Huffey v. Mail Contractors of America, Inc. ( 2020 )

IN THE COURT OF APPEALS OF IOWA
No. 18-2055
Filed April 1, 2020
MARTEN HUFFEY, SR.,
Petitioner-Appellee,
vs.
SECOND INJURY FUND OF IOWA,
Respondent-Appellant,
MAIL CONTRACTORS OF AMERICA, INC., and CHARTIS,
Respondents-Appellants,
ACE PROPERTY AND CASUALTY,
Respondent.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Sarah Crane, Judge.
The Second Injury Fund and the employer appeal a judicial review order
reversing in part and remanding to the workers’ compensation commissioner.
AFFIRMED.
Thomas J. Miller, Attorney General, and Sarah C. Brandt and Meredith C.
Cooney, Assistant Attorneys General, for appellant Second Injury Fund of Iowa.
Kelsey J. Paumer of Prentiss Grant LLC, Omaha, Nebraska, for appellants
Mail Contractors of America, Inc., and Chartis.
Matthew Milligan of Schott Mauss and Associates, PLLC, Des Moines, for
appellee.
Heard by Tabor, P.J., and Mullins and Schumacher, JJ.
2
TABOR, Presiding Judge.
This appeal combines two challenges to the judicial review order remanding
Marten Huffey’s claim for benefits back to the workers’ compensation
commissioner. The Second Injury Fund contests the district court’s reversal of the
agency’s finding that Huffey’s 1999 right arm injury did not qualify as a first injury
under Iowa Code section 85.64 (2018). His employer—Mail Contractors of
America (MCA)—disputes the need to remand for the agency to decide whether
Huffey’s 2012 left knee injury arose as a sequela1 of his 2011 right knee injury.
Because the agency misinterpreted the law on the first issue and failed to consider
a relevant matter on the second issue, we affirm the judicial review order.
I. Facts and Prior Proceedings
Huffey sought compensation from MCA for his work-related injuries.2
Huffey also raised a claim against the Second Injury Fund. That claim required
the agency to determine whether he suffered a qualifying first and second injury.
See Iowa Code § 85.64.
Huffey’s relevant work history starts in California, where he joined a trade
union operating on Hollywood studio sets from 1973 through 1991. In that role, he
drove camera trucks, motor homes, and fork lifts. In 1992, he moved home to
Iowa, where he drove a school bus for three years. He returned to work in
1 The workers’ compensation commission has defined “sequela” as “an after effect
or secondary effect of an injury.” Powers v. Trimark Physician’s Grp., 2005 WL
8149431 (Iowa Workers’ Comp. Comm’n) at *5 (Sept. 5, 2005).
2 MCA had a different workers’ compensation insurer providing coverage at the
time of each injury. The causation and impairment determinations for each injury
will control which entity is responsible for the benefits.
3
California during 1995 and 1996. And then in 1997 he took a job as a truck driver
for MCA, based in Des Moines. That employment lasted sixteen years.
As a semi-truck driver for MCA, Huffey transported mail, often on a
designated route. The job required loading and unloading with or without freight-
handling equipment. The duties required occasional bending, twisting, climbing,
squatting, crouching, and balancing. Huffey also had to push or pull a minimum of
100 pounds and sit for prolonged periods. On average, Huffey would spend 60%
to 80% of his time in the truck. And he was responsible for the maintenance of the
truck.
Over the years, Huffey suffered many mishaps on the job. The table below
summarizes the relevant injuries.
Injury Date Body Part Explanations File No
July 1994 Left knee Received surgery and was
placed at maximum medical
improvement (MMI) within
one year
October 1999 Right arm and right Underwent two surgeries
wrist (strapping and returned to work with no
lumber to truck) restrictions in March 2000
Rated at 7%
impairment
July 2003 Left knee (stepping Left knee surgery 5042766
off truck bumper) (MCA is employer)
March 2011 Right knee alleged Right knee surgery 5042767
left knee sequela (MCA is employer)
(hit knee while
exiting truck)
February 2012 Left knee (jumping Reached MMI and returned 5042768
out of truck) to work on March 2012.
