Gregory v. Second Injury Fund of Iowa ( 2010 )

HECHT, Justice.

In this appeal, we must decide whether the workers’ compensation commissioner erred in concluding a claimant who sustained successive injuries in the course of her employment is not entitled to benefits from the Second Injury Fund (the Fund). The commissioner concluded the Fund owes nothing in this case under Iowa Code section 85.64 (2001) because the first injury sustained by the claimant, Lori Gregory (Gregory), resulted in surgeries and functional losses to both of her arms and shoulders and functional limitations extending into the whole body. On appeal from the district court’s judgment affirming the commissioner’s decision, we reverse and remand for further proceedings consistent with this opinion.

I. Background Facts and Proceedings.

Gregory began working for Jeld-Wen, Inc. d/b/a Doorcraft of Iowa (Doorcraft) in 1999. In September 2000, she experienced bilateral upper extremity dysfunction. She underwent a right carpal tunnel surgery on December 15, 2000, and had the same surgery on the left side on February 19, 2001. These procedures left Gregory with a two percent functional impairment of her left hand and a six percent functional impairment of her right hand.

In the spring and summer of 2001, Gregory underwent bilateral surgical procedures intended to decompress her distal clavicles and treat pain in her shoulders. The orthopedist who performed these procedures subsequently opined Gregory sustained a ten percent impairment of her right arm and a ten percent impairment of her left arm secondary to the surgical treatment of her clavicles.

Gregory was able to continue her employment at Doorcraft after her recovery from the surgeries. However, she sustained a new injury in the course of her employment on October 8, 2002, when a door end-rail fell, fracturing her right foot. During the ensuing months, Gregory was treated for persistent pain in the injured foot and in her right leg.

Gregory filed a petition with the Iowa Workers’ Compensation Commissioner on July 6, 2004, seeking compensation from Doorcraft for the injury to her right foot.¹ The petition also asserted Gregory was entitled to benefits from the Fund, alleging the 2000 injury to her left hand constituted a first qualifying injury and the 2002 injury to her right foot constituted a second qualifying injury.² The industrial commissioner denied Gregory’s claim against the Fund, concluding the 2000 injury did not constitute a first qualifying injury under Iowa Code section 85.64 because the resulting functional limitations “clearly extended] beyond the bilateral arms and into the whole body.” The commissioner reasoned that the 2000 injury could not constitute a first qualifying injury because it resulted in permanent partial bilateral disability to Gregory’s hands, arms, and shoulders for which compensation was calculated as an injury to the body as a whole under Iowa Code section 85.34(2)(⅞).

Gregory sought judicial review, and the district court affirmed the commissioner’s decision.

II. Scope of Review.

An appeal of a workers’ compensation decision is reviewed under standards described in chapter 17A. Iowa Code § 86.26. “The agency decision itself is reviewed under the standards set forth in section 17A.19(10).” Mosher v. Dep’t of Inspections & Appeals, 671 N.W.2d 501, 508 (Iowa 2003). The agency’s decision in this case was based on an interpretation of Iowa Code section 85.64. Interpretation of the workers’ compensation statute is an enterprise that has not been clearly vested by a provision of law in the discretion of the commissioner. Finch v. Schneider Specialized Carriers, Inc., 700 N.W.2d 328, 330 (Iowa 2005). Thus, we will reverse the agency’s decision if it is based on “an erroneous interpretation” of the law. Iowa Code § 17A.19(10)(c).

III. Discussion.

Gregory contends the commissioner erred in concluding her 2000 left-hand injury cannot qualify as a first injury under section 85.64. The Fund asserts the commissioner correctly concluded Gregory’s 2000 injury resulting in impairment to more than one member enumerated in the statute, considered for purposes of workers’ compensation together with impairment to Gregory’s shoulders in determining disability to her body as a whole, cannot qualify as a first injury under the statute. A brief review of the Fund’s legislative history will aid our resolution of this issue.

The General Assembly passed legislation establishing the Fund in 1945. The statute originally provided in relevant part:

If an employee who has previously lost, or lost the use of, one hand, one arm, one foot, one leg, or one eye, becomes permanently and totally disabled by a compensable injury which has resulted in the loss of or loss of use of another such member or organ, the employer shall be liable only for the degree of disability which would have resulted from the latter injury if there had been no preexisting disability. In addition to such compensation, and after the expiration of the full period provided by law for the payments thereof by the employer, the employee shall be paid out of the “Second Injury Fund” created by this Act the remainder of such compensation as would be payable for permanent total disability after first deducting from such remainder the compensable value of the previously lost member or organ.

