chapter 85 had not been delegated to the Commissioner. Mycogen Seeds v. Sands, 686 N.W.2d 457, 464 (Iowa 2004). The court noted that it had recently modified this standard to define the inquiry as to whether the legislature had "clearly vested an agency with the authority to interpret a particular statue or phrase in a statute." Renda v. Iowa Civil Rights Commission, 784 N.W.2d 8 (Iowa 2010). The court noted that it must first determine whether the agency had been granted authority to interpret the disputed statute or phrase, and in the absence of such a grant of authority, the court must determine whether the legislature clearly vested the agency "with the power to interpret the statute by implication." The court concluded the section 85.34(5) was not one of the statutes where the agency was clearly vested with power, and the court was therefore free to substitute its interpretation de novo.

In determining the rate issue, the commissioner had concluded that, under section 85.36(9), the claimant had earned less than the usual weekly earnings of a regular full-time adult laborer at his Swiss Colony job, and thus was entitled to benefits based on his wages at both Swiss Colony and Webber Metals. The court reversed, finding that the finding that claimant made less than the usual weekly earnings of a full time adult laborer was not supported by substantial evidence. The court concluded that neither party produced evidence on this issue, as the commissioner had acknowledged in his opinion. Nonetheless, the commissioner had concluded that because the vast majority of businesses view 40 hours as full-time, claimant was entitled to part-time treatment of his wages. In reversing, the court cited King v. City of Mt. Pleasant, 474 N.W.2d 564, 566 (Iowa 1991). In King, the court had indicated that the question was not whether claimants had outside employment, but whether the weekly earnings were inconsistent with the earnings of full-time employees. Applying King, the court found that a 40 hour week could not be considered the standard for every industry. Rather than remanding the case for a factual determination of the appropriate rate, the court stated that "when a record is inadequate, remand for additional evidence is generally not appropriate," and concluded that, given the language of King, there were no good reasons for the remand of the case to the commissioner on the issue of the rate standard for the industry. The case was remanded to consider recalculation of benefits under the proper standard.

The second issue involved in the case was the issue of credits. The employer had overpaid the claimant, and the question presented involved the recoupment of the overpayment by the employer. Claimant argued that under section 85.34(5), if an employee was paid "any weekly benefits" by the employer, the only credit that could be provided was credit "for any future weekly benefits . . . for a subsequent injury to the employee." Claimant's argument was that the employer was not entitled to a credit for future benefits on the same injury, but only on a subsequent injury. The court, citing the express language of the statute, agreed. The employer argued that where claimant had not received his total permanency award, future benefits could be reduced to recoup such an overpayment.

In concluding that claimant's position was correct, the court found that it determined legislative intent based on the words chosen by the legislature, not on what the legislature might have said. The court stated that the plain language of the statute compelled the result that recoupment could occur only in future injuries, citing the language in the statute that covered "any weekly benefits." The court noted that its decision was based on what the legislature said, not what it might have said in the statute. Although the court noted that employers may find themselves without a remedy in such situations, the solution to the problem was legislative.

On the industrial disability question, the court affirmed a 60% award of benefits with little comment.

Although the court struggled with the language of both 85.36(9) and 85.34(5), the court ultimately concluded that because the workers' compensation system is based on a statutory analysis, the words of the statute must prevail. In some cases, this cuts against claimant, as with the rate issue in Deutmeyer. In other cases, the employer's position is harmed. Ultimately, however, since workers' compensation depends on a statutory regime, the words of the statute should be deemed paramount.

Supreme Court Decision on Court Costs

2010-08-12T06:46:00.000-05:00

Solland v. Second Injury Fund of Iowa, 2010 WL 2791170, No. 08-1893 (Iowa July 16, 2010) provided the court with an opportunity to decide an issue of costs. The court of appeals had assessed costs equally to the claimant and the Fund, despite the fact that claimant had prevailed in all respects before the court of appeals. Solland began as a case in which claimant pursued his case against the Fund for two bilateral injuries. At the court of appeals level, the court found in favor of claimant, citing Gregory v. Second Injury Fund of Iowa, 777 N.W.2d 395 (Iowa 2010) and Second Injury Fund of Iowa v. Kratzer, 778 N.W.2d 42 (Iowa 2010). On the costs issue, the court of appeals reversed the decision of the district court approving the assessment of costs by the commissioner and taxed costs of appeals to both parties equally.

The Supreme Court found that Solland was the successful party on appeal, "prevailing on all substantive issues." The court found it clearly erroneous, given the success of claimant, to divide costs equally between the parties. All costs on appeal and judicial review were assessed against the Fund.

In some ways, it was unusual that the court reached out to decide an issue of costs. The Solland decision makes clear that costs should be assessed against the party who loses on appeal, which only makes sense. The case also makes it clear that at least at the appellate level, costs may be taxed against the Fund. The logic of the Solland decision would seem to allow for taxation of costs against the Fund at the agency level as well.

Supreme Court Decides Horseplay Case

2010-08-06T09:01:00.001-05:00

Horseplay is not an area that is addressed frequently by the Supreme Court, so the decision in Xenia Rural Water District v. Vegors,2010 WL 2867918, No. 09-0426 (July 23, 2010) was an interesting departure from most workers' compensation cases before the court. The facts of the case are somewhat unusual. Claimant and a co-worker were in the habit of acknowledging each other by activities such as waving the boom of a back hoe at the other. On the date of injury, claimant had his hands full and acknowledged the other employee by "wiggling his butt" at him. The co-employee the attempted to bump claimant with the mirror of his truck, but ended up hitting him with the truck bed.

The commissioner found claimant entitled to benefits, holding that the burden of proving horseplay was on the employer. The commissioner also rejected a defense that the injury was caused by a willful act of a third party. The district court reversed and denied benefits to claimant.

