Neifert, Byrne & Ozga, P.C.

Welcome to the blog for Neifert, Byrne & Ozga, P.C., devoted to developments in the field of workers' compensation in the State of Iowa. We hope the blog provides helpful information to users, including updates of Iowa Supreme Court and Court of Appeals cases of interest to claimants and workers' compensation practitioners.

Neifert, Byrne & Ozga represents only injured workers in workers' compensation claims in Iowa. This blog is meant to provide accurate and updated information on state of workers' compensation claims in our state. Should you have further questions, please contact us at Neifert, Byrne & Ozga, P.C, 1441 29th Street, Suite 111, West Des Moines, IA 50266. Tel. 888-926-2117 (toll free). Visit us on the web at www.nbolawfirm.com or www.iowa-workers-comp.com.

Wednesday, October 31, 2012

Court of Appeals Decides Exclusivity Case Concerning Employee of Temporary Agency

The court, in Kelly v. Riser, Inc., No. 11-1898 (Iowa App. Oct. 31, 2012) addressed a question of an employee of a temporary workers' agency, who recovered benefits for an injury from the workers' compensation carrier, could also proceed against the property owner, general contractor and subcontractor.  The court concluded that there was no right of recovery in tort against parties other than the employer, and that workers' compensation was the exclusive remedy available to the claimant. 

Claimant worked for Labor Ready, a temporary employment contractor, and was assigned to dismantle and install a new bleacher system for Bettendorf High School.  He was injured on the job.  The contract between claimant and Labor Ready indicated that the exclusive means of recovery for an injury was through workers' compensation.  Following the injury, claimant received workers' compensation benefits, but later sued over parties in tort.  The district court, on summary judgment, dismissed all claims against the property owner, general contractor and contractor.  The court found that the subcontractor was a third party beneficiary of the contract between Labor Ready and Kelly.  With respect to the owner and contractor, the district court rejected claims for negligent supervision, duty to maintain a safe workplace, negligent hiring or negligence per se for OSHA violations.

The court of appeals found that the release signed by Kelly was a broad exculpating release of which the subcontractor was a third party beneficiary, and affirmed the award of summary judgment in the subcontractor's favor.

Claimant argued that he was a third party beneficiary of the contract between the employer and the subcontractor, which provided that the safety requirements in the subcontractor's agreement were for the protection of Labor Ready workers.  The court concluded that the contractor did not manifest an intent to benefit a third party, and rejected the claimant's contention.  The same was found to be true of contract between the owner and the contractor, which did not contain any language that was designed to benefit the interests of a third party.

On the negligent hiring claim, the court concluded that section 411 of the Restatement of Torts did not include protection for employees of an independent contractor suing a general contractor for negligent hiring of its own employer.  This is because, in part, the cost of workers' compensation insurance is expected to be borne by the employer who hired the injured worker.  The court affirmed the dismissal of the lawsuit against the subcontractor, owner and general contractor. 

Court of Appeals Affirms Finding that Injury Arose Out of Employment

In O'Reilly Auto Parts v. Alexander, No. 11-1864 (Iowa App. Oct. 31, 2012), the court addressed two issues.  The first was whether claimant's injury arose out of and in the course of employment.  The second was whether the commissioner had erred in sua sponte entering an insurance carrier into the proceedings.  The court affirmed on both counts.

Claimant contended he had suffered a back injury while unloading a tote from a truck and twisting his body to take a step.  Injury reports did not reflect the date of injury actually claimed in the action.  Claimant was not sent to see the company doctor, and did not initially explain the mechanism of injury to his family doctor.  Dr. Ray concluded that claimant had sustained a worsening of pain from the work accident.  Claimant subsequently had a stroke and explained at hearing that he had problems with memory.  The claim was denied by the deputy but the commissioner reversed and concluded that claimant suffered a work related injury.

The court first noted that it was commissioner's decision that was being reviewed, not that of the deputy, citing Myers v. FCA Servs., Inc., 592 N.W.2d 354, 358 (Iowa 1999).  The court next found that defendants had preserved error on the issue of whether the injury arose out of employment.  The court noted that the determination of credibility was in the province of the commissioner and found that substantial evidence supported the conclusions of the commissioner.

