Neifert, Byrne & Ozga, P.C.

Welcome to the blog for Neifert, Byrne & Ozga, P.C., devoted to developments in the field of workers' compensation in the State of Iowa. We hope the blog provides helpful information to users, including updates of Iowa Supreme Court and Court of Appeals cases of interest to claimants and workers' compensation practitioners.

Neifert, Byrne & Ozga represents only injured workers in workers' compensation claims in Iowa. This blog is meant to provide accurate and updated information on state of workers' compensation claims in our state. Should you have further questions, please contact us at Neifert, Byrne & Ozga, P.C, 1441 29th Street, Suite 111, West Des Moines, IA 50266. Tel. 888-926-2117 (toll free). Visit us on the web at www.nbolawfirm.com or www.iowa-workers-comp.com.

Wednesday, November 8, 2017

Court of Appeals Issues Decision on Validity of District Court Nunc Pro Tunc Order

Reihe v. Midwest Viking, Inc., No. 17-0214 (Iowa App. Nov. 8, 2017), deals with the somewhat unusual situation where a district court remanded a matter to the workers' compensation commissioner for entry of an order nunc pro tunc correcting a compromise settlement agreement.  Claimant argues that the district court improperly considered extrinsic evidence and that reformation of the contract was barred by judicial estoppel.

The settlement proposal that was agreed to indicated that defendants would pay roughly $75,000 less deductions of payment made to date (2/23/15), which totaled $21,080.12.  The settlement documents indicated the settlement was roughly $75,000 less weekly payment made from 3/5/15 until settlement approval.  Defendants would have received considerably more in credits under the original agreement than under the terms of the settlement documents.  The settlement documents were approved and defendants sent a check to claimant in an amount equivalent to the original agreement ($51,35-.15).  Defendants filed a motion for a nunc pro tunc order correcting the typographical error and this was denied for lack of jurisdiction. 

Claimant filed a petition in the district court requesting that the unpaid portion of the award be paid.  He also requested attorney's fees.  Defendants filed a counterclaim for contract reformation.  Claimant agreed that the original agreement had started credits in June of 2014, but argued that when the written agreement was signed, this changed the terms of the settlement.  The district court found this was a drafting error and remanded to the commissioner for entry of a nunc pro tunc order.

On appeal, claimant argues the district court erred in considering extrinsic evidence, i.e. the original agreement between the parties.  Because the settlement documents were not ambiguous, according to claimant, the court should not consider extrinsic evidence.  The court notes that the cardinal rule of contract interpretation is to determine the intent of the parties when they entered into the contract.  The court further finds that admission of parol evidence is permissible in actions for reformation so long as the evidence is relevant and material.  Although normally a unilateral mistake is not grounds for reformation, the mistake of a scrivener does not require mutuality of mistake.  The court concludes that there was a mistake that did not reflect the true intention of the parties. 

Claimant also argues that he filed an action under section 86.42 and the district court's action was well outside the scope of an action under that section.  The court found that the district court had jurisdiction to reform the contract.  The court also rejected an argument based on judicial estoppel, because there was an error in the contract. 

The district court had remanded the claim to the commissioner, but the court of appeals remands to the district court to reform the settlement agreement, declare the settlement agreement to be null and void and directing the commissioner to follow the procedures for consideration of whether to approve  the reformed compromise settlement agreement.

This case serves as a cautionary tale for attorneys on both sides of the case to carefully peruse settlement documents before they are filed with the commissioner.

Court of Appeals Decides Case Involving Accommodated Work

In Norton v. Hy-Vee, No. 16-1299 (Iowa App. Nov. 8, 2017), claimant's back and neck injury resulted in a 25% loss in hours in her work as a pharmacy tech.  Despite the injuries, she continued to work and was described as a motivated and valuable employee both before and after the injury.  Claimant argued that she was permanently and totally disabled, inasmuch as she would not have been able to work absent the accommodations provided by Hy-Vee.  The employer argued that claimant did not have a significant industrial disability because she continued to work.  The deputy and commissioner found that claimant was entitled to a 70% industrial disability.  The commissioner found that the award of permanent disability was based on claimant's ability to continue as a pharmacy tech and her ability to find new employment should she leave Hy-Vee. The district court affirmed, finding that the agency had correctly interpreted decisions focusing on claimant's ability to earn in the competitive job market.

