Opinion
No. 6-032 / 05-1097
Filed March 1, 2006
Appeal from the Iowa District Court for Woodbury County, John D. Ackerman, Judge.
IBP, Inc. appeals the district court's ruling on petition for judicial review of the worker's compensation commissioner's appeal decision. AFFIRMED.
James Drury, IBP, Inc., Dakota City, Nebraska, for appellant.
Dennis McElwain, Smith McElwain Law Office, Sioux City, for appellee.
Heard by Sackett, C.J., and Mahan and Eisenhauer, JJ.
IBP, Inc. appeals the district court's ruling on petition for judicial review of the worker's compensation commissioner's appeal decision. IBP argues the district court erred when it found the commissioner's decision was not supported by substantial evidence. It argues the district court was also in error when it (1) reversed the commissioner's decision that Thomas O'Donnell sustained a fifty-percent industrial disability and (2) found O'Donnell is permanently and totally disabled under the odd-lot worker doctrine. We affirm.
I. Background Facts and Proceedings
Thomas O'Donnell was born on May 2, 1944. He graduated from high school and both worked in construction and drove an armored truck. In 1970 he suffered a non-occupational low back injury. The injury required a lumbar discectomy; however, he had no permanent work restrictions or limitations as a result.
He began working at IBP in March 1974. During his twenty-eight years with the meat packing plant, he worked a variety of jobs on the slaughter side of the plant. He also sustained multiple work-related injuries. In 1988 while working "pulling paunches," he injured his lower back. The injury required a two-level lumbar fusion. It resulted in a twenty-five-percent partial impairment of the body as a whole and a permanent lifting restriction not to exceed forty pounds. Also in 1988, O'Donnell injured his left knee. That injury required several surgeries from 1989 through 1994. O'Donnell's physicians imposed work restrictions including lifting no more than forty pounds, using a cane when needed, and walking and standing as tolerated.
In 1992 the IBP medical case manager assisted O'Donnell in finding sedentary or light work due to his limitations. He moved to a "honeycomb" position, where he separated a corner of the stomach. He was required to stand, but could lean against a railing adjacent to his work station. In 1998 O'Donnell began working in the frego unit. The job required him to ensure carcasses on the line were properly spaced. If, for example, two carcasses were bunched together, O'Donnell was required to separate them by reaching overhead with a steel rod. There he was permitted to sit in a chair about half the time. In 1999 and 2003 he injured his right knee. That injury also required surgery. Physicians began suggesting total knee replacement in 2000. O'Donnell reported severe difficulty both navigating the plant floor and ascending and descending stairs.
In February 2001 O'Donnell suffered a severe injury to his left shoulder. Surgery was required to repair a labral tear, a parital tear of the biceps tendon, and a near full-thickness tear of the supraspinatus. A subacromial decompression was also performed. O'Donnell's surgeon found him to be a maximum medical improvement in December 2001. O'Donnell returned to work with a partial impairment rating of five percent of the body as a whole, but without restrictions.
O'Donnell continued working in the frego unit despite pain in his shoulder. In September 2002 his job duties were expanded to include stamping carcasses. As a result, O'Donnell could no longer use a chair. In October he reported pain in his right hand. Physicians determined the repetitive stamping motions resulted in a four-percent partial impairment of the right hand.
On October 30, 2002, O'Donnell was laid off because no light duty was available and IBP could not accommodate his working restrictions. In addition to the other restrictions noted above, O'Donnell's restrictions also included no bending, twisting, squatting, kneeling, or crawling, and sitting or standing as needed. He was terminated on October 27, 2003, because his leave of absence had expired.
O'Donnell filed a petition with the worker's compensation commissioner in February 2002. He alleges that as a result of his numerous injuries, he is permanently and totally disabled and an odd-lot worker. At his hearing, O'Donnell testified he is no longer able to perform any job other than the one he was performing in the frego unit. Further, he was only able to perform that job with the chair accommodation. Carmen Hacht, a union ergonomic specialist, testified that the chair provided O'Donnell was an accommodation not normally associated with any job in the plant.
A report from Dr. James Rochelle, a physician who conducted an independent examination of O'Donnell was also in evidence. According to Dr. Rochelle,
Range of motion is internal rotation 80°; external rotation 80°; abduction 154°; adduction 45°; flexion 110°; extension 50°. His strength is rather deficient, especially on resisted abduction. He certainly doesn't have good strength for lifting activity straight up overhead. His pain diagram shows significant pain in both the front and posterior aspect of the shoulder. His pain level ranges between two and six, requiring that he take Aleve two or three times a day.