1945 Iowa Acts eh. 81, § 2. The scope of the statute was extended less than a decade later when the General Assembly amended the law and eliminated the requirement that the claimant prove total permanent disability as a result of the second injury to establish the Fund’s liability. 1951 Iowa Acts ch. 59, § 6 (expressing in its title the intent “to liberalize the provisions of the second injury fund”). Under the current version of section 85.64, the Fund is implicated in a workers’ compensation claim when an employee suffers successive qualifying injuries.

We have noted the Fund was conceived by the legislature to encourage the employment of disabled persons “by making the current employer responsible only for the disability the current employer causes.” Second Injury Fund v. Shank, 516 N.W.2d 808, 812 (Iowa 1994); see also Second Injury Fund v. Neelans, 436 N.W.2d 355, 358 (Iowa 1989) (noting the purpose of second injury fund statutes “was to provide a more favorable climate for the employment of persons injured through service in World War II”); Anderson v. Second Injury Fund, 262 N.W.2d 789, 791-92 (Iowa 1978) (stating the purpose of second injury fund statutes is to encourage employers to hire disabled workers).³ The Fund’s salutary purpose is accomplished by an award of compensation after a second qualifying injury to “an employee who has previously lost, or lost the use of, one hand, one arm, one foot, one leg, or one eye.” Iowa Code § 85.64. Thus, Gregory’s entitlement to benefits from the Fund is dependent upon proof of the following propositions: (1) she sustained a permanent disability to a hand, arm, foot, leg, or eye (a first qualifying injury); (2) she subsequently sustained a permanent disability to another such member through a work-related injury (a second qualifying injury); and (3) the permanent disability resulting from the first and second injuries exceeds the compensable value of “the previously lost member.” Id.; Shank, 516 N.W.2d at 812.

Each party believes the plain language of section 85.64 supports its position. The Fund reads the statute to mean a first qualifying loss must be confined to a body part enumerated in the statute. As Gregory’s disability arising from the 2000 injury included not only a partial functional loss of her left hand but also included disabling injuries to both of her shoulders resulting in compensation for industrial disability, the State contends the commissioner correctly concluded the Fund has no liability in this case. Gregory views section 85.64 more broadly. She posits the statute must be interpreted to include within the universe of qualifying first losses any disability to an enumerated body part whether or not it coexists with one or more disabilities simultaneously sustained in other enumerated or unenumerated body parts. We find each of these interpretations to be plausible, rendering the statute ambiguous.

When interpreting a statute, our “ultimate goal is to determine and effectuate the intent of the legislature.” Beier Glass Co. v. Brundige, 329 N.W.2d 280, 283 (Iowa 1983). We generally presume words contained in a statute are used in their ordinary and usual sense with the meaning commonly attributed to them. Am. Home Prods. Corp. v. Iowa State Bd. of Tax Review, 302 N.W.2d 140, 142-43 (Iowa 1981). In discerning the meaning of an ambiguous statute, we construe terms according to their accepted usage when they are not defined in the statute. State v. Bower, 725 N.W.2d 435, 442 (Iowa 2006). We strive for “an interpretation that is reasonable, best achieves the statute’s purpose, and avoids absurd results.” Id.

We also give careful attention to the purpose of a statute as we engage in interpretation. Am. Home Prods., 302 N.W.2d at 143. Workers’ compensation statutes are to be liberally construed in favor of the employee. Myers v. F.C.A. Servs., Inc., 592 N.W.2d 354, 356 (Iowa 1999).

The legislature enacted the workers’ compensation statute primarily for the benefit of the worker and the worker’s dependents. Therefore, we apply the statute broadly and liberally in keeping with the humanitarian objective of the statute. We will not defeat the statute’s beneficent purpose by reading something into it that is not there, or by a narrow and strained construction.

Holstein Elec. v. Breyfogle, 756 N.W.2d 812, 815-16 (Iowa 2008) (citations omitted).

