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 or

Wednesday, December 29, 2010

Permanent Total Disability Awarded in Court of Appeals Case

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.

Wednesday, November 3, 2010

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

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).  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.

Tuesday, September 7, 2010

Supreme Court Decision Apportioning Risk in Case Involving Volunteer Firefighter

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.

Friday, September 3, 2010

Court of Appeals Decides Rate Case

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.

Thursday, August 12, 2010

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

In Swiss Colony v. Deutmeyer, 789 NW2d 129 (Iowa 2010), 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

Solland v. Second Injury Fund of Iowa, 786 NW2d 248 (Iowa 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.

Friday, August 6, 2010

Supreme Court Decides Horseplay Case

Horseplay is not an area that is addressed frequently by the Supreme Court, so the decision in Xenia Rural Water District v. Vegors, 786 NW2d 250 (July 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.  

Monday, June 21, 2010

IWCC Issues Declaratory Ruling on Section 85.39

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.

Thursday, May 27, 2010

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

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) 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.

Wednesday, May 26, 2010

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

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.

Friday, April 23, 2010

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

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) 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.  

Monday, April 12, 2010

Apportionment - New Cases Interpreting 85.34(7)

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). 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). 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),%20Thomas-5022821a.doc and Summerlin v. Tyson Foods, Inc., Nos. 5025718, 5025719 (Reh'g Dec. March 2, 2010),%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.  

Wednesday, March 31, 2010

2010 Legislative Session A Bust for Workers' Compensation

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.

Wednesday, March 24, 2010

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

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. 

Tuesday, March 23, 2010

Supreme Court Decision in Schutjer v. Algona Manor Care Center

In Schutjer v. Algona Manor Care Center, 780 NW2d 549 (Iowa 2010), 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.

Monday, March 22, 2010

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

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.  

Sunday, March 21, 2010

Supreme Court Decision in Gregory v. Second Injury Fund

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.

Friday, March 19, 2010

Supreme Court Decision in IBP, Inc. v. Burress

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, 779 NW2d 210 (Iowa 2010). 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.

Thursday, March 18, 2010

Supreme Court decision in Bell Brothers v. Gwinn

On March 5, 2010, the Supreme Court issued a decision in Bell Brothers Heating and Air Conditioning v. Gwinn, 779 NW2d 193 (Iowa 2010). 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.