The final issue presented was that the commissioner conducted an independent investigation by reviewing proof of insurance coverage on the agency's website to find that correct insurer for the employer, and then added that insurer to the claim.  The employer indicates that this suggests bias on the part of the commissioner, since neither party had asked the commissioner to do so.  The employer did not suggest that it was injured or prejudiced by the actions of the commissioner, only that there was the appearance of impropriety.  The court found that the agency simply corrected an error, which counsel failed to identify and remedy.  The commissioner's action was within the authority granted the commissioner by the legislature to adjudicate rights and duties as between injured workers and the responsible insurance carriers.  The commissioner's decision was affirmed. 

Court of Appeals Decides Review-Reopening Claim Involving Weight Loss Surgery and Commencement Date for Benefits

In Verizon Business Network Serv., Inc. v. McKenzie, No. 11-1845 (Iowa App. Oct. 17, 2012), the court grappled with issues involving review reopening and the commencement date of such benefits, and also concluded that weight loss surgery was not related to the work injury.

The case had previously been remanded by the court in November of 2010, to be reconsidered under the review-reopening standard set forth in Kohlhaas.  Claimant had initially been found to have a 25% industrial loss as a result of her back injury, and the commissioner had concluded on the initial review reopening that she was permanently and totally disabled.  The court also indicated that the commissioner should reconsider payment for the bypass surgery under Bell Bros. v. Gwinn.  Finally, the agency was to redetermine the correct date for commencement of benefits.

On remand, the commissioner found that claimant was unable to work due to her spine injury.  The commencement date for benefits was said to be the date of the original injury, with the employer due a credit for weekly compensation that had been paid.  Finally, the commissioner found that the gastric bypass surgery was the responsibility of the employer in that the care provided a much more favorable outcome than the lack of care provided by the employer.

At the district court, the commissioner's decision was reversed to the extent that the commissioner was found not to have properly applied Kohlhaas.  The court found that there was no evidence of a change in the work injury or earning capacity of the claimant.  The court concluded that it defied logic to take the commencement date back to the date of the original injury, when the initial arbitration decision only awarded a 25% industrial benefit.  The court found that the date the petition was filed was the appropriate date.  The court found that Bell Bros. was properly applied to award payment for the gastric bypass surgery.

The court interpreted Kohlhaas as setting forth five ways in which a review-reopening claim could be satisfied: 1) worsening of physical condition; 2) reduction of earning capacity; 3) temporary disability developing into a permanent disability; 4) a critical fact existed but was unknown or could not have been discovered; and 5) a scheduled member claim later causes an industrial disability.  The claimant argued that the fourth way of proving entitlement was appropriate. She asserted that the fact that the weight loss surgery and years of treatment did not improve her condition with respect to her back was the change in condition necessary to trigger review-reopening.  The court rejected this argument, finding that, unlike Gosek, in which the review reopening argument was based on a new fact not previously recognized, in this case, claimant knew all along that she was morbidly obese (of course, she did not know that treatment for the obesity would not change the condition of her back, as her doctors had told her that it would).  The court indicates that claimant was simply asserting that the commissioner erred in originally finding that her industrial disability was 25%.

The court also rejected a claim under Meyers v. Holiday Inn, 272 N.W.2d 24, 26 (Iowa App. 1978), in which the court had granted review reopening upon a doctor's opinion that he had erred in his original assessment of disability.  The court found that Kohlhaas prevented such a result, because under that case, the commissioner should not be evaluating whether the initial decision anticipated that the claimant's condition would improve or deteriorate.  Kohlhaas, according to the court, "specifically rejected a review-reopening proceeding based solely on a 'difference of opinion of experts or competent observers as to the percentage of disability arising from the original injury.'"  The court found that the commissioner's conclusion that absent the consideration of claimant's weight, it could clearly determine the impact of the back injury was "precisely what Kohlhaas warned against."  The court remanded to the agency simply to determine whether there is a change in claimant's work related condition or earning capacity.  Based on this result, it would not be surprising if further review was requested of the Supreme Court.

On the commencement date issue, the commissioner found that the date of the original injury was the correct commencement date.  The district court concluded, based on Dickenson v. John Deere Products Engineering, 395 N.W.2d 644, 649 (Iowa App. 1986), that the appropriate date was the date the review reopening petition was filed.  The court in Dickenson had indicated that interest payments should not begin until the review reopening was filed.  The court found it implicit in Dickenson that weekly benefits for review reopening are not due until the review reopening is filed (this appears to ignore the holdings in cases such as Robbenolt v. Snap-On Tools, 555 N.W.2d 229, 235 (Iowa 1996) which indicates that the commencement of benefits occurs at the end of the healing period).

