Amended September 20, 2016 David Lowell Evenson v. Winnebago Industries, Inc. and Sentry Insurance Company

IN THE SUPREME COURT OF IOWA
No. 14–2097
Filed June 3, 2016
Amended September 20, 2016
DAVID LOWELL EVENSON,
Appellant,
vs.
WINNEBAGO INDUSTRIES, INC. and SENTRY INSURANCE COMPANY,
Appellees.
Appeal from the Iowa District Court for Winnebago County,
Gregg R. Rosenbladt, Judge.
Petitioner appeals from district court judgment affirming on
judicial review workers’ compensation commissioner’s decision.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Mark S. Soldat of Soldat, Parrish-Sams & Gustafson, PLC, West
Des Moines, for appellant.
Steven T. Durick and Joseph M. Barron of Peddicord, Wharton,
Spencer, Hook, Barron & Wegman, LLP, West Des Moines, for appellee.
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ZAGER, Justice.
In this appeal, we are asked to decide whether an employer’s
matching contributions to an employee’s 401k plan should be considered
part of weekly earnings for purposes of calculating workers’
compensation weekly benefits. We must also decide whether the district
court erred in affirming the workers’ compensation commissioner’s
decision on the amount of healing period benefits owed, the extent of
permanent disability, and the penalty to be awarded. For the reasons
stated below, we conclude that an employer’s matching contributions to
an employee’s 401k plan are not weekly earnings for purposes of
calculating workers’ compensation weekly benefits. We also conclude the
district court did not err in affirming the decision of the commissioner
with respect to the extent of permanent disability. However, we hold that
the district court erred in affirming the date when healing period benefits
commenced, the date when the healing period benefits ended, and the
date when permanent partial disability (PPD) benefits commenced. We
therefore affirm in part and reverse in part the judgment of the district
court. We remand the case to the district court with the following
instructions on judicial review: (1) to affirm the commissioner’s findings
as to the weekly benefit rate and the extent of permanent partial
disability and (2) to remand the case to the commissioner for a
redetermination of the date when healing period benefits commenced in
September 2010, for a redetermination of the date when healing period
benefits ended and PPD benefits commenced, and for a recalculation of
penalty and interest benefits based on the above dates.
I. Background Facts and Proceedings.
David Evenson began working at Winnebago Industries, Inc. in
1987 to supplement his income from farming. On May 18, 2010, while
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employed at Winnebago, Evenson sustained an injury to his left elbow.
Evenson was an hourly employee at the time of his injury. On May 27,
Evenson sought treatment for pain in his left elbow. He was seen by
James McGuire, PA-C. Evenson reported that the pain in his left elbow
started after he was stacking aluminum running boards as part of his
job duties. Evenson was diagnosed with left elbow medial epicondylitis.
He was provided a brace and advised to avoid lifting running boards until
his next appointment. At his next appointment, Evenson reported the
pain condition had improved and that he was still working his regular
job. At his follow-up appointment on June 10, Evenson reported that his
left elbow was sore because he had been doing extra work at Winnebago
and working overtime. Although Evenson had full range of motion in his
left arm, McGuire restricted him to working eight-hour days, five days
per week.
Evenson was also treated by Dr. Carlson. Evenson received a
cortisone injection in his left elbow on June 25, and he reported that it
reduced his pain significantly. At his follow-up appointment with
McGuire, Evenson was told he could continue with his work duties at
eight hours per day. At the next appointment, Evenson reported more
discomfort with heavy lifting and gripping, but also reported that he had
been working ten-hour days. On August 17, Evenson reported he was
experiencing more pain in his left elbow while working overtime.
On September 3, Evenson received a second cortisone injection
from Dr. Carlson. On the same day, he was also given work restrictions
and told not to use his left arm for two weeks. Evenson claims that
September 3 is the date when he stopped working, while Winnebago
asserts that September 7 is the date that he stopped working.
Dr. Carlson made notations on the Winnebago form following the
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cortisone injection on September 3 that stated: “OFF 1300 9-3-10 . . .
can’t accommodate – will give vac. for remainder of day if he chooses or
98 WI – wants Holiday pay so plans to use vac.” Winnebago’s records
show that Evenson took one hour of vacation pay on September 3 and
that there was a plant shut down on the same day for one-half hour.
Evenson was also paid eight hours of holiday pay on September 6 for
Labor Day. The records indicate no other vacation pay during the time
period between September 3 and September 6.
On September 7, Evenson had a follow-up appointment with
McGuire. McGuire noted some improvement in the left elbow and
advised Evenson to avoid tight gripping and heavy lifting with his left
arm. McGuire’s office notations from the appointment state that
Evenson “was told that there is really no light duty in his work area. His
supervisor wanted to know if there is some other alternative to this;
otherwise, he will have to be off work.” The notation goes on to say that
Evenson “should be off work for another ten days as long as they do not
have any light duty for the patient.” (Emphasis added.)
Evenson was eventually referred to Dr. Gibbons, an orthopedic
surgeon. On October 5, after his examination of Evenson, Dr. Gibbons
gave Evenson work restrictions to only lift up to twenty pounds
continuously; to push, pull, or lift with his left arm only occasionally;
and to avoid repetitive tasks. At a follow-up appointment, Evenson
reported that his symptoms were worsening. Dr. Gibbons restricted
Evenson to lifting ten pounds continuously and twenty pounds
occasionally, and directed him not to push/pull or handle/grip with his
left arm. Dr. Gibbons lifted these restrictions on January 27, 2011, and
Evenson was released to return to his regular duties. Dr. Gibbons
reported that Evenson was at maximum medical improvement (MMI) at
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that time. He also noted that he had no impairment rating for Evenson
because Evenson retained the full range of motion in his left elbow.
On September 14, 2011, Evenson filed a petition seeking workers’
compensation benefits related to the injury to his left elbow. Sentry
Insurance Company was the workers’ compensation insurer for
Winnebago. 1
In February 2012, Evenson was again seen by McGuire. At this
appointment, Evenson complained that he was still having elbow pain
and reported numbness and tingling radiating down his arm into the left
small and ring fingers. McGuire ordered nerve conduction studies on the
left elbow and advised Evenson to limit left hand gripping. The studies
showed ulnar neuropathy in Evenson’s left elbow and asymptomatic mild
median neuropathy in Evenson’s left wrist.
Evenson was later treated by Dr. Yanish, another orthopedist. On
March 4, Dr. Yanish diagnosed left medial epicondylitis and ulnar nerve
impingement. An MRI showed some tendinopathy.
At the request of his attorney, Evenson obtained an independent
medical examination and evaluation (IME) from Dr. Kuhnlein in March
2012. The IME addressed not only the nature and extent of the injury to
Evenson’s left elbow, but also addressed several other body parts and
conditions that were separately relevant to his claim against the Second
Injury Fund. 2
1Evenson also filed a claim for benefits under the Second Injury Fund of Iowa.
This claim was subsequently settled. Therefore, this opinion only addresses Evenson’s
claims against Winnebago and Sentry.
