Cathy Stowe v. Second Injury Fund of Iowa ( 2017 )

IN THE COURT OF APPEALS OF IOWA
No. 16-0599
Filed January 25, 2017
CATHY STOWE,
Petitioner-Appellee,
vs.
SECOND INJURY FUND OF IOWA,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Glenn E. Pille, Judge.
The Second Injury Fund appeals the district court’s ruling that reversed
the agency’s grant of summary judgment in favor of the Fund, determining the
agency erred in its conclusion that Stowe was precluded from claiming a hand
injury based upon a settlement agreement in another case. AFFIRMED.
Thomas J. Miller, Attorney General, and Stephanie J. Copley, Assistant
Attorney General, for appellant.
Kellie L. Paschke and Troy A. Skinner of Skinner & Paschke, PLLC,
Waukee, for appellee.
Heard by Potterfield, P.J., and Doyle and Tabor, JJ.
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DOYLE, Judge.
In 2014, Cathy Stowe entered into a settlement agreement with her
employer and its insurance carrier wherein the parties agreed Stowe sustained
an employment injury in December of 2010. The agreement specifically stated:
The injury caused [Stowe] to sustain the following disability
and resulting entitlement to compensation:
a. Healing period/Temporary total disability for 16 weeks and
4 days. . . .
b. Temporary partial disability for 0 weeks and 0 days. . . .
c. Permanent partial disability for 49.70% loss of the left
thumb resulting in 29.82 weeks of compensation under Iowa Code
section 85.34(2)(a) [(2009)] regarding the following injuries
sustained by [Stowe]: left thumb.
Attached thereto was evidence “corroborat[ing] this settlement,” including
medical reports. The settlement was subsequently approved by the Iowa
Workers’ Compensation Commissioner.
Prior to entering into that settlement agreement, Stowe in December 2013
filed a petition for arbitration claiming she was entitled to Second Injury Fund
(Fund) benefits. That petition stated Stowe injured her left hand by way of
repetitive motion on August 25, 2011. The addendum attached to Stowe’s
petition indicates her left knee was impaired in September 1993, and her right
hand was first impaired in May 1996 and then reinjured in August 2009.
After Stowe entered into the settlement agreement with her employer, the
Fund filed a motion for summary judgment in its case. The Fund argued that
because Stowe agreed she sustained an injury to her thumb in December 2010
in the settlement agreement, she was precluded from subsequently asserting in
its case that she suffered an injury to her hand. Because a thumb injury is not a
compensable injury under the Second Injury Compensation Act, and because
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Stowe was precluded from claiming injury to her hand, which was a compensable
injury, the Fund argued it was entitled to summary judgment as a matter of law
and requested Stowe’s petition be dismissed.
Ultimately, the deputy workers’ compensation commissioner agreed,
granting the motion for summary judgment and dismissing Stowe’s petition. The
deputy’s ruling explained:
[The Iowa Workers’ Compensation Commissioner has] held a
claimant who settles his or her case against the employer is bound
by that settlement. [Stowe] cannot settle her underlying case
against the employer on the basis of an injury to the thumb and
then assert a claim against the [Fund] for an injury to the hand.
An injury to the thumb does not trigger liability of the [Fund].
As [Stowe] has acknowledged her injury was to her thumb and not
her hand, there is no genuine issue of material fact.
On appeal, the Iowa Workers’ Compensation Commissioner affirmed and
adopted the deputy’s ruling.
Stowe subsequently filed a petition for judicial review challenging the
ruling, and following a hearing, the district court reversed the commissioner’s
decision. The court found the commissioner erred as a matter of law when he
concluded the language of Stowe’s settlement agreement precluded her from
seeking Fund benefits on the basis of a hand injury. The court noted the Fund
was not a party to the settlement agreement nor was the issue of whether Stowe
sustained an injury to her hand litigated in that proceeding. The court also found
no support in the record to substantiate the agency’s finding that Stowe
acknowledged her injury was not to her hand. Viewing the facts in the light most
favorable to Stowe, the court concluded a genuine issue of material fact existed
as to whether the settlement concerned the injury to the thumb, hand, or the
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metacarpal joint, and it remanded the matter back to the agency for further
proceedings.