Finally, on the issue of beneficial care, the court addressed the question of whether the gastric by pass surgery provided a more favorable outcome than would have been achieved by the care authorized by the employer.  The court concluded that despite claimant's testimony that her pain was less following the bypass surgery, there was evidence that she was taking more narcotic pain medication, and concern among the doctors that the surgery had not helped as anticipated.  The court finds that because there was not a more favorable outcome for the work injury, "we disagree with the district court and the commissioner that the gastric bypass surgery was beneficial to McKenzie."  There is no real discussion of substantial evidence in this aspect of the case, and the court appears to simply weigh the evidence.

Judge Danilson dissents in part, finding that claimant had met her burden to reopen her claim.  He concluded that "clearly the commissioner concluded that McKenzie had a diminution of earning capacity from 25% to 100% and that the loss in earning capacity was proximately caused by the injury."  The judge found that it was well settled in other jurisdictions and in Kohlhaas that increased incapacity of the employee, due to the original injury subsequent to the initial award entitled the employee to additional compensation.  Judge Danilson would have affirmed the commissioner's permanent total disability award.

McKenzie may represent the next case in which the Supreme Court considers review reopening and beneficial care issues.  As of October 30, no request for further review had been filed in the case, so it is unknown whether further review will be sought. 

Tuesday, October 30, 2012

Court of Appeals Addresses Penalty Issues, Sanctions

In Dunlap v. Action Warehouse, No. 11-1451 (Iowa App. Oct. 17, 2012), the court addressed issues of causal connection, permanency, temporary benefits, penalty and sanctions.  The issues concerning causal connection, extent of permanency and temporary benefits were fairly straightforward analyses based on substantial evidence principles.  The penalty and sanction issues are potentially more important.

Dunlap was injured at work, and after a numerous struggles to obtain care, including an alternate medical care proceeding, he was set up with Dr. Prevo.  Dr. Prevo found that there was no permanency and further indicated the back problems were not related to his work.  Dr. Prevo was subpoenaed to a deposition and also provided with a subpoena duces tecum.  At the deposition, he refused to provide certain documents that had been subpoenaed.  Prevo refused to answer questions concerning disciplinary proceedings before the Iowa Board of Medicine. 

At hearing, Dunlap sought sanctions against the employer for the refusal of Dr. Prevo to answer questions.  The deputy found in favor of claimant and ordered the employer to pay the cost of Dr. Prevo's deposition, including the fees incurred for Dr. Prevo's and the court reporter's time.  Running healing period benefits were awarded, but penalty benefits were denied, based on opinions from Dr. Boyett and Dr. Neff.  The commissioner affirmed.

The district court affirmed in all respects save the penalty issue.  On that issue, the court found that the employer was liable for penalty from the date of injury until September 26, 2008, the date Dr. Neff responded to the employer's letter agreeing that there was no causal connection.

On the issue of running healing period, the court affirmed the decision of agency on substantial evidence grounds.  The court noted that the deputy detailed why he gave greater weight to the opinions of Dr. Kuhnlein and Dr. Thompson than to Drs. Neff, Boyett and Prevo.

On the penalty issues, the employer argued that Dr. Boyett's full duty release provided a reasonable basis for its position that no benefits were owing.  The employer also argued that Dr. Neff's opinion that the back pain was not related to his work injury defeated claimant's penalty claim.  Without a great deal of discussion, or an indication of the time period involved, the court reversed the determination of the district court and affirmed the commissioner's denial of penalty benefits.

On the issue of sanctions, claimant requested that Dr. Prevo be held in contempt for refusing to comply with the subpoena.  The agency found that it lacked contempt power.  The district court affirmed this holding, finding that "the law in Iowa is well-settled that an administrative agency is without power to enforce subpoenas or to hold someone in contempt of court."  The court of appeals affirmed this analysis.  Claimant also argued that the agency had the power to deem Dr. Prevo in contempt, even if it did not have the power to impose civil punishment.  The court rejected this assertion, indicating that section 665.2(4) of the Code limited the contempt power to courts.  The court also noted that administrative agencies possessed only such power as accorded by statute. 

