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.

Saturday, December 10, 2011

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

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

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

Friday, November 11, 2011

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

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

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

Thursday, November 10, 2011

Court of Appeals Rejects Gross Negligence Claim

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

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

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

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

Thursday, October 6, 2011

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

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

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

Wednesday, September 28, 2011

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

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

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

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

Tuesday, September 27, 2011

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

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

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

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

Saturday, September 24, 2011

Court Reverses Agency Decision Denying Benefits

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

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

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

Court Affirms Permanent Total Disability Award

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

Court Affirms Permanent Total Award

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

Court Affirms That Second Dismissal of Case is Without Prejudice

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

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

Court of Appeals Affirms Denial of Benefits on Substantial Evidence Grounds

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

Wednesday, August 24, 2011

Court of Appeals Criticizes Agency Decision, Remands Case to Agency

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

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

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

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

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

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

Monday, July 25, 2011

Court of Appeal Affirms Decision Against Claimant on Substantial Evidence Grounds

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

Sunday, July 24, 2011

Court of Appeals Decides Rate Case Favorably to Claimant

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

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

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

Court of Appeals Affirms Penalty Award, Healing Period Benefits

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

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

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

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

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

Court of Appeals Affirms Two Permanent Total Awards

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

Saturday, July 23, 2011

Governor Unilaterally Reduces Commissioner's Salary

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

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

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

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

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

Saturday, June 18, 2011

Court of Appeals Affirms Commissioner's Decision on Costs

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

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

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

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

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

Friday, June 10, 2011

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

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

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

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

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

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

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

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

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

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

Thursday, June 9, 2011

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

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

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

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

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

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

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

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

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

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

Court of Appeals Decides Cumulative Injury, Manifestation Case

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

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

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

Friday, April 29, 2011

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

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

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

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

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

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

Thursday, April 28, 2011

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

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

Monday, April 4, 2011

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

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

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

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

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

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

Friday, April 1, 2011

Court of Appeals Decision in Westling v. Hormel Foods

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

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

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

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

Court of Appeals Decision in Traco v. Dumler

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

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

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

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

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

Sunday, January 23, 2011

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

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

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

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

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

Saturday, January 22, 2011

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

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

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

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

Supreme Court Reverses Court of Appeals in Substantial Evidence Case

In Broadlawns Medical Center v. Sanders, 792 NW2d 302 (Iowa 2010), Justice Marsha Ternus entered her last workers' compensation decision, reversing the Court of Appeals and concluding that the decision of the commissioner awarding permanent partial disability benefits was supported by substantial evidence.  Claimant worked at a group home for the mentally ill, where she was required to clean a room in which a client had committed suicide.  As a result of this experience, she began having nightmares, flashbacks and hallucinations, resulting in a diagnosis of PTSD.

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

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

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

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

Wednesday, January 5, 2011

Court of Appeals Issues Decision on Full Responsibility, Healing Period

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

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

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

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

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

Healing Period.  Defendants contended on review that under Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 447 (Iowa 1999), claimant was not entitled to healing period following his fourth surgery.  Defendants argued that since claimant had earlier reached maximum medical improvement, healing period was not appropriate.  The court finds that no evidence was presented to dispute that maximum medical improvement had been reached prior to the fourth surgery, and denied healing period benefits.  In reaching this conclusion, the court did not discuss the apparently contradictory opinion of the Supreme Court in Teel v. McCord394 N.W.2d 405 (Iowa 1995), in which the court concluded that intermittent healing periods were possible.  The court also did not address the factual distinctions between Ellingson and Mr. Mettler's situation, since the claimant in Ellingson did not have surgery following the initial injury, and essentially claimed healing period benefits for days off work following a finding of MMI.  Mettler would appear to stand for the proposition that there is no such thing as an intermittent healing period, which is directly contradictory to the law at the agency level.


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


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

Tuesday, January 4, 2011

Review-Reopening Case Decided by Court of Appeals

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

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

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

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

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

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

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