IN THE COURT OF APPEALS OF IOWA
No. 13-1441
Filed October 1, 2014
MELINDA MAY VITZTHUM,
Plaintiff-Appellant/Cross-Appellee,
vs.
KLM ACQUISITION CORPORATION, d/b/a ALUMA, LTD. and LIBERTY
MUTUAL FIRE INSURANCE, a/k/a LM INSURANCE CORPORATION,
Defendant-Appellees/Cross-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Robert B. Hanson,
Judge.
Melinda Vitzthum appeals and Aluma, her employer, cross-appeals from
the district court’s orders regarding the Iowa Workers’ Compensation
Commission’s final disposition on Vitzthum’s compensation petition and appeal.
AFFIRMED.
Mark S. Soldat of Soldat & Parrish-Sams, P.L.C., West Des Moines, for
appellant/cross-appellee.
Amanda M. Phillips of Law Offices of James W. Nubel, Omaha, NE, for
appellees/cross-appellants.
Heard by Potterfield, P.J., and Tabor and Mullins, JJ.
2
POTTERFIELD, P.J.
Melinda Vitzthum appeals from the district court, which affirmed in part
and remanded in part the proceedings before the Iowa Workers’ Compensation
Commission. The defendants, KLM Acquisition Corp.—doing business as
Aluma, Ltd.—and its insurer, Liberty Mutual Fire Insurance (collectively, “Aluma”)
cross-appeal. Together they raise five issues: (1) the correct rate of weekly
benefits to which Vitzthum is entitled; (2) whether Aluma has a reasonable or
probable cause or excuse to avoid penalties for late payments; (3) whether
Aluma has a reasonable or probable cause or excuse to avoid penalties for
underpayments; (4) whether the district court was correct to remand for
additional fact-finding; and (5) whether the assessment of arbitration and court
costs below was proper.
I. Factual and Procedural Background
Vitzthum was injured at work on June 30, 2008. Aluma agreed to pay
healing period benefits, calculated the rate of those benefits at $292.65 per
week, and began issuing checks based on that calculation on July 10, 2008. A
regular ongoing weekly payment schedule had solidified by the end of August
2008. Vitzthum initially accepted the weekly checks without dispute.
On June 25, 2010, Vitzthum filed a petition for arbitration before the Iowa
Workers’ Compensation Commission. Part of the petition involved a claim for a
higher weekly benefits rate—$305.29—to be applied prospectively and
retroactively. Another element of the petition was a claim for additional benefits
assessed as penalties against Aluma on three bases: first, for making late
payments; second, for paying less than the proper benefit rate; and third, for
3
“underpayments resulting from payments insufficient to satisfy both the accrued
interest and principal of compensation.”
In its arbitration decision, the commission held that the correct weekly
benefit rate was $298.39. It ordered that Aluma pay twenty-five percent of the
total amount underpaid as a penalty. It denied Vitzthum’s other bases for
penalties. Vitzthum appealed before the commission. In the appeal decision by
the designated appellate deputy commissioner, the commission held the weekly
benefit rate should in fact have been $305.29 (as Vitzthum claimed) from the
outset. However, it reversed the previous assignment of penalty benefits and
instead ruled that Vitzthum was not entitled to penalties under any of her three
theories.
Vitzthum filed for judicial review in the district court. The district court
affirmed the weekly benefit rate of $305.29 and remanded for further fact-finding
on the issue of penalty benefits based on the underpayment of the correct weekly
rate for payments made on or after July 1, 2009, the date an amendment to the
Iowa Code provision regarding penalties became effective. See Iowa Code
§ 86.13(4)(c) (2011). The district court affirmed all other aspects of the
commissioner’s holdings regarding penalty benefits and the calculation of the
weekly benefit rate. Vitzthum appeals, asserting error in the district court’s
affirmance of the denial of her other claims for penalties and in the assignment of
costs. Aluma cross-appeals, claiming the district court’s remand for further fact-
finding on the issue of penalties was improper and the commission’s calculation
of a weekly benefit rate of $305.29 was in error.
4
II. Standard and Scope of Review
Our review of agency action is for correction of errors at law. Finch v.