Monday, October 29, 2012

Court Addresses 86.42 Judgment and Stay of Judgment

In Annett Holdings v. Pepple, No. 12-0468 (Iowa App. Oct. 17, 2012), claimant had sought and obtained a judgment under section 86.42 of the Code.  At the time that claimant sought judgment, defendant sought a stay of that judgment, which was denied by the district court.  The court found that although defendant might suffer harm from the judgment, the harm was less certain and less significant than the harm to claimant.

On appeal, the court found that the district court had considered the factors set forth in section 17A.19(5)(c) of the Code, in addition to the Supreme Court's decision in Grinnell College v. Osborn.  The court found that "when  a party requesting judgment has met all the conditions of Iowa Code section 86.42, the district court is required to enter the judgment in favor of the party requesting judgment."  The court found that this was the case, and affirmed the decision of the district court. 

Court of Appeals Decides Equitable Apportionment, Penalty Case

In Carter v. Alter Trading Corp., No. 11-1697 (Iowa App. Oct. 17, 2012), the court decided a claim dealing with equitable apportionment and penalty benefits for failure to pay benefits pending equitable apportionment.  The fighting question was whether the apportionment of death benefits among his children and wife was equitable.

Claimant was a native of Honduras and had a family in Honduras at the time he died as a result of an industrial accident.  That family consisted of his oldest son, Angel, his wife Carmen, and his daughter, Lidia. Claimant came to the US to work, and provided the family with support.  Claimant had a paramour in the US, Ruth, with whom he fathered a child, Sandra.  Claimant did not live with Ruth and Sandra, but provided them with support as well.

When claimant was killed, both families sought payment of death benefits.  The deputy allocated 45% of death benefits to Carmen as surviving spouse, and 22% to Angel during the period of his dependency.  The remaining 33% was assigned to Sandra during her dependency.  One half of the benefits apportioned to Carmen and her children was ordered to be paid to the Second Injury Fund under section 85.31(5) of the Code.  The deputy noted that the benefits for Sandra were decreased to provide an equitable apportionment.  The deputy also noted that Sandra had received life insurance benefits in the amount of over $48,000.  Penalty benefits were awarded because the employer never commenced benefits.

On appeal, the apportionment amounts were changed slightly, with 40% going to Carmen, 30% to Angel, and 30% to Sandra.  The commissioner ordered that when Angel was no longer dependent, 65% should go to Carmen, 35% to Sandra.  The commissioner indicated that he did not consider the amount paid to the Fund when making the apportionment.  The penalty award was affirmed.

On appeal the court noted that normally the full compensation is to be paid to the surviving spouse under section 85.43, unless the commissioner equitably apportions the amount.  The court noted that the commissioner must consider the facts and circumstances in making the equitable apportionment.  Sandra argued that the commissioner had failed to explain how or why the apportionment was equitable, in large part because expert testimony was presented to indicate that the cost of living in Honduras was only 40% of what it was in the US.  The court noted that the commissioner did not ignore this evidence, but simply considered other relevant factors, such as the receipt of life insurance by Sandra, her mother's ability to be employed, and the fact that claimant was the major source of income for Carmen, Angel and Lidia.  The court concluded that the commissioner had equitably apportioned the benefits.  The court also concluded that the agency was correct in not considering the reduction in payments because of the payments made to the Fund in making its apportionment decision.

On the penalty benefits issue, the court affirmed.   Defendants argued that they had a reasonable or probable cause or excuse for the delay of benefits because of the controversy concerning the disposition of those benefits.  The court found that the argument that defendants were waiting until the outcome of the apportionment was not objectively reasonable.  Sandra also argued that the penalty should be based on 50% of all past due benefits, not just a portion of those benefits.  The commissioner had apportioned the penalty benefits, and the court found there was substantial evidence to support this apportionment.

Finally, the court reversed the district court on a sanctions issue.  The commissioner had not decided this issue, and the district court had remanded to the commissioner to decide the issue.  The court concluded that the commissioner had decided the issue, denied sanctions, and a remand was not necessary.

Jamie Byrne from Neifert, Byrne & Ozga represented Carmen, Angel and Lidia throughout the proceedings in the case.  

