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, 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.