Opinion
No. 1-467 / 00-1620.
Filed January 28, 2002.
Appeal from the Iowa District Court for Winnebago County, JAMES M. DREW, Judge.
The petitioner appeals and the respondent cross-appeals from the district court's ruling on judicial review affirming and remanding the workers' compensation commissioner's award of industrial disability benefits to the petitioner. AFFIRMED IN PART, REVERSED IN PART AND REMANDED WITH INSTRUCTIONS.
Mark S. Soldat, Algona, for appellant.
Harry W. Dahl of Harry W. Dahl, P.C., Des Moines, for appellees.
Heard by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
Sharon Sylvara and her former employer and its insurance carrier all seek further judicial review of an industrial commissioner's decision. They challenge the commissioner's: (1) findings on the nature and extent of her injury, industrial disability, and healing period benefits; (2) award of penalty benefits; and (3) assessment of fees, expenses, and costs. We affirm in part, reverse in part, and remand with instructions.
I. Background Facts and Proceedings
Sylvara worked as a home health care aide for Hancock/Winnebago Counties Home Health Care Aide and Nursing Services, where she primarily performed housekeeping services. She began experiencing arm, neck, and shoulder pain that resulted in a medical restriction on her work hours. Ultimately, health care professionals expanded the restriction on hours to a temporary restriction on her work there. Sylvara did not return to the job.
In 1996, Sylvara filed a workers compensation claim against Hancock and its insurance carrier, ITT Hartford, alleging she sustained a cumulative work-related injury to her right shoulder, back, neck, and upper extremities that caused her permanent disability. The industrial commissioner, by delegation to a deputy commissioner, issued a final agency decision determining Sylvara sustained a work-related injury that resulted in a fifteen percent industrial disability. The commissioner also awarded healing period benefits and found the employer had delayed and underpaid some compensation, entitling Sylvara to penalty benefits. Sylvara filed a petition for rehearing which the commissioner partially granted. Both parties sought judicial review.
In the remainder of the decision, both will be referred to as Hancock.
The commissioner awarded interest on the penalty benefits and clarified the award of temporary partial disability benefits.
The district court affirmed the commissioner's ruling but remanded the case to the agency for a clearer explanation of its penalty award. Sylvara appealed and Hancock cross-appealed. The parties raise a host of issues falling into the following general categories: (1) challenges based on the asserted absence of substantial evidence to support the commissioner's determinations; (2) challenges to the penalty benefit award; and (3) challenges to the allocation or non-allocation of fees, expenses, and costs.
II. Substantial Evidence Issues
A. Substantial Evidence Standard . As a preliminary matter, the parties maintain that the district court applied an incorrect standard in evaluating the agency record. Specifically, they assert that the court was required to consider the agency record as a whole, not just the record supporting the agency findings.
In support of this proposition, the parties cite a recent amendment to the Iowa Administrative Procedure Act that expressly requires a court to review all the relevant evidence which detracts from, as well as supports, the agency decision. See Iowa Code § 17A.19(10)(f)(3) (1999 Supp.). The cited amendment applies only to "agency proceedings commenced on or after July 1, 1999." See Acts 1998, 77 G.A. ch. 1202 § 46. As this matter began in 1996, the amendment does not apply. However, it does serve to clarify what was already the law, namely, that a reviewing court must consider all the record evidence. Iowa Health Systems Agency, Inc. v. Wade, 327 N.W.2d 732, 733 (Iowa 1982).
We agree with the parties that the Administrative Procedure Act requires a district court on judicial review to examine the agency record "as a whole." See Iowa Code § 17A.19(8)(f) (1995). While the district court's position to the contrary finds support in Second Injury Fund v. Hodgins, 461 N.W.2d 454, 456 (Iowa 1990), that opinion relied on an administrative law principle formulated before the Administrative Procedure Act was promulgated. Id. (citing Deaver v. Armstrong Rubber Co., 170 N.W.2d 455, 459 (Iowa 1969)). The Administrative Procedure Act expressly altered that principle. See Iowa Code § 17A.19(8)(f). Accordingly, in examining issues implicating the substantial evidence standard of review, we will view the agency record as a whole.
B. Work-Related Injury . Hancock asserts there is not substantial evidence to support the deputy commissioner's determination that Sylvara sustained a work-related injury. We disagree.
