Lakeside Casino And Zurich-american Insurance Group Vs. Dana Blue

IN THE SUPREME COURT OF IOWA
No. 15 / 03-1221
Filed November 9, 2007
LAKESIDE CASINO and
ZURICH-AMERICAN INSURANCE GROUP,
Appellees,
vs.
DANA BLUE,
Appellant.
Appeal from the Iowa District Court for Clarke County, William H.
Joy, Judge.
Injured worker appeals district court judgment on judicial review
reversing Workers’ Compensation Commissioner’s award of workers’
compensation benefits. REVERSED AND REMANDED.
Max J. Schott of Max Schott & Associates, P.C., Des Moines, for
appellant.
Donna R. Miller and Nicholas J. Mauro of Grefe & Sidney, P.L.C.,
Des Moines, for appellees.
2
TERNUS, Chief Justice.
The appellant, Dana Blue, injured her foot when she stumbled on her
employer’s stairs as she returned to work from a break. The Workers’
Compensation Commissioner awarded benefits to Blue for her injury,
concluding her work subjected her to the inherently dangerous activity of
traversing stairs. On judicial review, the district court rejected the
Commissioner’s conclusion that stairs are inherently dangerous and
reversed the award of benefits, stating Blue’s injury coincidentally occurred
at work and was not compensable. Blue has appealed this decision. Upon
our consideration of the parties’ arguments, we reverse the decision of the
district court and remand this case for entry of a judgment affirming the
Workers’ Compensation Commissioner’s award of benefits.
I. Background Facts and Proceedings.
The facts surrounding the occurrence of Blue’s injury are largely
undisputed. At the time of her injury, Blue was employed as a cocktail
server by appellee, Lakeside Casino. On December 31, 2000, she became
light-headed and nauseated while on duty and was directed by her
supervisor to go to the employee’s lounge until she felt better. After
spending approximately forty-five minutes in the lounge, Blue’s symptoms
disappeared, and she felt well enough to return to work. Blue left the
lounge with several of her coworkers, walked forty feet to a set of stairs, and
descended the stairs with no problem. Still conversing with her coworkers,
she turned a corner and began walking down a second set of stairs. As she
descended the steps, Blue stumbled and grabbed onto a coworker so as not
to fall down the stairs. Although she immediately felt a pain in her ankle,
Blue continued to the bottom of the staircase without incident. She later
denied any light-headedness or nausea at the time of this incident.
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Within the next couple of days, Blue’s ankle became painful and
swollen, and she could not walk without limping. Despite treatment, Blue
continues to have pain in her ankle. She has been diagnosed with possible
early complex regional pain syndrome, and her physicians have related this
condition to the staircase incident.
Blue sought workers’ compensation benefits from her employer and
its insurer, appellee Zurich-American Insurance Group. A deputy workers’
compensation commissioner presided over the hearing on her claim and
determined Blue’s ankle problems arose out of and in the course of her
employment at Lakeside Casino. Acknowledging there must be “a causal
relationship between the employment and the injury” to satisfy the “arising
out of” requirement for compensability, the deputy relied on two Iowa
Supreme Court cases that stated this requirement was satisfied if “the
nature of the employment exposes the employee to risk of such an injury” or
if the injury is a “rational consequence of the hazard connected with the
employment.” See Hanson v. Reichelt, 452 N.W.2d 164, 168 (Iowa 1990);
Burt v. John Deere Waterloo Tractor Works, 247 Iowa 691, 700, 73 N.W.2d
732, 737 (1955). The deputy concluded: “Stairs are inherently more
dangerous than a flat, smooth, unobstructed walking surface. A stumble
while descending stairs in the course of employment can, as here, cause
injury arising out of that employment.”
On appeal to the Workers’ Compensation Commissioner, the
Commissioner affirmed and adopted the deputy’s decision as the final
agency action, supplementing that decision with some additional analysis.
The Commissioner stated:
When injured, [Blue] was on duty and on the employer’s
premises. Her employment compelled her to traverse those
stairs. Accordingly, any injury she sustained as a result of
traversing the stairs arose out of and in the course of her
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employment unless something in the evidence establishes
otherwise.
