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.
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.
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