Opinion
No. 3-220 / 02-0950.
Filed June 25, 2003.
Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg, Judge.
A school district and its workers' compensation carrier appeal from a district court ruling that affirmed an award of workers' compensation benefits to an employee of the district. The employee cross-appeals the district court's reversal of a penalty benefit award. AFFIRMED.
E. J. Giovannetti and Anne Clark of Hopkins Huebner, P.C., Des Moines, for appellants.
Michael McEnroe of Dutton, Braun, Staack Hellman, P.L.C., Waterloo, for appellee.
Heard by Mahan, P.J., and Miller and Vaitheswaran, JJ.
The Oelwein Community School District and its workers' compensation carrier, EMC Insurance Companies, appeal from a district court ruling that upheld an agency award of workers' compensation benefits to Julie Williams, a district employee. Williams cross-appeals as to the court's reversal of a penalty benefits award. We affirm the district court on both points.
I. Background Facts and Proceedings. In December 1996 Julie Williams, a teacher and drama and speech director for the Oelwein Community School District, had non-work-related bunion surgery on her right foot. In January 1997 she slipped and fell while at work, re-injuring her right foot. A second surgery was performed in February 1997. Williams then suffered a non-work-related slip and fall, in January 1998. The fall bruised but did not re-injure her right foot. Although Williams did not experience any specific back trauma during the 1998 fall, she began having leg and back problems. She was ultimately diagnosed with a left L5 radiculopathy and L4-5 disc extrusion. She underwent surgery, but experienced another disc extrusion.
Williams filed a workers' compensation claim against the school district and EMC Insurance Companies (collectively EMC), in April 1999. She asserted that her foot and back problems were caused by the 1997 work injury. At the September 2000 arbitration hearing Williams offered the testimony of her podiatrist, Dr. Lantz. Dr. Lantz opined that the second foot surgery was necessitated by damage inflicted during the 1997 fall, and that as a result of the second surgery, there was a change in Williams's gait. He opined that this change in gait was a proximate cause of her back problems. No other expert opinion was presented regarding the cause of Williams's radiculopathy and disc extrusions.
Williams's back surgeon, Dr. Abernathey, gave no opinion as to the cause of her back problems. Dr. Gorsche, an orthopedist retained by EMC, contradicted Dr. Lantz's findings as to Williams's foot injury, but gave no opinion as to the cause of Williams's back problems. Although Dr. Gorsche examined Williams after her back surgery, the only reference in his report to Williams's back was a statement that he found "no abnormalities with the knee, hip or back."
The deputy commissioner found that Williams's foot impairment was causally related to the 1997 at-work fall, and relied on Dr. Lantz's testimony to find that the change in Williams's gait had caused her back problems. Based on evidence that Williams's back ailment prevented her from sitting for long periods of time or lifting heavy objects, the deputy concluded that Williams had sustained a ten-percent industrial disability. The deputy calculated compensation under Iowa Code section 85.36(6) (1999), but declined to award penalty benefits.
EMC appealed the finding that Williams's back problems were caused by her 1997 work injury, and both EMC and Williams appealed the weekly benefits calculation. Williams also argued penalty benefits should have been awarded pursuant to section 86.13. The agency affirmed the causation finding, and the use of section 85.36(6) to calculate Williams's weekly benefits, but arrived at a higher benefit amount. It also imposed penalty benefits because, in conflict with established agency precedent, EMC had not calculated Williams's weekly benefits pursuant to section 85.36(6).
On judicial review, the district court affirmed the causal finding, but remanded Williams's case for recalculation of weekly benefits in accordance with the recent holding in Area Education Agency 7 v. Bauch, 646 N.W.2d 398 (Iowa 2002). It also reversed the imposition of penalty benefits, determining that, in light of the holding in Bauch, there had been a good faith dispute over the proper method of benefit calculation. EMC appeals from the court's ruling, arguing there was not substantial evidence that Williams's back problems were caused by her 1997 work injury. Williams's cross-appeals, contending the district court erred in reversing the agency's award of penalty benefits.
II. Scope of Review . Review of agency actions is limited to correcting errors of law. IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001). We will grant relief in a contested case if substantial rights of the petitioner have been prejudiced because the agency action is unsupported by substantial evidence in the agency record, when that record is viewed as a whole. Iowa Code § 17A.19(8)(f). Evidence is substantial if it allows a reasonable person to reach the same conclusion as the agency. Grundmeyer v. Weyerhaeuser Co., 649 N.W.2d 744, 748 (Iowa 2002). We will also grant relief if substantial rights of the petitioner have been prejudiced because the agency action is characterized by an abuse of discretion. Iowa Code § 17A.19(8)(g).