Dr. Rochelle also noted O'Donnell is able to perform work overhead only occasionally. He also imposed restrictions limiting O'Donnell from lifting more than ten pounds and prohibiting frequent shoulder activity and repetitive shoulder movement more than one-third of the workday.
Michael Newman, a vocational rehabilitation expert, provided a report, stating,
Physically, Mr. O'Donnell is limited to sedentary employment. His work experience limits him to unskilled work. Review of the labor market data coupled with Mr. O'Donnell's educational training and work experience would indicate there are no reasonably attainable jobs for this worker in my opinion. It is further my opinion that Mr. O'Donnell meets the definition of an "odd-lot" worker, which in effect states there is no reasonable probability that he can expect to sell his services in a competitive labor market undistorted by such factors as business booms, sympathy of a particular employer, or friends, good luck, or superhuman efforts to rise above his vocational handicaps.
Also introduced into evidence was a job hazard analysis of O'Donnell's frego job conducted in 2001 by Roger Svec, P.T. After visiting on-site, talking with O'Donnell, and viewing a videotape of the job being performed, Svec concluded the frego job did not involve any significant shoulder, forearm, or wrist stressors.
After reviewing the relevant law concerning the odd-lot doctrine and apportionment rules, the deputy commissioner determined O'Donnell had not proven he was permanently and totally disabled. He noted all of O'Donnell's injuries, but determined he was no longer working at IBP due to the injury to his right hand. He also noted the vocational rehabilitation study showed there were no jobs available to O'Donnell, but stated O'Donnell had not looked for alternative employment within his restrictions. The deputy concluded:
The claimant has not shown that he is permanently and totally disabled, either under the odd-lot doctrine or under standard total disability analysis. He has work restrictions, but they are not severe. He has a rating of impairment, but it is not high. He has a multitude of prior conditions that must also be considered under the full responsibility rule, however. His motivation to apply for other jobs has not been good, but if he were to do so, an employer would see those multiple conditions and he would not be a very attractive candidate for any type of the factory, packing house, or assembly line type of work that makes up most of his work experience in the past.
His age of 59 works against him. His education is limited to a high school diploma.
Based on these and all other appropriate factors of industrial disability, it is found that as a result of his work injury, the claimant has an industrial disability of 50 percent.
The commissioner affirmed the deputy's decision on appeal.
On petition for judicial review, however, the district court reversed. According to the district court, the commissioner's decision was not supported by substantial evidence under Iowa Code section 17A.19(10)(f) (2001); was based on an irrational, illogical, or wholly unjustifiable application of law to fact under section 17A.19(10)(m); and was otherwise unreasonable, arbitrary, capricious, or an abuse of discretion under section 17A.19(10)(n). IBP appeals.
II. Standard of Review
We review the district court's ruling by applying the standards of section 17A.19 to the agency's action to determine whether our conclusions are the same as those reached by the district court. Univ. of Iowa Hosp. and Clinics v. Waters, 674 N.W.2d 92, 95 (Iowa 2004). If they are, we affirm; if not, we reverse. Hill v. Fleetguard, Inc., 705 N.W.2d 665, 669 (Iowa 2005). We may affirm, remand, reverse, modify, or grant other appropriate relief if the agency action is in violation of any of the fourteen grounds listed in section 17A.19(10). IBP specifically claims that the district court erred in determining the commissioner's decision lacked substantial evidence under section 17A.19(10)(f). Additionally, the district court determined the commissioner's application of the law to the facts was "irrational, illogical, or wholly unjustifiable" under section 17A.19(10)(m), and his decision was "unreasonable, arbitrary, capricious, or an abuse of discretion" under section 17A.19(10)(n).
First, we are bound by the agency's findings if they are "supported by substantial evidence when the record is viewed as a whole." Simonson v. Snap-On Tools Corp., 588 N.W.2d 430, 434 (Iowa 1999). Evidence is substantial if a reasonable person would find it adequate to reach a conclusion. Id. Substantial evidence need not amount to a preponderance, but must be more than a scintilla. Elliot v. Iowa Dep't of Transp., 377 N.W.2d 250, 256 (Iowa Ct.App. 1985). Further, we are to give deference to the fact-finding of the agency as we would a jury verdict. IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001). This deference includes the agency's credibility determinations. Clark v. Iowa Dep't of Revenue Fin., 644 N.W.2d 310, 315 (Iowa 2002). Our review of the record should be fairly intensive. Wal-Mart Stores, Inc. v. Caselman, 657 N.W.2d 493, 499 (Iowa 2003). We must consider all of the evidence; even that which detracts from the agency's findings is not insubstantial merely because it supports a contrary conclusion. Id. However, if there is enough evidence to support the findings, we must affirm the agency's decision even if we might have found otherwise. Harpole, 621 N.W.2d at 420.
