Central Iowa Fencing, LTD. and Grinnell Select Insurance v. Josh Hays ( 2022 )

IN THE COURT OF APPEALS OF IOWA
No. 21-1530
Filed July 20, 2022
CENTRAL IOWA FENCING, LTD. and GRINNELL SELECT INSURANCE,
Plaintiffs-Appellants,
vs.
JOSH HAYS,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg,
Judge.
An employer and its insurance company appeal the commissioner’s finding
of a cumulative injury and award of temporary benefits and costs. AFFIRMED.
Kaylie Paul, Stephen W. Spencer, and Christopher S. Spencer of Peddicord
Wharton, LLP, West Des Moines, for appellants.
Nicholas W. Platt of Platt Law Firm, P.C., Urbandale, for appellee.
Heard by Bower, C.J., and Schumacher and Ahlers, JJ.
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BOWER, Chief Judge.
Central Iowa Fencing, Ltd. (CIF), and Grinnell Select Insurance (collectively
“the Employer”) appeal an award of workers’ compensation benefits to Josh Hays.
We find the commissioner did not abuse his discretion in finding a cumulative injury
and substantial evidence supports the cumulative injury finding. We affirm the
commissioner’s award of temporary disability benefits and taxation of costs.
I. Background Facts & Proceedings
Hays worked for CIF at two separate times: first from 2015 to 2016, and the
second time starting in October 2017. Hays had a history of low back pain dating
back to 2007, which was usually corrected through adjustments by his
chiropractor, Dr. Nicholas Nerem, allowing him to return to normal activities. In
July 2017, he returned to Dr. Nerem for a series of three adjustments, and Dr.
Nerem released him at “pre-accident status” on August 1.
Hays was hired by CIF in October 2017 in a full-time position with no
accommodations.1 Over the winter he worked on planters and built similar items,
then he moved to full-time on a fencing crew, removing and installing fences—a
very physical job that required lifting, digging, and repetitive motions. Hays
habitually wore a back brace as “preventative maintenance.”
On April 26, 2018, Hays injured his back when removing an old fence post
in the course of his employment. A coworker took Hays to his chiropractor for an
adjustment to address the injury. Mark Dunahoo, the owner of CIF, knew of the
1Hays had worked seasonally for CIF during fencing season in 2015 and 2016.
He left for a time to seek year-round employment. Most of Hays’s twenty years of
employment history is in the construction field.
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injury but completed no paperwork relating to it. Hays stated Dr. Nerem’s
adjustment following this injury helped but did not bring him back to one hundred
percent. Hays continued working, but his coworkers took on more of the heavy
lifting.
In late July, his crew was working at a hilly, rocky jobsite pounding posts
and digging out rocks when Hays’s back flared up. Hays went home early and
took the next day off due to his back pain. His work team shifted responsibilities
to minimize Hays’s physical work. Hays’s back condition deteriorated and, two
weeks later, Hays had difficulty even putting on his tool belt at work. Dunahoo
encouraged Hays to see a doctor but never referred him to a specific doctor and
also failed to fill out any workers’ compensation information.
Also in July, Hays and his wife moved out of their residence. Several of
Hays’s friends and coworkers assisted moving the furniture and other heavy items.
Hays did very little heavy lifting during the moving process because of back pain.
After a job in early August, Hays was told by his crew foreman to take Friday
off and rest his back. Dunahoo called Hays on Friday. With respect to this call,
Dunahoo stated he asked Hays to bring a doctor’s note to figure out what they
could do. Hays asserted Dunahoo said there was no longer work available for him
and then called Hays back on Monday, stating he had not fired Hays and would
begin the workers’ compensation process.
Hays saw Dr. Seth Quam for Employer-authorized treatment in mid-August.
Dr. Quam ordered image testing and physical therapy and restricted Hays from
returning to work. Hays’s workers’ compensation claim was denied, and he
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pursued imaging at his own cost because of the denial. The doctor recommended
injections, and Hays was seen by pain specialists and surgeons.
Hays filed an unemployment claim and was granted benefits after a
contested hearing. In its ruling, the administrative law judge found “the employer
had no work available or was not willing to accommodate the work restrictions.” In
November, Hays began working part-time as a cashier at a gas station near his
home.
On September 7, Hays filed a petition for arbitration and medical benefits
with the workers’ compensation commissioner, asserting injury to his back, left leg,
and whole body from performing his work duties with CIF. He listed April 26,
July 23, and August 9 as injury dates, with disability beginning April 26 through the
date of filing.