Schneider Specialized Carriers, Inc., 700 N.W.2d 328, 330 (Iowa 2005). We
apply the standards of Iowa Code section 17A.19(10) to the agency’s decision
and compare our conclusion with the conclusion of the district court.
Grundmeyer v. Weyerhaeuser Co., 649 N.W.2d 744, 748 (Iowa 2002). “If they
are the same, we affirm; otherwise we reverse.” Id.
We are “bound by [the agency’s] fact-finding if it is supported by
substantial evidence.” Asmus v. Waterloo Cmty. Sch. Dist., 722 N.W.2d 653,
657 (Iowa 2006); see Iowa Code § 17A.19(10)(f). Evidence is substantial when it
is “the quantity and quality of 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)(a). “[T]he question
on appeal is not whether the evidence supports a different finding than the
finding made by the commissioner, but whether the evidence supports the
findings actually made.” Meyer v. IBP, Inc., 710 N.W.2d 213, 218 (Iowa 2006).
III. Discussion
We first address Aluma’s claim on cross-appeal that the appellate deputy
commissioner’s calculation of benefits was erroneous. We then consider
whether Vitzthum is entitled to penalty benefits on the theories she puts forward
on appeal. We consider the issue on cross-appeal of the district court’s limited
remand on the issue of underpayment penalties simultaneously with Vitzthum’s
5
claim that the district court’s remand should be expanded. We finally consider
the assessment of costs to the parties.
A. Calculation of Benefits
Aluma asserts on cross-appeal that the district court erred by affirming the
commission’s holding that Vitzthum’s weekly benefit rate payable is $305.29
instead of Aluma’s calculated rate of $292.65 per week. Aluma rests its
argument on a single case decided by the commission, which stands for the
proposition that some employers allow unusual employee weekly schedules that
elude sensible outcomes under the typical statutory calculations. See Daniels v.
T & L Cleaning Servs., File No. 1283486, 2002 WL 32125261, at *1 (Iowa
Workers’ Comp. Comm’n Oct. 8, 2002).
However, we agree with the appellate deputy commissioner, who stated: “I
do not see much evidence in the record to show that [Aluma’s] practice is all that
unusual.” Even though Aluma’s practice of offering additional personal days may
theoretically be conceptualized as offsetting employees’ overtime, that offset is
not so unusual that the statutory calculus does not reach a sound conclusion as
to the proper weekly rate. Therefore, the usual calculation method found in Iowa
Code section 85.36(6) still controls.1
1
Iowa Code § 85.36(6) provides,
In the case of an employee who is paid on a daily or hourly basis, or by
the output of the employee, the weekly earnings shall be computed by
dividing by thirteen the earnings, including shift differential pay but not
including overtime or premium pay, of the employee earned in the employ
of the employer in the last completed period of thirteen consecutive
calendar weeks immediately preceding the injury. If the employee was
absent from employment for reasons personal to the employee during
part of the thirteen calendar weeks preceding the injury, the employee’s
weekly earnings shall be the amount the employee would have earned
had the employee worked when work was available to other employees of
6
The appellate deputy commissioner’s conclusions of law offer a sound
explanation of his reasons for independently reaching the calculated amount.
That evidence includes the fact that three of the thirteen weeks prior to
Vitzthum’s injury were non-representative weeks because she took time off.
Additionally, the appellate deputy commissioner corrected calculation errors that
occurred in the initial commission proceedings as a result of including premium
overtime pay.
Even if his calculations were to differ from those of either or both of the
parties, there remains substantial evidence in the record to support his
conclusion. We affirm the district court and decline to disturb the commission’s
final conclusion on the proper weekly benefit rate and resulting amount past
due.2
B. Penalty Benefits—Reasonable or Probable Cause or Excuse
In Vitzthum’s first two issues on appeal, she ascribes error to the district
court’s affirmance of the denial of penalty benefits. She alleges Aluma made
every benefit payment past its due date and underpaid those benefits due to its
erroneous benefit rate calculation. She asserts Aluma must pay penalty benefits
because there was no showing of a reasonable excuse for the delay or
underpayment that would insulate Aluma from mandatory penalties. On cross-
appeal, Aluma asserts the district court’s remand for further fact-finding regarding
the employer in a similar occupation. A week which does not fairly reflect
the employee’s customary earnings shall be replaced by the closest
previous week with earnings that fairly represent the employee’s
customary earnings.
