Supreme Court Holds that Scheduled Member Injury Cannot be Apportioned Against Unscheduled Injury, But Can Be Apportioned Against the Functional Portion of the Earlier Injury

P.M. Lattner Manufacturing Co. v. Rife, No. 22-1421 (Iowa Feb. 9, 2024)

Claimant suffered a right shoulder injury in 2009, which ultimately resulted in a commutation settlement for 29.6% of the body as a whole.  Claimant subsequently suffered another injury to the right shoulder in 2018, following changes to the Code which made shoulder injuries unscheduled.  At hearing, claimant was awarded a 19% functional impairment for the injury to his right shoulder.  The employer argued that the entire award should be credited given that the earlier commutation resulted in a greater award than the second right shoulder injury.  The commissioner rejected this argument, but noted that defendants could arguably be entitled to a credit for the functional portion of the injury.  In this case, however, defendants failed to prove the amount of the credit and thus no credit was awarded.

A secondary issue was also presented regarding payment of the IME.  The commissioner awarded that entire cost of the IME, rejecting an argument that the IME included expenses for an unrelated right ankle injury.

The district court reversed on both issues.  The court concluded that the agency had failed to consider the relevant statutes and remanded the case for consideration of these issues.  The district court also found that claimant was not entitled to reimbursement of any portion of the IME. Claimant appealed and the Court of Appeals found that it could not determine the amount of appropriate credit on the record and remanded to the agency.  The court found that although claimant was entitled to payment of some of the IME, this was only for the cost of the impairment rating and not the examination.  This was also remanded to the commissioner.

On the apportionment issues, the Court concludes that the 2017 legislative changes to 85.34(7) were to "prevent all double recoveries and all double reductions in workers' compensation benefits for permanent partial disability."  The Court concluded that the answer to the questions in this case were resolved by the recent decision in Loew v. Menard,     N.W.3d    (Iowa 2024).  In that case, the Court had concluded that "offsetting an award based on functional impairment against a prior award based on loss of earning capacity was an improper comparison of apples to oranges."  Instead, the employer was entitled to credit for the amount of functional impairment awarded originally against the new functional impairment.  The employer is only responsible, according to the Court, for the "marginal increase in functional impairment caused by the second injury."  The agency below had refused to apportion, despite reaching the same result as the Court, because of a failure of evidence to support the employer's position.  The Court, however, finds that there were good faith reasons for failure to provide this evidence and remands the case to the agency for presentation of additional evidence regarding the credit to be provided.

On the IME issue, the Court agrees that the district court erred in concluding claimant was not entitled to reimbursement of the IME.  The Court rejects the decision that claimant was only entitled to payment for the amount of the IME attributable to impairment rating and concludes the examination of the claimant was also reimburseable, citing Mid-Am. Constr. LLC v. Sandlin,   N.W.3d     (Iowa 2024).  Here, because the IME doctor had affirmed that the fee was reasonable for an IME in the geographical community, the entire costs of the IME were awarded, in accordance with the commissioner's decision.