Second, factual determinations in a worker's compensation case are vested by law in the discretion of the worker's compensation commission. Mycogen Seeds v. Sands, 686 N.W.2d 457, 465 (Iowa 2004). In order to determine a worker's right to benefits, the commissioner must apply the law to the facts. Id. Because the determination of facts is within the discretion of the agency, so too is its application of law to facts. Id.; Clark v. Vicorp Restaurants, Inc., 696 N.W.2d 596, 604 (Iowa 2005). Therefore, we may only reverse the agency's application of the law to the facts if we find it to be "irrational, illogical, or wholly unjustifiable." Iowa Code § 17A.19(10)(m); Mycogen Seeds, 686 N.W.2d at 465.
Finally, an abuse of discretion occurs when the agency's exercise of discretion is based on untenable grounds or is clearly erroneous. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 630 (Iowa 2000). Such abuse is "synonymous with unreasonableness," and is "clearly against reason and evidence." Dico, Inc. v. Iowa Employment Appeal Bd., 573 N.W.2d 352, 355 (Iowa 1998) (quoting Stephenson v. Furnas Elec. Co., 522 N.W.2d 828, 831 (Iowa 1994)). "Arbitrary" or "capricious" means the agency acted without regard to the law or facts. Bernau v. Iowa Dep't of Transp., 580 N.W.2d 757, 764 (Iowa 1998). We therefore concentrate on whether the agency's decision is both rational and based in law and fact. Dico, 576 N.W.2d at 355.
III. Merits
IBP finds fault with the district court on three of its primary factual determinations: (1) the basis of O'Donnell's medical leave in November 2002; (2) the severity of O'Donnell's restrictions and impairment; and (3) O'Donnell's attempt to obtain other employment. IBP uses these three factual disputes to argue the deputy properly applied the full-responsibility rule and district court erred in concluding O'Donnell was an odd-lot worker. We review these legal issues, and their corresponding factual disputes, in turn.
A. Full-Responsibility Rule
IBP argues the deputy commissioner's discussion of the full-responsibility rule and his documentation of O'Donnell's injuries indicate he properly applied the full-responsibility rule. Under the full-responsibility rule, "[a]part from statute, in a situation of two successive work-related injuries, the employer is generally held liable for the entire disability resulting from the combination of the prior disability and the present injury." Celotex Corp. v. Auten, 541 N.W.2d 252, 256 (Iowa 1995). IBP points out the deputy reiterated much of the rule. He listed all of O'Donnell's injuries. He also wrote: "He has a multitude of prior conditions that must also be considered under the full responsibility rule."
Our trouble, like that of the district court, is with the deputy's factual determinations. First, he determined that "[O'Donnell] is no longer working for the defendant employer not because of his prior conditions or his current injury, but due to his right hand injury, which arose later and had been settled to the satisfaction of the parties." This determination is not supported by substantial evidence. See Iowa Code § 17A.19(10)(f). First, had O'Donnell only had a hand injury, he would have had a job. Ergonomics specialist Hacht testified that if O'Donnell had only suffered a wrist condition, he would have been placed on the light duty program where one-armed work was available. Second, O'Donnell testified that even with a chair accommodation on the frego job, the added responsibility of stamping carcasses required him to stand about eighty percent of the time. This standing requirement violated his other medical restrictions. Finally, O'Donnell told the deputy at his hearing he was forced to leave work due to the combination of all his medical restrictions:
DEPUTY: Okay. I'm a little unclear what happened in between. When did you — how did you come to stop working, physically working at the plant? Did you decide that you couldn't do it?
O'DONNELL: No, I went to the dispensary with a problem with the right hand again, and she went through her procedures, and then I was told to — I had to go up and see the people in personnel.
DEPUTY: When was that?
O'DONNELL: The 31st of October.
DEPUTY: Okay. But that is because of something in your right hand?
O'DONNELL: Well, I went to the dispensary to report it, and they said after — when they finished their thing down there they said they want you up in personnel.