2The Second Injury Fund claim involved bilateral foot injuries and left knee
injuries. Dr. Kuhnlein was asked to give impairment ratings for the right foot, left foot,
and left knee, in addition to Evenson’s left elbow.
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Dr. Yanish performed surgery on Evenson’s left elbow on April 14,
after which Evenson underwent physical therapy. Dr. Yanish kept
Evenson off work until May 2, but noted that Evenson could not use his
left arm upon return to work. On June 10, Evenson reported his pain
had improved and he was not experiencing any further numbness or
tingling. Dr. Yanish restricted Evenson to not lifting anything over ten
pounds with his left arm. In early August, Dr. Yanish changed Evenson’s
restrictions to not lifting more than twenty pounds with his left arm.
Dr. Yanish also found an improved range of motion in Evenson’s left
elbow. On August 31, Dr. Yanish changed Evenson’s restrictions to only
occasionally lifting forty pounds, lifting up to twenty pounds repetitively,
and only occasionally lifting up to twenty pounds above shoulder level.
On October 7, Dr. Yanish released Evenson from treatment and
restricted him to no lifting over twenty pounds and no lifting over his
shoulder.
A contested hearing was held on July 6, 2012. Both Dr. Yanish
and Dr. Kuhnlein offered opinions. Dr. Yanish allocated a four percent
permanent impairment to Evenson’s left arm and recommended that
Evenson restrict lifting, pushing, and pulling with that arm to twenty
pounds. Dr. Kuhnlein rated Evenson’s permanent arm impairment at
three percent and selected June 7, 2011, as the date when Evenson
reached MMI.
Some of Evenson’s family members testified—over objection—about
their observations of his use of his left arm after the injury. Evenson’s
wife testified that he has difficulty with certain tasks and estimated that
he lost sixty percent of the use of his left arm. Evenson’s father, his
father-in-law, and his sister-in-law testified that he has lost some use of
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his left arm. They estimated, respectively, that Evenson lost sixty
percent, eighty percent, or fifty-five percent of the function of his left arm.
Evenson also testified regarding the effect of the loss of use of his
left elbow to his home life and hobbies. Although he continues to farm,
he has scaled back his activities significantly and relies on his family’s
help. Evenson testified that he is no longer able to steer his farming
machinery with his left arm because it is painful and he has trouble
gripping the wheel. He is no longer able to care for his horses. Evenson
previously broke his horses to ride, but he is no longer able to do so
because he cannot properly grip a rope in his left hand. Evenson’s wife
is now responsible for taking care of the horses. Evenson is no longer
able to climb ladders on his farm. Due to his left elbow pain, Evenson
stated that he is no longer able to ride his snowmobile or his four-
wheeler. Evenson testified that the pain in his left elbow is usually at a
constant five on a scale of one to ten.
On August 8, 2012, the deputy commissioner issued his
arbitration decision. In the decision, the deputy commissioner awarded
Evenson fifty weeks of PPD benefits at the rate of $506.42 per week;
healing period benefits between April 14, 2011, and June 14, 2011, at
the rate of $506.42; and temporary partial disability (TPD) benefits for a
number of time periods 3 based on an average gross weekly rate of
compensation of $763.52. The arbitration decision awarded Evenson
only part of the cost of the IME performed by Dr. Kuhnlein because a
substantial portion of the doctor’s evaluation focused on body parts and
3Evenson was awarded TPD benefits at the weekly rate of $764.53 for the time
periods of June 10, 2010, through June 25, 2010; July 13, 2010, through September 2,
2010; October 5, 2010, through December 15, 2010; February 17, 2011, through April
13, 2011; and June 14, 2011, through October 4, 2011.
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conditions unrelated to the upper extremity injury claimed by Evenson in
this case. The deputy commissioner also concluded the employer
contributions to Evenson’s 401k plan were a fringe benefit and therefore
not included in the calculation of average weekly gross earnings. 4 In
determining the extent of Evenson’s permanent disability, the deputy
commissioner considered not only the impairment ratings determined by
the medical testimony, but also the testimony of Evenson’s family
members. The deputy commissioner concluded that Evenson suffered a
twenty percent permanent loss of use in his left arm as a result of the
injury in this case.
The deputy commissioner further concluded Evenson is entitled to
healing period benefits. In particular, the deputy commissioner found
Winnebago paid all healing period benefits owed up to the time of
Evenson’s surgery in September 2011, but found additional healing
periods owed for subsequent time off work were both delayed and
insufficient in amount. The deputy concluded that Winnebago must pay
a penalty because the “defendants failed to provide reasonable cause or
excuse for the delay and denial of healing period and temporary partial
disability benefits discussed above and certainly did not provide notice of
the reason for such delays and denials.”
The deputy stated,
A general award will be made again awaiting more specific
calculations of the parties in a manner consistent with this
decision. I do not find the use of the weekly rate of
4The deputy found that Evenson’s weekly wage was $763.52, which resulted in a
weekly compensation rate of $506.42. If Winnebago’s 401k matching contributions
were included in the calculation, Evenson’s weekly wage would be $771.21, resulting in
a weekly compensation rate of $510.43.
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compensation of $468.62[ 5] unreasonable given the
considerable fluctuations in claimant’s earnings each week.
Also, the amount of the penalties shall be only 25 percent of
the amounts delayed or denied as there was no showing of
any prior violations of law by Winnebago or Sentry
Insurance.
Evenson filed a rehearing application, which was denied.
Winnebago and Sentry filed a notice of appeal to the Iowa Workers’
Compensation Commissioner on September 7, 2012, and Evenson filed a
notice of cross-appeal. The commissioner issued an appeal decision on
August 2, 2013, affirming the arbitration decision on all issues. Evenson
sought judicial review. After a hearing, the district court entered an
order on October 14, 2014, affirming the decision of the commissioner.
Evenson appealed and we retained the appeal.
II. Standard of Review.
The first issue in this case asks us to engage in statutory
interpretation to determine whether an employer’s contribution to an
employee’s 401k plan is included in the calculation of weekly benefits.
We review the commissioner’s interpretation of Iowa Code chapter 85 for
errors at law. Iowa Code § 17A.19(10)(c) (2011); see Iowa Ins. Inst. v.
Core Grp. of Iowa Ass’n for Justice, 867 N.W.2d 58, 65 (Iowa 2015). We
have declined to give deference to the commissioner’s interpretation of
various provisions included in chapter 85. Waldinger Corp. v. Mettler,
817 N.W.2d 1, 7 (Iowa 2012) (holding that the commissioner was not
vested with interpretive authority for section 85.34(1)); Neal v. Annett
Holdings, Inc., 814 N.W.2d 512, 519 (Iowa 2012) (holding that the
commissioner did not have the authority to interpret the phrase “suitable
5On December 7, 2011, Winnebago and Sentry paid Evenson ten weeks of
benefits using the four percent impairment rating given by Dr. Yanish. The rate paid
was $468.62 per week plus interest in the amount of $179.58.