Claimants have the burden of proving that an injury "arose out of" and "in the course of" their employment. Iowa Code § 85.3(1); Koehler Elec. v. Wills, 608 N.W.2d 1, 3 (Iowa 2000). The phrase "arise out of" requires a showing of a causal connection between the injury and employment. Id.
The deputy commissioner determined that Sylvara "did sustain an injury on March 21, 1996, which arose out of and in the course of her employment." She reasoned:
The most persuasive evidence offered here is offered by claimant herself with her description of her symptoms as well as the history provided to the physicians who treated her and the expert medical opinion of Dr. Wolbrink. Dr. Donovan's opinion as to the work performed by claimant and its relationship to her injury is specifically discounted based in large part on his own misunderstanding of claimant's medical records as well as the inadequate information he had about the work claimant performed for defendant employer.
The record contains substantial evidentiary support for this determination. Sylvara testified in detail about how her job duties exacerbated her pain. This evidence was relevant and material on the issue of causation. See Miller v. Lauridsen Foods, Inc., 525 N.W.2d 417, 421 (Iowa 1994). Additionally, her testimony was corroborated by the testimony of her treating physician, Dr. Wolbrink, who opined that the repetitive and cumulative nature of her work for Hancock worsened her shoulder and cervical spine problems. Finally, we note that the deputy commissioner explicitly acknowledged and discounted an evaluating physician's contrary opinion. For these reasons, we agree with the district court's affirmance on this issue.
C. Industrial Disability . Both parties take issue with the deputy commissioner's industrial disability assessment of fifteen percent-Sylvara claiming it is too low and Hancock claiming it is too high. The district court found the agency determination was supported by substantial evidence. We agree.
Industrial disability measures a claimant's lost earning capacity. See Myers v. F.C.A. Services, Inc., 592 N.W.2d 354, 356 (Iowa 1999). Factors to be considered in determining industrial disability include the employee's functional disability, age, education, qualifications, experience, and the employee's ability to engage in similar employment. Id. The commissioner found:
Claimant was 35 years old on the day of the hearing. She has a high school diploma plus additional training. Claimant is no longer suited or able to provide the work for Hancock/Winnebago Counties that she had done previously. However, claimant did receive unemployment and applied for a number of jobs. Her application for those jobs indicates that at least in some part she believed she could perform that work, hence, her application for the job. Claimant's job opportunities are not as limited because she has not had surgery for her injury, notwithstanding the fact that she has work restrictions. Additionally, claimant has an impairment rating of three percent to the upper extremity from Dr. Wolbrink.
After considering all the factors that comprise industrial disability as well as the testimony of each and every witness, it is determined the claimant has sustained a 15 percent industrial disability.
Although the deputy did not articulate precisely how she arrived at a fifteen percent figure, our court has reiterated that an agency's decision is sufficient if it is possible to work backward to deduce what must have been the agency's legal conclusions and findings. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 634 (Iowa 2000). Additionally, it is established that the commissioner "is not required to fix disability with precise accuracy." Myers, 592 N.W.2d at 357. Undoubtedly, each party can construe the record to support a lower or higher percentage of industrial disability, but if reasonable minds could differ over the outcome of an issue, the question is not whether the evidence could have supported another finding, but whether the evidence supports the finding actually made. IBP, Inc. v. Harpole, 621 N.W.2d 410, 420 (Iowa 2001).
The record contains evidence that Sylvara experienced constant pain that limited her ability to engage in certain activities but did not completely preclude her from engaging in gainful employment. Dr. Wolbrink approved Sylvara for part-time work. Sylvara conceded she could perform sales jobs such as telephone solicitation or marketing of her family's nascent woodworking business, as well as a certain amount of office work. She also stated she thought she could work as a cashier. We believe the deputy commissioner could have concluded from this evidence that Sylvara's industrial disability was fifteen percent.