(MCA is employer)
January 2013 Left knee surgery Dr. Mahoney performed
total knee replacement.
(MCA is employer)
4
We focus first on Huffey’s 2003 left knee injury. In an earlier workers’
compensation case, assigned file number 5042766, the commissioner considered
whether that 2003 injury led to Huffey’s 2013 total left knee replacement. The
commissioner held the surgery related instead to Huffey’s 2012 left knee injury so
the worker could not recover for the 2003 work injury. Huffey did not appeal that
decision.
Eight years after the 2003 left knee injury, Huffey hit his right knee while
exiting his truck. Huffey argued the right knee injury entitled him to permanent
partial disability benefits. He also claimed the right knee injury led to a sequela
injury to the left knee that caused permanent disability. The commissioner
assigned file number 5042767 to this claim. Dr. Patrick Sullivan performed a right
knee medial meniscectomy in May 2011. After that procedure, Dr. Sullivan placed
Huffey at MMI in June 2011 and imposed a 2% permanent impairment rating. As
for the left knee, Dr. Sullivan noted Huffey’s progressive pain and discomfort
resulted from degenerative arthritis.
Huffey’s expert witness, Dr. Robin Sassman, had a different opinion. After
she performed an independent medical examination (IME), she assigned a 7%
impairment rating for the right knee. Dr. Sassman also opined Huffey’s left knee
problems resulted from changes in his gait caused by the pain and swelling of the
right knee. Dr. Sassman opined both the 2011 sequela and the 2012 work injury
accelerated the need for the total left knee replacement in 2013.
The deputy commissioner accepted Dr. Sassman’s 7% impairment rating
on the right knee. But the arbitration decision also found Huffey failed to
demonstrate a sequela injury to his left knee. The deputy commissioner found
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Dr. Sullivan’s opinion more persuasive on the sequela issue because he was
treating Huffey at that time. By contrast, Dr. Sassman based her opinion on an
IME performed three years later. In the appeal of the arbitration decision, the
commissioner failed to directly address whether the right knee injury caused a
sequela injury to the left knee that caused permanent and total disability.
The third file, number 5042768, corresponds to Huffey’s left knee injury
incurred in February 2012. After this work injury, Huffey received treatment from
Dr. Daniel Miller. Dr. Miller prescribed work restrictions and pain medication.
Dr. Miller then cleared Huffey to return to work in March 2012. When his left knee
pain persisted, Huffey sought treatment from Dr. Craig Mahoney in November
2012. Dr. Mahoney performed a total left knee replacement in January 2013.
That same month, Huffey applied for short-term disability benefits. Huffey
advanced the opinion of Dr. Sassman that his February 2012 work injury
aggravated the underlying degenerative changes and accelerated the need for the
left total knee replacement. Dr. Sassman found a 20% impairment to the left knee.
By contrast, Dr. Miller opined the February 2012 injury “did not contribute or cause
his need for the left total knee replacement in January 2013.”
The deputy commissioner accepted Dr. Sassman’s opinion that the
February 2012 injury “lit up” and accelerated the left knee condition so Huffey
required left knee replacement sooner than he otherwise would have. The deputy
commissioner’s arbitration decision concluded Huffey was entitled to permanent
disability benefits at a 50% impairment rating. The commissioner reversed that
determination. The commissioner’s appeal decision held Huffey failed to carry his
burden to show a permanent disability from the February 2012 work injury.
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As for the Second Injury Fund, Huffey claimed his first injury was to his right
arm in 1999 and his second injury was to his right knee in March 2011. Rather
than address the 1999 injury, the deputy commissioner treated the March 2011
right knee incident as the first injury and the February 2012 left knee incident as
the second injury. On appeal from that arbitration decision, the commissioner
agreed the March 2011 right knee incident was one qualifying injury, but the
commissioner declined to treat the February 2012 left knee event as a second
injury or the 1999 right arm event as a first injury.
Huffey petitioned for judicial review. The district court decided the
commissioner “erred as a matter of law because he relied on industrial factors not
required to determine a first qualifying injury.” The district court also remanded for
the agency to address the sequela question. The Fund and MCA both appeal.