The Commissioner then reviewed the evidence and concluded Blue had no
health impairment that caused her to trip, and therefore, her stumble was
not idiopathic. He further observed there was no evidence of “[a] defect in
the stairs or other hazardous condition that caused her to trip, beyond the
hazard inherent in stairs.” The Commissioner found Blue “simply
stumbled, perhaps through her own negligence by not being sufficiently
careful while traversing the stairs.” Noting “traversing stairs [is] an
inherently hazardous activity,” the Commissioner ruled Blue’s injury was
compensable:
[T]he injury occurred from the hazard of traversing stairs and
the trauma of stumbling on those stairs while [Blue] was on the
employer’s premises and performing actions necessary for her
to perform in order to perform the duties of her job. Her injury
is compensable.
The employer and insurer sought judicial review. The district court
reversed the Commissioner’s decision, rejecting his “legal conclusion” that
stairs are inherently dangerous. The court then applied the actual-risk
doctrine and determined Blue’s injury did not arise out of her employment.
The district court reasoned:
In this case there is no indication that the design of the
stairs, condition of the stairs or the lighting of the stairs
contributed to Blue’s injury. Nor is there any indication that
the conditions of Blue’s employment exposed her to a hazard
not generally associated with traversing stairs (for instance,
she was not asked to or required to carry large, heavy, or
awkward objects while traversing the stairs). Blue’s injury
“coincidentally occurred while at work” and therefore did not
arise out of work.
Blue has appealed the district court’s judicial review decision.
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II. Scope of Review.
Our review is governed by Iowa Code chapter 17A. See Wal-Mart
Stores, Inc. v. Caselman, 657 N.W.2d 493, 498 (Iowa 2003). We apply the
standards of section 17A.19(10) to the Commissioner’s decision and decide
whether the district court correctly applied the law in exercising its judicial
review function. Herrera v. IBP, Inc., 633 N.W.2d 284, 286–87 (Iowa 2001).
In determining the proper standard of review, we must first identify
the nature of the claimed basis for reversal of the Commissioner’s decision.
Here, the employer asserted the Commissioner incorrectly held the
employee’s injury arose out of her employment. This issue “presents a
mixed question of law and fact.” Meyer v. IBP, Inc., 710 N.W.2d 213, 218
(Iowa 2006). The factual aspect of this decision requires the Commissioner
to determine “the operative events that [gave] rise to the injury.” Id. Once
the facts are determined, a legal question remains: “[W]hether the facts, as
determined, support a conclusion that the injury ‘arose out of . . . [the]
employment,’ under our workers’ compensation statute.” Id. (quoting Hawk
v. Jim Hawk Chevrolet-Buick, Inc., 282 N.W.2d 84, 87 (Iowa 1979)).
In the case before us, there is no dispute as to the facts. Rather, the
dispute centers on the Commissioner’s application of the law to the facts.
This aspect of the Commissioner’s decision-making process “can be affected
by [various] grounds of error such as erroneous interpretation of law;
irrational reasoning; failure to consider relevant facts; or irrational, illogical,
or wholly unjustifiable application of law to the facts.” Id. (citing Iowa Code
§ 17A.19(10)(c), (i), (j), (m) (2001)).
Based on the arguments made in the petition for judicial review and
the district court’s discussion of the issues in its decision, we conclude our
review is governed by section 17A.19(10)(c), (m):
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The court shall reverse, modify, or grant other appropriate
relief from agency action . . . if it determines that substantial
rights of the person seeking judicial relief have been prejudiced
because the agency action is any of the following:
....
c. Based upon an erroneous interpretation of a provision
of law whose interpretation has not clearly been vested by a
provision of law in the discretion of the agency.
....
m. Based upon an irrational, illogical, or wholly
unjustifiable application of law to fact that has clearly been
vested by a provision of law in the discretion of the agency.
