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, 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.