2
The appellate commissioner held, “At the time of the hearing, the amount due was
$2233.32 and interest due on that amount accrues at the rate of $.6119 per day from the
date of the hearing on April 11, 2011. This will be awarded.”
7
potential penalty benefits resulting from underpayments made on or after July 1,
2009 should be vacated.
1. Applicable Law
Iowa Code section 86.13(4)(a) provides,
If a denial [or] a delay in payment . . . of benefits occurs without
reasonable or probable cause or excuse known to the employer or
insurance carrier at the time of the denial [or] delay . . . , the
workers’ compensation commissioner shall award [penalty]
benefits . . . up to fifty percent of the amount of benefits that were
denied [or] delayed . . . without reasonable or probable cause or
excuse.
For penalties to be assessed, the employee must first affirmatively show
that there has been a delay in payment or a denial of benefits. Keystone Nursing
Care Ctr. v. Craddock, 705 N.W.2d 299, 307 (Iowa 2005). Then the burden
shifts to the employer to prove a reasonable or probable cause or excuse for the
delay. Schadendorf v. Snap-On Tools Corp., 757 N.W.2d 330, 334–35 (Iowa
2008).
A reasonable or probable cause or excuse exists if either “(1) the delay
was necessary for the insurer to investigate the claim or (2) the employer had a
reasonable basis to contest the employee's entitlement to benefits.” IBP, Inc. v.
Burress, 779 N.W.2d 210, 222 (Iowa 2010) (quoting Christensen v. Snap-On
Tools Corp., 554 N.W.2d 254, 260 (Iowa 1996)). “A reasonable basis for denial
of the claim exists if the claim is fairly debatable.” Id. (quotations omitted). A
claim is fairly debatable “when it is open to dispute on any logical basis.” Rodda
v. Vermeer Mfg., 734 N.W.2d 480, 483 (Iowa 2007) (emphasis added). Whether
8
a claim is fairly debatable may be determined as a matter of law. 3 Id. It is
irrelevant whether the employer’s basis for the delay or denial is correct in the
final legal analysis; rather, “[t]he issue is whether there was a reasonable basis
for the employer’s position that no benefits were owing.” Craddock, 705 N.W.2d
at 308.
Even if the employer’s basis was not objectively reasonable, we must
nevertheless determine whether it “knew, or should have known, that the basis
for denying the employee’s claim was unreasonable” before assigning penalties
under section 86.13. Rodda, 734 N.W.2d at 483; see Burton v. Hilltop Care
Center, 813 N.W.2d 250, 267 (Iowa 2012). The requirement that the employer
must have known or should have known that its basis for delaying payment or
underpaying was unreasonable is a by-product of Iowa courts’ interpretation of
section 86.13 incorporating a bad faith standard from tort law. See City of Madrid
v. Blasnitz, 742 N.W.2d 77, 81–82 (Iowa 2007) (citing Christensen, 554 N.W.2d
at 260). “Courts . . . do not weigh the conflicting evidence that was before the
insurer; they decide whether evidence existed to justify denial of the claim.” Id.
(citations omitted). “The purpose or goal of the statute is both punishment and
deterrence.” Robbennolt v. Snap-On Tools Corp., 555 N.W.2d 229, 237 (Iowa
1996). Our case law makes clear that the intended punishment and deterrence
is for employers or insurers that attempt to escape or lessen their payments to
injured workers in bad faith. See Blasnitz, 742 N.W.2d at 82.
3
Aluma has never contested Vitzhum’s entitlement to benefits. The “fairly debatable”
discussion in this case therefore relates to its calculation of the amount of benefits and
dates of payment.
9
On July 1, 2009, after Vitzthum began receiving benefits, an additional
provision added to section 86.13 came into effect. Iowa Code section 86.13(4)(c)
adds three statutory requirements to the employer’s burden of proof when an
employer or insurance carrier asserts a reasonable or probable cause or excuse:
(1) The excuse was preceded by a reasonable investigation and
evaluation by the employer or insurance carrier into whether
benefits were owed to the employee.
(2) The results of the reasonable investigation and evaluation were
the actual basis upon which the employer or insurance carrier
contemporaneously relied to deny [or] delay payment
of . . . benefits.