Iowa Code § 17A.19(10)(c), (m) (2005). “The interpretation of workers’
compensation statutes and related case law has not been clearly vested by a
provision of law in the discretion of the agency.” Finch v. Schneider
Specialized Carriers, Inc., 700 N.W.2d 328, 330 (Iowa 2005). Therefore, we
give the Commissioner’s interpretation of the law no deference and are free
to substitute our own judgment. Id. On the other hand, application of the
workers’ compensation law to the facts as found by the Commissioner is
clearly vested in the Commissioner. See Mycogen Seeds v. Sands, 686
N.W.2d 457, 465 (Iowa 2004). Therefore, we may reverse the
Commissioner’s application of the law to the facts only if it is “irrational,
illogical, or wholly unjustifiable.” Finch, 700 N.W.2d at 331.
III. Test For “Arising Out Of.”
A. Governing Principles. In order for an injury to be compensable
in Iowa, there must be “a connection between the injury and the work.”
Meyer, 710 N.W.2d at 221. That connection is established by showing the
injury arose out of and in the course of the worker’s employment. Iowa
Code § 85.31(1) (2001); Meyer, 710 N.W.2d at 220. In this case, the
employer does not dispute that Blue’s stumble on the stairs occurred in the
course of her employment, but it does contest the Commissioner’s
determination that Blue’s injury arose out of her employment. Not only do
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the parties disagree whether Blue has carried her burden to prove her
injury arose out of her employment, the parties disagree on the proper test
under which this element is to be determined. Consequently, we begin our
analysis with a discussion of the legal standard that should be employed to
determine whether an injury arises out of the worker’s employment.
As this court has noted in prior cases, “[i]njuries that occur in the
course of employment or on the employer’s premises do not necessarily
arise out of that employment.” Miedema v. Dial Corp., 551 N.W.2d 309, 311
(Iowa 1996). “The two tests are separate and distinct and both must be
satisfied in order for an injury to be deemed compensable.” Id. It is
important, therefore, to understand the “in the course of” test before we
address the “arising out of” test.
The element of “in the course of” refers “to the time, place, and
circumstances of the injury.” Id. To satisfy this requirement, the injury
must take place “ ‘within the period of the employment, at a place where the
employee reasonably may be, and while the employee is fulfilling work
duties or engaged in doing something incidental thereto.’ ” Meyer, 710
N.W.2d at 222 (quoting 1 Arthur Larson & Lex K. Larson, Larson’s Workers’
Compensation Law ch. 12, scope, at 12-1 (2005)). 1
1In Meade v. Ries, 642 N.W.2d 237 (Iowa 2002), we stated that the “arising out of”
requirement is satisfied when the incident that caused the injury “ ‘occurr[ed] while the
employee [was] engaged in some activity or duty which [the employee was] authorized to
undertake, and which [was] calculated to further, indirectly or directly, the employer’s
business.’ ” Meade, 642 N.W.2d at 245 (quoting 82 Am. Jur. 2d Workers’ Compensation
§ 265, at 261-62 (1992)). This statement seems indistinguishable from the test for the “in
the course of” element of causation, as set forth in Meyer. For this reason, we reject the
Am. Jur. 2d test as an appropriate definition of the “arising out of” element under Iowa law,
disavow any contrary statements in our prior cases, and do not employ the Am. Jur. 2d test
in determining whether Blue’s injury arose out of her employment by Lakeside Casino. (We
note the most recent edition of Am. Jur. 2d has omitted the statement quoted in Meade
from its discussion of the meaning of the phrase “arising out of.” See 82 Am. Jur. 2d
Workers’ Compensation § 239, at 228–29 (2003)).
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The element of “arising out of” requires proof “that a causal
connection exists between the conditions of [the] employment and the
injury.” Miedema, 551 N.W.2d at 311. “In other words, the injury must not
have coincidentally occurred while at work, but must in some way be
caused by or related to the working environment or the conditions of [the]
employment.” Id.; accord McIlravy v. N. River Ins. Co., 653 N.W.2d 323, 331
(Iowa 2002) (stating injury “must be related to the working environment or
the conditions of employment”); Griffith v. Norwood White Coal Co., 229 Iowa
496, 502, 294 N.W. 741, 744 (1940) (stating “injury arises out of the
employment if it can reasonably be said to result from a hazard of the
employment”). In Hanson, this court adopted the actual-risk rule:
If the nature of the employment exposes the employee to the
risk of such an injury, the employee suffers an accidental
injury arising out of and during the course of the employment.
