Opinion
No. 4-568 / 03-1684.
August 26, 2004.
Appeal from the Iowa District Court for Jefferson County, Annette Scieszinski, Judge.
Respondents appeal the decision of the district court reversing the ruling of the Workers' Compensation Commissioner and reinstating the decision of the deputy commissioner. REVERSED AND REMANDED.
Steven E. Ort of Bell Ort, New London, for appellants.
J.W. McGrath of McGrath McGrath, P.C., Keosauqua, and Janece Valentine of Valentine Law Office, P.C., Fort Dodge, for appellee.
Considered by Huitink, P.J., and Hecht and Eisenhauer, JJ.
I. Background Facts Proceedings
Tory Bennett was first awarded workers' compensation benefits in 1994 following a work-related injury resulting in amputation of his right arm. The arbitration decision awarding him industrial disability benefits stated:
Had the employer failed to reemploy claimant in good faith at a comparable rate of pay, the industrial disability would probably exceed 90 percent.
As a result, Bennett's benefits were based on a sixty-five-percent industrial disability.
Because Bennett's physical and mental condition declined, he sought an additional award in this review and reopening proceeding. Following a contested hearing, a deputy industrial commissioner found:
Combining the recommendations of Dr. Marsh and those of Dr. Parker, [Bennett] is able to only perform simple work tasks in a sedentary position that does not require turning his body at any time. I find that such work is so limited in quality and quantity that a reasonable stable market does not exist. I find it highly unlikely [Bennett] will be able to find such work in any recognized area of the labor market.
The deputy, citing the odd-lot doctrine, concluded Bennett was therefore totally and permanently disabled.
On appeal to the commissioner, Dexter challenged the deputy's conclusion that Bennett was entitled to total permanent disability benefits under the odd-lot doctrine. The commissioner agreed, finding Bennett "did not introduce evidence that makes a prima facie showing of permanent total disability by a bona fide effort to find work or otherwise." The commissioner concluded Bennett should be awarded benefits based on a seventy-five-percent industrial disability.
On judicial review, the district court reversed the commissioner after determining the commissioner applied the wrong legal standard in concluding Bennett was not an odd-lot employee. The court's decision also ordered reinstatement of the deputy commissioner's decision awarding Bennett total permanent disability benefits.
Dexter and its insurance carrier appeal. They claim the district court erred in finding the commissioner applied an erroneous legal standard in this case. They also claim that they met their burden to produce evidence Bennett was capable of finding suitable and available work.
II. Standard of Review
We review a district court's decision on judicial review for correction of errors at law. Heartland Express v. Gardner, 675 N.W.2d 259, 262 (Iowa 2003). We apply the standards of Iowa Code section 17A.19 (2001) in our review of workers' compensation decisions. R.R. Donnelly Sons v. Barnett, 670 N.W.2d 190, 195 (Iowa 2003). The commissioner's decision may be reversed if it is unsupported by substantial evidence in the record or characterized by an abuse of discretion. Iowa Code § 17A.19(10). Evidence is not insubstantial merely because it would support contrary inferences. University of Iowa Hosps. Clinics v. Waters, 674 N.W.2d 92, 95 (Iowa 2004).
III. The Merits
When an employee seeks an increase in workers' compensation benefits in a review-reopening proceeding, the employee must show a decreased earning capacity proximately caused by the original injury. Acuity Ins. v. Foreman, ___ N.W.2d ___, ___ (Iowa 2004). The circumstances giving rise to the decrease in earning capacity must not have been within the contemplation of the parties at the time of the original award. Id. These issues are not in dispute. The fighting issue is whether Bennett is totally permanently disabled because he is an odd-lot employee.
An employee may be considered totally disabled under the odd-lot doctrine "if the only services the worker can perform are `so limited in quality, dependability, or quantity that a reasonably stable market for them does not exist. . . .'" Guyton v. Irving Jensen Co., 373 N.W.2d 101, 105 (Iowa 1985) (quoting Lee v. Minneapolis St. Ry. Co., 41 N.W.2d 433, 436 (Minn. 1950)). The odd-lot doctrine applies when an employee is not totally physically disabled, but the employee is incapable of obtaining employment in any well-known branch of the labor market. Michael Eberhart Constr. v. Curtin, 674 N.W.2d 123, 125 (Iowa 2004). The employee is considered totally disabled because an employee with no reasonable prospects for steady employment has no material earning capacity. Guyton, 373 N.W.2d at 105.
An employee has the burden to establish a prima facie case supporting an odd-lot claim. This burden is met by proof of a "degree of obvious physical impairment, coupled with other facts such as claimant's mental capacity, education, training, or age. . . ." Id. (quoting 2 A. Larson, The Law of Workmen's Compensation, § 57.51, at 10-164.95 (1983)). The burden of producing contrary evidence then shifts to the employer requiring the employer "to show that some kind of suitable work is regularly and continuously available to the claimant." Id.
In Guyton, the court determined that a prima facie case required proof that the employee made a reasonable effort to secure employment in the area of his or her residence. Id. The supreme court has, however, relaxed this requirement by holding:
The industrial commissioner and district court ruled that Nelson has not met the threshold requirement for application of the odd-lot doctrine because he had not looked for work. However, we agree with Nelson that such proof is not an absolute prerequisite if the employee introduces other substantial evidence that he has no reasonable prospect of steady employment. . . . Any other rule would require clearly unemployable claimants to go through the futile exercise of searching for nonexistent employment.
Second Injury Fund v. Nelson, 544 N.W.2d 258, 267-68 (Iowa 1995) (citations omitted). The court determined that substantial evidence of an employee's physical impairment, intelligence, education, training, ability to be retrained, and age may be sufficient to prove a prima facie case that the employee comes within the odd-lot doctrine. Id. at 268.
Dexter claims the district court erred by finding the commissioner applied the wrong standard to determine whether Bennett proved a prima facie case within the odd-lot doctrine. We agree with the district court that the commissioner misapplied the applicable standard in odd-lot cases by using the Guyton job search standard, rather than analyzing the facts under the standard announced in Nelson. The commissioner clearly determined Bennett did not come within the odd-lot doctrine because he had not made a bona fide effort to find work. Furthermore, there is no indication the commissioner considered any other relevant factors, such as Bennett's education or ability to be retrained, prior to rejecting Bennett's odd-lot theory.
We disagree with the court's conclusion, however, that the proper remedy in this case is to reinstate the decision of the deputy workers' compensation commissioner. We may reverse, modify, or remand to the commissioner for further proceedings if that agency's action was affected by an error of law, or was not supported by substantial evidence. Quaker Oats Co. v. Ciha, 552 N.W.2d 143, 150 (Iowa 1996). We are not free to substitute our findings of fact for those of the commissioner. See Wilson v. Good Will Publishers, 671 N.W.2d 479, 482 (Iowa 2003). We conclude this case should be remanded to the commissioner for application of the correct standard to determine whether Bennett has established a prima facie case that he comes within the odd-lot doctrine.
Because we have determined this case should be remanded to the commissioner, we do not address the appellants' claim regarding whether the employer met its burden of production of evidence to show that some kind of suitable work is regularly and continuously available to Bennett. The commissioner may consider this issue if he determines a prima facie case for the odd-lot doctrine has been established.
We reverse the decision of the district court and remand to the Workers' Compensation Commissioner. We do not retain jurisdiction. Costs of this appeal are assessed to appellants.