As an initial matter, the court found that the commissioner was not vested with the authority to interpret Iowa Code sections 85.3(1) and 85.16(3). Therefore, the conclusions of the commissioner were viewed for errors at law rather than on a more deferential basis.

The court found that the prohibition on recovery where the injury resulted from horseplay stemmed from the requirement that injuries arise out of and in the course of employment. Further, the proper analysis was whether the claimant substantially deviated from the course of employment. The burden of demonstrating that the injury was not the result of horseplay ultimately rested with the claimant, since this was a part of the arising out of/in the course of burden. Thus, the burden did not shift to the employer because they had alleged horseplay as a defense.

The court noted that in Ford v. Barcus, 155 N.W.2d 507, 511 (1968), an employee who voluntarily instigates and aggressively participates in horseplay cannot recover workers' compensation benefits. But this denial of benefits only occurs where "claimant substantially deviates from the employment." Innocent employees who are injured as a result of another's horseplay may recover. Four factors are taken into account in determining whether the horseplay is a deviation from the course of employment:

extent and seriousness of deviation
completeness of the deviation
extent to which horseplay was an accepted part of employment
extent to which the nature of the employment may be expected to include some horseplay

According to the court, the character of claimant's action of shaking his rear end - not the injury that resulted - must be evaluated to determine whether this was a sufficient deviation to bar recovery. The court found that this could not be determined as a matter of law. Because of this, the case was remanded to the agency to determine whether the facts justified a finding of horseplay.

The court also addressed the issue of whether compensation should be denied because the injury was caused by the willful act of a third party. The court holds that the action of the co-employee was not done for reasons "personal to the employee" and because of this, section 85.16(3) did not apply. According to the court, for 85.16(3) to apply, the reasons for the action of the third party must be based on something in the personal relationship between the claimant and the third party "outside the working environment." Since there was no such evidence in this case, the affirmative defense under 85.16(3) did not apply as a matter of law.

IWCC Issues Declaratory Ruling on Section 85.39

2010-06-21T08:47:00.001-05:00

In February of 2009, Snap-On Tools filed a petition for declaratory order with the Iowa Workers' Compensation Commissioner. Initially, the commissioner did not answer the petition, and a petition for judicial review was filed in district court. The parties agreed that the commissioner would issue a ruling, and on June 14, 2010, the commissioner did so.

All of the questions posed in the declaratory ruling related to section 85.39 of the Code. Those questions were as follows:

Must the employer use specific language in an 85.39 request?
Can the employee veto or control the identity of the 85.39 physician?
What amount of time before the examination is fair notice?
Must mileage and meal expenses be paid in advance?
What is a reasonable expense for meals?
Under what circumstances must lodging be paid for in association with an 85.39 exam?
Must the employee actually incur a lodging expense to be entitled to payment?
Does 85.39 authorize an employer to request a medical exam as part of its initial investigation?
Can the commissioner compel the claimant to attend an exam where the claim is not litigated?
If benefits are suspended for failing to attend an exam, can benefits be reinstated by simply agreeing to attend an exam after the hearing?

The commissioner answered the questions in the following manner:

There is no requirement for specific language in 85.39, but a "plain reading of section 85.39 requires the employer to provide enough information to adequately inform the employee of the proposed examination including a summary of the type or scope of examination, the date time and location of the examination and the name of the licensed physician who is to perform the examination."
The employee has no right to veto or control the identity of the IME physician as long as the physician is licensed to practice medicine in Iowa or some other state.
"Absent exigent circumstances, 30 days advance notice would typically be enough notice [of an IME exam], but a longer time period may be required under some circumstances."
The questions regarding payment for transportation and meals are answered together. The commissioner indicates that advance payment is required only if ordered by a deputy or the commissioner. If the agency does not order advance payment, the injured worker must submit proof of expense before reimbursement. Meal or lodging expenses must be "reasonably incident to the examination," but when this test is met, the employer must pay the full cost of the expenses, so that the exam is "without cost to the employee."
The commissioner or deputy does not have the authority to compel attendance at an exam in a non-litigated case. The only enforcement action is suspension of benefits.
A suspension of benefits "lasts only during the period of refusal. If the employee later relents and agrees to submit to examination after hearing, the employee's entitlement to benefits can be reinstated in a timely review-reopening proceeding or should be reinstated voluntarily by the employer."

The actions of the commissioner appear to be a common sense application of section 85.39, in light of the actual words of the statute. On the one hand, the commissioner clearly notes that the employer has the right to control the identity of the doctor performing the 85.39 exam at the behest of the employer. On the other hand, if the employer takes this option, the employee should be given adequate notice (30 days or more), and should have all expenses reimbursed, including meal and lodging expenses. The commissioner clarifies that the remedy of suspension lasts only during the period in which a claimant refuses to attend an examination, and that if the claimant decides to attend the examination, benefits must be reinstated. The commissioner notes that although this can be the subject of a review-reopening petition, benefits "should be reinstated voluntarily by the employer," which would seem to give rise to a penalty claim if the benefits are not reinstated once the claimant indicates he or she is willing to attend the exam.

For those contested cases in which there is a good deal of gamesmanship going on, the ruling clarifies the responsibilities of each of the parties, and should prevent last-minute use of the 85.39 exam as a way to beat down the claimant. It also clarifies that the claimant has little or no say in determining who will be conducting the examination. The 30 day advance notice requirement; the finding that all expenses reasonably incident to the exam be paid; and the clarification that reinstatement should occur once a claimant has agreed to attend the exam are all clarifications that work in claimants' favor. The findings are rooted in the language of 85.39, and in the general approach that the parties act "reasonably" throughout the contested case process.