And it makes no difference that the risk was common to the
general public on the day of the injury.
452 N.W.2d at 168. Consequently, with limited exceptions, 2 we have
abandoned any requirement that the employment subject the employee to a
2A claimant seeking compensation for a nontraumatic mental injury caused only by
mental stimuli must prove “that the mental injury ‘was caused by workplace stress of
greater magnitude than the day-to-day mental stresses experienced by other workers
employed in the same or similar jobs,’ regardless of their employer.” Dunlavey v. Econ. Fire
& Cas. Co., 526 N.W.2d 845, 857 (Iowa 1995) (quoting Graves v. Utah Power & Light Co.,
713 P.2d 187, 193 (Wyo. 1986), superseded by statute, Wyo. Stat. Ann. § 27-14-102(a)(xi)(J)
(Cum. Supp. 1996)). When workers’ compensation benefits are sought for an employee’s
heart attack, the legal causation required to establish the injury arose out of the
employment can be shown in three different ways:
(1) heavy exertions ordinarily required by the job are superimposed on a
defective heart, aggravating or accelerating the previous condition; (2)
unusually strenuous employment exertion is superimposed on a preexisting
diseased condition; or (3) damage results from continued exertion required
by the employment after the onset of the heart attack symptoms.
Wilson v. Good Will Publishers, 671 N.W.2d 479, 480-81 (Iowa 2003), abrogated on other
grounds by P.D.S.I. v. Peterson, 685 N.W.2d 627, 635 (Iowa 2004).
9
risk or hazard that is greater than that faced by the general public. 3 Floyd
v. Quaker Oats, 646 N.W.2d 105, 108 (Iowa 2002) (stating requirement of
increased hazard or exertion only applies to claims of heart attack and
mental illness).
Applying these principles, this court has held the following injuries
were not compensable or, in the penalty-benefits/bad-faith context,
arguably not compensable, because they did not arise out of the employee’s
employment: (1) a knee injury that occurred as the employee was walking
across a level floor, McIlravy, 653 N.W.2d at 331 4 ; (2) a neck injury that
happened when the employee straightened up after bending over to sign an
invoice, Gilbert v. USF Holland, Inc., 637 N.W.2d 194, 200 (Iowa 2001)5 ; (3) a
3As the claimant points out in her brief, this court commented in Miedema on the
absence of any evidence that the employment in that case exposed the claimant to an
increased hazard or risk. Miedema, 551 N.W.2d at 311. These observations were merely
incidental to the primary holding in that case that the claimant had failed to prove a causal
connection between his back injury and a hazard or condition of his employment. Id. We
disavow any intent in Miedema to retreat from our decision in Hanson to reject the
increased-risk rule in favor of the actual-risk rule.
4This case presented a bad-faith claim brought by a workers’ compensation
claimant against the workers’ compensation insurer, claiming the insurer had had no
reasonable basis to deny his claim for workers’ compensation benefits. McIlravy, 653
N.W.2d at 326-27. The initial information available to the insurer was that the claimant’s
knee popped as he was walking across a level cement floor. Id. at 326. A later doctor’s
report stated that claimant’s work made him more susceptible to the occurrence of such an
injury. Id. at 327. We held the information initially available to the insurer gave the
insurer a reasonable basis to deny the claim. Id. at 331. Based on this limited
information, there was no evidence the injury was “related to the working environment or
the conditions of employment.” Id.
5This workers’ compensation case included a claim for penalty benefits. Gilbert, 637
N.W.2d at 195. There was evidence to support a finding that the claimant was injured
when his neck popped as he straightened up after signing an invoice, but there was also
evidence that he was injured when he tugged on a stuck dock plate. Id. at 195-96.
Although the Commissioner ultimately determined the injury occurred when the claimant
pulled on the dock plate, we held the claimant’s claim was fairly debatable. Id. at 197, 201.