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work” under section 85.33(3)); Burton v. Hilltop Care Ctr., 813 N.W.2d
250, 261 (Iowa 2012) (explaining that we substitute our own
interpretation of sections 85.36 and 85.61(3) if we find the interpretation
of the commissioner was erroneous); Swiss Colony, Inc. v. Deutmeyer,
789 N.W.2d 129, 133 (Iowa 2010) (explaining that we did not believe the
legislature vested the commissioner with the authority to interpret
section 85.34(5)).
This case also asks us to determine whether the district court
erred in upholding the commissioner’s findings regarding healing period
benefits, the percentage of disability, and the amount of penalty to be
awarded. When we review the commissioner’s findings of fact, we apply
the following principles:
The industrial commissioner’s findings have the effect of a
jury verdict. We may reverse the commissioner’s findings of
fact only if they are unsupported by substantial evidence in
the record made before the agency when the record is viewed
as a whole. Evidence is substantial if a reasonable mind
would find it adequate to reach the same conclusion. An
agency’s decision does not lack substantial evidence because
inconsistent conclusions may be drawn from the same
evidence.
Coffey v. Mid Seven Transp. Co., 831 N.W.2d 81, 89 (Iowa 2013) (quoting
2800 Corp. v. Fernandez, 528 N.W.2d 124, 126 (Iowa 1995) (citations
omitted)). Substantial evidence is “evidence that would be deemed
sufficient by a neutral, detached, and reasonable person, to establish the
fact at issue when the consequences resulting from the establishment of
that fact are understood to be serious and of great importance.” Iowa
Code § 17A.19(10)(f)(1).
III. Analysis.
A. Employer’s Contribution to Employee’s 401k Account. The
parties disagree whether an employer’s matching contributions to an
11
employee’s 401k plan should be included in a weekly rate calculation
when determining workers’ compensation benefits. This is an issue of
first impression for this court. Our determination rests upon the
question of whether matching contributions to a 401k plan are
considered “spendable weekly earnings” under Iowa Code section
85.61(9).
Iowa Code section 85.37 provides that the weekly benefit amount
paid to an employee is based on eighty percent of the employee’s “weekly
spendable earnings.” Id. § 85.37. Compensation is based on “the weekly
earnings of the injured employee at the time of the injury.” Id. § 85.36.
“Weekly earnings” are defined as “gross salary, wages, or earnings of an
employee to which such employee would have been entitled had the
employee worked the customary hours for the full pay period in which
the employee was injured.” Id.
“Spendable weekly earnings” are defined as the “amount remaining
after payroll taxes are deducted from gross weekly earnings.” Id.
§ 85.61(9). “Gross earnings” are defined as
recurring payments by employer to the employee for
employment, before any authorized or lawfully required
deduction or withholding of funds by the employer,
excluding irregular bonuses, retroactive pay, overtime,
penalty pay, reimbursement of expenses, expense
allowances, and the employer’s contribution for welfare
benefits.
Id. § 85.61(3).
We must determine whether an employer’s matching contributions
to an employee’s 401k plan are considered weekly earnings for purposes
of Iowa’s workers’ compensation law. When we are asked to interpret a
statute, we turn to well-settled rules of statutory interpretation:
The purpose of statutory interpretation is to determine the
legislature’s intent. We give words their ordinary and
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common meaning by considering the context within which
they are used, absent a statutory definition or an established
meaning in the law. We also consider the legislative history
of a statute, including prior enactments, when ascertaining
legislative intent. When we interpret a statute, we assess the
statute in its entirety, not just isolated words or phrases.
We may not extend, enlarge, or otherwise change the
meaning of a statute under the guise of construction.
Branstad v. State ex rel. Nat. Res. Comm’n, 871 N.W.2d 291, 295 (Iowa
2015) (quoting Schaefer v. Putnam, 841 N.W.2d 68, 75 (Iowa 2013)). “We
also consider the statute’s ‘subject matter, the object sought to be
accomplished, the purpose to be served, underlying policies, remedies
provided, and the consequences of the various interpretations.’ ” Id.
(quoting Cox v. State, 686 N.W.2d 209, 213 (Iowa 2004)).
We first look at the ordinary meaning of certain words contained in
the workers’ compensation statutes. Section 85.36 defines “weekly
earnings” as including “gross salary, wages, or earnings.” Iowa Code
§ 85.36. “Salary” is defined as the “fixed compensation paid regularly (as
by the year, quarter, month, or week) for services.” Salary, Webster’s
Third New International Dictionary (unabr. ed. 2002). “Wage” is defined
as
a pledge or payment of usu. monetary remuneration by an
employer esp. for labor or services usu. according to contract
and on an hourly, daily, or piecework basis and often
including bonuses, commissions, and amounts paid by the
employer for insurance, pension, hospitalization, and other
benefits.
Wage, Webster’s Third New International Dictionary. “Earnings” are
defined as “something (as wages or dividends) earned as compensation
for labor or the use of capital.” Earnings, Webster’s Third New
International Dictionary.
An employer’s contribution to a 401k plan is not dependent upon
the hours an employee works in the normal way we think of the wage or
13
salary an employee earns for working a certain number of hours or days.
An employee’s 401k plan is related, at least tangentially, to his or her
wage or salary, in that the amount the employee chooses to contribute
may be based on how much they earn. However, an employer’s 401k
plan matching contributions are based on an employee’s choice and
participation. Ultimately, an employee chooses whether and how much
to participate in a 401k plan. After the employee chooses, then the
employer matches the contribution to the plan. The portion the
employee chooses to contribute certainly comes from his or her normal
salary or wage. The added contribution from any match by the employer,
however, does not.
It is clear from the ordinary meaning of the words salary, wage,
and earnings that an employer’s matching contribution to an employee’s
401k plan is not meant to be included in weekly earnings for purposes of
our workers’ compensation statute. When we read the dictionary
definitions in conjunction with the exclusionary language contained in
our statute, we conclude our legislature intended to exclude employer
contributions to 401k plans from the definition of gross earning. See
Iowa Code § 85.61(3) (specifically excluding “irregular bonuses,
retroactive pay, overtime, penalty pay, reimbursement of expenses,
expense allowances, and the employer’s contribution for welfare benefits”
from the regular definition of gross earnings).
Evenson contends an employer’s matching contributions to a 401k
plan are not welfare benefits, and they therefore should not be excluded
from gross earnings under section 85.61(3). We disagree. The ordinary
meanings of the terms salary, wage, and earnings inform our
interpretation of the term “welfare benefits” in this context. See id.
(defining gross earnings as “recurring payments by
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employer to the employee for employment, before any authorized or
lawfully required deduction or withholding of funds by the employer,
excluding . . . welfare benefits”). A “benefit” is defined as “financial help
in time of sickness, old age, or unemployment” and “a cash payment or
service provided for under an annuity, pension plan, or insurance
policy.” Benefit, Webster’s Third New International Dictionary. “Welfare”
is defined as “the state of faring or doing well . . . thriving or successful
progress in life . . . a state characterized esp. by good fortune, happiness,
well-being, or prosperity.” Welfare, Webster’s Third New International
Dictionary. The term included in the statute is “welfare benefits,” and the
two words should be considered together. Together, welfare benefits can
mean something extra given to an employee for their well-being. We
conclude a tax-deferred fund often utilized by employees as a substitute
for, or in addition to, an established retirement plan clearly falls under
the definition of welfare benefits.