In January 2019, Hays underwent an independent medical examination
(IME) by a physician of his choosing. The examining physician opined Hays had
not yet reached maximum medical improvement (MMI) and needed either surgical
care or other ongoing pain-management treatment. The doctor opined the work
incidents described were the medical cause for Hays’s pain and suggested
restrictions to sedentary work.
In July, Hays underwent another IME, this time with the Employer’s chosen
physician. The doctor opined Hays had an irritated nerve root and the appropriate
treatment would be pain medication. Hays indicated he did not want to use pain
medications. The physician further opined Hays’s pain had “unknown or idiopathic
causation” in the first week of August 2018. The doctor agreed Hays had a
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permanent partial impairment to his back but did not apportion any impairment to
Hays’s work activities.
The arbitration hearing on Hays’s claim occurred on September 11, 2019.
At the hearing, evidence submitted included medical records and deposition
testimony from Dr. Nerem and Dr. Quam; reports from IMEs by Hays’s and the
Employer’s chosen doctors; a functional capacity evaluation; assorted medical
records, depositions, and discovery answers; and testimony from Hays, several of
his coworkers, friends, and family.
The presiding deputy workers’ compensation commissioner issued a
decision on May 28, 2020. The deputy found in Hays’s favor, noting “two injurious
events depicted in the medical records and through claimant’s testimony,” and
“contemporaneous medical records depict a gradual worsening of claimant’s
condition.” The deputy found a cumulative permanent low back injury precipitated
by the successive injuries in April and July 2018 and manifesting August 9, 2018.
The Employer was ordered to pay Hays’s reasonable medical expenses. Because
Hays had not reached MMI, the deputy could not yet determine industrial disability
for Hays and instead ordered continuing temporary partial disability benefits. The
deputy noted the exam portion of the IME was not a reimbursable cost under Iowa
Code section 84.39 (2019) because the Employer had not had its IME completed
when the exam was done. The deputy assessed the fee for drafting the report—
but not the exam—as costs.
The Employer appealed the arbitration ruling to the workers’ compensation
commissioner. The commissioner found the deputy “provided a well-reasoned
analysis of all the issues raised in the arbitration proceeding. I affirm the deputy
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commissioner’s findings of fact and conclusions of law pertaining to those issues.”
The commissioner specifically affirmed Hays “sustained a work-related cumulative
permanent material aggravation of his pre-existing low back condition” and
affirmed the benefits awarded and costs assessed.
The Employer then filed a petition for judicial review. The district court
examined the record and, in September 2021, issued a thorough, well-reasoned
ruling. The district court concluded:
[T]here was substantial evidence in the record to support the
commissioner’s findings that (1) Hays’s injury arose out of an in the
course of his employment, (2) he suffered a cumulative injury with a
manifestation date of August 9, 2018, (3) awarded Hays temporary
total benefits (healing period) and temporary partial benefits,
(4) awarded a weekly benefit rate of $525.54, and (5) awarded Hays
costs of $2324.40 associated with this action.
The Employer appeals, contesting the cumulative injury finding, the
temporary disability and healing period benefits awards, and the report costs
assessed.
II. Standard of Review
Iowa Code chapter 17A (2020) governs judicial review of decisions by the
workers’ compensation commissioner. See Ramirez-Trujillo v. Quality Egg, L.L.C.,
878 N.W.2d 759, 768 (Iowa 2016). “When an appellate court reviews a district
court decision that reviewed an agency action, the appellate court’s task is to
determine if it would reach the same result as the district court in applying the Act.”
Gits Mfg. Co. v. Frank, 855 N.W.2d 195, 197 (Iowa 2014). “[W]e accept the
commissioner’s factual findings when supported by substantial evidence.” Bluml
v. Dee Jay’s Inc., 920 N.W.2d 82, 84 (Iowa 2018). “[T]he district court and the
appellate court should not consider the evidence insubstantial merely because the
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court may draw different conclusions from the record.” Gits Mfg., 855 N.W.2d at
197.
“The commissioner commits an abuse of discretion when the exercise of
discretion is clearly erroneous or rests on untenable grounds. This standard, when
applied in administrative proceedings, is the same as the abuse of discretion
review used in evaluating the exercise of the district court’s discretion in other
contexts.” Univ. of Iowa Hosps. & Clinics v. Waters, 674 N.W.2d 92, 96 (Iowa
2004) (internal citations omitted).