On appeal, claimant argued that the agency incorrectly made a downward adjustment of industrial disability based on Hy-Vee's accommodations of her work restrictions.  The court agreed with claimant that Gallardo did not be interpreted as the Supreme Court's approval of a downward adjustment to industrial disability based on an employer's accommodations of work restrictions.  Similarly, Overholser could not be interpreted to support such a downward adjustment.  The court indicated that industrial disability was to be based on the injured worker's earning capacity, without regard to accommodation.  The court agreed with claimant that an injured worker's performance of accommodated work, without more, cannot be used to reduce a worker's industrial disability rating.  But the performance of accommodated work could be considered in assessing industrial disability if the work is transferable to the competitive job market and discloses a discerned earning capacity.

Although the court agreed with claimant as to the state of the law regarding accommodated work, it concludes that the commissioner correctly interpreted that law.  The commissioner noted that claimant was a valuable member of the pharmacy team and had developed unique skills.  The commissioner also noted that claimant would probably find employment, even with her restrictions, should she leave Hy-Vee.  The court also indicates that a review reopening proceeding would be available to claimant in the future if there were a change in her condition or earning capacity in the future.  Claimant also points to the fact that her case has been cited by the commissioner for the proposition that a downward departure based on accommodated work is permissible.  The court finds that these cases are not before it and does not lead to the conclusion that the commissioner's interpretation was incorrect.  The decision of the agency was affirmed.

Judge Tabor dissented, indicating that the caselaw demonstrates that loss of earning capacity should be viewed in terms of the present ability of claimant to earn in the competitive job market without regard to accommodations.  Judge Table found that the commissioner had specifically considered claimant's accommodations in making its determination of a 70% industrial award.  The accommodation should not have been considered at all, even if her ability to find a job after Hy-Vee was considered. 

Given the extended discussion of the issues by both the majority and dissent, and the commissioner's citation of Norton to justify downward reductions based on accommodations, it is quite likely that this case will wind up before the Supreme Court on further review. 








Wednesday, October 11, 2017

Court of Appeals Affirms Finding that Claimant Did Not Give Timely Notice of Her Injury

In Callahan v. Horseshoe Casino, No. 16-2230 (Iowa App. Oct. 11, 2017), the court addressed an issue of notice to the employer under section 85.23 of the Iowa Code.  The claimant's back problems had manifested on October 10, 2011, and the commissioner determined that the employer did not have actual knowledge of the injury until August 13, 2012, making claimant's claim untimely.  The commissioner concluded that there was no credible evidence to support the deputy's finding to the contrary and found that the claim was time-barred.

The Court of Appeals notes that the commissioner concluded that although the employer knew of the back injury, it did not know that the injury was related to work until 14 months after the injury had manifested.  The court viewed this as a question of substantial evidence and finds that the commissioner's finding that there was no actual notice the injury was work related until August of 2012 was supported by substantial evidence. The court also concluded that the finding that the claim was time-barred was not illogical, irrational or wholly unjustifiable. 


Wednesday, September 20, 2017

Court of Appeals Affirms Decision Finding that the Filing of Claimant's Petition was Untimely

In Myers v. R.R. Donnelly & Sons, No. 17-0306 (Iowa App. Sept. 13, 2017), the Court of Appeals upheld a decision of the agency concluding that claimant's petition was untimely and was not saved by the discovery rule.  

Claimant was employed by Donnelly as a press operator until 2011, when he was moved to another position because he could not longer perform the duties of a press operator as a result of back problems.  The back problems had begun in 1999.  The agency concluded that claimant knew his back problems were related to his work by 2009.  On November 2012, claimant received permanent restrictions of no lifting of more than 40 pounds and was terminated because the employer could not accommodate his work restrictions.  Claimant filed a petition on April 2, 2013.

The agency concluded that claimant's injury date was 2/25/09, when claimant's doctor diagnosed him with disabling mechanical back pain and referred him to his surgeon.  The deputy found that the manifestation date was 3/3/11.  Because Myers filed his petition more than two years after this date, the claim was dismissed.   The dismissal was affirmed by the commissioner and the district court.

The court notes that the manifestation date for the injury is the date on which both the fact of the injury and the causal relationship of the injury to the claimant's employment would have become plainly apparent to a reasonable person.  The court went on to note that under Herrera, in a cumulative injury case, the statute of limitations will not begin to run until the employee also knows that the physical condition is serious enough to have a permanent adverse impact on the claimant's employment or employability.