The statute contemplates that there may be welfare benefits given
to employees that are separate and distinct from their normal weekly
earnings. See Iowa Code § 85.61(3). Matching contributions to an
employee’s 401k plan fall under this category. As discussed above, we
conclude that a 401k plan falls outside the normal definition of wage,
salary, or earnings. An employer’s matching contributions to a 401k
plan are something extra, in addition to an employee’s normal, earned
wages. They provide assistance for employees in planning for retirement.
An employer’s contribution to an employee’s retirement account is a
benefit (something extra given by an employer) for the welfare of an
employee (that employee’s well-being, specifically in regard to prosperity).
Thus, under the ordinary meaning of the terms, we conclude an
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employer’s matching contribution to an employee’s 401k plan is a welfare
benefit under the statute.
Further, Iowa Code section 85.61 defines “spendable weekly
earnings” as “that amount remaining after payroll taxes are deducted
from gross weekly earnings.” Iowa Code § 85.61(9). As a deferred
compensation plan, an employer’s matching contribution to an
employee’s 401k plan is not subject to payroll taxes in a manner that
would fall under the statutory definition. An employee who receives a
matching contribution to their 401k plan cannot immediately spend the
contribution at the time it is paid, unlike a regular weekly wage.
The leading Supreme Court case on fringe benefits is Morrison-
Knudsen Construction v. Director, Office of Workers’ Compensation
Program, 461 U.S. 624, 103 S. Ct. 2045, 76 L. Ed. 2d 194 (1983). In this
case, the Court held that an employer’s contributions to a union trust
fund for health and welfare, pensions, and employee training were not
considered wages for the purposes of calculating weekly benefits under
the District of Columbia’s Workers’ Compensation Act. Id. at 637, 103
S. Ct. at 2052–53, 76 L. Ed. 2d at 204. In so deciding, the Supreme
Court relied on the fact that the health and welfare, pension, and
training funds could not be readily converted to a cash equivalent in the
same way as regular wages or the reasonable value of lodging. Id. at
630, 103 S. Ct. at 2048–49, 76 L. Ed. 2d at 199. The Court also noted
that the legislative history indicated that Congress did not intend to
include these types of fringe benefits when calculating the rate of
compensation benefits. Id. at 632, 103 S. Ct. at 2050, 76 L. Ed. 2d at
201.
The majority trend is to treat an employer’s matching contribution
to a 401k plan as a welfare benefit that falls under the category of “fringe
benefits,” and thus is not included in the calculation of weekly benefits
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for workers’ compensation purposes. 8 Arthur Larson et. al., Larson’s
Workers’ Compensation Law § 93.01[2][b], at 93-20 (rev. ed. 2015); cf.
City of Lamar v. Koehn, 968 P.2d 164, 167 (Colo. App. 1998) (excluding
an employer’s contribution to an employee’s pension plan from the
calculation of weekly benefits); Luce v. United Techs. Corp., 717 A.2d 747,
755 (Conn. 1998) (finding that the calculation of “wages” under the
state’s workers’ compensation laws does not include pensions); Rainey v.
Mills, 733 S.W.2d 756, 758 (Ky. Ct. App. 1987) (declining to find
statutory support to include fringe benefits, such as employer pension
plan contributions, in weekly wage calculation); Barnett v. Sara Lee
Corp., 627 A.2d 86, 90–91 (Md. Ct. Spec. App. 1993) (finding that
pension plans could not be considered in the calculation of weekly wages
for the purpose of determining a claimant’s industrial loss of use); In re
Gagnon, 965 A.2d 1154, 1159 (N.H. 2009) (holding that weekly wages are
calculated using a claimant’s pre-tax pay and, therefore, it was not
unjust for the collective bargaining agreement to exclude employer
payments to an employee’s pension plan from the definition of wage);
Shaw v. U.S. Airways, Inc., 665 S.E.2d 449, 453 (N.C. 2008) (holding that
an employer’s contributions to an employee’s retirement account are not
included in the calculation of a weekly wage for workers’ compensation
purposes); Clopton v. City of Muskogee, 147 P.3d 282, 284–85 (Okla. Civ.
App. 2006) (relying on Morrison-Knudsen in determining that pension
plans are not included in the definition of wage for workers’
compensation purposes); Nelson v. SAIF Corp., 714 P.2d 631, 631–32 (Or.
Ct. App. 1986) (finding that pensions are not included in the definition of
wages included in Oregon’s workers’ compensation laws).
We acknowledge that a few states have changed their workers’
compensation statutes to include retirement plans in the definition of
fringe benefits. See, e.g., Neb. Rev. Stat. Ann. § 48-1229 (West, Westlaw
17
current through 2016 2d Reg. Sess.). Our legislature has not taken such
action, and we agree with the majority trend evidenced by the cases cited
above. An employer’s matching contributions to an employee’s 401k
plan fit much more squarely into the fringe-benefits category than that of
a regular salary or wage. As discussed earlier, those contributions are
not directly linked to an employee’s salary, nor are they immediately
available for the employee to spend in the same way as regular wages.
We conclude the commissioner and the district court were correct in
declining to expand the definition of weekly spendable earnings to
include employer 401k contributions.
B. District Court Judgment. Evenson also claims that the
district court erred by affirming the commissioner’s decision regarding
the extent of his scheduled member disability, the commencement dates
of healing period benefits, and the amount of penalty awarded. We
address each argument in turn to determine whether the commissioner’s
findings of fact were supported by substantial evidence. See, e.g., Coffey,
831 N.W.2d at 89.
1. Extent of disability. An injury to the elbow is a scheduled injury
(to the arm) with a maximum benefit period of 250 weeks. Iowa Code
§ 85.34(2)(m). The compensation for a scheduled injury is based on the
impairment of bodily function. Westling v. Hormel Foods Corp., 810
N.W.2d 247, 252 (Iowa 2012). “[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.” Gits Mfg. Co. v. Frank, 855 N.W.2d 195, 199 (Iowa
2014) (quoting Miller v. Lauridsen Foods, Inc., 525 N.W.2d 417, 421 (Iowa
1994)).
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In this case, the deputy considered opinions offered by Dr. Yanish,
who rated Evenson’s functional impairment at four percent, and Dr.
Kuhnlein, who rated Evenson’s functional impairment at three percent.
The deputy also heard testimony from various family members about the
injury suffered by Evenson. Based on all of the testimony, the agency
found Evenson suffered a twenty percent permanent loss of the use of
his left arm. In making this determination, the agency considered all of
the expert medical opinions as well as the testimony of Evenson’s family
members. The district court found substantial evidence supporting the
agency’s determination on the extent of Evenson’s disability. On appeal,
Evenson contends the commissioner’s disability finding is not supported
by substantial evidence and contends he suffered a twenty-one to fifty
percent disability in his left arm.