“Generally, we review the workers’ compensation commissioner’s legal
interpretation of Iowa Code chapter 85 for errors at law rather than giving
deference to those interpretations.” Gumm v. Easter Seal Soc’y of Iowa, Inc., 943
N.W.2d 23, 28 (Iowa 2020).
III. Analysis
The Employer raises several claims on appeal relating to the finding of a
cumulative injury, the benefits awarded, and the costs taxed below.
A. The Employer’s first claim is the commissioner erred by finding Hays
incurred a cumulative injury when no claim of cumulative injury was stated in
Hays’s arbitration petition.
“Whether [an] application for workers’ compensation benefits sufficiently
informed the [employer] of the possibility of a cumulative injury claim is not, first
and foremost, a factual issue, but rather a matter within the agency’s discretion.”
Waters, 674 N.W.2d at 96 (footnote omitted). In Waters, the supreme court found
it “important to point out the form [to file a workers’ compensation claim in
arbitration] does not ask applicants to state whether their injuries were cumulative
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or acute.” 674 N.W.2d at 97. Words such as “gradual” and “repetitive” and verbs
like “lifting, carrying, and dumping,” which imply repetitive work, along with a history
of similar injury problems may sufficiently apprise an employer of the possibility
that a cumulative injury may be found to justify a workers’ compensation award.
Id. at 97–99; see also Oscar Mayer Foods Corp. v. Tasler, 483 N.W.2d 824, 828
(Iowa 1992).
Here, Hays’s petition for arbitration listed multiple injury dates and described
what portions of his body he injured. He then stated, “Claimant continued to
exacerbate his condition with his work duties.” (Emphasis added.) We conclude
the petition sufficiently apprised the Employer of the possibility the cumulative
injury doctrine might apply. The Employer has not proved the commissioner’s
exercise of discretion was on untenable or clearly erroneous grounds. See
Waters, 674 N.W.2d at 99.
B. The Employer next claims the commissioner erred in finding Hays proved
a cumulative injury arising out of and in the course of his employment. The
Employer asserts Hays did not provide a credible medical opinion supporting a
cumulative injury and argues the commissioner wrongly discounted Hays’s
preexisting back problems.
The deputy commissioner—whose findings and conclusions were adopted
by the commissioner and upheld on judicial review—thoroughly examined the
medical records, explained at length the evidence supporting their findings,
discounted the opinion of the Employer’s chosen doctor, and found other doctors’
opinions credible. As to the Employer’s assertions regarding Hays’s preexisting
back condition, while the Employer is not liable for Hays’s pre-employment
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disability, it is liable for the disability arising out of his employment and relating to
the injuries he received—that is, the cumulative aggravation which prevented him
from working without accommodation as he did from October 2017 to April 2018.
See Iowa Code § 85.34(7); accord Roberts Dairy v. Billick, 861 N.W.2d 814, 823–
24 (Iowa 2015) (explaining the fresh-start rule as: “the employer [is] liable for a
work-related permanent partial loss of the new earning capacity refreshed by
market forces and existing at the time of the successive injury—not for a
preexisting disability”). Nor does the evidence of Hays moving his belongings
militate in favor of a decision for the Employer. As the deputy observed, the
witness accounts supported Hays’s contention that others did most of the heavy
lifting for the move.
While the Employer is able to cite evidence to support its view, when we
review the record as a whole, we find substantial evidence to support the
commissioner’s ruling. See Gits Mfg., 855 N.W.2d at 197. First, credible medical
evidence supports the ruling, as detailed in the agency and district court rulings.
Second, “[i]t is a fundamental requirement that the commissioner consider all
evidence, both medical and nonmedical. Lay witness testimony is both relevant
and material upon the cause and extent of injury.” Id. at 199 (alteration in original)
(citation omitted). Hays’s coworkers from CIF—including company owner
Dunahoo—testified Hays worked without accommodation for several months in
late 2017 and early 2018; identified specific incidents where Hays stopped working
due to injury; and acknowledged after the April 2018 injury Hays had more frequent
flare-ups, was often assigned lighter duty to accommodate his injuries because his
back “wasn’t getting any better,” and, by August, Hays was unable to even wear
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his tool belt. Substantial evidence supports the finding of an aggravation
cumulative injury.
C. The Employer disputes the commissioner’s award of healing period and
temporary disability benefits. The Employer asserts temporary benefits were not
owed because Hays was not fired but refused suitable work and voluntarily quit.