(3) The employer or insurance carrier contemporaneously
conveyed the basis for the denial [or] delay in payment . . . of
benefits to the employee at the time of the denial [or] delay . . . .
The payments made to Vitzthum in this case commenced before and continued
beyond this statute’s effective date. Because there is no contrary case law or
legislative intent apparent, these additional requirements are “presumed to be
prospective in [their] operation.” Iowa Code § 4.5.
2. Delay in Payment of Benefits
Vitzthum asserts she has “proved without contradiction the elements
necessary to prove Aluma did not make timely compensation payments.” She
claims Aluma must pay penalty benefits because every payment made since its
second payment has been delayed.4 Aluma, on the other hand, asserts Vitzthum
has not met her initial burden of proof. It asserts the record is sufficient to show
that it has made all its payments on time according to its reasonable (or at least
fairly debatable) calculation of amounts due.
4
Vitzthum claims “186 payment delays of 9153 days” and a total of $41,024.81 in
delayed payments.
10
After Vitzthum’s first hearing before the commission, the deputy
commissioner held that there was no delay in payments because she believed
Vitzthum’s “request for penalty appears premised on the concept that payments
are made when the check is received versus when the check is mailed.” On
appeal before the commission, the appellate deputy stated, “I [] do not see where
defendants untimely paid its version of the weekly benefits and due dates.” On
judicial review, the district court’s ruling on Vitzthum’s assertions of delay
apparently considered only the claim that the payments were delayed because
they were not paid in full as a result of Aluma’s miscalculations. Vitzthum’s
position is that there was an actual delay plus a miscalculation. We reach both
issues and arrive at the same result as the district court.
There are two unique characteristics of Vitzthum’s claim that made it
difficult for the commission and district court to respond: (1) her unilaterally
declared due dates and (2) the prospective application of benefit and interest due
dates to develop post facto a rolling delay from each benefit period to the next.
First, Vitzthum has presented in various iterations and at various stages of
the proceedings copious tabular data to express her opinion as to the due date of
each payment. At no stage in the proceedings has the commission or the court
expressed any formal approval or adoption of these dates in their findings of fact
or conclusions of law.5 Vitzthum claims her asserted due dates have been
5
The appellate deputy commissioner did “adopt” Vitzthum’s calculated benefit rate and
total amount owing. Vitzthum declares, “By approving [Vitzthum’s computations of the
amount of benefit payments and resulting underpayment], the appeal deputy necessarily
found the correctness of the due dates used in them.” We find this assertion
unpersuasive. The appellate deputy commissioner issued no ruling as to Vitzthum’s due
dates; he only concluded that the total amount due by his calculations was the same as
the amount Vitzthum had put forward. Additionally, this is the same deputy that denied
11
calculated according to the dictates of Robbennolt, 555 N.W.2d at 234–36. She
fails, however, to demonstrate how the language of Robbennolt mandates the
precise due dates she asserted. Robbennolt requires “weekly compensation [to
be] timely paid at the end of each compensation week.” Id. at 235. “[W]eekly
compensation payments are ‘made’ when they are mailed to the claimant.” Id.
Aluma’s payment schedule involved issuing a check to Vitzthum at the
end of a calendar week. For example, on Friday, October 24, 2008, Aluma
issued a check for the payment of benefits accrued from Monday, October 20,
2008, to Sunday, October 26, 2008. This squarely meets the description of
timely payment in Robbennolt. Id.
However, according to Vitzthum’s calculations each weekly payment
should have accrued from Thursday of each week (e.g. October 16, 2008) to
Wednesday of the following week (e.g. October 22, 2008). It is not clear from the
record why Vitzthum rejects Aluma’s Monday-to-Sunday weekly payment and
instead demands payment on a Thursday-to-Wednesday basis.6 Because
Vitzthum has failed to support her unilaterally declared due dates with any
particularized legal citation or factual assertion, we find that Aluma’s payment
scheme comports with Robbennolt.
Second, Vitzthum alleges every payment made by Aluma was delayed
due to a disagreement (and possible error) regarding benefits owed in the six
delay penalty benefits because he did “not see where defendants untimely paid its
version of the weekly benefits and due dates.” That deputy therefore in fact rejected
Vitzthum’s purported due dates insofar as he held they do not bear upon the issue of
delay penalties.