Court of Appeals Rejects Application of Daubert to Workers' Compensation Cases

2010-05-27T16:46:00.001-05:00

The Iowa Court of Appeals rejected defendants' argument that the opinion of claimant's expert had to be evaluated under Daubert v. Merrell Dow Pharmaceuticals. Frank v. FITS Mfg., No. 09-1419 (Iowa App. May 26, 2010) http://www.iowacourts.gov/court_of_appeals/Recent_Opinions/20100526/0-186.pdf. Frank involved a claimant who developed respiratory problems, ostensibly at work. Claimant's expert witness, a pulmonologist from the University of Iowa Hospitals and Clinics, believed that the constrictive bronchiolitis that claimant developed was related to her work. Defendants' experts, an industrial hygienist and an occupational physician, did not believe that the fumes at the workplace caused or contributed to claimant's condition.

The defendants' specifically asked the Court of Appeals to adopt the Daubert standard as the law in Iowa. The court rejected this invitation, finding that the Iowa Supreme Court had previously declined to apply Daubert in Leaf v. Goodyear Tire & Rubber Co., 590 N.W.2d 525, 533 (Iowa 1999), and had recently "affirmed its commitment to a liberal view on the admissibility of expert testimony. . . ." in Ranes v. Adams Laboratories, 778 N.W.2d 677, 685-86 (Iowa 2010). The court noted that even if it was assumed that this was the type of case to which Daubert applied, general and specific causation had been established by claimant's expert. In a footnote, the court further indicated that the rules of evidence for workers' compensation claims were different that those in a general civil action.

Ultimately, the court relied on the time-honored principle that whether an injury has a direct causal connection with the employment is essentially in the domain of expert testimony, and that the commissioner is the one to make this decision. Finding that the commissioner's decision was supported by substantial evidence, the court affirmed the award of benefits.

It will be interesting to see whether further review of this case is sought by defendants. On its surface, this is not the type of case where Daubert would seem to assist defendants even if it was applied. The bona fides of the experts involved are such that defendants' experts certainly don't seem to prevail over those of the claimant's expert. In addition, claimant's expert opined based on various peer reviewed studies, while defendants' expert testified primarily based on testing of the plant conducted two years after claimant's injury. The implies, without directly stating so, that Daubert is particularly inappropriate in workers' compensation cases, which are generally not the "difficult scientific cases" to which Daubert applies. Based on the decisions in Leaf and Ranes, it appears unlikely the Supreme Court will want to revisit this issue in the workers' compensation context.

Interference with Medical Care Results in Employer's Loss of Right to Control Care

2010-05-26T16:31:00.001-05:00

In what the deputy described as what may have been the longest alternate medical care hearing ever before the agency, the employer was found to have "actively interfered" with the care recommendations made by the treating doctor. Dodge v. Excel Corp./Cargill Meat Solutions, No. 5032411 (AMC April 27, 2010). The physician had restricted claimant to sitting duty only, with her leg elevated. As a part of her light duty work, claimant was made to sit in an 8 x 10 foot room with as many as 11 other workers, and she testified that the nurses at Cargill never check her status. Despite attempts by claimant to have the doctor change her work status and place her off work, the doctor indicated his hands were tied by the employer's indication that it had suitable work for the claimant.

Although claimant's arguments were primarily about the treatment she had received at the hands of the employer, she also argued that the employer had interfered with the medical judgments of the treating physician, who had originally kept her off work. Claimant sought to change care so that she could choose the doctor. The deputy concluded that the employer did more than simply inform the doctor of the policy, they actively urged a change in the restrictions placed on the claimant. The deputy found:

This noble sounding goal is belied by the record, which shows the light duty room is not a pleasant place, and in fact no nursing care is given to the workers there, not even ice when it is requested for pain. The assertion that Cargill wants injured workers in the light duty room for benevolent purposes is not accepted. It is highly suspected the purpose of the light duty room is to deny injured workers the opportunity to recuperate from surgery at home.

The decision concluded that the defendant employer had abused its privilege to choose the medical care by actively interfering with that care, and inhibiting claimant's recovery as a result. The doctor was found to be vulnerable to undue influence over his medical judgment by the employer. The claimant was allowed to choose to continue care with the doctor who had performed surgery, and to choose another qualified medical professional to address her foot injury.

The decision relates both to the care provided (and allegedly interfered with) and the question of suitable work. The fact that the room in which injured workers were kept was small and that no care was provided to the employees when they were in the room seems Dickensian, and was undoubtedly a reason for the conclusion reached by the deputy. The decision has been appealed to the Iowa District Court, and will most likely proceed beyond that point.

Supreme Court Restricts Advocacy By Third Party of a Workers' Compensation Claimant

2010-04-23T07:49:00.002-05:00

On April 16, 2010, the Supreme Court issued a decision in Ballalatak v. All Iowa Agriculture Association, 2010 WL 1507635, No. 08-1588 (Iowa April 16, 2010) http://www.iowacourts.gov/Supreme_Court/Recent_Opinions/20100416/08-1588.pdf. Ballalatak involved a supervisor who was fired for advocating to two injured workers that they hire an attorney to ensure they received workers' compensation benefits. The district court held that even if the supervisor was fired for attempting to help the injured workers receive workers' compensation benefits, plaintiff failed to state a claim because there was no public policy that protected supervisors or coemployees from termination for aiding injured employees in collecting workers' compensation benefits.

In affirming the decision of the district court, the Supreme Court noted that employers may generally fire an at-will employee at any time. In order for the public policy exception to the at-will rule to apply, said the court, there must be a clearly defined public policy that protected employee activity, this policy would be jeopardized by the discharge from employment, the conduct was the reason for the employee's discharge and there was no overriding business justification for the termination. The court never went beyond step one of this analysis, holding that there was no clearly defined public policy that protected Mr. Ballalatak.