The Fund appeals the district court’s ruling, asserting the agency did not
err in its conclusion that Stowe was precluded from claiming a hand injury based
upon her settlement agreement and therefore correctly granted its motion for
summary judgment. At oral argument, the Fund conceded that the doctrine of
issue preclusion does not apply for the reasons found by the district court. See,
e.g., Winnebago Indus., Inc. v. Haverly, 727 N.W.2d 567, 572 (Iowa 2006) (“Iowa
law is clear that issue preclusion requires that the issue was ‘actually litigated’ in
the prior proceeding.”); Leavens v. Second Injury Fund of Iowa, No. 11-1636,
2012 WL 2411684, at *4 (Iowa Ct. App. June 27, 2012) (concluding that issue
preclusion was inapplicable because the “Fund was not a party to the settlement
agreement; it therefore did not have an opportunity to fully and fairly litigate the
issue of liability”). However, it argued that the doctrine of judicial estoppel barred
Stowe’s claim of a hand injury because it was inconsistent with her statement in
the other judicial proceeding that she injured her thumb. In response, Stowe
argued the statements were not inconsistent.
Our review is prescribed by the standards described in Iowa Code chapter
17A (2013); specifically, the “agency decision itself is reviewed under the
standards set forth in section 17A.19(10).” Second Injury Fund of Iowa v.
Kratzer, 778 N.W.2d 42, 45 (Iowa 2010) (citing Iowa Code § 86.26). The district
court acts in an appellate capacity to correct errors of law on the part of the
agency. Grundmeyer v. Weyerhaeuser Co., 649 N.W.2d 744, 748 (Iowa 2002).
On appeal, we review the district court’s judicial review ruling “to determine if we
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would reach the same result as the district court in our application of the Act.”
Second Injury Fund of Iowa v. George, 737 N.W.2d 141, 145 (Iowa 2007). If our
conclusions are the same, we affirm; otherwise, we reverse. See Mycogen
Seeds v. Sands, 686 N.W.2d 457, 464 (Iowa 2004). Though the theory of judicial
estoppel was not expressly addressed by the Commissioner or the district court,
judicial estoppel may be raised at any stage, even the appellate stage, “to protect
the integrity of the fact-finding process by administrative agencies and courts.”
Tyson Foods, Inc. v. Hedlund, 740 N.W.2d 192, 195 (Iowa 2007). Ultimately, we
agree with the district court’s reversal of the agency’s ruling.
The doctrine of judicial estoppel “prohibits a party who has successfully
and unequivocally asserted a position in one proceeding from asserting an
inconsistent position in a subsequent proceeding,” which may “creat[e] the
perception that at least one court has been misled.” Id. at 196; see also 28 Am.
Jur. 2d Estoppel and Waiver § 33 (2d ed. 1990) (“The doctrine of judicial
estoppel typically applies when, among other things, a party has succeeded in
persuading a court to accept that party’s earlier position so that judicial
acceptance of an inconsistent position in a later proceeding would create the
perception that either the first or the second court has been misled.”). Though
the doctrine generally cannot be reduced to a simple formula or test, “[a]
fundamental feature of the doctrine is the successful assertion of the inconsistent
position in a prior action.” Hedlund, 740 N.W.2d at 196 (citation omitted). In the
context of propositions, ideas, or beliefs, “inconsistent” means “so related that
both or all cannot be true or containing parts so related.” Inconsistent, Webster’s
Third New International Dictionary (2002); see also Green v. City of Cascade,
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231 N.W.2d 882, 890 (Iowa 1975) (“[I]nconsistent means ‘incongruous,
incompatible, irreconcilable.’”). “The view has been expressed in many cases
that, to give rise to an estoppel, the positions must be not merely different but so
inconsistent that one necessarily excludes the other.” 28 Am. Jur. 2d Estoppel
and Waiver § 66; see also, e.g., Esparza v. Kaweah Delta Dist. Hosp., 207 Cal.
Rptr. 3d 651, 657 (Cal. Ct. App. 2016) (“[S]tatements or allegations of fact are
‘inconsistent’ when both cannot be true.”); Olson v. Darlington Mut. Ins. Co., 723
N.W.2d 713, 717 (Wis. Ct. App. 2006) (“For judicial estoppel to apply, the two
positions must be clearly inconsistent and have more than ‘[t]he mere
appearance of inconsistency.’” (citation omitted)).
The Fund maintains that stating one has a thumb injury absolutely
excludes that person from claiming a hand injury; for the Fund, it is an either-or
proposition, and it relies upon Stumpff v. Second Injury Fund of Iowa, 543
N.W.2d 904, 905-06 (Iowa 1996). In that case, the Iowa Supreme Court agreed
with the agency that Stumpff’s first injury to his index finger—a severe fracture at
the distal aspect of the proximal phalanx—did not trigger the Fund’s liability. See
Stumpff, 543 N.W.2d at 905-06. The court reasoned that because a finger injury
and a hand injury were separately identified scheduled injuries in Iowa Code
section 85.34, the legislature’s use of “hand” in section 85.64 meant it chose not
to allow a sole finger injury to qualify as a first injury under section 85.64. See id.
at 906-07. Nevertheless, the court noted that “the loss of a finger or thumb does,
to some extent, affect the hand,” and it stated a finger injury could qualify as a
hand injury “when the site of the injury is at the point where the bones of the
finger connect to the bones of the hand (phalangeal-metacarpal joint).” Id.7
Because Stumpff’s injury was to a finger bone and the finger bone only, it did not
qualify as a first injury for the purpose of Fund liability. See id. at 907.