With these principles in mind, we must interpret section 85.64 to determine whether Gregory “lost, or lost the use of, one hand, one arm, one foot, one leg, or one eye” as a consequence of the 2000 injury. Although not controlling here, our recent decision in Second Injury Fund v. George, 737 N.W.2d 141 (Iowa 2007), is instructive. In George, the claimant sustained a work-related injury in 1996 resulting in a seven percent disability to her left leg. 737 N.W.2d at 144. In 2000, George sustained another work-related injury that caused disability to both of her legs. Id. The Fund contended George’s 2000 right leg injury was not a qualifying second injury because her left leg was also injured in the same incident. Id. at 145. Affirming the commissioner’s determination that the bilateral nature of the 2000 injury did not preclude its qualification as a second injury under section 85.64, we interpreted the phrase “loss of or loss of use of another such member” to mean a subsequent loss to another enumerated member notwithstanding more than one enumerated member was disabled as a consequence of the same incident. Id. at 147.

Although George interpreted only that part of section 85.64 which addresses the second qualifying injury, we believe its reasoning is relevant here. Liability of the Fund under section 85.64 expressly turns on the part(s) of the body permanently injured in successive injuries. The focus of our analysis must therefore be on whether Gregory sustained a partial permanent loss of at least two enumerated members in successive injuries. She clearly did. Given our decision in George that a subsequent injury to an enumerated member is not disqualified as a second injury merely because it occurred simultaneously with an injury to another enumerated member, we believe it would be senselessly inconsistent to conclude a first qualifying injury cannot likewise occur simultaneously with an injury to another such member.

Our determination that Gregory’s 2000 left hand injury qualifies as a first injury under section 85.64 is not affected by the fact that the incident also caused bilateral shoulder impairment and was therefore compensated as an unscheduled injury under Iowa Code section 85.34(2)(¾). The plain language of section 85.64 does not support the Fund’s contention that it is significant to the determination of whether the 2000 injury is a first qualifying loss that compensation was calculated under “the schedule” found in Iowa Code section 85.34(2)(a)-(t), rather than under section 85.34(2)(¾) as one of the factors bearing upon the nature and extent of an injured worker’s industrial disability. Just as a first qualifying injury need not be a work-related injury, the method of calculating compensation for a first qualifying injury cannot be controlling on this issue. Moreover, the fact that the physical impairment of Gregory’s left hand was presumably considered by the parties when they negotiated a compromise special case settlement of Gregory’s claim for the 2000 injury will not impede the calculation of the Fund’s credit for the compensable value of the partial loss of that enumerated member (two percent).⁴

We recognize the statute establishing the Fund has been characterized by commentators as a “narrow” second injury fund regime and that some jurisdictions have opted for statutory formulations with broader reach. See Harry W. Dahl, The Iowa Second Injury Fund — Time for Change, 39 Drake L.Rev. 101, 103 (1989-1990).⁵ However, our determination that Gregory’s 2000 injury is a first qualifying injury under section 85.64 respects the General Assembly’s choice of a comparatively nairow statute. The 2000 injury to Gregory’s left hand qualifies as a first injury only because it was situated in an enumerated member and was not confined to an unenumerated part of her body.

Our decision in George and our disposition of the issues in this case are faithful to the well-established principle that chapter 85 is to be liberally construed in favor of the injured employee. In both instances, the Fund has advocated an interpretation of section 85.64 favoring claimants with fewer previously disabled body parts over claimants with a more complex array of disabilities. Our rejection of the Fund’s interpretation conforms to our understanding that the General Assembly did not intend to disadvantage claimants with histories of more complex combinations of enumerated and unenumerated member injuries.

Gregory’s claim for Fund benefits alleged a 2000 injury to her left hand as a first qualifying injury. The uncontrovert-ed medical evidence in the record establishes that this injury resulted in a two percent functional impairment of that hand. The fact that Gregory combined in a single workers’ compensation proceeding her claim for that scheduled loss with other scheduled and unscheduled injuries did not disqualify it as a first qualifying injury under section 85.64.

Our interpretation of section 85.64 permitting a loss of an enumerated member to qualify as a first injury for purposes of the Fund’s liability notwithstanding the fact the injury was combined with disability to one or more unscheduled body parts for purposes of compensation under section 85.34(2)(⅜) will not result in a double recovery for Gregory. In determining the Fund’s liability under section 85.64, the commissioner shall consider only the extent to which Gregory’s earning capacity was diminished by the combined effect of the 2000 and 2002 losses to her enumerated extremities. See Iowa Code § 85.64. This new and discrete assessment by the commissioner of the loss of earning capacity for purposes of the Fund’s liability shall consider only Gregory’s disability to the left hand resulting from the 2000 injury and her disability to the right foot resulting from the 2002 injury. Accordingly, the assessment of the Fund’s liability in this case will not provide additional compensation to Gregory for the loss of earning capacity resulting from any disability to other enumerated or unenumerated body parts arising from the injury in 2000.