The court distinguished Springer v. Weeks & Leo Co., 429 N.W.2d 558 (Iowa 1988), which had established a claim for wrongful termination where an employee was fired for pursuing workers' compensation benefits. Springer, according to the court, had relied on section 85.18 of the Iowa Code, which provided that no contract, rule or device shall operate to relieve the employer from the liability created by this chapter. The court noted that plaintiff was not raising his own claims, but the claims of others, which the court found was not clearly protected by the statute. Had plaintiff been instructed by the employer to circumvent the employees' rights under the statute, there might have been a claim under the public policy exception, but an internal concern about whether the employer was correctly applying the workers' compensation laws was not sufficient. The court concluded that "the public policy found in Iowa's workers' compensation statutes strongly protects injured employees, but does not extend to coworkers or supervisors who express concerns regarding whether the injured employees will be properly compensated." The decision of the court was unanimous.

In the short term, the Ballalatak decision creates serious problems for co-employees and supervisors of injured workers who make an attempt to go to bat for the injured worker. The implication of the Ballalatak decision is that unless the employer specifically encourages a supervisor to violate the law, there will be no protection for that worker. For example, the decision specifically allows for the discharge of an employee who urges an injured worker to file a workers' compensation claim, to find an attorney, or to take certain actions in support of the workers' compensation claim. It is difficult to determine how firings in these situations would not violate the public policy of the state, as expressed in section 85.18 of the Code. Allowing the employer to fire an employee who assists another employee in filing a claim certainly appears to be a device that operates to relieve the employer from liability under the workers' compensation law.

In the long term, a legislative solution is needed to address the problems created by the Ballalatak decision. Although the public policy would seem to protect those who are attempting to assist those who are using the workers' compensation system, the Supreme Court saw things differently, and without a legislative solution, assisting employees who have workers' compensation claims is likely to become more fraught with peril.

Apportionment - New Cases Interpreting 85.34(7)

2010-04-12T15:13:00.001-05:00

Following the passage of section 85.34(7), the constitutionality of the bill (HF 2581) of which that provision as a part was challenged in the case of Godfrey v. State of Iowa, 752 N.W.2d 413 (Iowa 2008). http://www.iowacourts.gov/Supreme_Court/Recent_Opinions/20080620/05-1691.pdf. In Godfrey, the court found that the claimant lacked standing to challenge the provisions of the bill, and therefore did not rule on the constitutionality of that provision. More recently, the constitutionality of the bill of which the apportionment language was a part was again challenged, in Quaker Oats v. Main, 2010 WL 200420, No. 08-1507 (Iowa App. Jan. 22, 2010). http://www.iowacourts.gov/court_of_appeals/Recent_Opinions/20100122/9-896.pdf. In Main, the court found that the claimant's constitutional challenge was not filed in a timely manner, and hence could not be heard by the court. The court indicated that since the challenge had not been filed before HF 2581 was codified in January of 2005, a challenge to the constitutionality of the provision was not appropriate. The court also ruled in Main that so long as the second injury occurred after the passage of the legislation on September 7, 2004, the provisions of section 85.34(7) were effective.

The merits of section 85.34(7) have only begun to be parsed out, and this article will examine two cases, Steffen v. Hawkeye Truck and Trailer, No. 5022821 (App. Sept. 9, 2009)http://decisions.iowaworkforce.org/workerscomp/2009/September/Steffen,%20Thomas-5022821a.doc and Summerlin v. Tyson Foods, Inc., Nos. 5025718, 5025719 (Reh'g Dec. March 2, 2010)http://decisions.iowaworkforce.org/workerscomp/2010/March/Summerlin,%20David-5025718O.doc . Generally speaking, Steffen addresses the impact of section 85.34(7)(b)(1), and Summerlin wades into the murky waters of 85.34(7)(b)(2). Clearly, since these decisions are the first to discuss the apportionment language of the statute in depth, there will be future reworkings of the decisions - but they provide a general examination of the commissioner's thinking concerning apportionment.

Steffen involved a claimant who had a prior work injury to his neck, which resulted in the award of a 25% industrial disability following a hearing. At the time of the initial hearing, claimant had been returned to work with no restrictions. Claimant suffered a right shoulder injury prior to the arbitration award but after the initial neck injury, and that injury was the subject of the Sept. 9, 2009 appeal decision. The agency first concluded that because both injuries had not occurred following the passage of 85.34(7), the statute did not apply (this construction of the statute has been rejected in Main). It then addressed apportionment issues - both generally speaking and in light of 85.34(7).

The agency noted that in the absence of statute, apportionment is appropriate only where the prior injury is non-work related and causes an ascertainable portion of the ultimate disability prior to the second injury. If the extent of preexisting disability cannot be ascertained, the employer is liable for the full industrial disability proximately caused by the second injury. The prior injury must independently produce some degree of disability before the second injury. Based on the application of the law without consideration of 85.34(7), the commissioner concluded that claimant had suffered a 55% industrial disability, payable in full by the employer. As a result of the full responsibility rule, no apportionment was appropriate.

The commissioner next addressed the injury to the claimant should 85.34(7) apply. He noted that section 85.34(7)(a) was a restatement of the fresh start rule as applied in conjunction with a modified full responsibility rule. That section provides, according to the commissioner, that the employer does not compensate for any preexisting disability from earlier work or non-work causes. In the Steffen case, the agency noted that claimant had the benefit of the fresh start rule when he commenced work with the employer, and because he had two injuries for the same employer, any apportionment for the successive disability would arise from 85.34(7)(b). Under the terms of the statute, the combined disability is partially satisfied to the extent of the percentage of disability previously compensated by the employer. In Mr. Steffen's case, since 25% was paid for the neck injury, the claimant was entitled to an additional 30%, since his industrial disability was found to be 55%. The agency also noted that there was nothing in the statute that allowed the claimant to be compensated for the fact that his wage rate had increased by the time of the second injury, and the credit for the first injury was paid at that increased rate, despite the fact that the actual payments were less.

