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.

Thursday, April 17, 2014

Court of Appeals Affirms District Court Decision Denying Judgment to Claimant

Kollasch v. Hormel Foods, No. 13-1416 (Iowa App. April 16, 2014), addresses issues raised by section 86.42 of the Iowa Code.  Claimant filed for judgment based upon an agreement for settlement.  At hearing, claimant objected to the introduction of what he believed was extrinsic evidence outside of the agreement of the parties.  The district court summarized the parties views about the meaning of several key terms in the agreement, specifically regarding visits to a pharmacy.  Claimant filed a motion to reconsider, arguing that the district court had made findings of fact and strayed from the terms of the settlement agreement.  The court also found that the evidence produced by defendants was meant to clarify and not modify the settlement.

Claimant argued before the Court of Appeals that the district court erred in making findings of fact, in construing the term reimburse, in entering a money judgment for expenses already incurred and in not awarding costs.  As an initial matter, the COA found no problems with the background portion of the district court, in which the court summarized the arguments of the parties.

Under 86.42, the court must enter a judgment in conformance with the workers' compensation award.  Where the district court merely explains what is in the award, but does not alter the terms of the award, there is no error.  The court may construe the award, but not expand upon it.  The court found that the settlement agreement, which delineated "the pharmacy" at which prescriptions would be picked up meant a particular pharmacy.  Similarly, in construing the term "reimburse," the district court did not err in finding that this meant repayment of a cost incurred.  The court also found that the district court did not err in converting owed expenses from prior visits to the pharmacy to a judgment.  The COA also concluded that there was no error in refusing to assess court costs against Hormel.

Court of Appeals Decides Claimant Is an Employee Rather Than Independent Contractor, Reversing District Court

Claimant was a carpenter who started doing carpentry work for Stark Construction when he had an injury.  When he reached the hospital, claimant indicated he was employed by Don Risdahl Builders and was self-employed.  Claimant later filed a claim against Stark, who affirmatively alleged that he was an independent contractors.  The deputy found claimant was an independent contractor and the commissioner reversed.  At the district court level, the court reversed the agency, finding that claimant was an independent contractor.

The Court of Appeals reversed the action of the district court and affirmed the action of the commissioner in Stark Contruction v. Lauterwasser, No. 13-0609 (Iowa App. April 16, 2014).  Initially, the court found that since the law did not vested the agency with power to interpret the term "employee," no deference was due the commissioner in determining how the term was to be defined.   On appeal, claimant contended that the district court erred in concluding that the intent of the parties was a controlling factor in determining whether a claimant was an employee.

The court first noted that under section 85.61(11) of the Iowa Code, an employee was a "person who has entered into the employment of, or works under contract of service, express or implied, or apprenticeship, for an employer . . ."  The court also noted that under Daggett v. Nebraska-Eastern Exp., Inc., 107 N.W.2d 102, 105 (Iowa 1961), doubt as to whether a person was an employee was to be resolved in favor of the person being an employee.  

To prove that an individual is an employee, he must first establish he was rendering services to the putative employer.  The burden then shifts to the employer to prove that the claimant was an independent contractor and not an employee.  The court noted that the name chosen by the parties was not conclusive, and cited articles noting misclassification of workers in large numbers of cases.  A close look at the underlying relationship was needed to determine the claimant's status.

Citing to Nelson v. Cities Serv. Oil Co., 146 N.W.2d 261, 265 (Iowa 1966), the court noted the following five factors as being important to answering the question of whether claimant was an employee: 1) the right of selection or to employ at will; 2) responsibility for payment of wages by the employer; 3) the right to discharge or terminate the relationship; 4) the right to control the work; and 5) the identity of the employer as the authority in charge of the work or for whose benefit it is performed.  The Nelson court noted that looking at the parties intent by itself could be deceiving.  The court also noted that in Henderson v. Jennie Edmundson Hospital, 178 N.W.2d 429 (Iowa 1970), the court noted that the intention of the parties may be considered.

