Opinion
No. 3-506 / 02-1017
Filed August 27, 2003
Appeal from the Iowa District Court for Polk County, Robert A. Hutchison, Judge.
Jack Waters appeals the district court's ruling on judicial review which reversed the decision of the Workers' Compensation Commissioner regarding the scope of his pleadings. AFFIRMED.
Paul McAndrew of Paul McAndrew Law Firm, Coralville, for appellant.
Thomas J. Miller, Attorney General, and Darrel Mullins, Assistant Attorney General, for appellee.
Considered by Huitink, P.J., and Vaitheswaran and Eisenhauer, JJ.
I. Background Facts Proceedings.
Jack Waters was formerly employed as a custodian at the University of Iowa Hospitals and Clinics (UIHC). Walters filed a claim for workers' compensation benefits from UIHC on February 3, 1999. In his petition Waters claimed he injured his back on June 16, 1997, while "lifting, carrying, and dumping heavy trash at work."
At the beginning of the hearing on the merits of Waters's claim, the deputy commissioner inquired of counsel concerning the issues in dispute. The record includes the following response by the parties' attorneys:
MR. McANDREW [Waters's Attorney]: There has been ongoing lack of clarity when during the week of June 16, 1997, my client was last able to work. We noted it in the deposition of my client taken June 22, 1999. I think you'll get it clear from the record in this case that Jack Waters has had some back problems over the years. We filed this on a specific date.
But in keeping with the case law, specifically Hormel versus Jordan and others, we would like the Hearing Officer to keep in mind that the Commission has discretion to set the — if the evidence tends to show it, to set the date of injury or cumulative trauma-type injury such as this on the date that the evidence tends to show the injury occurred. And that might be within — We've pled it on the date on an incident report, June 16th. And there's some evidence in the file that he may have worked after that until as late as June 21.
THE DEPUTY: So is it — Is what you're telling me, that there is an issue with regard to what might be the correct day of injury?
MR. McANDREW: Yes, there is.
MS. MOELLER [UIHC's attorney]: May I respond?
THE DEPUTY: Certainly.
MS. MOELLER: It's our position, and I think you will be able to tell from not only the testimony in this case but from the records, that this particular claimant has given several different versions of what his injury was caused by. The petition does not allege that there was a cumulative injury, nor does the incident report allege a cumulative injury. Rather it alleges a specific incident occurred on a specific day. I do believe the evidence will show that the last day of work was June 20 something. It was after the alleged — after the date alleged in this injury. But as far as I know, and as far as the pleadings show, this was not a cumulative injury case. In fact, it was a specific injury that the claimant was aware of on a specific date. So we would object to any standing request, and we'd like to bring that to the Deputy's attention.
THE DEPUTY: All right. Well, I will consider the issue in the light of the evidence and pleadings and other things in the case. And I evaluate everything in order to decide the case. But I will indicate — or I do consider fixing the alleged date of injury understanding that the injury itself is disputed. I will understand — I understand that fixing the date of the alleged injury is one of the issues in the case. Anything else?
The record discloses no further statements or arguments in response to the deputy's inquiry.
The deputy commissioner ultimately determined that Waters suffered a cumulative traumatic injury to his back. The deputy also determined Waters's date of injury was June 21, 1997, because that was the date Waters was no longer able to work.
On appeal to the commissioner, UIHC raised the following issues:
(1) The hearing officer's award of benefits under a cumulative injury theory is inappropriate as such a theory was never pled by the claimant, who described a specific traumatic injury.
(2) The claimant's June 1997 injury, whether it occurred on the 16th, the 21st or some other day, is not work related.
(3) Claimant failed to notify his employer of his alleged work-related injury within the required ninety day period.
(4) The hearing officer's reduction of the employer's long-term disability credit was improper.