II. Scope and Standards of Review
When deciding a judicial review petition, the district court acts in an
appellate capacity. Mike Brooks, Inc. v. House, 843 N.W.2d 885, 888 (Iowa
2014). So, in what is essentially a second appeal, we apply Iowa Code
chapter 17A standards to decide whether we reach the same conclusions as the
district court. Id. “If we reach the same conclusions, we affirm; otherwise we may
reverse.” Id. (quoting Watson v. Iowa Dep’t of Transp., 829 N.W.2d 566, 568
(Iowa 2013)).
We review the two questions raised here under the standards described in
Iowa Code section 17A.19(10). See Iowa Code § 86.26; Gregory v. Second Injury
Fund of Iowa, 777 N.W.2d 395, 397 (Iowa 2010). The parties disagree on which
subparagraph governs. The Fund contends we apply the substantial-evidence
7
standard under section 17A.19(10)(f) to the question of eligibility. The employer
argues we review the remand decision on the sequela question for an abuse of
discretion, citing subparagraphs (i) and (j). For his part, Huffey relies on
subparagraph (m) because he believes the questions on appeal involve the
application of law to fact.
We have yet a different view. In the Fund’s appeal, the agency’s decision
hinged on an interpretation of Iowa Code section 85.64. The legislature did not
clearly vest the power to interpret that statute with the commissioner. See Finch
v. Schneider Specialized Carriers, Inc., 700 N.W.2d 328, 330 (Iowa 2005). We are
free to substitute our judgment if the agency’s decision is based on “an erroneous
interpretation” of the law. Iowa Code § 17A.19(10)(c); Second Injury Fund of Iowa
v. Kratzer, 778 N.W.2d 42, 45 (Iowa 2010).
We apply another standard when the commissioner fails to consider all of
the evidence. See JBS Swift & Co. v. Hedberg, 873 N.W.2d 276, 280 (Iowa Ct.
App. 2015). On MCA’s appeal, we assess if the agency’s action was illogical or
irrational. See Iowa Code § 17A.19(10)(i), (j).
III. Analysis
A. Second Injury Fund’s Appeal
We construe the workers’ compensation statute in favor of the worker. See
Holstein Elec. v. Breyfogle, 756 N.W.2d 812, 816 (Iowa 2008). That construction
remains true for the second injury fund compensation act—codified at Iowa Code
sections 85.63 through 85.69. Through that act, the legislature encourages the
employment of workers with disabilities. See Stumpff v. Second Injury Fund of
Iowa, 543 N.W.2d 904, 905 (Iowa 1996).
8
To establish a claim against the fund, Huffey had to prove by a
preponderance of the evidence that (1) he lost or lost the use of a hand, arm, foot,
leg, or eye; (2) he sustained a loss or loss of use of another specified member or
organ through a compensable work-related injury; and (3) both injuries resulted in
permanent disability. See Iowa Code § 85.64; Anderson v. Second Injury Fund,
262 N.W.2d 789, 790 (Iowa 1978).
The fund is responsible for the difference between the disability caused by
the current employment and the employee’s total disability. Second Injury Fund of
Iowa v. Shank, 516 N.W.2d 808, 812 (Iowa 1994). There are two ways to evaluate
a disability: functional and industrial. Id. at 813. A functional disability involves
“determining the impairment of the employee’s body function and is limited to the
loss of the physiological capacity of the body or body part.” Id. An “[i]ndustrial
disability goes beyond body impairment and measures the extent to which the
injury impairs the employee’s earning capacity.” Id. A functional disability is one
factor in determining industrial disability, but other factors include “the employee’s
age, education, qualifications, experience, and the ability of the employee to
engage in employment for which the employee is fit.” Id.Like the district court, we zero in on the agency’s rationale:
Claimant had a right arm injury in 1999. Other than claimant’s
testimony, there is no evidence claimant had surgery for this injury.
