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.
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.
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