Claimant argued that he knew the nature of his injury, but not the seriousness of the injury on 2/21/11.  He also argued that he did not know the probable compensable character until 9/14/12.  The court cited hearing testimony indicating that claimant knew the work related nature of his injury in 2009-2011.  Ultimately, the court concluded that claimant knew of the compensable character by 2/21/11, under the substantial evidence rule.  

Note that the last injurious exposure appears to have been in 2011, as that was the time that claimant was switched from his role as a press operator.  The court does not specifically address the fact that claimant did not have permanent restrictions until November of 2012.  




Thursday, July 6, 2017

Court of Appeals Affirms Award of 45 Weeks of Permanent Partial Disability

In Lopez v. Cargill Meat Solutions, No. 16-1421 (Iowa App. July 6, 2017), the court rejected claimant's allegations that his claim should have been considered as an industrial disability and affirmed the functional award of 45 weeks of benefits.  Claimant argued that his experts presented substantial, credible evidence of industrial disability and it was unfair, irrational and illogical to reject those opinions. The court concluded that the agency had given greater weight to certain expert opinions over others and thoroughly explained the reasons for doing so.  Because those findings were supported by substantial evidence and were not irrational, illogical or wholly unjustifiable, the decision of the agency stood.

Supreme Court Establishes Private Constitutional Right of Action Against Government Actors in Commissioner's Suit

Following the reduction of his salary by the Governor in 2010, former Commissioner Chris Godfrey filed an action against the State of Iowa and various state officials, including the Governor, alleging a variety of legal theories.  In Godfrey v. State of Iowa et al., No. 15-0695 (Iowa June 30, 2017), the Court ruled, for the first time, that constitutional claims, in this cases allegations of deprivation of property rights without due process of law and deprivation of liberty interests without due process created causes of action directly under the Iowa Constitution.

Four counts of the petition were at issue before the court.  Count VI alleged that Godfrey was deprived of his property rights in his salary because of partisan politics and sexual orientation.  Count VII alleged a damage to a protect liberty interest in his reputation without due process by falsely claiming poor work performance.  Count VIII alleged a violation of the equal protection of the laws for discrimination based on sexual orientation.  Finally, Count IX alleged equal protection violations because of different treatment of homosexual state officers or individuals as compared to heterosexual officers or individuals.

The commissioner alleged that Article I, section 6 and Article I, section 9 of the Iowa Constitution were self-effectuating.  Section 6 is the equal protection division of the constitution and section 9 is the due process provision.  He argued that the provision of the Iowa Constitution (Article XII, section 1) which requires that "the legislature shall pass all laws necessary to carry [the] constitution into effect," was modified by the word "necessary" and that it was not necessary to effectuate due process and equal protection provisions.  Defendants argued that if the drafters of the Constitution had intended the Constitution to be self-effectuating, they would have said so.  Defendants also noted that Iowa had not passed an analogue to 42 USC 1983, the provision of federal law that allows direct actions under the US Constitution.

After considering Supreme Court jurisprudence as well as the Iowa Constitution at length, the Court ultimately concluded that there was a direct action under the Iowa Constitution for due process and equal protection violations.  Three justices would have also held that the constitutional claims in Counts VIII and IX were not preempted by the Iowa Civil Rights Act.  Justice Cady, who concurred in the judgment with respect to Counts VI and VII, found that the Iowa Civil Rights Act provided an adequate remedy for the sexual discrimination claim, and thus those claims were found to have been correctly dismissed.

The three dissenters argued that the Constitution required legislative authorization or a footing in the common law of torts before a direct action was possible. The dissenters believed that the constitutional text of Article XII, section 1 foreclosed plaintiff's argument, since it required the legislature to pass laws enabling a right to sue.  The conclusion they reached was that although the impact of the decision in commissioner Godfrey's case might be limited, there could be "many claims from current and former inmates seeking damages for wrongful incarceration" and juveniles who were resentenced because their earlier sentences violated Article I, section 17 to seek damages under the constitution.

The Godfrey  case will now proceed to trial, with the further expenditure of public funds to defend the case.