Steffen sets forth a relatively straightforward method of determining industrial disability for a claimant who has multiple industrial injuries with the same employer. The first task is to determine the extent of industrial disability in light of the workers' current condition, premised on the modified full responsibility rule established in section 85.34(7)(a). The second is to allow the employer credit for the percentage of disability that had previously been paid, in accordance with 85.34(7)(b). This application of the rule should be relatively easy to apply in future cases.

The Summerlin case presents the more difficult issue of how to address 85.34(7)(b) when a worker has multiple injuries with the same employer, and has had a loss of wages as a result. In this case, claimant had two shoulder injuries. Consideration of these injuries was undertaken in the same arbitration decision. As a result of the first injury, claimant was provided with a 40% industrial disability in the decision, and industrial disability following the second injury was found to be 75%. Defendants were given credit for the percentage of disability already paid.

In the first important aspect of the case, the deputy concluded that where there was an overlap in benefits, as there was here, the claimant receives the higher rate during the period of overlap. In the second, and more important, of the rulings in the rehearing portion of the case, the deputy found that in applying 85.34(7)(b)(2), the calculation is based on the percentage of disability previously compensated minus the percentage that the earnings were less at the time of the first injury. In Mr. Summerlin's case, this resulted in taking a 40% industrial award from the first injury, and reducing that award by 16.14% to reach a total of 23.86%. Thus, the credit allowed to the defendant went from 40% to 23.86%. Subtracting 23.86% from 75% (the total award) meant that defendants had to pay an additional 51.14% over and above the 40% that was to have been paid for the first injury. The total weeks of benefits to be paid was therefore 91.14%, or 455.7 weeks of benefits.

Although the decision is somewhat complicated, it gives meaning to 85.34(7)(b), which is applicable when a claimant earns less at the time of the present disability than would have been the case had the earlier disability not occurred. This is a much more sound result than the initial formulation in the case, which had allowed a credit only for 16.14 weeks, which was equivalent to the percentage by which the earnings were less than they otherwise would have been.

Whether this particular formulation withstands scrutiny at the appellate level or in the courts is obviously an open question. Nonetheless, it offers an opportunity to frame the debate in a manner that is most fair for claimants in light of the other harmful effects of 85.34(7). Note that with the repeal of 85.36(9)(c), which had prohibited the recovery of two awards when there was an overlap, defendants cannot make the same arguments with respect to the overlap that was available previously.

From a practitioner's standpoint, the Summerlin decision counsels that is important to determine whether the first injury "caused the employee's earnings to be less at the time of the present injury. . . " This will require a more focused effort to determine the employee's wages following the first first injury. More to come in this area in the future, but for a first interpretation of 85.34(7)(b)(2), the agency's action minimized the harm to claimants caused by the statute.

2010 Legislative Session A Bust for Workers' Compensation

2010-03-31T11:13:00.001-05:00

Reflecting the focus on the budget and economic issues, the 2010 General Assembly passed nothing of import relating to workers' compensation. A number of bills had been on the table, including the following:

- Choice of Doctor

- Use of Assets in Second Injury Fund to Reimburse Commissioner

- Allowing consideration of certain scheduled injuries industrially where earning capacity was negatively impacted

- Including the full value of overtime in determining WC rates

- Allowing for cost of living adjustments for certain claims

- Modification of alternate care procedures for medical treatment

- Denying coverage for certain willful acts

- Excluding injuries incurred in voluntary recreational programs

Because the 2010 session was the second year of the session, all of these bills will need to start from ground zero if they are introduced again. Thus, certain bills that have already passed one chamber will have to begin the process again in the newly constituted Senate and House of Representatives.

From the claimant's standpoint, bills such as industrial consideration of certain scheduled injuries, cost of living increases, and considering overtime in determining workers' compensation rates are bills that would greatly improve the system and make the payment of benefits more equitable. These bills, or refined versions of these bills, may well come before the General Assembly in future sessions, given their importance to claimants with work injuries.

Decision in Quaker Oats v. Main - Apportionment and Constitutionality of 85.34(7)

2010-03-24T07:26:00.001-05:00

A recent decision addressing §85.34(7) of the Code has been issued. In Quaker Oats v. Main, No. 08-1507 (Iowa Ct. App. Jan 22, 2010), 2010 WL 200420, the Court of Appeals addressed two issues regarding the apportionment section of the workers’ compensation law. The court found that §85.34(7) applied to successive injuries with the same employer as long as one of the injuries occurred after September 7, 2004, the effective date of the legislation. The commissioner had earlier ruled in Main that both injuries had to take place after September 7, 2004 in order for the legislation to apply, but the district court reversed this finding, and this conclusion was affirmed by the Court of Appeals.

The Main court also addressed the issue of the constitutionality of the provisions of House File 2581 that resulted in the legislation codified as §85.34(7). The legislation had been attacked as being violative of the single subject provisions of the Iowa Constitution, Art. III, sec. 29. The constitutionality of this provision had previously been attacked in Godfrey v. State of Iowa, 752 N.W.2d 413 (Iowa 2008), with the court holding that the plaintiff in that case lacked standing to bring the challenge to the legislation, because she had not been directly affected by the legislation. In Main, the court held that claimant had filed his challenge to the constitutionality of the provision too late – that is, after the bill had been codified. This rule was established in State v. Mabry, 460 N.W.2d 472, 475 (Iowa 1990), which had indicated that codification of the bill cured constitutional defects in the title or subject matter of the bill.