At the arbitration hearing, Hays’s account of his termination was as follows:
Q. You said you were fired or terminated. How were you
terminated? A. They—after a job on a Thursday, Nathan called me
or texted, I can’t remember, but said for me to take Friday off and
rest my back. That Mark would call me Friday and give me direction
as to what I was doing. So I said okay. I took the Friday off, and
Mark called and he told me at that point that he no longer had work
available for me. This was where our paths had to split, and I was
no longer, I don’t know what the word is, beneficial to the company,
basically.
....
Q. Okay. So at that point you considered yourself terminated?
A. Yes, sir.
Q. Did you talk with Mark again after that? A. Yes. He called
right away Monday morning and just told me four or five times how
he didn’t fire me. And I wasn’t terminated and he didn’t do any of
that and that he was going to start a workman’s comp claim for me
and to go and seek help.
Hays further testified he never received an offer from CIF to return to work
after August 9, 2018. The commissioner found Hays’s testimony to be credible.
In the district court’s review, it specifically noted the unemployment decision ruling
that Hays had not been offered suitable work despite an availability for light-duty
restriction and the record presented was devoid of any written offer of suitable
work.
The Employer argues the commissioner (and district court) misinterpreted
Iowa Code section 85.33(3) on the requirements for an offer and refusal of suitable
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work. The Employer asserts the two paragraphs of section 85.33(3)2 operate
independently, with paragraph (a) requiring a claimant to accept suitable work in
order to qualify for temporary or healing period benefits, while paragraph (b) sets
a separate set of requirements if the offer is made in writing. In other words, the
2 Iowa Code section 85.33(3) provides:
a. If an employee is temporarily, partially disabled and the
employer for whom the employee was working at the time of injury
offers to the employee suitable work consistent with the employee’s
disability the employee shall accept the suitable work, and be
compensated with temporary partial benefits. If the employer offers
the employee suitable work and the employee refuses to accept the
suitable work offered by the employer, the employee shall not be
compensated with temporary partial, temporary total, or healing
period benefits during the period of the refusal. Work offered at the
employer’s principal place of business or established place of
operation where the employee has previously worked is presumed
to be geographically suitable for an employee whose duties involve
travel away from the employer's principal place of business or
established place of operation more than fifty percent of the time. If
suitable work is not offered by the employer for whom the employee
was working at the time of the injury and the employee who is
temporarily, partially disabled elects to perform work with a different
employer, the employee shall be compensated with temporary partial
benefits.
b. The employer shall communicate an offer of temporary
work to the employee in writing, including details of lodging, meals,
and transportation, and shall communicate to the employee that if
the employee refuses the offer of temporary work, the employee shall
communicate the refusal and the reason for the refusal to the
employer in writing and that during the period of the refusal the
employee will not be compensated with temporary partial, temporary
total, or healing period benefits, unless the work refused is not
suitable. If the employee refuses the offer of temporary work on the
grounds that the work is not suitable, the employee shall
communicate the refusal, along with the reason for the refusal, to the
employer in writing at the time the offer of work is refused. Failure to
communicate the reason for the refusal in this manner precludes the
employee from raising suitability of the work as the reason for the
refusal until such time as the reason for the refusal is communicated
in writing to the employer.
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offer of suitable work does not have to be in writing, and the employee only need
refuse in writing if the offer is in writing.
We do not agree with the Employer’s interpretation and find it conflicts with
the plain language of the statute. If the written element was optional as asserted,
paragraph (b) would begin, “The employer may communicate an offer . . . in
writing.” But the statute is unambiguous: “The employer shall communicate an
offer of temporary work to the employee in writing.” Iowa Code § 85.33(3)(b)
(emphasis added). We conclude the appropriate interpretation is paragraph (a)
explains what suitable work an employer must offer and an employee must accept
in temporary partial disability cases, and paragraph (b) provides guidance on how
the offer and a refusal based on suitability of work must be communicated to be
relied on in litigation.
Our supreme court has observed, “The question of whether an employer
offered suitable work is ordinarily a fact issue.” Neal v. Annett Holdings, Inc., 814
N.W.2d 512, 518 (Iowa 2012). By adding the written requirement of paragraph (b)
in 2017, the legislature required tangible evidence from which the commissioner
could evaluate the work offered and basis of refusal in temporary partial disability
cases, lessening the commissioner’s need to rely on credibility determinations of
the employer’s and employee’s testimony on a critical question. The two
subparagraphs of section 85.33(3) work together, not independently, to protect
both the employer and employee in cases for temporary disability benefits. Under
section 85.33(3), an employer’s offer of suitable temporary work to an injured
employee must be in writing, and an employee refusing an offer must communicate
in writing the reason for the refusal. The writing ensures evidence exists that
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suitable work is offered to the injured employee, the offer is accepted or rejected,
and the employer has an opportunity to modify duties if necessary for the work to
be suitable—both parties can be held accountable. We find no legal error in the
commissioner’s interpretation of section 85.33(3).
