Supreme Court Concludes that Functional Portion of Industrial Injury is Apportionable Under 85.34(7)

Loew v. Menard, Inc., No. 22-1894 (Iowa Feb. 9, 2024)

Claimant suffered a low back injury resulting in a 20% functional impairment and a resulting 30% award of industrial disability.  Claimant suffered a second work-related back injury, which was compensated functionally as he continued to work for the employer earning wages in excess of those at the time of the injury.  As a result of the second award, claimant was found to have a 28% functional disability.  The commissioner concluded that the employer was not required to pay additional benefits for the second injury, as the employer received a credit for the 30% award that had previously been paid, which was in excess of the 28% functional award.  The district court affirmed the commissioner's decision.  The Supreme Court accepted review of the claim.

The Court first notes that Iowa's worker's is statutorily based and that the statute is "liberally construe[d] . . .in claimant's favor to effectuate the statute's humanitarian and beneficent purpose."  The Court briefly reviews the difference between functional and industrial injuries and notes that under 85.34(2)(v) unscheduled injuries are to be determined functionally if the employee continues to work for the employer at the same or greater compensation.  Under section 85.34(7), according to the Court, an employer is only responsible for paying for an injury once - double recoveries are prohibited.

On the facts of the case, the Court concludes that the commissioner "erred in interpreting 85.34(7) to preclude compensation for this new permanent partial disability." The text of 85.34(7) limits an employer's liability only "to the extent that the employee's pre-existing disability has already been compensated under this chapter."  The Court notes that claimant did not seek to hold the employer liable for a preexisting disability, only the new permanent partial disability, the additional 8% functional impairment that occurred as a result of the second injury.  The Court indicates that this was not a double recovery case, as only 20% of the 28% impairment had previously been compensated.  Because the earlier recovery was based on an industrial consideration rather than on a functional consideration, the two are "incommensurable, and it makes not logical sense to use one award to offset the other."

The Court notes that a claimant's industrial disability can be lower than functional impairment.  For example, if claimant's earlier industrial injury had been 10%, there would be no argument that claimant would be entitled to an 18% award (the difference between the 10% industrial award and 28% functional loss).  The determination of the credit to be made is premised on the difference between the initial functional award and the subsequent functional finding.