In this case, the commissioner had concluded that where there is an agreement to call the claimant an independent contractor, that intent may be ignored if this is for the purpose of evading the workers' compensation laws.  The district court agreed, but the Court of Appeals indicated that this principle did not appear in any Iowa cases, although it did appear in Larson's.  The court concluded that community custom "did not act as a counterweight when there exists a clear finding the employer controlled the work."

In applying the standards above to Lauterwasser's case, the Court of Appeals concluded that the district court erred in viewing the parties intent as the controlling factor.  The district court held that claimant must meet the five factors from Nelson and the parties intent must be that an employment relationship be created.  The court noted that the most important factor was the right to control the work.  Only if that control is debatable does the trier of fact need to consider the parties' intention or community custom.  Citing Schlotter v. Leudt, 123 N.W.2d 434, 436 (Iowa 1963).  The court concluded that the district court erred in elevating the intention of the parties above all else.

In addressing the facts, the court found most facts undisputed and gave Stark the right to control Lauterwasser's work.  Lauterwasser's tax returns, however, showed Starks' income on a 1099 form, and he had deducted $5,734 for advertising, money that was not actually paid for advertising.  The commissioner also found that claimant made numerous statements on the day of injury that contradicted his later claim that he was an employee.  The court found that there was substantial evidence to support the factual findings of the agency, and because the right to control was obviously vested in Stark, it need not resort to assessing the parties' subjective intent.  Even if intent were considered, however, it was so plainly at odds with the facts that it could be disregarded.  The court reversed the decision of the district court and remanded for further consideration of other issues not addressed below.

The decision in Lauterwasser is clear that right to control is the paramount test for determining whether a claimant is an employee or independent contractor.  In establishing this straightforward test, the court clarifies what has often been a muddled mess centered on the intention of the parties.  Given the decision of the court, and the importance of the issue, it would not be surprising to see that this case proceeds on further review to the Supreme Court.

Award of Permanent Total Disability Affirmed

The Court of Appeals, in Cargill Meat Solutions v. DeLeon, No. 13-1266 (Iowa App. April 16, 2014), once again concludes that factual findings are left to the commissioner, and affirms an award of permanent total disability benefits.  The court adopted the conclusions of the district court, which had noted that the commissioner credited the views of Dr. Hines in finding permanent total disability.

The court addressed defendants' argument that Dr. Hines was not provided with all prior medical treatment records, and that therefore the decision should be reversed under the Court of Appeals' decision in Mike Brooks, Inc. v. House.  The court noted that evidentiary rulings were in the commissioner's discretion and that a scrutinizing analysis was not to be given to decisions of the agency on factual matters.  The court also noted that the Supreme Court had vacated the decision in House, upon which Cargill had relied.  The court found that the commissioner had considered all of the expert medical opinions together with the other evidence introduced at hearing, and concluded that Dr. Hines' testimony, in conjunction with the testimony at the hearing, provided substantial evidence of a permanent, work-related injury.

On the question of permanent total disability, the court noted that claimant was not an English speaker and had substantial physical limitations, and could not return to many of his prior jobs.  The decision was affirmed.

An Application for Further Review was filed with the Supreme Court and denied on July 16, 2014.

Court of Appeals Affirms Commissioner's Decision That Claimant's Loss Was a Scheduled Injury

In Hendrickson v. Ihle Trucking, Inc., No. 13-1114 (Iowa App. April 16, 2014), the court of appeals affirmed the commissioner's finding that claimant's injury was limited to his right hand.  The court first noted that its review of final agency action was "severely circumscribed" and stated that nearly all disputes are won or lost at the agency level.  Citing Pease and House.

The Court of Appeals noted that the district court had appropriately discussed and considered the evidence and affirmed the commissioner's decision that the injury was limited to the right hand.  The court noted that it could not improve upon the district court's analysis, which found that the agency's decision was detailed and exhaustive.  Based on the district court's decision, the court affirmed, citing Iowa Ct. R. 21.26.