In this case, the deputy heard and considered medical opinions,
opinions of family members, and the testimony of Evenson himself. In
our review of the record, we find substantial evidence supporting the
agency’s finding on disability and therefore affirm the district court’s
ruling on judicial review.
2. Healing period benefits. Evenson alleges that the commissioner
incorrectly determined the commencement dates for healing period and
PPD benefits. The commissioner determined that Evenson had two
different compensable healing periods. The first was from September 7,
2010, to September 19, 2010. The second was from April 14, 2011, to
June 14, 2011. The arbitration decision awarded Evenson PPD benefits
beginning on November 30, 2011. This was based on Dr. Yanish’s
impairment rating that placed Evenson at MMI on November 29, 2011.
Both the commissioner and the district court affirmed that
commencement date for PPD benefits.
19
Evenson contends his first healing period began on September 3,
rather than September 7. He argues that he first received physical
restrictions on September 3 and Winnebago was unable to accommodate
his restrictions at that time. Therefore, he was required to be off work
beginning on September 3. Dr. Carlson’s progress note reported that
Evenson planned to take vacation pay because Winnebago was unable to
accommodate his restrictions. McGuire’s progress note for September 7
stated that Evenson should be off work for another ten days, suggesting
that Evenson had already been off work before that appointment.
Further, Winnebago’s records show that Evenson took one hour of
vacation pay on September 3 and that there was a one-half hour plant
shut down on the same day. Evenson was also paid eight hours of
holiday pay on September 6 for Labor Day. We agree with Evenson that
substantial evidence does not support the commissioner’s finding that
the first healing period began on September 7.
Generally, an employer may seek a credit for the good faith
overpayment of workers’ compensation benefits. Iowa Code § 85.34(4)–
(5); see also 15 James R. Lawyer, Iowa Practice: Workers’ Compensation
§ 13:10, at 175 (2015) [hereinafter Iowa Practice]. Additionally, the
commissioner allows credits for sick pay and vacation pay in some
situations. Iowa Practice, at 175–76; see also King v. Marion Indep.
Cmty. Sch. Dist., Iowa Workers’ Comp. Comm’n, 2013 WL 3185066, at
*2–3 (June 10, 2013). If an employee elects to use sick pay or vacation
pay during a time in which workers’ compensation benefits are not being
paid, an employer is not entitled to a credit for the pay unless the
employee later elects to have the vacation or sick pay restored. Iowa
Practice, at 176.
20
Conversely, the commissioner has generally allowed an employer a
credit against healing benefits in the amount of holiday pay paid to an
employee during a healing period. See, e.g., King, 2013 WL 3185066, at
*2. The rationale for treating vacation and sick pay differently than
holiday pay is that sick pay and vacation pay are paid leave that an
employee accrues over time for previous work that the employee
performed. See id. The employee who uses vacation or sick pay as
compensation during a healing period loses the future ability to utilize
such benefits for their intended purpose. If an employer is granted a
credit for paying an employee for sick or vacation pay that the employee
elected to take during a time when the employer should have been
paying workers’ compensation benefits, then the cost is shifted to the
employee rather than the employer. See id. In contrast, there is not a
cost to the employee when they take holiday pay. See id. Holiday pay is
not something an employee accrues and can use in the future; it is a
benefit that is given independent of the employee’s hours worked or
choice to take a paid day off. See id. We agree with the approach the
commissioner has taken on this issue. If, on remand, the commissioner
determines the first healing period began on September 3, then the
holiday pay Evenson was paid for September 6 may be credited against
Winnebago’s obligation to pay additional healing period.
Evenson also argues that the commissioner should have awarded
PPD benefits beginning on September 20, the day he returned to work
after the first healing period, and then suspended those benefits during
his second healing period between April 14, 2011, to June 14, 2011, and
recommenced PPD benefits on June 15, 2011.
Iowa Code section 85.34 provides the standard for determining
when healing period benefits terminate. Iowa Code § 85.34(1). We have
21
recognized that the statute presents a menu of options the fact finder
shall consider when deciding that the healing period has ended. See,
e.g., Waldinger Corp., 817 N.W.2d at 8–9. Section 85.34 provides that
the healing period lasts
until the employee has returned to work or it is medically
indicated that significant improvement from the injury is not
anticipated or until the employee is medically capable of
returning to employment substantially similar to the
employment in which the employee was engaged at the time
of injury, whichever occurs first.
Iowa Code § 85.34(1) (emphasis added). We have previously recognized
that there may be more than one healing period for a single injury.
Waldinger Corp., 817 N.W.2d at 8.
“Compensation for permanent partial disability shall begin at the
termination of the healing period . . . .” Iowa Code § 85.34(2). When
there are multiple healing periods, we must determine whether PPD
begins to run from the end of the first healing period or whether the fact
finder may choose among the multiple healing periods that are supported
by substantial evidence, as occurred here. We hold that the statute
clearly states the healing period lasts until whichever situation occurs
first. Id. § 85.34(1); see also Teel v. McCord, 394 N.W.2d 405, 407 (Iowa
1986). In this case, the first of the three alternative events to occur was
Evenson’s return to work in September 2010.
The commissioner found Evenson returned to work on September
20, 2010, after several days off. This ended the first healing period as a
matter of law because it was the earliest of the section 85.34(1)
alternatives and because PPD “shall begin at the termination of the
healing period provided in subsection 1 [of section 85.34].” Iowa Code
§ 85.34(1)–(2). Because we conclude the first healing period ended on
September 20, there is not substantial evidence in the record to support
22
the commissioner’s finding the healing period benefits terminated in
November 2011. See Teel, 394 N.W.2d at 406–07 (concluding a
claimant’s entitlement to PPD benefits commenced when the claimant
first returned to work after his 1974 injury—not after subsequent
intermittent healing period or after he finally “returned to work for good”
in 1981 after a series of surgeries). The date of Evenson’s first return to
work established the end of the healing period and the commencement of
PPD benefits because it was the earliest of the three triggering events
prescribed in section 85.34(1). Iowa Code § 85.34(1).
Our determination that Evenson’s return to work in September
2010 established the commencement date for PPD benefits is not
precluded by the fact that he was entitled to TPD benefits for subsequent
weeks when he was medically restricted from working his regular hours.
In Presthus v. Barco, Inc., the claimant received healing period benefits
after a work-related injury. 531 N.W.2d 476, 480 (Iowa Ct. App. 1995).
He returned to work, but for approximately three weeks was unable to
work regular full-time hours and received TPD benefits. See id.
Presthus contended his entitlement to PPD benefits commenced upon his
return to work, which was the same time he would begin receiving TPD
benefits. Id. 6 The commissioner held PPD benefits commenced at a later
date—after the short period of temporary partial disability. Id. The
district court and court of appeals concluded on judicial review that the
commissioner correctly delayed the commencement of PPD benefits until
the termination of the period of temporary partial disability. Id. at 480–
81.