6
In one of Vitzthum’s many data tables, she calculates the weeks for which benefits are
due. In her appeal brief to the commission, she includes a column entitled “7-day
Week,” and that column lists eight seven-day weeks and—without explanation—
calculations for two five-day “weeks,” a four-day “week,” and a two-day “week.”
12
weeks immediately following the injury.7 According to Vitzthum, the asserted
error created a rolling delay for each subsequent payment. For example, Aluma
specifically denoted the check issued on October 24, 2008, as payment for the
week of October 20, 2008. But Vitzthum asserts it was in fact a late payment for
benefits that were due and unpaid on October 2, 2008. In this way, Vitzthum
characterizes every payment made as a payment on benefits already owing and
past due. Based on that theory, Vitzthum retroactively accrues each benefit
period as a future debt rather than a contemporaneous payment from Aluma.
There is no indication Vitzthum believed this rolling late payment scheme
was in effect as she received the payments. On the facts of this case, Vitzthum’s
“rolling delay” concept casts the impression of a litigation strategy designed to
maximize potential penalty benefits. But we find no support for such a concept in
our law, and indeed, Vitzthum has not cited any.8
On the theory presented,9 Vitzthum has failed to meet her initial burden of
proof that there was an unexcused delay in payment of benefits. Each payment
Aluma made corresponds with the work week for which it was issued—the
7
Vitzthum’s calculations are presented in tabular data, but the design of the tables
makes it difficult to compare her calculated benefits with those actually paid. The record
indicates that the alleged errors in benefits payments made soon after her injury related
to Vitzthum’s claimed temporary partial benefits periods. Aluma issued benefit
payments that coincide with all of her claimed healing period benefits.
8
Vitzthum makes generalized gestures towards the United States rule, but that rule only
applies “regarding allocation of interest when payment is made toward retiring a
judgment.” Christensen, 554 N.W.2d at 261–62 (emphasis added). Vitzthum’s
reference to the rule may serve as a sufficient analogy for her rolling delay concept, but
it is not applicable law on these facts. Aluma’s benefit payments were not made toward
retiring a judgment upon which interest had begun to accrue.
9
We note Vitzthum may have had a valid claim for a delay in payment relative to
temporary partial benefits owed and unpaid for the periods of July 7 to July 28, 2008,
and August 2 to August 17, 2008. However, she has not presented that claim, relying
instead on her rolling delay penalty theory.
13
payments cannot be considered back-payments toward a running balance of
which neither Aluma nor Vitzthum herself had any knowledge.
Even assuming arguendo that we could recognize the rolling delay as a
proper basis for penalty benefits on these facts, we note that Aluma’s belief its
payments were timely and complete constitutes a reasonable excuse. It was
fairly debatable that the Monday-through-Friday payment system comports with
the law in Robbennolt. Because there is substantial evidence in the record to
support the district court’s implicit affirmance of the commissioner’s denial of
these penalty benefits, we affirm.
3. Underpayment of Benefits
Vitzthum also asserts Aluma must pay penalty benefits due to the de facto
denial of benefits owed as a result of Aluma’s incorrect calculation of the correct
benefit rate.10 The commission did not award penalty benefits on this basis,
finding that Aluma had demonstrated a reasonable excuse for its underpayment
because it had a fairly debatable basis for its computations. The district court
agreed that the basis for Aluma’s computation was fairly debatable and that it
therefore was not subject to penalty benefits for all benefits paid prior to the
statutory amendment’s effective date on July 1, 2009. The district court
remanded to the commission the issue of possible penalty benefits owed on
benefits paid after the statutory amendment went into effect, as the applicable
law included additional burdens of proof on Aluma under Iowa Code section
86.13(4)(c).
10
Vitzthum calculates the total amount of unpaid principal as $1832.27 by multiplying the
difference between her calculated weekly benefit rate and Aluma’s rate by the number of
weeks paid.
