Court of Appeals Concludes that Rejection of Review Reopening Claim Against the Second Injury Fund was Proper

In Grahovic v. Second Injury Fund of Iowa, No. 14-1295 (Iowa App.  June 10, 2015), the court was presented with a situation where claimant sought review of an earlier denial of a claim against the Fund.  Claimant had suffered multiple scheduled injuries, but liability of the SIF had been denied previously.  The court found that a review reopening was improper in the circumstances of the case.

Claimant had a left leg injury in 1997, and a right leg injury in 2001.  He settled a claim against the Fund in 2003 on a closed file basis.  Claimant later had an injury to his left knee in 2005.  He brought a claim against the Fund with the left knee injury of 2005 being the second injury and the right leg injury of 2001 being the first injury.  He settled with the employer and went to hearing against the Fund.  The agency found that claimant failed to prove his left leg injury and even if he did, had failed to prove that this caused permanent disability.  These findings were ultimately affirmed by the district court.

In 2011, claimant filed a review reopening petition against the employer and the Fund, arguing the same two injuries that had been part of the earlier proceedings before the agency (2001 first injury and 2005 second injury).  Claimant also alleged that  his left knee injury had become worse.  The commissioner ruled against claimant, finding that claimant had not demonstrated that his injury had become worse, that his economic condition had become worse, or that his restrictions had changed.  The commissioner concluded that even if the left knee condition was worse than at the time of the hearing against the Fund, it had not been shown that the worsening was due to the 2005 work injury.

The court finds that the earlier Fund petition had been denied because he had failed to prove that he had sustained a permanent disability to his left leg (the 2005 injury).  Claimant argues in this proceeding that he was not attempting to relitigate this issue, but was instead urging that because his left leg injury did not improve to the extent anticipated, time had now passed to determine the seriousness of the injury.

The court concludes that 86.14 could not be invoked because there had been no prior award for payments against the Fund.  The court, citing Kohlhaas, noted that the language in that case demonstrated that for there to be a review reopening "there must have been a prior award of compensation that might be increased."  Citing Gosek, the court noted that on a review reopening petition, the claimant has the burden of demonstrating an entitlement to benefits "in addition to that accorded by a prior agreement or adjudication."  Even if claimant had a review reopening claim, the court noted that the agency had found that his worsening of his left knee condition was not proximately caused by the 2005 injury with the employer.  The denial of benefits was affirmed.

Note that Second Injury Fund liability is often derivative of that against the employer.  For example, the statute of limitations for Fund cases is based on payments of benefits by the employer.  This opinion can be seen as decoupling those situations for review reopening purposes.  Grahovic is somewhat unusual in that there was a payment of benefits by the employer for the second injury, but a later finding by the agency that there had been no permanency.  The court clearly felt that in order for there to be a review-reopening against the Fund, that there had to be some earlier award against or payment by the Fund.

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