D. Healing Period Benefits . In pertinent part,Iowa Code section 85.34(1) authorizes payment of healing period benefits for a period beginning on the first day of disability after the injury and continuing until "it is medically indicated that significant improvement from the injury is not anticipated." Iowa Code § 85.34(1); Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 447 (Iowa 1999). The deputy commissioner determined the latter date to be February 27, 1997. The deputy based her determination on the opinion of Dr. Wolbrink. The district court affirmed the deputy's determination after considering only this supporting evidence. Hancock asserts that the medical opinions of two other physicians support a much shorter healing period. We agree with that assertion, but note it is the commissioner's role as fact finder to determine the weight to be afforded expert testimony. See Terwilliger v. Snap-On Tools Corp., 529 N.W.2d 267, 271 (Iowa 1995). The deputy commissioner made this determination. She expressly acknowledged the diverging medical opinions on the question of when Sylvara's medical improvement ended and accepted Dr. Wolbrink's opinion because he had more contact with Sylvara than the other physicians, who each only evaluated her one time. Accordingly, after considering the whole record, we affirm the district court on this issue.
III. Penalty Benefits
A. District Court Remand for Further Explanation of Penalty Benefits Awarded . Under Iowa Code section 86.13, an unreasonable delay in payment of benefits entitles an employee to penalty benefits. See Meyers v. Holiday Express Corp., 557 N.W.2d 502, 504 (Iowa 1996); Robbennolt v. Snap-On Tools Corp., 555 N.W.2d 229, 235 (Iowa 1996). The amount of the award lies within the discretion of the commissioner. Christensen v. Snap-On Tools Corp., 554 N.W.2d 254, 261 (Iowa 1996). The commissioner is to consider factors such as the length of the delay, the number of delays, the information available to the employer regarding the employee's injury and wages, and the employer's past record of penalties. Meyers, 557 N.W.2d at 505.
The deputy commissioner awarded Sylvara penalty benefits for delays and underpayments of certain compensation. The commissioner reasoned:
Once defendants voluntarily commence payments they are under an obligation to pay the correct weekly rate of compensation and to pay the benefits timely. (Citation omitted.)
Defendants have failed to pay temporary partial disability of $29.94 for the period April 8, 1996-April 15, 1996; and $15.96 for the period June 3, 1996-June 10, 1996. Defendants have offered no reason why the payments were not made. Claimant is entitled to a penalty of 50 percent for these benefits.
Defendants failed to timely pay temporary partial disability benefits for the periods May 6, 1996-June 2, 1996. The payments were all two days late. Defendants should pay a penalty of ten percent for untimely payment of those benefits.
Defendants failed to timely pay nine weeks of healing period benefits. Approximately 60 percent of the healing period benefits were timely paid. Defendants have offered no reasons why the untimely payments were untimely. Defendants should pay a penalty of five percent for the healing period benefits untimely paid.
Defendants failed to pay the proper rate for any of the temporary partial disability and healing period benefits. Defendants have offered no reason why the payments were at the wrong rate. Defendants should pay a penalty of 50 percent of the amount underpaid. ($171.07 minus $168.28). There are 35 weeks from April 8, 1996-December 8, 1996.
It should be noted that the aggregate total of the penalties awarded is less than 50 percent of the correct weekly rate.
On judicial review, the district court concluded it could not discern the path the deputy commissioner took in arriving at its penalty award. The court accordingly remanded the penalty issue to the agency for additional explanation. Hancock contends there was no need to remand the penalty issue because the decision was adequately supported. Sylvara responds that the case must be remanded to the agency because the deputy's decision does not explain why she chose to impose a fifty percent penalty with respect to some delays and only a five percent penalty with respect to others.
Our mandate is to broadly apply a commissioner's findings to uphold rather than defeat her decision. Al-Gharib, 604 N.W.2d at 634. In light of this mandate, we conclude that the deputy commissioner's findings are sufficiently specific. We further conclude that the deputy did not abuse its discretion in her determination of the penalty amounts. Accordingly, we reverse the remand portion of the district court's order.
B. Failure to Impose Penalty for Underpayment of Principal . Penalty benefits cannot be assessed for the late payment of interest, only the late payment of principal. See Weishaar v. Snap-On Tools Corp., 506 N.W.2d 786, 791 (Iowa Ct. App. 1993). Sylvara concedes she was awarded penalty benefits for the late payment of her principal, but maintains that the amount was too low because the commissioner failed to apply a principle known as the United States rule.
Under the United States rule, when partial payments are made, they are allocated first toward the interest due. Christensen, 554 N.W.2d at 261-2. Any payment exceeding the interest due is applied toward the principal. The district court concluded that Sylvara was essentially seeking a prohibited penalty benefit on delayed interest payments and affirmed the commissioner on this issue. We disagree with this conclusion.