14
On appeal, Vitzthum argues that there was not a fairly debatable basis for
Aluma’s underpayments prior to July 1, 2009, subjecting it to penalty benefits for
both pre- and post-amendment underpayments. On cross appeal, Aluma argues
its fairly debatable basis was sufficient to obviate Vitzthum’s claim for penalty
benefits even under the new statutory requirements, rendering the district court’s
remand to the commission unnecessary. In other words, the district court’s
remand suggests some of the benefit underpayments may be subject to penalty;
Vitzthum argues that all of the benefit underpayments are subject to penalty;
Aluma argues that none of the benefit underpayments are subject to penalty.
Since the commission held that Aluma’s calculations were indeed
erroneous, Vitzthum has satisfied her burden to demonstrate there was a denial
of benefits. Our analysis, therefore, is Aluma’s burden to show a reasonable or
probable cause or excuse for the underpayments.
As to the pre-amendment benefits, we agree with the district court that the
assessment of penalty benefits is not justified. Aluma had a reasonable basis for
paying Vitzthum its calculated rate of $292.65 per week, because relevant
authority could have led it to believe the thirteen weeks upon which it based its
calculations formed a proper basis even though Vitzthum’s actual work hours
fluctuated both above and below forty hours a week with some regularity. See
Daniels, 2002 WL 32125261, at *1 (holding where “earnings varied greatly from
week to week due to available work[, t]he most appropriate method to calculate []
customary earnings was to average them over the previous 13 weeks before the
injury as done by the defense”).
15
Vitzthum misstates the applicable law when she insinuates Aluma is
subject to penalties because there was not “any ‘debate,’ let alone a ‘fair debate’”
regarding its rate computation method. This is not what the law requires. The
law requires that Aluma’s reason for its rate computation method be “fairly
debatable.” Burress, 779 N.W.2d at 222. We agree with the commission and
with the district court that—regardless of its ultimate correctness—Aluma had a
fairly debatable basis for its rate of benefit payments made to Vitzthum before
July 1, 2009. 11
As to the post-amendment benefits, we agree with the district court that
the deputy commissioner failed to analyze the three requirements of section
86.13(4)(c). Furthermore, we note the deputy failed to satisfactorily analyze the
effect of the prospective nature of the 2009 amendments. The deputy applied
only the pre-amendment requirements to the facts.12
On judicial review, the district court relied on a footnote in Burton to
suggest the additional requirements may apply to individual post-amendment
payments. Burton, 813 N.W.2d at 267, n.4. Aluma, however, argues the
prospective nature of the amendments should relate to the date of the predicate
11
Vitzthum’s characterization of Aluma’s reasonable or probable cause or excuse for
underpayment (i.e. fairly debatable miscalculation) as an ex post facto excuse
manufactured during litigation to avoid liability is unpersuasive. The miscalculation
occurred at the outset of Aluma’s payment regime in July 2009. Whether Aluma’s
calculations were disclosed when it began payments or during these proceedings, the
excuse is not ex post facto because those calculations existed at the outset of the
compensation period. The “excellent, recurring, and timely question” regarding
legislative intent and ex post facto excuses that Vitzthum raises in the routing statement
of her appellate brief is not actually implicated by the facts of the case before us.
12
The appellate deputy commissioner’s decision indicates some confusion as to the
timing of the injury and the effective date of the amended legislation, which resulted in
the application of the pre-amendment law to the post-amendment benefit payments
without consideration of the effect of the amendment.
16
injury rather than the dates of individual payments.13 Under Aluma’s
interpretation of the amendment, the new requirements do not apply to any of the
payments in this case because Vitzthum’s injury occurred prior to the
amendment’s effective date. The district court’s interpretation of the statute, on
the other hand, would alter the burden of Aluma’s payment obligations mid-
performance.
There are three requirements under the post-amendment law of a
reasonable or probable cause or excuse for underpayment. First, Aluma must
have undertaken a “reasonable investigation” to determine what benefits it owed
to Vitzthum. Iowa Code § 86.13(4)(c)(1). Second, Aluma must have
“contemporaneously relied” on the results of that investigation as the “actual
basis” for its underpayments. Id. § 86.13(4)(c)(2). Third, Aluma must have
“contemporaneously conveyed the basis for the denial [] of benefits to the
employee at the time of the denial . . . .” Id. § 86.13(4)(c)(3). If these
requirements are applicable, the commission must make sufficient findings of fact
to support them.