The Fund argues this case is like Stumpff because Stowe expressly stated
her injury was to her thumb in the settlement agreement. At oral argument, the
Fund agreed that although Stowe could have stated she had a hand injury based
upon the evidence, she did not, converting the issue from a factual one to a legal
one and ending any further discussion. To claim a hand injury now, the Fund
asserts, is inconsistent with her agreement, and it argues that to find otherwise
could lead to a slippery slope where claimants will claim two different injuries to
seek both industrial disability benefits and Fund benefits. We believe this puts
form over substance and ignores reality. Under the facts of this case, Stowe’s
claims are not unequivocally inconsistent.
The word “hand” itself generally encompasses more than one’s palm; as
one medical encyclopedia states, the “hand” is “[t]he body part attached to the
forearm at the wrist. It includes . . . the fingers (phalanges) with their [fourteen]
bones.” Taber’s Cyclopedic Medical Dictionary 1003 (Donald Venes ed., 21st
ed. 2009) (emphasis added); see also id. at 873 (defining “finger” as “[a]ny of the
five digits of the hand”), 2317 (defining “thumb” as the “short, thick first finger on
the radial side of the hand, having two phalanges and being opposable to the
other four digits”). Thus, an injury to the thumb, by itself and without more, does
not automatically exclude an injury to the hand in ordinary parlance. This is true
even if she was only compensated for a “thumb” injury. See Gregory v. Second
Injury Fund of Iowa, 777 N.W.2d 395, 400 (Iowa 2010) (noting “[j]ust as a first
qualifying injury need not be a work-related injury, the method of calculating
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compensation for a first qualifying injury cannot be controlling on [the] issue” of
whether the injury qualifies as a first injury under section 85.64); see also Second
Injury Fund of Iowa v. Neer, No. 07-0579, 2009 WL 2514098, at *2 (Iowa Ct.
App. Aug. 19, 2009) (holding the district court correctly “looked at Neer’s injuries
to determine if any were a scheduled injury, instead of looking at how she was
compensated for her injuries”).
Certainly, one can envision circumstances where a settlement agreement
similar to Stowe’s might be inconsistent with a claimant’s position in the
proceeding for Fund benefits, such as where the parties to the agreement
explicitly define in it the word “thumb” to exclude a hand injury. Or, similar to
Wilson v. Liberty Mutual Group, 666 N.W.2d 163, 167 (Iowa 2003), the
agreement might expressly contain a proposition that is completely contrary to
and mutually exclusive of the claimant’s latter position, such as an express
agreement by the parties to the settlement that the claimant did not sustain a
hand injury. More importantly, like in Stumpff, the evidence attached to the
agreement might show the claimant’s thumb injury did not extend beyond the
thumb’s phalanges. See Stumpff, 543 N.W.2d at 905-06. But here, the
settlement agreement specifically referenced the attached medical
documentation, which supported a claim of an injury beyond the thumb’s
phalanges and included the joint between her thumb and hand. Because
Stumpff makes clear that a finger injury can qualify as a hand injury in certain
circumstances, see id. at 906-07, Stowe’s settlement agreement did not explicitly
exclude the possibility of a hand injury, and the medical documentation attached
to the agreement supports a claim of a hand injury by way of an injury to the joint,
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we do not find Stowe’s settlement agreement’s use of the word “thumb” is
unequivocally inconsistent with her claim of a hand injury for purposes of Fund
benefits such that the doctrine of judicial estoppel is applicable.
Viewing the evidence in the light most favorable to Stowe, we agree with
the district court that the agency erred in finding there was no genuine issue of
material fact such that the Fund was entitled to summary judgment as a matter of
law based upon Stowe’s settlement agreement. While the agency may ultimately
determine Stowe did not prove she was entitled to Fund benefits, the evidence
presented was sufficient to establish a factual issue concerning her claim, and
Stowe is entitled to present her evidence and have the agency make a
determination based upon that evidence. For these reasons, we affirm the ruling
of the district court finding the agency erred in granting the Fund’s motion for
summary judgment and dismissing Stowe’s petition, and we remand the matter
back to the agency for further proceedings.
AFFIRMED.