Court of Appeals Affirms Commissioner's Decision Concluding that a Decision Specifying a Specific Amount of Benefits is Necessary Before Partial Commutation is Permissible

In July of 2017, the partial commutation statute was amended to permit commutations only if both parties agreed.  Prior to the effective date of the statute on 7/1/17, cases were filed throughout Iowa seeking partial commutations despite the fact that no administrative decision had been issued setting the amount of benefits owed to the claimant.  These cases were uniformly denied by the commissioner and in Vangetson v. Aero Concrete, Ltd. and Fasig Snitker v. Birdnow Enterprises, Inc., No. 19-0738 (Iowa App. July 22, 2020), the Court of Appeals affirms the decision of the district court which had, in turn, affirmed the decision of the commissioner.

The court focused on the language in section 85.45(1) of the Code which stated that a commutation was possible when "the period during which compensation is payable can be definitely determined" and when the commutation was in the "best interest" of the claimant.  The court noted, in reviewing the claim, that the commissioner's legal interpretation was given no deference.

The court noted that the version of the statute considered in an earlier decision, Diamond v. Parsons Co., 129 N.W.2d 608 (Iowa 1964) and the version of the statute applicable prior to the 7/1/17 legislative changes provided that commutation was possible only where the period of compensation could be definitely determined. The court noted that although the procedural rules were different as of the time Diamond  was decided (at that time the district court decided whether a commutation was appropriate), this made no substantive difference in the fact that the award must have been definitely determined.  The Court of Appeals believed that Diamond, a Supreme Court decision, was controlling on this issue. According to the court, an arbitration award or settlement was a jurisdictional predicate necessary for the decision maker to consider a commutation petition.

The court also affirmed the dismissal of the commutation petitions in the face of claimants' argument that the new statute was unconstitutional because it deprived them of the ability to proceed under the prior statute.  The court found that since there was nothing to be adjudicated under the former statute, as there had been no determination of disability, dismissal was appropriate.