Because the commission’s conclusions of law do not sufficiently determine
the effect of the 2009 amendments and its findings of fact do not determine any
attendant substantive satisfaction of the post-amendment requirements, we
agree with the district court that the case must be remanded for further
proceedings to interpret the effect of the 2009 amendments and for a disposition
13
Aluma notes that Burton is factually distinguishable because every individual payment
occurred prior to the effective date of the amended legislation. Burton, 813 N.W.2d at
267, n.4. However, the footnote suggests the amendments would have changed the
employer’s burden for payments after the effective date. In this case, individual
payments were issued both before and after the amendment went into effect.
17
on the matter of penalty benefits for underpayments made on or after July 1,
2009.
C. Assignment of Costs
In compensation cases, “[a]ll costs incurred in the hearing before the
commissioner shall be taxed in the discretion of the commissioner.” Id. § 86.40.
If the case is later subject to judicial review, “[t]he taxation of costs on judicial
review shall be in the discretion of the court.” Id. § 86.32. We therefore review
for abuse of discretion. Robbennolt, 555 N.W.2d at 238.
We find that neither the commission nor the district court abused their
discretion in their assignment of costs. Vitzthum contends that Robbennolt, 555
N.W.2d at 238, and Solland v. Second Injury Fund of Iowa, 786 N.W.2d 248, 249
(Iowa 2010),14 mandate remand to the commission for recalculation of costs
based on her success on the merits. However, neither case issues or references
any such mandate. We find re-taxation on remand unnecessary.
It is true that, in principle, the relative success of the parties should be
considered when assigning costs. Robbennolt, 555 N.W.2d at 238. Both the
commission and the district court appropriately did so. Before the commission,
Vitzthum was successful on some claims (i.e., the weekly healing period rate
calculus) and unsuccessful on the others (i.e., her penalty benefit claims). The
commission appropriately divided the costs equally.
14
We note that the Solland court considered the taxation of costs pursuant to Iowa Code
section 625.1 (“Costs shall be recovered by the successful against the losing party.”), so
its reasoning is inapposite in this case. Here, costs were taxed according to Iowa Code
section 625.3 (“Where the party is successful as to a part of the party's demand, and
fails as to part, unless the case is otherwise provided for, the court on rendering
judgment may make an equitable apportionment of costs.”).
18
At the district court level, her success was a very narrow remand.
Because she was only partially successful, the district court has great discretion
in dividing costs. See Lake v. Schaffnit, 406 N.W.2d 437, 442 (Iowa 1987)
(holding the district court’s assignment of 100% of costs to the defendant proper
despite the fact that he was successful in ascribing 49% of the fault to the
plaintiff); see also Iowa Code § 625.3 (“Where the party is successful as to a part
of the party's demand, and fails as to part, . . . the court on rendering judgment
may make an equitable apportionment of costs”). The district court’s
apportionment of costs accounts for the fact that Vitzthum’s was relatively
unsuccessful on judicial review; her petition was denied as to all but the narrow
remand.
Neither the agency nor the district court abused their wide discretion to
assign costs because neither party entirely prevailed. To reassess those costs
or to allow Vitzthum to reargue these assignments on remand would be to allow
her to attempt to recover costs on her multitude of rejected petitions and motions.
All heretofore taxed costs are affirmed. Each party is to bear its own costs of this
appeal.
IV. Conclusion
We agree with the district court and find there is substantial evidence
supporting the appellate deputy commissioner’s final disposition on most issues
presented. First, we find there is substantial evidence supporting the
commissioner’s final calculation of the proper weekly benefit rate and amount
due. Second, there is substantial evidence supporting the appellate deputy
commissioner’s denial of penalty benefits based on a theory of delayed
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payments. Third, there is substantial evidence supporting the appellate deputy
commissioner’s denial of penalty benefits based on a theory of underpayment for
benefits paid prior to July 1, 2009. Fourth, all assignment of costs by the
commission and the district court were proper and within their discretion. We
affirm.
However, we find there is not yet sufficient evidence to support the
appellate deputy commissioner’s denial of penalty benefits based on a theory of
underpayment for benefits paid on or after July 1, 2009. The commission must
explicitly interpret the effect of the 2009 amendments relative to the facts of this
case and then expand its findings of fact to coincide with the applicable rule of
law. We affirm the district court’s order to remand for further proceedings.
AFFIRMED.