We held the claimant’s initial explanation of his injury—that it occurred as he
“straightened up after signing some work documents”—provided a basis for the employer to
dispute whether the injury arose out of the claimant’s employment. Id. at 199–200. We
noted that if the injury had occurred in this manner, it “would arguably be coincidental to
work and would not necessarily be related to the conditions of employment.” Id. at 200.
 10
back injury that occurred when an employee twisted to flush the toilet,
Miedema, 551 N.W.2d at 312; and (4) a back injury that occurred when the
employee was leaning against a wall for balance while putting on an
overshoe, Musselman v. Cent. Tel. Co., 261 Iowa 352, 361, 154 N.W.2d 128,
133 (1967). We concluded or suggested there was nothing in the conditions
of the work environment that caused or was related to the employees’
injuries. See McIlravy, 653 N.W.2d at 331; Gilbert, 637 N.W.2d at 200;
Miedema, 551 N.W.2d at 311; Musselman, 261 Iowa at 359–60, 154 N.W.2d
at 132.
In contrast to these decisions, we have held the following injuries did
arise out of the employee’s employment: (1) death of an employee caused by
a deranged co-employee, Cedar Rapids Cmty. Sch. v. Cady, 278 N.W.2d 298,
302 (Iowa 1979); and (2) a head injury that occurred when a mining
employee riding a “man trip” struck his head on a beam in the roof of the
mine shaft, Griffith, 229 Iowa at 502, 294 N.W. at 744. In both cases, we
concluded the injuries were causally connected to a hazard of the
employment. Cady, 278 N.W.2d at 302–03; Griffith, 229 Iowa at 502, 294
N.W. at 744. In a third case, this court held an injury occurring when a
teacher slipped on ice while checking on the condition of the highway prior
to the students leaving school was compensable without any specific
discussion of the “arising out of” requirement other than a statement of the
basic definition. See Crowe v. De Soto Consol. Sch. Dist., 246 Iowa 402, 410,
68 N.W.2d 63, 67–68 (1955).
B. Commissioner’s Interpretation of the Governing Legal
Principles. With this background, we now turn to the Commissioner’s
decision and his discussion of the applicable law. As noted above, the
Commissioner adopted the deputy’s proposed decision, but added some
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additional analysis of his own. We will separately consider both bases of
the Commissioner’s decision.
The deputy concluded in his proposed decision that the claimant had
to establish a causal connection between her injury and a condition, risk, or
hazard of her employment in order to prove her injury arose out of her
employment. We find no error in this interpretation of the workers’
compensation statute. As noted above, this court adopted the actual-risk
rule in Hanson, and the deputy’s statement of the law is consistent with this
rule.
Although the Commissioner incorporated the deputy’s actual-risk
analysis into his final decision, the Commissioner also appeared to interpret
Iowa law to allow compensation under the positional-risk doctrine. See
generally 1 Arthur Larson & Lex K. Larson, Larson’s Workers’ Compensation
Law § 3.04, at 3–5 (2007) (stating under the actual-risk doctrine, the injury
is compensable “as long as the employment subjected [the] claimant to the
actual risk that caused the injury”); id. § 3.05, at 3–6 (stating under the
positional-risk rule, “[a]n injury arises out of the employment if it would not
have occurred but for the fact that the conditions and obligations of the
employment placed claimant in the position where he would be injured”).
The Commissioner stated in his decision:
When injured, [Blue] was on duty and on the employer’s
premises. Her employment compelled her to traverse those
stairs. Accordingly, any injury she sustained as a result of
traversing the stairs arose out of and in the course of her
employment unless something in the evidence establishes
otherwise.
The Commissioner seems to be applying the rule “that causal connection is
sufficiently established whenever [the employment] brings claimant to the
position where he or she is injured.” Id. ch. 7, scope, at 7–1. Iowa has not
12
adopted the positional-risk rule, and we decline to do so now under the
circumstances presented by this case.