6Iowa Code section 85.34(2) (1993) provided that “[c]ompensation for permanent
partial disability shall begin at the termination of the healing period provided in [section
85.34(1)].”
23
The court of appeals concluded Presthus could not “receive
temporary partial and permanent partial benefits for the same injury at
the same time” because it believed he could not be “both temporarily and
permanently disabled at the same time.” Id. at 480. This language from
the Presthus opinion was imprecise and requires clarification. In the
world of workers’ compensation, the words “temporary” and “permanent”
have different meanings in different contexts. In a medical sense, the
court of appeals could have reasoned that Presthus’s injury was not both
temporary and permanent in nature at the same time. Yet, the terms
“temporary” and “permanent” have different meanings and significance
when used in describing the several categories of workers’ compensation
benefits employees receive for work-related injuries.
Some categories of compensation authorized under Iowa Code
chapter 85 are for the purpose of compensating injured employees
during weeks when they experience a temporary total or partial loss of
actual earnings (reduced or eliminated paychecks) caused by the injury.
See Iowa Code § 85.33(1) (providing for temporary total disability (TTD)
benefits for time lost from work for an injury that does not result in a
permanent disability); id. § 85.33(2) (providing for TPD benefits during
periods when the employee cannot return to work substantially similar to
the job performed at the time of the injury, but is able to perform other
work consistent with the injury); id. § 85.34(1) (providing for healing
period benefits for time lost from work for an injury that results in
permanent partial disability). Other categories of workers’ compensation
benefits serve distinctly different purposes and are owed when an
employee sustains an injury that causes a permanent partial loss of
either bodily function (scheduled member injuries compensated under
section 85.34(2)(a)–(t)), or earning capacity (body-as-a-whole injuries
24
compensated under section 85.34(2)(u)), or when the employee sustains a
permanent total loss of earning capacity under section 85.34(3). Id.
§ 85.34. So, unlike in the medical world in which an injury is ultimately
either temporary or permanent, in the workers’ compensation world, a
single injury can result in an employer’s liability for both temporary and
permanent disability benefits.
As we have noted, the various categories of workers’ compensation
benefits have distinct purposes. Thus, because TPD and PPD benefits
compensate for completely different categories of losses, an employee
who receives TPD and PPD benefits following a single workplace injury is
not paid twice for the same injury or loss. Perhaps in an effort to avoid
even the misapprehension that Presthus might be paid more than he was
entitled if he simultaneously was owed TPD and PPD benefits for a single
work-related injury, the commissioner in Presthus chose to commence
the claimant’s entitlement to PPD benefits after a brief period of TPD
benefits concluded. Presthus, 531 N.W.2d at 478. The court of appeals
affirmed that part of the agency’s decision on appeal, concluding
Presthus could not receive temporary and permanent disability payments
at the same time for the same injury. Id. at 480. We now conclude
Presthus was wrongly decided.
In this case, Evenson’s entitlement to PPD benefits commenced
when he first returned to work because that is when his entitlement to
healing period benefits ended. See Iowa Code § 85.34(1)–(2) (providing
healing period benefits are owed “until the employee has returned to
work or it is medically indicated that significant improvement from the
injury is not anticipated or until the employee is medically capable of
returning to employment substantially similar to the employment in
which the employee was engaged at the time of injury, whichever occurs
25
first,” and stating “[c]ompensation for permanent partial disability shall
begin at the termination of the healing period” (emphasis added)).
Because TPD benefits were paid to Evenson after he first returned to
work following the injury, we conclude the commencement of
Winnebago’s obligation to pay PPD benefits cannot be delayed until after
the TPD benefits subsequently terminated under the plain meaning of
section 85.34.
Our conclusion that Evenson’s entitlement to PPD benefits was not
suspended beyond the end of the first healing period until after his
period of temporary partial disability ended poses no risk of duplication
or overpayment of benefits under the circumstances presented here. As
we have noted, TPD payments are calculated to replace part of Evenson’s
loss of actual earnings after he returned to work during a period of
partial disability. The PPD payments, by contrast, are intended to
compensate him for a different loss: a permanent partial loss of his left
arm. Thus, although we conclude today that PPD payments can be owed
for periods during which a claimant was paid temporary partial
disability, no duplication of benefits arises. Our conclusion on this point
is also based in part on the fact that the principal purpose of the
statutory scheme establishing a date (the termination of the healing
period) for the commencement of PPD benefits is the calculation of
interest owed on such benefits for the duration of any delay of payment.
See, e.g., Teel, 394 N.W.2d at 407 (explaining that interest on PPD
benefits was owed from Teel’s first return to work on May 7, 1974—even
though he experienced subsequent intermittent healing periods and the
extent of his disability was not known until 1980—because “the employer
in effect [was] holding [Teel’s] money, and presumably earning interest on
it”).
26
We remand for a determination of whether the first healing period
began on September 3 or September 7. On remand, the commissioner
shall also make a new determination of the date PPD benefits
commenced consistent with this opinion.
3. Amount of penalty. Iowa Code section 86.13(4) provides that, if
a delay in payment occurs without reasonable or probable cause or
excuse known to the employer, the commissioner shall award a penalty
in an amount up to fifty percent of the amount of benefits denied,
delayed, or terminated without such reasonable or probable cause or
excuse. Iowa Code § 86.13(4)(a). The arbitration award determined that
a twenty-five percent penalty was appropriate in this case, stating that
defendants failed to provide reasonable cause or excuse for
the delay and denial of healing period and temporary partial
disability benefits discussed above and certainly did not
provide notice of the reason for such delays and denials. A
general award will be made again awaiting more specific
calculations of the parties in a manner consistent with this
decision. I do not find the use of the weekly rate of
compensation of $468.62[7] unreasonable given the
considerable fluctuations in claimant’s earnings each week.
Also, the amount of the penalties shall be only 25 percent of
the amounts delayed or denied as there was no showing of
any prior violations of law by Winnebago or Sentry
Insurance.
The commissioner’s appeal decision adopted the penalty determination,
concluding as follows:
The arguments of the parties have been considered
and the record of evidence has been reviewed de novo.
Pursuant to Iowa Code sections 86.24 and 17A.15, I
affirm and adopt as the final agency decision those portions
of the proposed arbitration decision filed on August 21, 2012
that relate to issues properly raised on intra-agency appeal.
7On December 7, 2011, Winnebago and Sentry paid Evenson ten weeks of
benefits based on the four percent impairment rating given by Dr. Yanish. The rate
paid was $468.62 per week plus interest in the amount of $179.58.
27
The calculations of claimant as to healing period benefits,
temporary partial disability benefits, princip[al]/interest
owed, and penalties assessed are adopted as if fully set forth
herein.
The district court considered the penalty imposed by the commissioner.