Tuesday, May 23, 2017

Supreme Court Decides Workers' Compensation Bad Faith Claim

In Thornton v. American Interstate Insurance Company, No. 15-1032 (Iowa May 19, 2017), plaintiff was awarded $284,000 in compensatory damages and $25 million in punitive damages by the jury in a case involving the payment of workers' compensation benefits in a permanent total disability case.  The Supreme Court concludes that the insurer lacked any reasonable basis to dispute PTD status and affirmed summary judgment for the claimant.  The Court also held, however, the district court erred in holding that the insurer acted in bad faith as a matter of law for resisting claimant's partial commutation petition.  The judgments for compensatory and punitive damages were reversed and remanded.

Plaintiff had a serious injury while working as an over the road truck driver.  As a result of this injury, the insurance carrier began paying benefits and set its reserves in an amount based on a PTD finding. The evidence at trial  indicated that the insurance carrier and its attorney believed that Mr. Thornton's claim was a PTD claim.  Defendants presented settlement proposals to plaintiff based on payment of a PTD claim on a structure with a Medicare Set Aside and closure of the file.  Plaintiff filed a workers' compensation claim and defendants denied PTD in answer to the petition.  A mediation failed and the case proceeded to hearing.  Defendants' witness indicated that although there may not have been a reasonable defense, he felt that they still had a right to go to hearing.  Claimant was found PTD after hearing.

Plaintiff subsequently filed a partial commutation claim.  Defendants resisted the partial commutation claim.  Defendants hired an expert to dispute that a partial commutation was in claimant's best interests.  A partial commutation was granted following hearing and indicated it would be hard to imagine a clearer scenario where a partial commutation should be granted.

The Supreme Court found that to establish a first party bad faith claim against a workers' compensation insurer, plaintiff must show that there was no reasonable basis for denying benefits and the insurer knew or had reason to know that its denial was without basis.  The Court discusses earlier workers compensation bad faith claims and concludes that bad faith depended on the carrier's conduct in light of its statutory obligations and not the specific wording of the insurance contract.  Therefore, the failure to introduce the contract at trial did not defeat claimant's claim.

The district court had ruled, as a matter of law, that defendants had acted in bad faith.  The concluded that this decision was appropriate with respect to claimant's PTD status.  The Court did not believe there was bad faith in the mediation phase of the case.  The Court also concluded that there was not bad faith in resisting partial commutation.  The Court notes that commutation is not like the payment of weekly benefits, which commands action from the insurer.  The resistance to commutation was found to be fairly debatable on its facts.

Because of the ruling on the resistance to commutation, the Court concludes that a new trial on liability and damages is necessary.  Much of the $284,000 compensatory damage award was attributable to the delay in commutation portion of the claim.   Because of the incorrect ruling on the commutation portion of the bad faith claim, the trial was said to be tainted  and the other bad faith claims did not cure the taint from the bad instruction.

Plaintiff had also requested attorney's fees for litigating the bad faith action.  The Court, citing the American rule, concludes that the loser does not normally pay attorney's fees and that the bad faith exception to this rule did not apply.

Wednesday, February 8, 2017

Court of Appeals Affirms Denial of Alternate Medical Care

In Penny v. Whirlpool, No. 16-0495 (Iowa App. Feb. 8, 2017), the agency had denied claimant's request for alternate medical care with a neurosurgeon, finding that the care provided to claimant by the employer had not been unreasonable.  The Court of Appeals affirms the decision of the agency.

Claimant had been seen by Dr. Matos and Dr. Abernathey.  Dr. Abernathey did not believe surgery was indicated, but claimant's pain persisted.  The employer set up additional testing to determine claimant's radicular symptoms, but claimant did not attend the appointments under the believe that Whirlpool did not consider his back injury to be work related. Claimant then sought care with a neurosurgeon.  The deputy concluded that since the employer had authorized care with two doctors, as well as authorized an MRI, physical therapy, acupuncture, an EMG and treatment at a pain clinic, the care authorized was not unreasonable.  The district court affirmed.

On appeal to the Court of Appeals, claimant argued that the district court considered evidence outside the record of this alternate medical care proceeding.  The Court of Appeals noted that the record was limited to the record made before the agency and reviewed the record made on the June 2, 2015 application for alternate medical care.

The court finds that claimant failed to demonstrate that the care provided by Whirlpool was unreasonable to treat his injury.  The court rejected arguments that the commissioner's decision was based on an erroneous legal interpretation, was inconsistent with prior precedent, or was based on a determination of fact that was not supported by substantial evidence.  The court affirmed the decision of the agency.


