Iowa Workers' Compensation

In Saltern v. HNI Corporation and Gallagher Bassett Services , No. 18-1748 (Iowa App. Oct. 9, 2019), the Court of Appeals affirmed a district court ruling dismissing a bad faith claim brought by plaintiff Saltern.  The ruling was premised on the court's conclusion that the employer did not lack a reasonable basis for denying benefits and thus the first prong of the bad faith test was not met. Claimant had prevailed in her workers' compensation claim on her claim for injury due to carpal tunnel syndrome.  Penalty was awarded based on the fact that HNI had not communicated its basis for rejecting the claim under section 86.13 of the Code.  Following the resolution of the workers' compensation claim, Saltern brought a bad faith action.  The district court concluded on summary judgment that at the time that HNI first denied the claim, there was no information to indicate that her carpal tunnel was related to employment. Specifically, no doctor had concluded that the ...

Acting on a certified question of law from the federal district court, the Supreme Court in De Dios v. Indemnity Insurance Co. of North America and Broadspire Services, Inc. , No. 18-1227 (Iowa May 10, 2019) concluded that a bad faith action was not proper against a third party administrator because the administrator did not possess the attributes that have led to the imposition of bad faith liability The dispute arose out of a workers' compensation claim in which plaintiff  sued both the insurance carrier and 3d party administrator for bad faith.  The court found that the bad faith cause of action arises from: 1) the special contractual relationship between the insurer and insured, 2) the specific statutory duties imposed on insurers, or  3)some combination of the two.  Because a 3d party administrator did not possess these attributes, according to the court, bad faith liability against that entity was improper. The court canvasses the law of bad faith, both gen...

In Dunlap v. AIG, Inc., Commerce and Industry Insurance Company , No. 17-1503 (Iowa App. Jan. 9, 2019), the Court of Appeals reverses a district court order granting summary judgment in favor of defendants in a workers' compensation claim. The case was brought following a workers' compensation action in which claimant was found entitled to benefits but penalty benefits were denied because the issue of liability was fairly debatable because defendants had one doctor opining that the injury was not work-related.   In the underlying workers' compensation claim, Dr. Wolfe had opined that it is possible that Dunlap's arm injuries, while not directly caused by the initial work injury, were a result of the natural consequences of claimant's back injury requiring him to ambulate with the use of a cane. Despite this, defendants continued to deny liability. Claimant was ultimately found to be permanently and totally disabled and awarded medical care.   Plaintiff subs...

In Saltern v. HNI Corp. , No. 13-1193 (Iowa App. Aug. 13, 2014), the parties agreed to settle the case on an agreement for settlement basis, with defendants agreeing to pay penalty benefits for the delay in paying benefits.  After the AGFS was filed, claimant filed a bad faith claim and filed a motion for partial summary judgment urging the court to find that there was no reasonable basis to deny and delay benefits.  Defendants filed a cross motion for summary judgment, urging dismissal.  The district court denied claimant's motion and granted defendants' motion. Defendants argued that the facts in the workers' compensation case were such that there was a question of whether claimant slipped on ice in the parking lot, or whether the fall was idiopathic in nature.  Claimant argued that defendants' action of agreeing to payment of penalty demonstrated that there was no reasonable basis for its action in denying and delaying payment of benefits.  Claimant argued ...

In Leliefeld v. Liberty Mutual Ins. , No. 1-636 (Iowa App. Nov. 9, 2011), the Court of Appeals affirmed the district court ruling which had declined to stay a bad faith action pending resolution of the underlying workers' compensation case.  The district court had held that although it was reasonable to delay a trial in the bad faith claim until the workers' compensation claim had been resolved, there was no reason to stay discovery in the bad faith action.  The court noted that Reedy v. White Consolidated Industries , 503 N.W.2d 601 (Iowa 1993) had addressed a similar question, and had concluded that a stay was not always necessary and that the court should follow a discretionary abstention policy that would delay the consideration of the issues by the court.  This did not mean, however, that actions that were preliminary to a determination by the court should necessarily be stayed, and the Court of Appeals noted that Reedy had not mandated that a stay be granted or tha...