IV. Conclusion.

We conclude the commissioner erred in interpreting section 85.64. Accordingly, we reverse the district court’s judgment and remand this matter to the commissioner for further proceedings consistent with this decision.

DISTRICT COURT JUDGMENT REVERSED AND CASE REMANDED.

All justices concur except CADY, J., TERNUS, C.J., and STREIT, J., who dissent.

1 . Although the fracture was situated in the right foot, Gregory's petition initially alleged an injury to the body as a whole because a treating physician had diagnosed symptoms of reflex sympathetic dystrophy (RSD) in the right leg. The RSD symptoms resolved, however, and Gregory subsequently abandoned her claim that the 2002 injury extended permanently beyond the right foot, a scheduled member under Iowa Code section 85.34(2)(n).

2 . Gregory's workers’ compensation claim against Doorcraft for the 2000 bilateral hand and shoulder disabilities was resolved by a special case settlement agreement under Iowa Code section 85.35 on July 19, 2004.

3 . It has been suggested that this court’s decisions have mischaracterized the General Assembly's primary purpose in adopting the Fund and that the primary purpose of second injury fund statutes is mitigation of the harsh consequences of the apportionment rule for employees and the full-responsibility rule for employers in certain cases involving successive injuries to body parts enumerated in section 85.64. Although mitigation of the harsh consequences of the full-responsibility rule might have motivated legislatures in other states as they adopted their second injury fund statutes, such motivation was not likely a substantial factor in Iowa. See Lee M. Jack-wig, The Second Injury Fund of Iowa: How Complex Can a Simple Concept Become? 28 Drake L.Rev. 889, 890-91 (1978-1979) (noting that under Iowa law antedating the adoption of Iowa's Fund, "employers in Iowa had already been assured that if they hired a one-eyed, one-armed, or one-legged individual they would be liable only for any actual loss of the other eye or limb in a subsequent work-related injury because liability for total disability depended upon loss of two such organs or limbs in the same accident,” and suggesting the General Assembly's purpose in establishing the Fund was providing disabled persons with "a means of reasonably sufficient recovery in the event [they sustain] a subsequent compensable injury that combines with a prior disability so as to result in a degree of disability that exceeds the sum of the compen-sable values of the prior and subsequent disabilities”). Although a further exegesis as to which conception of the General Assembly's purpose merits the designation of "primary” could be of academic interest, we believe it would be of little significance to the appropriate disposition of this case. To be sure, "the general purpose of encouraging employers to hire [disabled persons] is not defeated [by the Fund].” Id. at 891.

4 . As we have already noted, Gregory and Doorcraft agreed upon a lump sum special case settlement of the 2000 claim under Iowa Code section 85.35. Doorcraft paid $27,500 as a full and final settlement of that claim. The medical records supporting the settlement agreement approved by the commissioner evidenced Gregory sustained a two percent permanent impairment of her left hand as a consequence of the 2000 injury.

5 . For example, some other jurisdictions impose liability on their second injury funds without regard to whether a claimant’s previous disabling injury was situated in an enumerated member. See, e.g., Christie v. Coors Transp. Co., 933 P.2d 1330, 1335 & n. 2 (Colo.1997) (observing 1975 amendment to Colorado's statute expanded benefits by replacing a first-injury requirement that the employee "previously suffered the loss, or total loss of use, of one hand, one arm, one foot, one leg, or the vision of one eye” with a requirement of a "previous permanent partial industrial disability”); Church v. McKee, 387 A.2d 754, 757 (Me.1978) (stating "[t]he legislature clearly intended to expand the kinds of pre-existing conditions which an employee could have and still be eligible for compensation from the Second Injury Fund” by moving from a "one hand, one arm” formulation to a broader formulation); Am. Mut. Liab. Ins. Co. v. Commonwealth, 379 Mass. 398, 398 N.E.2d 491, 495 (1979) (concluding a previous version of Massachusetts statute that was analogous to Iowa's statute "provided relief in only a limited class of cases where the previous personal injury resulted in the actual or functional loss of hand, foot, or eye, and a subsequent injury of the same type resulted in further disability").