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.

Sunday, May 19, 2013

Supreme Court Decides Subrogation Case Involving Choice of Law Issues

Moad v. Dakota Truck Underwriters, 831 NW2d 111 (Iowa 2013), involved the question of what law to apply (the law of Iowa or South Dakota) to determine whether a South Dakota WC carrier was entitled to subrogation for payments made to its insured by underinsured and uninsured carriers arising out of a settlement from third-party litigation.

Claimant died when the truck he was driving for his employer was struck by another vehicle near Iowa City.   WC benefits were paid under South Dakota law.  Claimant's wife filed a third party action in Iowa District Court.  Claimant's wife and children were South Dakota residents.  The WC carrier notified the parties that it was entitled to subrogation of any proceeds received by plaintiff as a result of the third party action.

A settlement agreement was reached with Northland agreeing to pay $300,000, plus $100,000 to cover the workers' compensation carrier's subrogation lien.  Plaintiff agreed to file a motion to strike or extinguish the lien.  Plaintiff filed the motion to strike, alleging that DTU, the comp carrier, had failed to file timely notice of its lien within 30 days after receiving notice of the suit.  The court approved the settlement.  DTU then sought to intervene, and argued that South Dakota law should apply and they should receive compensation for their lien.  The district court found that DTU's claim was barred because of the failure to timely file a response to the third party action.  Alternatively, the court applied Iowa law to bar the claim.  The court cited section 145 and 185 of the Restatement of Torts, which led to the conclusion that the law with the most significant contacts shoulder govern.  On appeal the court of appeals reversed, finding that the case sounded in contract rather than tort and thus the restatement did not apply.

Before the Supreme Court, the parties agreed that if Iowa law applied, DTU was not entitled to subrogation.  If South Dakota law applied, however, there was a valid lien.  The court undertook a lengthy examination of the conflict of law issues in Iowa and in other states.  The court noted that Iowa had rejected the conclusion that the place of the wrong automatically determined which state's law should apply in favor of a most significant relationship test.  Ultimately the court applied section 185 of the Restatement, which addressed the most significant relationship test in workers' compensation cases. Section 185 generally provided that in WC cases, the laws of the state in which the compensation was paid will always apply.  The court found that section 185 was superior to the more open-ended rules of the most significant relationship test.

The court remanded for further proceedings, and noted that if section 185 did not apply to all aspects of the subrogation issue, section 145 (the most significant contacts provision) would govern.  The court rejected the 30 day filing requirement on the grounds that this did not apply in underinsured and uninsured cases.  According to the court, section 85.22 had no application to DTU's effort to obtain a lien.

Saturday, May 18, 2013

Supreme Court Decides Review-Reopening Case Involving Statute of Limitations Issues

In Coffey v. Mid Seven Transportation Co., No. 11-1106 (Iowa May 10, 2013), claimant filed a review-reopening petition, which was found to be untimely by the commissioner and district court.  The employee also requested reimbursement of certain post-arbitration medical expenses, which were also denied.

Claimant originally had an injury to his left leg in 1994, and was unable to return to work following the injury.  After working part time, claimant was ultimately found eligible for social security disability benefits.

Prior to filing his workers' compensation claim, the employee had entered into a settlement with a third party for $275,000, of which he received $134,784.95 after payment of attorney's fees and medical costs.  Claimant alleged in his workers' compensation claim that he had injured not only his leg, but his back.  He also claimed that his post polio syndrome was aggravated by his injury.  He was paid workers' compensation payments totaling $70,783.19 prior to the arbitration decision.

Prior to the arbitration decision, claimant and his wife entered into a third party settlement for $100,000, of which $60,000 was for loss of consortium.  Claimant received $24,634.14 after payment of legal fees and expenses.  The arbitration decision concluded that claimant had a 75% industrial disability.  This finding was appealed through the Iowa Court of Appeals, with the commissioner's decision being affirmed.  The last action was a denial of an application for further review on January 11, 2006.