DEPUTY: And what happened there?
O'DONNELL: That is when they said because of all my restrictions and everything we don't have any light-duty work for you and —
DEPUTY: That is the last day you physically worked?
O'DONNELL: Yes, October 31st, and it was probably at lunch time, which would be probably about 11:00 or 11:30.
DEPUTY: The year went by and under the contract your employment was —
O'DONNELL: Self-termination because you are not back on the job within the 12 months allotted.
DEPUTY: Okay. So the personnel department basically said you don't have a job here anymore because of your restrictions?
O'DONNELL: Basically, yes.
Second, the deputy determined that "[O'Donnell] has work restrictions, but they are not severe. He has a rating of impairment, but it is not high." This determination is also not supported by substantial evidence. See Iowa Code § 17A.19(10)(f). Dr. Rochelle determined, as noted above, O'Donnell had a decreased range of motion in his shoulder. Further, he was constantly in pain, requiring him to take Aleve two to three times a day. Dr. Rochelle recommended O'Donnell should not be expected to lift more than ten pounds, and then only occasionally. He also restricted O'Donnell from frequent shoulder activity, maintaining he only perform occasional repetitive shoulder movement less than thirty-three percent of the workday. Additionally, O'Donnell had restrictions from his low back injury including a twenty-five-percent impairment rating and a forty-pound lifting limit. From the six surgeries he endured on his left knee, he had a thirty-nine-percent impairment rating, a forty-pound weight limit, and should have been allowed to walk, stand, sit, or use a cane as needed.
It is not as though the evidence in the record points to two potentially reasonable but inconsistent conclusions; it is that it does not support the deputy's conclusions at all. Review of the record shows O'Donnell's cumulative injuries were severe, and the combination of those injuries caused him to lose his job. Thus, the deputy's factual determinations were not supported by substantial evidence. See Iowa Code § 17A.19(10)(f).
If these were the factual determinations that provided the undercarriage of the deputy's legal conclusion concerning IBP's responsibility, we cannot conclude he properly applied the full responsibility rule. See Iowa Code § 17A.19(10)(m). Under that rule, the employer is responsible for the entire disability resulting from the combination of previous work injuries. O'Donnell alleged in his amended petition his injures included his "left shoulder, back, arm and hand injuries, in combination with [his] earlier work-related knee and back injuries." What the deputy considered to be O'Donnell's "current injury," or why he parsed the injuries when the rule clearly requires them to be considered in total, is unclear. We must conclude with the district court that "the deputy commissioner erroneously applied the law in not affording proper consideration to O'Donnell's cumulative injuries under the full-responsibility rule."
B. Odd-lot Worker Doctrine
IBP argues the district court erred in discounting the factual findings the deputy made in determining whether O'Donnell is an odd-lot worker. Again, our problem is both the lack of substantial evidence leading to the deputy's factual determinations and the erroneous application of the law to the facts.
"An odd-lot employee is one who is incapable of finding work in any established branch of the labor market." Second Injury Fund of Iowa v. Nelson, 544 N.W.2d 258, 267 (Iowa 1996). The odd-lot worker's skills and services 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 worker is considered totally disabled because a lack of steady employment precludes any material earning capacity. Id.; Second Injury Fund, 544 N.W.2d at 267.
In order to qualify for odd-lot status, a worker must establish a prima facie case "by producing substantial evidence that the worker is not employable in the competitive labor market." Guyton, 373 N.W.2d at 106. In order to establish the prima facia case, "the employee will want to demonstrate a good faith, unsuccessful effort to find steady employment since such evidence, although not determinative, is certainly persuasive." Second Injury Fund, 544 N.W.2d at 268. Our supreme court has held, however, that actually looking for work is not required. Id. at 267. A worker must introduce other substantial evidence indicating there is no prospect for steady employment. Id. (finding evidence sufficient where worker introduced evidence from two vocational rehabilitation experts and a doctor). The court may also consider factors such as the worker's age, level of education, level of training, vocational experience, mental capacity, work history, other physical impairment, and ability to be retrained. See id.; Guyton, 373 N.W.2d at 106.
Once the prima facie case is established, the burden shifts to the employer to produce evidence of suitable employment. Guyton, 373 N.W.2d at 106. "The practical effect of this burden-shifting rule is that when a claimant is an odd-lot employee, we presume that no jobs are available unless the employer introduces evidence of such work." Second Injury Fund, 544 N.W.2d at 267; see Michael Eberhart Const. v. Curtin, 674 N.W.2d 123, 126 (Iowa 2004). The burden of persuasion as to industrial liability, however, always rests with the worker. Second Injury Fund, 544 N.W.2d at 267.
