Court of Appeals Affirms Denial of Penalty Benefits

 Cochran v. Quest Liner, Inc., No. 21-0288 (Iowa App. Jan. 12, 2022)

Claimant suffered an injury at work and was paid healing period benefits for a time.  Defendants sent claimant a notice that healing period benefits would be ended as required by section 86.13.  Claimant alleged that he was entitled to additional healing period benefits and the arbitration decision found that claimant was entitled to continuing healing period benefits.  Penalty benefits were denied as the commissioner indicated it was reasonably debatable whether claimant was entitled to continuing benefits.

Claimant appealed, arguing that defendants failed to obtain an impairment rating or do any further investigation to determine if he was entitled to further benefits after their authorized treating physician placed him at MMI. 

On appeal, the court finds that the issue raised implicates the application of law to fact standard of review and that the decision will only be overturned if the application was irrational, illogical or wholly unjustifiable.  Claimant's argument with respect to penalty, according to the court, was that defendants failed to obtain an impairment rating as part of its ongoing investigation as to what permanency benefits might be payable after the termination of the healing period.  Defendants' contention was that its continuing payment of healing period for 6.7 weeks after receiving notification of MMI satisfied its obligation under the law. 

In rejecting claimant's argument, the court notes that although there is a general duty to seek an impairment rating once a claimant is at MMI, claimant had disputed the finding of MMI eight days after receiving notice of termination and 22 days before benefits were terminated.  Although claimant also asked the company to obtain an impairment rating, the court concludes that defendant could have surmised that if claimant was challenging the MMI finding, his entitled to PPD benefits was also in dispute. The disagreement with the MMI opinion afforded defendant a reasonable basis to defer seeking an impairment rating.  Accordingly, penalty benefits were not warranted and the commissioner's decision was not irrational, illogical or wholly unjustifiable.