Defendants' counsel wrote to claimant's counsel and indicated that the third party recoveries totally covered the workers' compensation award.  Defendants' counsel indicated that payment for attorney's fees would be roughly $51,000.  Claimant's counsel believed that approximately $155,000 was due.  Defendants wrote a check to claimant for the smaller amount on January 30, 2006.

On April 2, 2008, claimant filed a petition for review-reopening.  The deputy found that the claim was barred by the statute of limitations. The deputy found that the three year period began three years after the decision where no payment of weekly benefits occurred after the award.  The deputy ordered defendants to pay medical expenses.  The deputy found that the payment of $51,000 was not payment of benefits, but payment of attorney's fees.  The commissioner reversed on the question of medical payments, finding that claimant had not proved that these costs were related to the injury.

The Court noted that the legislature had not delegated any special powers to the workers' compensation commissioner regarding statutory interpretation.  Therefore, the question was one of law.  The fighting issue on the statute of limitations claim was when the last payment of benefits had been made.  Defendants argued that the SOL commenced from the date of the arbitration award while claimant argued that the payment of the $51,000 constituted weekly benefits or alternatively that the three year statute did not begin until the court's earlier denial of the application for further review.

On the record before the agency, the court found that it could not say that the credit under 85.22(1) covered all the weekly benefits awarded in the arbitration proceeding.  Because there appeared to be an issue of whether all medical bills, mileage and interest had been paid, the court remanded the case to the agency to determine whether these payments had been made and whether they were offset by the third party payments.  If the agency were  to find that defendants still owed benefits after the date of the arbitration decision, the commissioner must decide whether defendants had paid the last installment of weekly benefits.  If benefits were still owed, then the three year SOL was still alive.

If the employer was found to have paid all benefits prior to the date of the arbitration award, then the court still had to determine when the SOL commenced.  The court concluded that payment of attorney's fees was a reimbursement for attorney's fees and not weekly benefits.  Because of this, the SOL was not extended by that payment.

On the issue of whether a settlement from a third party extended the SOL, the court concluded there was no specific precedent addressing this issue, but that there was precedent, in Beier Glass v. Brundige, 329 N.W.2d 280, 287 (Iowa 1983), as to the extension of the SOL when medical benefits had been paid.  This precedent noted that the three year SOL commenced from the date of the arbitration decision.  The court found that the same rationale applied with respect to payment of the third party award prior to an arbitration decision.  Thus, the date of the arbitration decision was the commencement date for the three year statute of limitations.  Claimant argued that the final date for exhaustion of appeals was the correct date, but the court rejected this argument.  On remand, the agency was to determine whether the obligation to pay weekly benefits was completely satisfied by the third party recovery.

On the medical cost issue, the agency found that there was insufficient evidence that the expenses were related to the work injury.  The district court found that this was supported by substantial evidence.  The court found that the decision of the agency was supported by substantial evidence.

Thursday, May 16, 2013

Court of Appeals Finds There Was No Substantial Evidence to Support Denial of Benefits

Numerous cases on this blog have discussed situations in which the decision of the agency was affirmed on substantial evidence grounds.  In Estate of Herman v. Overhead Door Co. of Des Moines, No. 12-0892 (Iowa App. May 15, 2013), the court concludes that because there was no substantial evidence to support the agency's decision that claimant's injury did not arise out of and in the course of employment, claimant (or claimant's estate, since claimant died before this decision) was entitled to benefits.  The court concluded that: "because we find the commissioner’s outright rejection of uncontroverted medical opinions is not supported by substantial evidence when the record is viewed as a whole, and we find Herman’s injury arose out of
and in the course of his employment as a matter of law, we reverse and remand."