Following the decision by the Court of Appeals, claimant sought further review of the decision, and the Supreme Court denied further review on March 23, 2010. The upshot of Godfrey and Main is that it is next to impossible to challenge legislation on single subject grounds, given the fact that a claimant must be directly affected by the bill in the time period between passage of the bill and codification. Section 85.34(7) was effective on September 7, 2004, and was codified in January of 2005, meaning that only four months was available in which to challenge the bill. Although this protects the general rule that enactments of the General Assembly have a strong presumption of constitutionality, it often prevents an analysis of the constitutional issue on its merits and becomes, instead, a matter of timing.

The commissioner has begun to address issues raised by §85.34(7) of the Code, and future blogs will address these issues.

Supreme Court Decision in Schutjer v. Algona Manor Care Center

2010-03-23T07:43:00.001-05:00

In Schutjer v. Algona Manor Care Center, No. 06-1748 (March 19, 2010), 2010 WL 985740, the court was faced with four issues: 1) the correct rate; 2) whether TTD and TPD benefits were owed; 3) entitlement to PPD benefits; and 4) penalty. The commissioner had agreed with the employer on all four of these issues, but the district court determined that the rate had been improperly calculated and that the commissioner had incorrectly refused to provide temporary benefits for certain days between 12/2/02 and 1/4/03. In view of the decision on the rate issue, the district court remanded the penalty issue to the commissioner. The court of appeals agreed with the district court insofar as the above items were concerned (TTD, rate, penalty), but also concluded that the commissioner had not properly analyzed the question of Schutjer's eligibility for temporary benefits after she left work on 1/5/03, and had failed to provide adequate detail concerning the decision that there was no permanent disability. On further review, the Supreme Court concluded that the Court of Appeals had no basis for remanding on the temporary benefit and permanent disability issues, and affirmed the decision of the district court.

Claimant had suffered a back injury at work, and was returned to work with restrictions. There was a dispute over whether the employer was abiding by these restrictions, and claimant left employment. There was a dispute between the parties over whether claimant had quit her employment or not, with claimant indicating that the charge nurse had asked her to leave and the employer saying that Ms. Schutjer had quit. According to the facts as presented in the court's opinion, a number of the doctors with whom claimant visited believed she was exaggerating her symptoms. The court also indicates that claimant neglected to mention that she had earlier suffered from back problems. Ultimately, claimant had a fusion at L4-5. Dr. Beck believed the surgery was necessary and related to the work incident (pain in the back when transferring a resident), and Dr. Palit did not believe the surgery was necessary nor related to the work injury.

Claimant sought an independent medical evaluation, and Dr. Kuhnlein stated that claimant had a period following her departure from work where she apparently was pain free. She later developed pain and had the fusion surgery. Although he believed that the incidents in December of 2002 and June of 2003 were related, he could not objectively make the relationship between the two, "given the several month interval where no back pain is mentioned."

The deputy found that claimant lacked credibility, and found that claimant was not entitled to healing period or permanency benefits. The hearing deputy also found that claimant had quit her employment. The district court concluded that these factual findings were supported by substantial evidence. The court of appeals found that the issue of voluntary quit was irrelevant to the question of whether claimant was entitled to temporary benefits after 1/5/03, and further held that the real question was whether suitable work had been offered to claimant. The court of appeals also found that the agency had improperly failed to state the evidence it relied on in making its decision, and that the commissioner's decision must be sufficiently detailed to show the path taken.

On the temporary benefit issue, the court found that the commissioner had stated that the evidence was that claimant had voluntarily quit her employment, but did not discuss this issue any further in deciding that temporary benefits were awardable. The Supreme Court agreed with the Court of Appeals that the correct test for temporary benefits in this case was whether claimant had been offered suitable work and whether the employee refused such work. The court concluded, however, that claimant had been offered suitable work, and she refused this work. The court found that the employer was justified in accepting claimant's quit as a rejection of suitable work.

On the issue of permanency benefits, claimant argued that the agency failed to explain the basis for its rejection of the evidence supporting a causal connection, particularly the testimony of Dr. Beck. The court noted that section 17A.16(1) of the Code, a part of the IAPA, states that an agency in a contested case is to "include an explanation of why the relevant evidence in the record supports each material finding of fact. The court also found, however, that the law does not require the commissioner to discuss each and every fact in the record and explain why these facts have been rejected. The court stated that the burden on the commissioner "is not intended to be onerous." The court acknowledges that the arbitration decision does not express the step by step reasoning that led the commissioner to conclude that claimant had failed to demonstrate permanency. The court then indicated that despite this, "it is possible to determine from the commissioner's opinion what evidence he considered and why he credited some of this evidence over other, conflicting evidence." The court finds that it was evidence that the commissioner chose to rely on the opinions of Dr. Palit and Dr. Kuhnlein over those of Dr. Beck because those decisions were more consistent with the factual findings showing an absence of symptoms between February and June. The court concluded that the commissioner's decision was "sufficiently detailed" to demonstrate that he "seriously considered the evidence for and against his finding." The decision of the Court of Appeals was therefore rejected.

The takeaway from the Schutjer case is that the commissioner's decision need not be particularly detailed to meet the requirements of section 17A.16 of the Code. The burden on the commissioner is not onerous, and as long as the decision is sufficiently detailed enough so that the commissioner can be said to have seriously considered the evidence for an against the findings ultimately made, the commissioner's burden is met. Particularly in a case where credibility is a major issue, the commissioner's burden is small. It is hard not to see the Schutjer case as a retreat from Catalfo v. Firestone Tire & Rubber Co., 213 N.W.2d 506, 510 (Iowa 1973), in which the court had indicated that the "commissioner's decision must be sufficiently detailed to show the path he has taken through conflicting evidence." Under Schutjer, as long as there is serious consideration given to the evidence, the burden on the commissioner would appear to be met.