III. Substantial Evidence . EMC does not challenge the finding that Williams's second foot surgery was proximately caused by the 1997 work injury or that, as a result of the surgery, her right foot was permanently impaired. Nor does it appear to attack the finding that Williams suffered from permanent back problems. Rather, EMC focuses on whether there was substantial evidence that Williams's back problems were caused by her work injury. Proof of such causation is generally within the domain of expert testimony. Dunlavey v. Economy Fire Cas. Co., 526 N.W.2d 845, 853 (Iowa 1995). The only expert testimony or evidence tying Williams's back problems to her work injury was provided by Dr. Lantz.
A. Qualification of Dr. Lantz . EMC first argues the agency erred in admitting Dr. Lantz's testimony regarding the cause of Williams's back problems, because he was not qualified to render an opinion on the issue. The admission of expert testimony regarding causation is left to the discretion of the agency. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 631 (Iowa 2000). The agency's determination that Dr. Lantz was qualified to provide an opinion as to the cause of Williams's back problems is subject to reversal only if the agency exercised its discretion on untenable grounds or its exercise of discretion was otherwise clearly erroneous. Id. at 630.
EMC contends that because Dr. Lantz is a podiatrist, his expertise must be limited to areas affecting the foot and leg. In Iowa, however, the standard for admission of opinion testimony is a liberal one. Id. Under Iowa Rule of Civil Procedure 5.702 an expert's qualification is judged, not by his title, but by the degree of his knowledge, education, training, skill, and experience. These concepts "are too broad to allow distinctions based on whether or not a proposed expert belongs to a particular profession or has a particular degree." Hutchison v. American Family Mut. Ins. Co., 514 N.W.2d 882, 887-88 (Iowa 1994). We therefore assess the agency's decision to admit Dr. Lantz's testimony by looking to Dr. Lantz's knowledge, education, training, skill and experience.
Dr. Lantz admitted that he did not routinely examine backs in detail, was not qualified to treat and did not treat back ailments, and did not give back impairment ratings. He did testify, however, to having three years of training in biomechanics, or the "relationship of any joint movement in any extremity in relation to the rest of the body." He also testified that he is allowed to diagnose vascular and neurological conditions requiring referrals. Dr. Lantz routinely sees and refers for consultation knee, hip and back problems that occur when "foot function becomes impaired," and patients with knee, hip and back problems are often referred to him because their feet are being affected by the problems in the other areas of their bodies.
We agree with EMC that this is not overriding evidence of Dr. Lantz's qualification to opine on the cause of Williams's back problem. The facts must be viewed, however, in light of the expanded scope of evidence in agency proceedings. Al-Gharib, 604 N.W.2d at 630. Unlike a district court, an agency is not bound by technical rules of evidence, and can consider evidence that might not be admissible in a jury trial. Id. Given the liberal and discretionary standard to be applied in this case, we cannot conclude the agency abused its discretion in finding Dr. Lantz qualified to render an opinion as to the cause of Williams's back problems.
B. Unfair Surprise . EMC argues that even if Dr. Lantz was qualified to render the opinion, that opinion should have nevertheless been excluded, because it constituted unfair surprise. It is arguable that, because this issue was not raised before the deputy, it is not preserved for our review. See McSpadden v. Big Ben Coal Co., 288 N.W.2d 181, 187 (Iowa 1980) (finding failure to object at the time the testimony was admitted precluded opponent from curing defect, thus waiving error). Even if the issue was properly preserved, it is without merit.
Exclusion of Dr. Lantz's testimony would have been appropriate only if the admission of his testimony worked to EMC's prejudice. Schoenfeld v. FDL Foods, Inc., 560 N.W.2d 595, 598 (Iowa 1997). This is a matter within the agency's discretion. Id. Although EMC was not specifically apprised that Dr. Lantz had an opinion as to the cause of Williams's back injury, we cannot conclude that the admission of his testimony was on grounds or for reasons clearly untenable or unreasonable. See id.