Claimant worked in an unheated warehouse, and there was really little dispute that claimant worked in subfreezing temperatures in the winter of 2009, when he suffered his injury.  On January 21, 2009, claimant noted blisters on his foot, and the following day, his foot was wet when the blisters broke open.  On January 23, claimant reported the injury to his employer, and he was sent to the emergency room.  This visit resulted in a finding that claimant had suffered frostbite and a secondary injection in the right foot.  The frostbite was treated and claimant had skin grafts and an infection before finally losing his right toe.

Both treating physicians found that Mr. Herman's injury was more likely than not related to his work at Overhead Door and specifically his exposure to cold.  There were apparently no opinions finding that the injury was not related to work, but despite this fact the deputy and commissioner concluded that the injury did not arise out of and in the course of employment.

The arbitration decision in Mr. Herman's case was very brief and focused not on the doctor's opinions, but on how cold it was in the warehouse and outside.  That decision ignored the doctor's opinions by simply stating that they were not of much assistance, despite the fact that those opinions had linked the injury to claimant's work exposures.

On review, the court of appeals noted that this was not a classic "battle of the experts," since there were no experts indicating that the injury was not related to work.  The court commented on the decision of the deputy, finding that the deputy had "inexplicably" found that the doctors were not helpful in determining whether the injury was work related.  The court found that both the deputy and commissioner had failed to explain why the comments of the doctors were rejected in determining causation.  The court found that the outright rejection of the doctor's opinions was not supported by substantial evidence.  The court also found that the injury arose out of claimant's employment, and remanded the case to the agency.

Although the result in Herman is not something that occurs with frequency, the case serves as an example that there are still situations where there is no evidence to support a particular proposition, and thus no substantial evidence to support that proposition.


Wednesday, May 15, 2013

Court of Appeals Decides "Arising Out Of" Case Favorably to Employee

In AARP v. Whitacre, No. 12-1519 (Iowa App. May 15, 2013), claimant was a 79 year old part time janitor for AARP.  While on a coffee break one day, claimant began to choke, stood up to get a drink of water, stumbled and fell, causing injuries to his head and face.  The deputy and commissioner found that this injury arose out of his employment and awarded benefits.  On judicial review, the district court reversed.

In addressing the question, the court noted that the earlier decision in Lakeside Casino v. Blue, 743 N.W.2d 169 (Iowa 2007) had indicated that the arising out of test involved proof that a causal connection existed between the conditions of the employment and the injury. The COA also noted that earlier decisions of the Supreme Court were to the effect that risks that were personal to the employee were not compensable, but further noted that Lakeside Casino and other cases had indicated that the work risk need be no greater than risks outside the workplace.

The parties agreed that the fall was "idiopathic," but disagreed as to whether the conditions at work aggravated the injury.  The agency had concluded that the design and construction of the office in which claimant was working had contributed to the effects of the injury.  The office was a small office with hard concrete walls and a concrete floor. The deputy concluded that because claimant hit his head on the concrete wall, this aggravated the effects of the injury.

The court noted that the earlier decision in Koehler v. Wills,608 N.W.2d 1 (Iowa 2000), did not require the existence of a dangerous condition at the workplace (Koehler involved a fall from a ladder onto a concrete floor).  The COA specifically rejected language found in Miedema v. Dial Corp., 551 N.W.2d 309, 311 (Iowa 1996), which indicated that there needed to be an increased risk from the work situation, finding that this was "an inadvertent throw-back to the increased-risk doctrine."  The court found that the work related factor did not need to be greater than the risk in the non-work environment, but it had to be real, and not fictitious.

On the facts of the case, the court found that hitting a desk and then a concrete wall in a small office constituted a real risk that aggravated the effects of the injury.  The decision of the district court was reversed and the decision of the agency reinstated.

Although Whitacre does not represent a huge change in the law concerning injuries that arise out of employment, it is an important case in that it stresses the fact that there need be no increased work from the employment situation in order for a claim to be deemed compensable.  All that is necessary is that the work setting aggravate the effects of the injury.