Supreme Court Decision in Second Injury Fund of Iowa v. Kratzer

2010-03-22T08:35:00.002-05:00

The decision in Second Injury Fund of Iowa v. Kratzer, 778 N.W.2d 42 (Iowa 2010) followed close on the heals of the decision in Gregory v. Fund, which addressed similar issues. In Kratzer, claimant suffered an injury to both legs and lower back in 1994, which ultimately resulted in a decision by the commissioner, affirmed on appeal, of a 20% industrial disability. In 2002, claimant had another injury to her left leg, which was settled with the employer just before hearing. The arbitration decision found a first and second injury, and awarded 40% industrial disability. On appeal before the commissioner, the finding of first and second injuries was maintained, but the award was increased to permanent total disability under the odd-lot doctrine.

On judicial review, the district court concluded that although claimant's first injury to the right leg was a qualifying injury, the injury to the left leg in 2002 was not because the same member was injured in the 1994 accident (a bilateral injury). The Court of Appeals affirmed this decision. On review before the Supreme Court, Kratzer contended the 2002 injury was a qualifying second injury, and the Fund argued that the 1997 injury was not a qualifying first injury.

Based on the decision in Gregory (see discussion in this blog on March 21), the court concluded that the injury to the right leg in 1997 was a first injury. With respect to the 2002 injury, the court was faced with the question of whether a bilateral first injury precluded a qualifying second injury because this injury was not to "another member." The court noted the liberal construction of the workers' compensation statute and found "no support in the language of section 85.64 for the proposition that that General Assembly intended to qualify as second injuries only disabling injuries to enumerated members that were not previously functionally impaired." All that the phrase "another member" required was that a "subsequent disabling injury be to an enumerated member other than the member relied upon by the claimant to establish the first qualifying injury." The court concluded that to rule otherwise would require the court to ignore the principle that chapter 85 was to be interpreted in favor of injured employees.

Justice Ternus, based on the decision in Gregory, and the principle of stare decisis, concurred in the majority opinion. Justices Cady and Streit, based on their dissents in Gregory, also dissented in Kratzer. Justice Baker, who had dissented in the Court of Appeals decision, took no part in the decision of the Supreme Court.

Kratzer expands the reach of Second Injury Fund claims in keeping with the words of the statute. It should pave the way for consideration of cases in which claimants have a bilateral first injury as well as a bilateral second injury (e.g. a first bilateral carpal tunnel claim followed by a second such claim), and indeed in Solland v. Second Injury Fund, No. 08-1893 (Iowa Ct. App. March 10, 2010), 2010 WL 786165, the Court of Appeals did just this, finding that Kratzer required that a bilateral loss followed by a bilateral loss did not preclude benefits. The court remanded the case to the agency for further proceedings.

With Kratzer and George, the potential range of Fund cases has grown larger, but troubling language in Gregory concerning but not directly addressing the full responsibility rule could reduce the favorable effect of these decisions for claimants, depending on the future interpretation by the courts.

Supreme Court Decision in Gregory v. Second Injury Fund

2010-03-21T17:26:00.001-05:00

In Gregory v. Second Injury Fund, 775 N.W.2d 395 (Iowa 2010), the court addressed a number of issues that arise repeatedly in Fund cases which had not been addressed previously by the appellate courts. In Gregory, claimant suffered a first injury to both arms (bilateral carpal tunnel). At the same time she had bilateral injuries to her shoulders resulting in subacromial decompressions and distal clavicle excisions in both shoulders. She later fractured her right foot, and filed an action against the Fund. The workers' compensation commissioner concluded that an action against the Fund was not appropriate because Ms. Gregory's injuries extended beyond her extremities and into the body. The commissioner found that since this was a body as a whole injury, Fund benefits were not appropriate.

The court noted that the Fund was conceived to encourage the employment of disabled persons by making the current employer responsible only for the disability the current employer causes. The court concluded that Gregory's entitlement was dependent on proof of the following: 1) she sustained a permanent disability to a hand, arm, foot, leg or eye; 2) she subsequently sustained a permanent disability to another such member; and 3) the permenant disability resulting from the first and second injuries exceeded the compensable value of the previously lost member.

Using the familiar rationale that workers' compensation statutes are to be liberally construed in favor of or the employee, the court concluded that the focus of the inquiry must be on "whether Gregory sustained a partial permanent loss of at least two enumerated members in successive injuries." The court found that claimant clearly did suffer these injuries. Noting that the earlier decision in Second Injury Fund of Iowa v. George, 737 N.W.2d 141 (Iowa 2007) had concluded that a simultaneous second injury did not disqualify a party from Fund benefits, the court concluded that "it would be senselessly inconsistent to conclude a first qualifying injury cannot likewise occur simultaneously with an injury to another such member." With respect to the argument that Fund benefits were precluded because the injury also affected the whole body, the court stated that the plain language of the statute was not supportive of the Fund's contention. Ultimately, the court stated that its holding was consistent with the court's understanding "that the General Assembly did not intent to disadvantage claimants with histories of more complex combinations of enumerated and unenumerated member injuries."

In applying this rule, the court was at pains to point out that the commissioner shall consider only the extent to which earning capacity was diminished by the combined effect of the 2000 and 2002 losses to her enumerated extremities. This would seem to be inconsistent with earlier decisions indicating that the full responsibility rule was applicable to the Fund, and potentially to the general rule in workers' compensation actions that an employee is to be taken as he is found in making the determination of lost earning capacity. This was apparently not an issue that was presented to the court, but the language of the decision seems to put this in play.