Sylvara is not seeking penalty benefits on delayed interest payments but on underpaid principal. When Hancock delayed payment of her benefit, Sylvara became entitled to interest on the delayed payment. But, when Hancock ultimately paid the principal and interest, the United States rule mandated that the payment first be allocated to interest, then to principal. This left a portion of the principal unpaid. Therefore, Sylvara is entitled to a penalty benefit on the constant underpayment of principal that resulted when the accrued interest was paid first out of each check. See Meyers, 557 N.W.2d at 507 (remanding to the commissioner to determine "what underpayments resulted from the application of the United States rule" and to assess "interest under Iowa Code section 85.30 and penalties under section 86.13."). Accordingly, we reverse the district court on this issue with directions to remand the case to the commissioner for application of the United States rule and for reassessment of penalty benefits in light of that rule.
Sylvara uses the following example: If the payment owed is $500, and the payment is made thirty days late, the employer incurs interest on the payment in the amount of $4.11. When the next weekly $500 payment is made, the $500 must first be applied to the outstanding $4.11 in accrued interest. When this occurs, the $500 principal payment is actually reduced to $495.89, leaving $4.11 of principal in the second installment unpaid.
IV. Costs and Expenses
A. Taxation of Witness and Mileage Fees . The commissioner concluded Hancock should not be liable for the witness fees and mileage expenses of three of Sylvara's witnesses, including her husband. Sylvara maintains this was an abuse of discretion. We disagree.
Iowa Code section 86.40 states "all costs incurred in the hearing before the commissioner shall be taxed in the discretion of the commissioner." A rule promulgated by the commissioner clarifies that taxable costs include witness fees and expenses and reiterates that the costs shall be assessed at the commissioner's discretion. Iowa Admin. Code r. 876-4.33(86). The deputy commissioner articulated specific reasons for declining to assess the challenged fees and expenses against Hancock, stating:
Claimant's husband testified at the hearing. He also drove to the hearing. Claimant was present at the hearing. Presumably the mileage necessary for Mr. Sylvara was the same mileage necessary and costs required for claimant to attend the hearing. Defendants should not be responsible for witness fees and mileage for Mr. Sylvara. Claimant's niece and mother also testified. Their testimony offered little probative value beyond information that was provided by the testimony of claimant and her spouse.
None of these reasons are contravened by the record. Additionally, contrary to Sylvara's assertion, the discretionary standard for assessment of costs envisions reasons for denial of costs not expressly articulated in the statute or implementing rules. Accordingly, we find no abuse of discretion in the agency's ruling.
B. Costs of Intra-Agency Appeal and Judicial Review . The commissioner ordered the parties to "share equally the costs of the appeal including transcription of the hearing." Sylvara asserts this was an abuse of discretion because, in her view, she "made fewer challenges on intra-agency appeals and garnered more success, both in the amount of positive results and the dollar numbers." However, as she herself points out, the employer enjoyed success in one of its five intra-agency challenges and she enjoyed success on her four challenges only to the extent interest on the penalty benefits was awarded and the award of temporary partial disability benefits was clarified. Under these circumstances, we believe the commissioner did not abuse its discretion in equally dividing the costs of the intra-agency appeal. See Christensen, 554 N.W.2d at 262.
C. Failure to Tax Judicial Review Costs. Sylvara finally takes issue with the district court's failure to tax judicial review costs to either party. The court's order is silent on this question. We believe the district court is in the best position to assess the costs associated with its proceeding. See Iowa Code § 86.32 (noting taxation of costs on judicial review lies within the discretion of the court). Accordingly, we remand this issue to the district court.
V. Disposition
We affirm the district court's ruling on: (1) the existence of a work-related injury; (2) the percentage of industrial disability; (3) the termination date for healing period benefits; (4) the taxation of mileage expenses and witness fees; and (5) the allocation of the costs of the intra-agency appeal. We reverse that portion of the district court ruling which remanded the case to the commissioner to make additional findings and reassess the penalty benefits already awarded. We also reverse the district court's conclusion that Sylvara is not entitled to additional penalty benefits based on application of the United States rule. We remand the case to the district court to: (1) assess costs in connection with the district court proceedings; and (2) issue a remand order to the commissioner to award penalty benefits in light of the United States rule.
The costs of this appeal are taxed to Hancock.
AFFIRMED IN PART, REVERSED IN PART AND REMANDED WITH INSTRUCTIONS.