It considered that Winnebago and Sentry had failed to include interest on
some benefits and had failed to show reasonable or probable cause for a
delay in paying some benefits. It also considered that the deputy found
the weekly rate paid by Winnebago and Sentry prior to the arbitration
decision was not unreasonable based on the impairment rating provided
by Dr. Yanish. It noted that Winnebago did not have a history of delayed
payments. The district court noted that the penalty amount imposed
was half that allowed by the pertinent Code section. The court
concluded that this was not a case of extreme denial or delay and held
there was substantial evidence in the record to support the twenty-five
percent penalty award. We agree with the decision of the district court
that twenty-five percent of the delayed and underpaid benefits is the
proper penalty amount. However, because we remand for a recalculation
of the healing period and PPD benefits owed, we also remand for a
recalculation of the amount of the penalty and interest owed based on
the new healing period and PPD dates.
IV. Conclusion.
We hold that an employer’s matching contributions to an
employee’s 401k plan are not spendable weekly earnings for purposes of
calculating weekly workers’ compensation benefits, and we therefore
affirm the commissioner’s determination of Evenson’s weekly
compensation rate. We also hold substantial evidence in the record
supports the commissioner’s determination of the extent of Evenson’s
work-related disability. We reverse the commissioner’s determination of
28
the commencement date for healing period benefits in September 2010
and his related determination of the commencement date for PPD
benefits. We remand this case to the district court with the following
instructions: (1) to affirm the commissioner’s findings as to the weekly
benefit rate and the extent of permanent partial disability and (2) to
remand the case to the commissioner for a redetermination of the date
when healing period benefits commenced in September 2010, for a
redetermination of the date when healing period benefits ended and PPD
benefits commenced, and for a recalculation of penalty and interest
benefits based on the above dates.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
All justices concur except Mansfield and Waterman, JJ., who
concur in part and dissent in part.
29
#14–2097, Evenson v. Winnebago
MANSFIELD, Justice (concurring in part and dissenting in part).
I join most of the court’s well-reasoned opinion, but differ as to
when permanent partial disability benefits should begin.
I would affirm the commissioner’s determination that David
Evenson “achieved maximum medical improvement [MMI] on November
29, 2011” and that permanent partial disability benefits should
commence on November 30 of that year. In declining to uphold this
determination, my colleagues overturn existing law which had prohibited
claimants from receiving temporary partial disability benefits and
permanent partial disability benefits for the same injury over the same
time period. See 15 James R. Lawyer, Iowa Practice Series: Workers’
Compensation § 13:2, at 141 (2015).
My colleagues do not dispute that substantial evidence supports
the factual finding of a November 29, 2011 MMI. Instead, they reverse
on a legal ground—essentially by dramatically expanding the prior
holding of Waldinger Corp. v. Mettler, 817 N.W.2d 1 (Iowa 2012). Prior to
Waldinger, the law had been that MMI strictly demarcated the line
between (1) the termination of temporary partial disability or healing
period benefits and (2) the commencement of permanent partial disability
benefits. See Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 447 (Iowa
1999), overruled by Waldinger, 817 N.W.2d at 8.
In Waldinger, we carved out an exception for the situation when
the employee needs another surgery for his or her work-related injury
after attaining MMI. See 817 N.W.2d at 8. There the claimant had
attained MMI for an ankle injury in 2005, but missed three months of
work in 2007 due to arthroscopic surgery for the same work-related
injury. Id. at 3–4. The court of appeals held that the claimant was not
30
entitled to healing period benefits for the time he missed work in 2007
because he had already achieved MMI in 2005. Id. at 4. This court
disagreed, concluding that “the phrase ‘a healing period’ was not
intended by the legislature to limit healing period benefits to a single
period of temporary disability per injury.” Id. at 8. Thus, we overruled
Ellingson in part, holding:
We now conclude our interpretation in Ellingson of section
85.34(1) as a categorical prohibition of an award of healing
period benefits for disability from work occurring after the
date MMI has been achieved was erroneous, and we
therefore overrule it.
Id. We continued,
When, after achieving MMI, a claimant is rendered
temporarily disabled from work, as Mettler was, as a
consequence of surgical treatment provided under section
85.27 for a work-related injury, a new healing period begins
under section 85.34(1).
Id. We added, “We see no principled reason why Mettler, or any similarly
situated claimant, should be disqualified from a healing period remedy
when ordinary and necessary medical care for a work-related injury
temporarily removes them again from the work force.” Id. at 8–9.
Today’s decision is an illogical and ill-considered expansion of
Waldinger. Contrast the Waldinger facts with the situation here. In the
present case, Evenson suffered a work-related left elbow injury in May
2010. He was off work in September 2010 and again from April to June
2011. He achieved MMI in November 2011. The commissioner awarded
Evenson the following:
(1) healing period benefits for the two time spans he
was off work in September 2010 and April-June 2011, 8
8As noted by the majority, clarification is needed regarding September 3–7,
2010.
31
(2) temporary partial disability benefits compensating
for various time periods between June 2010 and October
2011 prior to the attainment of MMI when Evenson was
working at his prior job but could not earn overtime
compensation because of his condition, and
(3) permanent partial disability benefits as of the
attainment of MMI in November 2011.
Thus, unlike Waldinger, this is not a case where the claimant
achieved MMI, became eligible for PPD benefits, but then had a
subsequent episode where he missed time from work because of medical
treatment for the same work-related injury. Rather, the claimant—prior
to attaining MMI—had a combination of time off work and reduced hours
for which he already has been given compensation through a
combination of healing period benefits and temporary partial disability
benefits. I see no unfairness in the outcome approved by the
commissioner. Yet the court now holds that Evenson is also entitled to
PPD benefits dating back to when he returned to work on September 20,
2010.
There are several problems with what the court has done. To begin
with, it is inconsistent with the statutes. Iowa Code section 85.34(1)
(2011) regarding “healing period” provides that the healing period begins
on the first day of disability following the injury and continues
until the employee has returned to work or it is medically
indicated that significant improvement from the injury is not
anticipated or until the employee is medically capable of
returning to employment substantially similar to the
employment in which the employee was engaged at the time
of injury.
Section 85.34(2) provides, “Compensation for permanent partial
disability shall begin at the termination of the healing period provided in
subsection 1.” Id. § 85.34(2). Section 85.33(2) provides that temporary
partial disability benefits are “payable, in lieu of temporary total
32
disability and healing period benefits, to an employee because of the
employee’s temporary partial reduction in earning ability as a result of
the employee’s temporary partial disability.” Id. § 85.33(2).
Putting these statutes together, they indicate that when an
employee is receiving temporary partial disability benefits because he or
she is working fewer hours due to a workplace injury, this time period is
regarded as part of “the healing period” for section 85.34 purposes, and
only at the conclusion of this overall healing period would permanent
partial disability benefits commence. That is why the temporary partial
benefits are “in lieu of” healing period benefits. See id. In fact, the words
“in lieu of” in the statute make no sense otherwise. In short, when an
employee like Evenson suffers a workplace injury and thereafter has a
combination of time off work and reduced hours until he achieves MMI,
that entire pre-MMI time period is treated as “the healing period” for
purposes of determining when PPD benefits commence.
