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.