Wednesday, January 25, 2017

Court of Appeals Affrims Award of TTD Benefits, Medical Expenses and Penalties

In Polaris Industries, Inc. v. Doty, No. 16-0961 (Iowa App. Jan. 25, 2017), the COA affirmed the decision of the agency finding that claimant had established eligibility for TTD benefits, medical expenses and penalty.  Claimant was diagnosed with impingement syndrome, which defendants' original orthopaedic surgeon, Dr. Hough, related to claimant's work.  Dr. Hough, following an MRI showing a rotator cuff tear, recommended surgery.  Rather than proceeding with the surgery, defendants had Dr. Blow, a physical medicine doctor, perform a defense medical exam.  Dr. Blow concluded the problems were age related and did not recommend surgery.  Dr. Blow placed claimant at MMI, despite the facto that she had not had surgery.  Dr. Hough subsequently recommended surgery again and placed her on restrictions.  Dr. Hines, who performed an IME for claimant, found causation and also recommended surgery.

The hearing deputy found it was a strain to accept that claimant's condition was not related to work.  The deputy credited Dr. Hough and Dr. Hines and ordered TTD benefits, a small amount of medical expenses and penalties in the amount of 25% of past due TTD benefits.  On appeal, the commissioner affirmed and noted that penalty was appropriate because defendants failed to contemporaneously convey the basis of the denial to claimant.

The COA affirms in all respects.  The court concludes that despite the fact that the employer tried to "massage the factual record on appeal," this did not unsettle the substantial evidence supporting the commissioner's assessment of the doctors' viewpoints.  The court concluded that TTD and medical benefits were appropriate as the decision of the commissioner was supported by substantial evidence.
On the penalty issue, the court noted that the reason for granting penalty benefits was different at the arbitration and appeal levels.  The deputy awarded penalty because Dr. Blow's opinion did not transform claimant's entitlement to benefits into the fairly debatable realm because he ignored facts in the company's own records.  The commissioner found that Dr. Blow's conclusion did make the question fairly debatable, but concluded defendants had not provided the notice required by the statute.  The court concludes that penalties were appropriate, stating that any delay without a reasonable excuse entitles the employee to penalty benefits in some amount.  The record did not demonstrate that defendants had contemporaneously conveyed the reasons for denial to claimant and penalty was therefore appropriate.

Court of Appeals Reverses Commissioner's Summary Judgment Decision in Favor of SIF

Stowe v. Second Injury Fund of Iowa, No. 16-0599 (Iowa App. Jan. 25, 2107) presented the somewhat unusual situation where the commissioner had disposed of a case on summary judgment grounds.  Claimant had settled her case against the employer on an agreement for settlement and in the settlement documents had indicated that the injury was an injury to the left thumb.  When claimant brought an action against the Fund, the Fund filed for summary judgment, claiming that an injury to the thumb was not a qualifying injury for SIF purposes.  The deputy and commissioner agreed and the case was dismissed.

Claimant filed a petition for judicial review and the district court reversed the decision of the agency, finding that the commissioner erred in ruling as a matter of law the settlement agreement precluded claimant from seeking Fund benefits on the basis of a hand injury.  The court noted that the Fund was not a party to the settlement agreement and also found there was no support in the record to substantiate the agency's finding that claimant had acknowledged that the injury was not to her hand.  Viewing the facts in a light most favorable to claimant, the district court reversed and remanded.

On appeal, the Fund argues that the doctrine of judicial estoppel barred a claim for a hand injury because it was inconsistent with her statement in another proceeding that this was an injury to the thumb.  The COA notes that judicial estoppel prohibits a party who has successfully and unequivocally asserted a position in one proceeding from asserting an inconsistent position in a subsequent proceeding.  The court note that the positions in the two proceedings need not only be inconsistent, but "so inconsistent that one necessarily excludes the other."

The court discusses the definition of the word "hand" and notes that an injury to the thumb, by itself does not automatically exclude an injury to the hand in ordinary parlance.  Because Stumpff v. Second Injury Fund makes clear that a finger injury can qualify as a hand injury, the same can be said of the thumb.  The court noted that the documents attached to the settlement agreement supported the claim of a hand injury.  The court concluded that the district court was correct, affirms the action of the district court and remands the case to the agency.