The majority’s reading of the statutes also means an employee can
have a “temporary” disability and a “permanent” disability based on the
same injury at the same time. This seems to be a very incongruous
reading of the statutes and one that should be avoided. Additionally, the
majority fails to explain why the legislature expressly provided that an
employee could receive medical and death benefits “in addition to” PPD
benefits, see id. § 85.34(2) (“The compensation shall be in addition to the
benefits provided by sections 85.27 and 85.28.”), but did not say an
employee could receive temporary disability payments in addition to PPD
benefits. Surely, if the legislature wanted to indicate that an employee
could receive temporary partial disability benefits and PPD benefits
covering the same time period, it would have expressly said so, given that
it made express reference to the availability of benefits under sections
33
85.27 and 85.28—situations where the case for awarding additional
benefits is far clearer.
As I’ve already suggested, the majority’s approach leads to a
questionable policy outcome—namely, the duplication of benefits.
Evenson has already been awarded temporary partial disability benefits
for the time period before November 2011 to compensate for any “partial
reduction of earning ability” during that time. See Iowa Code § 85.33(2).
Now the court wants the commissioner to go back and further
compensate him for any loss of earning capacity during the same period.
Until now, our law had been clear:
In this particular case, Presthus was receiving both
temporary partial and permanent partial benefits for the
same injury. It follows that, in order to receive both benefits
at the same time as Presthus suggests, Presthus’ injury
would have to cause him to be both temporarily and
permanently disabled at the same time. We are not
persuaded that such a result is attainable. We conclude
Presthus cannot receive temporary partial and permanent
partial benefits for the same injury at the same time.
Presthus v. Barco, Inc., 531 N.W.2d 476, 480 (Iowa Ct. App. 1995). In
Presthus, no PPD benefits commenced until “after all of the temporary
partial benefits had been paid”—exactly the rule that I contend should be
followed here. Id.
Presthus is not the only decision that the court overrules today.
The court also discards the analytical framework we set forth in
considerable detail in one of our own opinions just six years ago. In
2010, in Bell Brothers Heating & Air Conditioning v. Gwinn, we explained
the interplay between temporary and permanent disability awards. 779
N.W.2d 193, 200–01 (Iowa 2010). We said,
Although early workers’ compensation law made no
distinction between temporary and permanent disability, our
workers’ compensation law now provides for separate awards
34
based on the temporary and permanent nature of a
disability. The difference between awards for temporary and
permanent disability can be best illustrated by considering a
typical industrial injury.
Normally, an industrial injury gives rise to a period of
healing accompanied by loss of wages. During this period of
time, temporary benefits are payable to the injured worker.
Generally, these benefits attempt to replace lost wages (and
provide medical and hospitalization care) consistent with the
broad purpose of workers’ compensation: to award
compensation (apart from medical benefits), not for the
injury itself, but the disability produced by a physical injury.
In Iowa, these benefits are spelled out in Iowa Code sections
85.33, 85.34, and 85.37. . . .
. . . Any disability that remains after stabilization of
the condition gives rise to “either a permanent partial or a
permanent total award.” In other words, maximum physical
recovery marks the end of the temporary disability benefits,
and at that point, any permanent disability benefits can be
considered.
This review of temporary and permanent disability
awards reveals that a fundamental component of a
permanent impairment is stabilization of the condition or at
least a finding that the condition is “not likely to remit in the
future despite medical treatment.” In other words,
stabilization is the event that allows a physician to make the
determination that a particular medical condition is
permanent.
The symmetry of the process reveals that a claim for
permanent disability benefits is not ripe until maximum
medical improvement has been achieved. Until that time,
only temporary benefits are available.
Id. (citations omitted) (first quoting 4 Arthur Larson & Lex K. Larson,
Larson’s Workers’ Compensation Law § 80.03[2], at 80-6 (2009); and then
quoting American Medical Association, Guides to Evaluation of Permanent
Impairment 27 (6th ed. 2008)). Bell Brothers clearly forecloses the
interweaving and intermixing of temporary and permanent benefits
35
approved by today’s opinion. Regrettably, the court today fails even to
discuss Bell Brothers. 9
Instead of Bell Brothers, the court cites to a thirty-year-old
decision—Teel v. McCord, 394 N.W.2d 405 (Iowa 1986). Several
important points about Teel should be noted. First, the facts of Teel are
different from those before us today in that there were no temporary
partial disability benefits. Id. at 406. There were simply a series of
healing periods when the employee was off work. Id. Furthermore, in
Teel the PPD interest payments were suspended during each of those
healing periods, the upshot being that PPD benefits were not due during
those periods. Id. Today, by contrast, the court decides that PPD should
be paid continuously once the first healing period ends. In this respect,
today’s decision is inconsistent with Teel. Third, the only argument the
employer raised in Teel was the legally insufficient one that interest on
PPD benefits should commence as of the date of the award. Id. Thus,
none of the issues involved in this case were squarely presented. Lastly,
the language from Teel on which the majority relies today is simply
irreconcilable with Bell Brothers.
In the end, today’s opinion rests on a nonsequitur. The court
concedes that its approach results in multiple healing periods prior to
MMI, not just one healing period, even though the statute refers to “the”
healing period. See Iowa Code § 85.34(2). This means the court must
determine which healing period should be selected for the
9Bell Brothers highlights the practical problems with today’s decision. The court
holds today that PPD benefits should have commenced when Evenson first resumed
working in September 2010. But how was anyone to know then that Evenson had
suffered a permanent disability? That is why the law allows temporary partial disability
benefits to compensate for a reduction in income until it is determined that MMI has
been attained.
36
commencement of PPD benefits. The court then states the end of the
first healing period must be chosen because each healing period ends as
soon as the employee returns to work. Why? The former conclusion
does not follow from the latter. To put it simply, the court has confused
two issues: (1) when each healing period ends and (2) which healing
period must be chosen for commencement of PPD benefits.
The worker’s compensation statutes, Presthus, Bell Brothers,
fairness, and logic all point in one direction: When an employee suffers
an industrial injury resulting in a combination of time off work and
reduced hours, and then attains MMI, the employee should receive
temporary partial disability and healing period benefits for the pre-MMI
timeframe, and PPD benefits commencing thereafter.
The court’s opinion is not clear, but to the extent the court is
indicating that penalty benefits could be awarded on any of the PPD
benefits, I also disagree with that conclusion. Having modified the law as
to when PPD benefits commence, it would be unfair for the court to
subject the employer to a penalty for its lack of clairvoyance regarding
the court’s own modification of the law. See Iowa Code § 86.13(4)
(authorizing a penalty when there was a denial or a delay of payment
“without reasonable or probable cause or excuse”). The commissioner
did not award any penalty on the PPD benefits, but the court today
upholds a penalty on “the delayed and underpaid benefits” and remands
for “a recalculation of the amount of the penalty and interest owed based
on the new healing period and PPD dates.”
While I join the rest of the court’s opinion, I fear that the foregoing
aspects of today’s decision misread the statutes, unnecessarily overturn
precedent, will produce confusion and double recoveries, and will
ultimately require a legislative fix.
Waterman, J., joins this concurrence in part and dissent in part.