Claimant was returned to work with no restrictions for this injury in
2000. Claimant worked a number of years performing heavy manual
labor with no restrictions to his right arm. There is no record claimant
had difficulty doing this work with his right arm. Dr. Sassman’s
opinion regarding permanent impairment to the right arm is found not
convincing. Given this record, claimant has failed to prove he had
an injury to his right arm in 1999 that qualifies him for Fund benefits.
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In short, the agency denied Huffey’s request for compensation from the fund for
two reasons: (1) the lack of medical records to document the 1999 injury and
(2) the failure to show an industrial loss from that injury. We find legal error in both
reasons.
First, the Fund points to no code provisions that require Huffey to present
medical documentation of his 1999 injury. See Block v. Second Injury Fund of
Iowa, File No. 5044550, 2015 WL 5547632, at *5 (Iowa Workers’ Comp. Comm’n
Sept. 16, 2015) (holding absence of medical records did not defeat claim against
the fund). The agency could rely on Huffey’s own testimony, as well as the
corroborative discussion of the 1999 surgery in his medical records, to establish
the qualifying first injury.
Second, to invoke fund liability, the first injury need not cause an industrial
disability. See Second Injury Fund of Iowa v. Braden, 459 N.W.2d 467, 470 (Iowa
1990) (explaining the first injury need only be a scheduled injury). The legislature
intended the agency to identify a scheduled injury by the loss of physiological
capacity of the body part and not by evaluating the impairment of earning capacity.
Thus the first injury does not have to result in an industrial disability to constitute a
“loss of use” under section 85.64. Id.Huffey contends the agency misinterpreted section 85.64 in requiring the
“loss of use” of a qualifying body part (for the first injury) be measured by industrial-
disability factors and not just the loss of physiological capacity. For instance, the
commissioner emphasized Huffey returned to work with no restrictions in 2000.
And the commissioner noted Huffey could perform “heavy manual labor” for many
years despite his 1999 right arm injury.
10
The district court accepted Huffey’s contention and held the agency
improperly required the first qualifying injury to have “an industrial impact.” In
reviewing the agency’s interpretation of statutory language, we “reserve for
ourselves the final interpretation of the law.” See Second Injury Fund of Iowa v.
Bergeson, 526 N.W.2d 543, 546 (Iowa 1995). Like the district court, we conclude
the agency wrongly interpreted the law when assessing the requirements for proof
of a valid first loss.
Whether Huffey satisfied the third element of a section 85.64 claim—that
the cumulative effect of his two scheduled injuries created permanent disability—
remains to be decided. We leave that question to the commissioner on remand to
the agency.
B. MCA’s Appeal
In seeking benefits for a permanent disability under section 85.34(2), Huffey
asserted he suffered a sequela injury to his left knee as a result of his March 2011
right knee injury. On appeal, MCA argues the district court erred in remanding for
the agency to determine whether the conflicting evidence supported Huffey’s
claim. The employer concedes the commissioner did not “specifically discuss” the
possibility of a sequela injury. But MCA maintains we can “deduce” from the
commissioner’s overall analysis that the agency considered, and rejected, that
possibility.
Huffey suggests the commissioner mistook his sequela argument as an
attempt to qualify for section 85.64 benefits. He contends it is “impossible to
deduce” the commissioner’s thinking when he “missed the mark on Huffey’s
11
alternative argument.” We agree with Huffey that the commissioner’s approach to
this particular question was irrational and illogical.
Like the district court, we believe a remand is necessary for the agency to
evaluate the conflicting expert testimony on the sequela issue. See Hedberg, 873
N.W.2d at 281 (finding remand to agency was appropriate remedy when
commissioner failed to consider all the evidence). On one hand, Dr. Sullivan
believed Huffey’s left knee injury stemmed from degenerative arthritis. On the
other hand, Dr. Sassman opined Huffey’s left knee problems were aggravated in
part because of the gait changes caused by the pain and swelling of the right knee.
On remand to the agency, the commissioner should directly decide Huffey’s claim
that the March 2011 injury caused permanent and total disability because of a left
knee sequela injury under section 85.34(2).
AFFIRMED.