Court of Appeals Affirms $39,000 Penalty Award

In Regional Care Hospital Partners, Inc. v. Marrs, No. 19-2138 (Iowa App. Feb. 17, 2021), the court affirmed an agency decision in which claimant was found to have suffered back injuries and the need for surgery as a result of her work activities.  The deputy awarded a $50,000 penalty, which was reduced to $39,000 by the commissioner.  The district court affirmed the commissioner's award on appeal.  

The appellate court first found that substantial evidence supported the commissioner's finding that claimant's injury was causally connected to her work activities.  The court noted that the opinions of Drs. Harbach and Kaspar were supportive of the decision of the agency.  The court also found that the commissioner had correctly determined claimant's rate and that the removal of a two week period in which claimant worked fewer hours than customary was supported by substantial evidence.

On the penalty issue, the court noted that approximately $80,000 of benefits were unpaid at the time of the hearing, for failure to pay healing period.  The employer argued that claimant stopped working due to conditions unrelated to her work injury and that claimant had reached MMI.  The court noted that in the agency's decision, the only argument raised was whether defendants reasonably relied on Dr. Abernathey to deny liability.  The commissioner found that Abernathey offered his opinions months after benefits were stopped and noted that defendants had not communicated the reason for the denial to claimant.  The court affirms the penalty award, finding that substantial evidence supported the finding that defendants failed to show it terminated benefits for reasonable cause.  The decision of the commissioner and district court was therefore affirmed.