Larson argues in his treatise that an unexplained fall should be
compensated under the positional-risk rule. Id. § 7.04[1][a], at 7–28 to 7–
29. Blue argues her injury arose from an unexplained fall, and Iowa should
permit compensation under the positional-risk rule. We disagree that
Blue’s stumble is unexplained. The Commissioner found that Blue tripped
when she lost her footing on the stairs. 6 Such an occurrence is easily
explained by the process of going down stairs: one must necessarily lift
one’s foot to clear the current step, carefully position one’s foot on the next
step, and all the while maintain one’s balance. Blue did not do so. Thus,
Blue’s stumble was readily explainable by the natural configuration of stairs
and the care required to traverse them.
To the extent the Commissioner interpreted Iowa law to permit an
award of benefits under the positional-risk rule, the Commissioner erred.
Notwithstanding this error, we do not believe the employer’s substantial
rights were prejudiced because the claimant met the “arising out of”
requirement under the actual-risk analysis incorporated in the
Commissioner’s final decision. Focusing then on the actual-risk rule, we
now examine whether the Commissioner’s decision was “[b]ased upon an
irrational, illogical, or wholly unjustifiable application of law to fact.” Iowa
Code § 17A.19(10)(m).
IV. Application of Law to The Facts of This Case.
In light of the principles and case law reviewed above, we are not
persuaded the Commissioner’s application of the actual-risk rule to the
facts of this case was irrational, illogical, or wholly unjustifiable. Blue
6The Commissioner found that Blue’s stumble was not idiopathic, and the employer
does not challenge this finding on judicial review.
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injured her ankle when she stumbled as she was walking down stairs. It
was not disputed that these stairs were a condition existing in her
workplace. Moreover, it is a matter of common knowledge that stairs pose
an actual risk of stumbling or falling when traversing them, similar to the
risk posed by going up and down ladders. Although Blue did not stumble
due to any particular defect in or condition of the stairs, it is not necessary
under Iowa case law that the stairs in Blue’s workplace be more dangerous
than a typical set of steps. 7 In addition, it matters not that she stumbled
through her own inattention. Blue’s misstep was causally related to the
fact that she was walking on stairs, and therefore, the Commissioner
rationally concluded her injury arose out of her employment.
This case is decidedly different from McIlravy, in which the employee
injured his knee walking across a level floor, Gilbert, in which the employee
arguably injured his neck straightening up from signing a document,
Miedema, in which the employee injured his back turning to flush the toilet,
and Musselman, in which the employee injured his back leaning against a
wall for balance. See McIlravy, 653 N.W.2d at 326; Gilbert, 637 N.W.2d at
195; Miedema, 551 N.W.2d at 310; Musselman, 261 Iowa at 356, 154
N.W.2d at 130. In each of these cases, although the employee may have
been in the course of his employment, there was no condition of his
employment, no risk of his employment activities, and no hazard in his
7The district court concluded the Commissioner incorrectly held a causal connection
between Blue’s employment and her injury was established under the actual-risk rule. In
explaining why Blue’s injury did not arise out of her employment, the court pointed out
there was no “indication that the conditions of Blue’s employment exposed her to a hazard
not generally associated with traversing stairs.” Although the district court purported to
apply the actual-risk rule, its rationale is more consistent with the discarded increased-risk
rule. This detour to increased-risk analysis may account for the district court’s mistaken
conclusion that the Commissioner’s application of the actual-risk rule was incorrect.
14
workplace that was related to his injury. 8 In contrast, in the present case,
Blue stumbled on the stairs, the Commissioner finding that “[t]he injury
occurred from the hazard of traversing stairs.” (Emphasis added.) It is this
causal relationship between a condition of Blue’s employment—the stairs—
and her injury that distinguishes the present case from those in which we
have determined the employee’s injury was not compensable.
V. Conclusion and Disposition.
We disagree with the district court’s conclusion that the
Commissioner erred in ruling Blue’s injury arose out of her employment.
Therefore, we reverse the district court’s judgment and remand this case for
entry of a judgment affirming the Commissioner’s decision awarding
workers’ compensation benefits to Blue under the actual-risk rule.
REVERSED AND REMANDED.
8We make this statement in reference to McIlravy and Gilbert on the basis of the
factual scenario held by the court to provide a reasonable basis for the insurer’s denial of
the employee’s claim, not on the basis of the facts as found by the Commissioner for
purposes of awarding workers’ compensation benefits.