EMC knew, as early as 1997, of Dr. Lantz's concern that Williams's permanent foot impairment "could affect her lower extremity and possibly her low back as well." It was also aware that Williams claimed a work-related back impairment and resulting industrial disability, and was provided the medical records relating to Williams's back problem and resulting surgery. EMC was informed that Dr. Lantz would testify during the hearing, and conducted a pre-hearing deposition to explore his testimony. It was apprised of Williams's change in gait. EMC had ample opportunity to obtain further evidence regarding Williams's claimed back impairment, but did not do so. We find no abuse of discretion in the agency's action.
C. Causation . Finally, EMC agues that even if Dr. Lantz's testimony was admissible, the record did not contain substantial evidence that Williams's back problems were proximately caused by her 1997 work injury. The testimony of Dr. Lantz, and Williams's own testimony about how her foot problems affected her ability to walk, provided substantial evidence that the change in gait was caused by the work injury. See Christensen v. Snap-On Tools Corp., 554 N.W.2d 254, 257 (Iowa 1996) ("Lay witness testimony is both relevant and material upon the cause and extent of injury."). The real issue is whether there was substantial evidence that the change in Williams's gait was a substantial contributing factor to her back impairment. See, e.g., Blacksmith v. All-American, Inc., 290 N.W.2d 348, 354 (Iowa 1980).
Dr. Lantz did not treat or even examine Williams's back, as Williams never presented to Dr. Lantz with back-related complaints. Dr. Lantz did, however, use biomechanics to explain how a change in gait could cause a herniated disc, and opined that, more likely than not, Williams's change in gait was a substantial contributing factor to the development of her current back condition. While he conceded that disc problems could be caused by any type of abnormal movement, Williams testified that she had done nothing out of the ordinary that might have led to disc herniation. Dr. Lantz agreed, based on his review of Williams's medical records, that there was no evidence of any other cause of her back problems. His opinion as to causation was uncontroverted.
While the evidence of causation is less than overwhelming, assessing the weight of the evidence is within the exclusive domain of the agency. Burns v. Board of Nursing, 495 N.W.2d 698, 699 (Iowa 1993). Courts are not allowed to reassess the weight of the evidence upon review. Christensen v. Snap-On Tools Corp., 602 N.W.2d 199, 201 (Iowa Ct.App. 1999). The agency may accept or reject Dr. Lantz's testimony, in whole or in part. See Sherman v. Pella Corp., 576 N.W.2d 312, 321 (Iowa 1998). The agency, as the fact finder, determines the weight to be afforded to his testimony, given the accuracy of the facts relied upon and other surrounding circumstances. Id. It is also allowed to utilize its own experience, technical competence, and specialized knowledge in evaluating the evidence before it. Iowa Code § 17A.14(5). Under such a standard, the record contains substantial evidence in support of the agency's causal finding.
IV. Penalty Benefits . Penalty benefits are awarded if all or part of an employee's benefits are delayed or withheld without reasonable or probable cause or excuse. See Iowa Code § 86.13. A reasonable excuse exists if the issue is "fairly debatable." Christensen v. Snap-On Tools Corp., 554 N.W.2d 254, 260 (Iowa 1996). Here, the agency awarded penalty benefits because EMC calculated weekly benefits in a manner contrary to agency precedent, resulting in a lower benefit amount. However, that agency precedent has been challenged, and at least partially invalidated.
In Area Education Agency 7 v. Bauch, 646 N.W.2d 398, 402 (Iowa 2002), our supreme court held that calculation of an employee's weekly earnings under section 85.36 is governed by the method of paying those earnings to the employee. Thus, an educator's wages are not to be calculated under the daily formula found in section 85.36(6) merely because her wages arguably accrued on a daily basis. Id. Rather, the agency should apply the formula under section 85.36 that corresponds to the frequency of payment. Id. Williams was paid, not on a daily basis, but semimonthly. Notwithstanding agency precedent, the method of benefit calculation was fairly debatable, and penalty benefits were not appropriate.
When the district court remanded this matter for recalculation, it directed that benefits be determined according to section 85.36(4), the subsection applied in Bauch. See Bauch, 646 N.W.2d at 402. However, Bauch was paid on a monthly basis. Id. As noted above, Williams was paid semimonthly. Compare Iowa Code § 85.36(4) (setting formula for employee who is paid on a monthly basis) with Iowa Code § 85.36(3) (setting formula for employee who is paid on a semimonthly basis).