The Employer also argues because Hays started a new job on November 5,
2018, he is no longer entitled to healing period or temporary disability benefits.
There are two types of temporary disability benefits, total and partial. The
Employer was only liable for temporary total disability benefits until November
2018 when Hays began alternate employment. See Iowa Code § 85.33(1).
However, Hays’s new employment pays significantly less than his work at CIF, and
he has not been shown medically capable to engage in “substantially similar” work
to that at CIF. Section 85.33(3)(a) explains precisely what is to happen in such a
circumstance: “If suitable work is not offered by the employer for whom the
employee was working at the time of the injury and the employee who is
temporarily, partially disabled elects to perform work with a different employer, the
employee shall be compensated with temporary partial benefits.” Subsection (4)
then provides the temporary partial benefits consist of two-thirds the difference
between the employee’s pre-injury weekly earnings and the employee’s actual
gross weekly income with the new employer. Id. § 85.33(4).
Under the statutes and the facts of this case, Hays was eligible for
temporary total disability benefits before he began his current employment. Since
his new employment started, he is entitled to temporary partial disability benefits
until such time as he reaches MMI and a permanent disability, if any, is determined.
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At that time, the provisions of section 85.34 will govern any healing period and
permanent partial disability benefits owed. We affirm the commissioner’s ruling.
D. Last, the Employer asserts costs assessed by the commissioner relating
to expert reports should be limited to the Iowa Code section 622.72 cap on fees
for expert witness testimony because the reports were submitted in lieu of
testimony. See Iowa Code § 622.72 (limiting expert witness testimony
compensation to a maximum of $150 per day). The Employer asks that we
overrule this court’s holding on the issue articulated in John Deere Dubuque Works
v. Caven, 804 N.W.2d 297, 301 (Iowa Ct. App. 2011), where we found Iowa
Administrative Code rule 876-4.33 clearly and unambiguously gives the
commissioner discretion to award reasonable costs of up to two doctor or
practitioner reports.3
The reasoning from Caven remains convincing. Iowa Code section 86.40
states, “All costs incurred in the hearing before the commissioner shall be taxed in
the discretion of the commissioner.” (Emphasis added.) The administrative rule
promulgated to explain which costs are taxable in the commissioner’s discretion
includes:
(4) witness fees and expenses as provided by Iowa Code
sections 622.69 and 622.72,
3 The Employer also asserts on appeal Hays sought reimbursement for three
reports under rule 876-4.33—the report from his treating physician, the report from
his IME, and a vocational report. In reviewing the arbitration decision, the
commissioner’s opinion, and the district court opinion, the only costs assessed
were for the report from Hays’s IME and his filing fee. Our record is limited to the
issues before the commissioner, and this issue was not raised or decided below.
See Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (“[I]ssues must
ordinarily be both raised and decided by the district court before we will decide
them on appeal.”).
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(5) the costs of doctors’ and practitioners’ deposition
testimony, provided that said costs do not exceed the amounts
provided by Iowa Code sections 622.69 and 622.72,
(6) the reasonable costs of obtaining no more than two
doctors’ or practitioners’ reports . . . .
Iowa Admin Code r. 876-4.33(4)–(6). Notably, while the witness fees and
deposition testimony are expressly limited to the amounts provided under Iowa
Code sections 622.69 and 622.72, doctor and practitioner reports are only limited
to “reasonable costs.” This is an unambiguous distinction, and the Employer cites
no persuasive or controlling authority to support overturning our prior decision. 4
The IME report was a taxable cost, and we affirm.
AFFIRMED.
4The Employer argues Des Moines Area Regional Transit Authority v. Young, 867
N.W.2d 839 (Iowa 2015), supports a more narrow reading of taxation of costs.
Young held that only the report from an IME, not the examination, was taxable as
a cost under section 86.40 and rule 876-4.33(6). 867 N.W.2d at 845–46. The
opinion provides no indication the report cost should be bound by witness or
deposition costs under paragraphs (4) or (5) of rule 876-4.33.