The three dissenting justices (four justices ruled in favor of Ms. Gregory) found that the observation that the Fund was meant to encourage the employment of disabled persons was incorrect "and has likely contributed to an overly broad interpretation of our Second Injury Fund statute over the years." The dissenters indicated that the Fund developed because not all employees were perfectly functioning when they entered the workplace or had an injury. Because it would not be fair to impose liability on employers for both injuries, the Fund was created. The dissenters believed that the majority was rewriting the statute, and suggested in a footnote that the decision could conceivably eliminate the Fund in Iowa because it placed Iowa at a competitive disadvantage from a business perspective. Whether this has any place in the explication of the meaning of a statute is open to question, and in seeming contradiction to the desire of the dissenters not to rewrite the statute.

Gregory expands the benefits to be paid under the Fund, but not to extent envisioned by the dissenters. Indeed, by limiting the recovery to the combined effect of the losses to a person's enumerated extremities, the court may have inadvertently limited Fund benefits, and allowed segregation of certain injuries that would not be segregated under the full responsibility rule. This issue is likely to come before the court in the future, as the court's understanding of the Fund evolves.

Supreme Court Decision in IBP, Inc. v. Burress

2010-03-19T07:18:00.001-05:00

The Burress case involved a claimant with brucellosis, which was contracted by exposure to hog blood. The Supreme Court concluded that brucellosis, despite being specifically mentioned in Chapter 85A, was an injury under Chapter 85 in Mr. Burress' case. IBP, Inc. v. Burress, No. 07-1887 (March 5, 2010), 2010 WL 743943. According to the court, an injury has its origin in a specific identifiable trauma or series of such occurrences. A disease, which is compensable under Chapter 85A, originates from a source that is neither traumatic nor physical.

The court engaged in an extensive discussion of the types of diseases that are occupational diseases and not injuries. They noted that in other states, the contraction of brucellosis had been found to be "an accidental injury rather than an occupational disease. The court relied on the findings of the hearing deputy that Mr. Burress' exposures were most likely due to a cut on his hands and exposure to blood that was "sudden, traumatic and of a brief duration." It rejected the contention that because brucellosis was mentioned in section 85A.11, it could not be an injury.

IBP also argued that claimant had not brought his petition within the two year statute of limitations, and had failed to notify the employer of his injury within 90 days. The agency had found that claimant was not aware of the potential compensability for the injury until December 8, 2004, the date on which a doctor had written a letter to the employer finding a causal link between work and brucellosis. Claimant, however, had notified the employer of the injury some months earlier in April of 2004. The court concluded that claimant may have become aware of the probable compensable character of his injury in March or April, and thus the notification of the employer in April would have been within the 90 day limits of section 85.23. Because no factual findings had been made concerning this earlier knowledge of the compensability of the injury, however, the court remanded the case to the commissioner for further factual findings.

In a finding concerning procedural issues, the court found that the fact that the extent of disability was changed from 80% at the arbitration level to permanent total disability on appeal would be affirmed, despite the fact that claimant had not filed a cross appeal urging an increase in the extent of disability. The court noted that IBP had appealed from "each and every" finding made in the arbitration decision, and also noted that claimant had clearly addressed the increase in disability in his brief. The court found that in this situation, the employer had not been deprived of fundamental fairness because they knew of claimant's argument to increase the award of benefits because it was noted in claimant's brief. Permanent total disability was affirmed on substantial evidence grounds.

Finally, the court reversed a penalty award made by the agency. Because there was an express reference to brucellosis in chapter 85A, the court found the employer had a reasonable basis to believe that brucellosis would be treated as an occupational disease.

Supreme Court decision in Bell Brothers v. Gwinn

2010-03-18T15:35:00.001-05:00

On March 5, 2010, the Supreme Court issued a decision in Bell Brothers Heating and Air Conditioning v. Gwinn, No. 07-0221, 2010 WL 743940. The case involved the proof required by the employee to establish a claim for benefits and expenses on account of medical care obtained by the employee, but not authorized by the employer or the commissioner. Mr. Gwinn had obtained non-authorized care (surgery) a week before the arbitration hearing.

The court noted that the employer generally had the right to control care (the so-called authorization defense), but that the statute allowed the employee to choose care in certain emergency situations, when the employer and employee agreed to alternate medical care, and when the commissioner approved alternate medical care. The court concluded, however, that the employer's right to select the medical care did not prevent the employee from choosing medical care at his or her own expense under two circumstances. The first circumstance is when the employer denied compensability of the injury.

The second circumstance, which the court addresses for the first time in Gwinn, occurs when an employee seeks care on his own with neither the consent of the employer nor the approval of the workers' compensation commissioner. Where there are legitimate differences of opinion between the parties over the diagnosis and treatment of the injury , the court found that the employer's duty to provide medical care continues, even when the care is unauthorized "upon proof by a preponderance of the evidence that such care was reasonable and beneficial." The court went on to indicate that care is "beneficial if it provides a more favorable medical outcome than would likely have been achieved by the care authorized by the employer." The court noted that this was a "significant burden" on the claimant. The court also noted that the responsibility of the employer to provide care is not discharged "once an employee deprives an employer of its right to control medical care by obtaining alternate care not authorized by the statute."

The Gwinn case marks the first time that the courts have addressed the beneficial care rule, and thus the limits of the rule will need to be developed in future cases. The creation of the rule, however, provides claimants with an opportunity, in the appropriate circumstances, to seek care on their own where the care provided by defendants is inadequate to address the medical needs of the claimant.