O'Donnell's vocational rehabilitation expert reported he did not think it likely O'Donnell would be able to find additional work. Further, O'Donnell presented evidence he could perform the only job he could, the frego job, because he was allowed a chair as an accommodation. Due to the addition of his stamping responsibilities, the accommodation was no longer applicable. Finally, the deputy commissioner himself concluded:
[O'Donnell] has a multitude of prior conditions that must also be considered under the full responsibility rule, however. His motivation to apply for other jobs has not been good, but if he were to do so, an employer would see those multiple conditions and he would not be a very attractive candidate for any type of the factory, packing house, or assembly line type of work that makes up most of his work experience in the past.
His age of 59 works against him. His education is limited to a high school diploma.
(Emphasis added.)
First, the deputy commissioner's conclusion that O'Donnell lacked motivation is not supported by substantial evidence. See Iowa Code § 17A.19(10)(f). While O'Donnell did not look for work between his termination and his hearing, he did spend several months going through medical referrals for his right hand injury. He also underwent knee replacement surgery in September 2003 and appears to have been still recuperating at the time of the hearing. O'Donnell may not have looked for work, but no evidence indicates he lacked motivation to do so.
Second, by ignoring the other factors presented to indicate O'Donnell's inability to obtain employment, the deputy incorrectly applied the law to the facts. It has been previously determined that "it is too mechanistic to equate a current inability to obtain employment with the odd-lot doctrine." Second Injury Fund, 544 N.W.2d at 268. Indeed, it seems unrealistic to require O'Donnell to look for a job even the deputy commissioner did not believe existed. Though the present inability to find a job is a factor, it is not determinative. Id. Thus, by making O'Donnell's failure to look for work the single determinative factor in the analysis, the deputy failed to correctly apply the law.
Third, O'Donnell's continued employment after his shoulder injury is not evidence that employment existed for him in the job market. The only reason he was able to continue in that job is because he was provided a chair. Ergonomics specialist Hacht confirmed the chair was an accommodation not normally associated with the frego job, or any other job in the plant. In order for an accommodated job to be considered a factor in discerning a worker's earning capacity, it must appear the accommodation would be available to the worker in the competitive job market. See Murillo v. Blackhawk Foundry, 571 N.W.2d 16, 18 (Iowa 1997). There is no evidence in the record suggesting the accommodation is available in the competitive job market. Therefore, we cannot consider the fact that O'Donnell continued his employment at the plant after his injury as probative on his earning capacity.
Given O'Donnell's age, physical restrictions, education, and vocational skills, together with the opinion of the vocational expert, we conclude with the district court that O'Donnell presented a prima facie case of being an odd-lot worker. Once O'Donnell made his prima facie showing, the burden shifted to IBP to show there were jobs available that O'Donnell could perform. IBP made no such showing. In fact, IBP initially laid O'Donnell off because there was no work he could perform. Nor did IBP introduce any evidence rebutting the opinion of the vocational rehabilitation expert. We are therefore required to presume there was no suitable work regularly and continuously available that O'Donnell could perform. See Second Injury Fund, 544 N.W.2d at 267.
In order to conclude IBP is liable as a matter of law for O'Donnell's permanent and total disability, we must determine whether O'Donnell's "disability is caused by conditions and injures for which [IBP] must compensate him." See id. Neither of the parties dispute O'Donnell's injuries are work-related. We decided the full-responsibility rule applies above. Therefore, we conclude IBP is liable for O'Donnell's permanent and total disability.
C. Arbitrary and Capricious
As noted above, the deputy made several factual findings not only unsupported by substantial evidence, but unsupported by any evidence at all. Further, the deputy erroneously applied the law concerning both the full-responsibility rule and the odd-lot doctrine. We agree with the district court that this decision constituted an unreasonable, arbitrary, or capricious action on behalf of the agency. See Iowa Code § 17A.19(10)(n). For this reason, in addition to the reasons stated above, we affirm the district court's well-reasoned ruling.
AFFIRMED.
Eisenhauer, J., concurs; Sackett, C.J., concurs in part and dissents in part.
I concur in part and dissent in part. I concur with the majority that the deputy misapplied the full responsibility rule. I would remand for its proper application.