Saturday, October 20, 2012

Court of Appeals Addresses Manifestation Date, 90 Day Notice

In Tyson Foods v. Shaw, No. 12-0432 (Iowa App. Oct. 3, 2012), the court addressed issues of the manifestation date of the injury, and the corollary issue relating to the 90 day notice requirement.  The court affirmed the commissioner's findings which indicated that the manifestation date was sufficient to bring claimant within the 90 day notice requirement.  The court also found that substantial evidence supported the conclusion that claimant's manifestation was correct found by the agency.

Claimant alleged a cumulative injury to his feet from his work at Tyson.  As a part of his job, he had to lift 50 pound bags of chemicals, and had to push heavy items.  He was required to wear rubber pullover boots on the job.  Claimant testified that his feet slipped in the boots because they were too large.  Claimant also had diabetes.  When problems began to develop with his feet, Tyson replaced his standard boots with leather steel toed boots.  Claimant had a lengthy process of problems with his feet, infections, and the eventual development of Charcot foot.  The doctor testified that June 30, 2007 was the first time he told claimant the foot deformity was being accelerated by his continued work.  Claimant reported the foot injury on August 30, 2007.

The agency found that the manifestation date was August 30, which was when she left work and became more and never returned to full duty after.  Tyson argued that the agency applied the wrong legal standard.  After surveying the law on cumulative injuries, including discussion of McKeever, Tasler and Herrera, the court concluded that "the commissioner did not reinvent the standard for determining when an injury manifests itself, but considered the factor which on this record demonstrated the date of manifestation."  The court found that this conclusion was supported by substantial evidence and affirmed the decision of the agency.

Court Concludes that Workers Compensation Remedy is Exclusive in Death Case

In Estate of Brehm v. Dubuque Community School District, No. 12-0176 (Iowa App. Oct. 3, 2012), the court of appeals addressed the issue of exclusive remedy in the death benefits case.  Claimant had died while performing one of two full time jobs, and under the provisions of the workers' compensation statute, was paid benefits based only on the wages earned on that full time job.  Claimant's estate argued that this remedy wasn't adequate, and that therefore the workers' compensation statute should not have been the exclusive remedy in the case.

Because the damages arose from a work related injury, and the employer had paid the damages owed under the workers' compensation act, the court concluded that the remedy was adequate and affirmed the decision of the district court.  The court noted that in situations where there was not an adequate remedy, claims may fall outside of the exclusive remedy provisions, but found that this was not such a case.  The court concluded that the facts of the case were within the contemplation of the workers' compensation statute, unlike those cases, such as breach of fiduciary duty and bad faith, where the harm being protested was not within the ambit of the workers' compensation statute.   The court concluded further that the fact that there was no recovery for wages from other jobs did not make the remedy inadequate, it simply reflected the legislative choice not to provide such a remedy.

Court of Appeals Follows Neal v. Annett Holdings on Suitable Work Issue

In Annett Holdings v. Allen, No. 12-0388 (Iowa App. Oct. 17, 2012), the court of appeals addressed a suitable work issue in the trucking context, as the Supreme Court had earlier done in Neal v. Annett Holdings, 814 N.W.2d 512 (Iowa 2012).  Allen involved the same trucking company, with the same light duty program in Des Moines as had been the case in Neal.  The primary difference in Allen was that claimant lived in Mississippi, and was over 800 miles away from home.  He declined to perform light duty work in Iowa, and the court concluded that the work offered was not suitable.  The court concluded that the distance traveled to the proposed light duty work was unreasonable, given the distance involved, claimant's cervical fusion, the restriction on the amount of time he could sit, and other physical limitations.  The court affirmed the agency, and reversed the district court in awarding healing period benefits.

The court also addressed the finding that claimant had a 50% industrial disability.  Claimant argued permanent total disability while the employer argued the disability finding was too high. The medical reports noted a lack of motivation on the part of the client, and the court affirmed the 50% industrial disability.  The court also rejected Allen's odd lot contention, finding that it was normally incumbent on the claimant to demonstrate a reasonable effort to secure employment.  The court concluded that to avoid the reasonable efforts requirement, claimant must show that any search would be futile.  Because claimant had not done so, and the agency had discounted the vocational expert's opinion absent supportive medical evidence, and had found claimant's credibility lacking (the agency found portions of his testimony "flatly unbelievable"), the rejection of the odd lot doctrine was affirmed by the court.