Concerning issue one, UIHC argued that neither Waters's original notice and petition or prehearing conference report pled or otherwise indicated Waters claimed he suffered a cumulative opposed to a traumatic injury. UIHC noted that Waters had not requested nor had the commissioner granted leave to amend the petition to include a cumulative injury claim. UIHC argued, "Allowing claimants or defendants to make such changes without notice to the opposing party effectively robs that party of the opportunity to present their best possible case and renders the rule on amendments superfluous." The commissioner adopted the deputy's proposed decision. The commissioner additionally rejected UIHC's arguments concerning Waters's cumulative injury theory, stating:
A claimant is not limited to a specific injury theory contained in the pleadings. If the evidence shows a cumulative injury when a traumatic injury was pled, an award based on a cumulative injury may be made unless substantial prejudice results to defendants. Reeves v. Burns Elec. Senaca Corp., App. Dec., July 26, 1999; Johnson v. George A. Hormel Co., App. Dec., June 21, 1988. In this case, claimant's June 16, 1997, injury petition, later amended to June 21, 1997, could have been read as either claiming a cumulative or a traumatic injury. Even if read as a traumatic injury pleading, defendants were well aware of claimant's long-standing history of back injuries, and were not prejudiced by a findings of a cumulative injury.
On judicial review, UIHC challenged the commissioner's decision on four separate grounds. UIHC claimed the record did not support a finding that Waters's injury was related to his employment, Waters failed to properly notify UIHC of his back injury, the commissioner failed to properly credit UIHC for long-term disability payments, and Waters was awarded benefits under a legal theory that was never pled.
The resulting ruling was limited to the last issue concerning the commissioner's award of benefits based on a finding that Waters sustained a cumulative injury. That ruling provides:
It is also evident that Waters's shift from acute to cumulative injury prejudiced UIHC. A cumulative injury requires different elements and proof than does an allegation of acute injury. UIHC did not offer any expert testimony because it believed Waters was claiming an acute injury and was prepared to respond to claims of injuries on the specific dates which had been alleged. A defense expert is almost a necessity in cumulative injury cases. Clearly, UIHC was not prepared to defend against Waters's allegations of a gradual injury. Accordingly, the Court concludes that it was an abuse of discretion for the commissioner to base Waters's award on the cumulative injury doctrine when UIHC did not have adequate notice of such a claim.
Waters's claim was accordingly remanded to the commissioner for further proceedings consistent with the trial court's findings and conclusions.
On appeal, Waters raises the following issues:
(1) Did the district court err in not applying the substantial evidence standard in reviewing the commissioner's findings and conclusions?
(2) Does the record when read as a whole contain substantial evidence to support the workers' compensation commissioner's findings and conclusions?
UIHC does not cross-appeal.
II. Standard of Review.
On appeal from a district court's review of an agency decision, our review is limited to determining whether the district court correctly applied the law in exercising the review provided by section Iowa Code section 17A.19(10) (2001). See Wal-Mart Stores, Inc. v. Caselman, 657 N.W.2d 493, 498 (Iowa 2003). When the agency decision turns on factual findings, both the district court and this court are bound by the workers' compensation commissioner's findings if they are supported by substantial evidence in the record. IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001); Bergen v. Iowa Veterans Home, 577 N.W.2d 629, 630 (Iowa 1998). On issues implicating the agency's discretion, however, we have applied an abuse of discretion standard of review. See Trade Profls., Inc., v. Shriver, 661 N.W.2d 119, 123 (Iowa 2003) (finding admission of a medical report was discretionary with the commissioner); IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 631 (Iowa 2000) (ruling admission of psychologist's testimony was left to the discretion of the commissioner); Miller v. Lauridsen Foods, Inc., 525 N.W.2d 417, 419 (Iowa 1994) (ruling commissioner had discretion to consolidate claims); Sheet Metal Contractors v. Commissioner of Ins., 427 N.W.2d 859, 866 (Iowa 1988) (finding commissioner is vested with considerable discretion in ruling on motions to continue).
The deputy workers' compensation commissioner's decision was entered on February 20, 2001, and the final agency action was entered on November 16, 2001, which was after the effective date of section 17A.19(10), July 1, 1999. Under Wal-Mart Stores, Inc. v. Caselman, 657 N.W.2d 493, 498 (Iowa 2003), we determine section 17A.19(10) applies.
Waters claims the district court used an incorrect standard when reviewing the commissioner's decision. The court determined that "it was an abuse of discretion for the commissioner to base Waters's award on the cumulative injury doctrine when UIHC did not have adequate notice of such a claim." Waters asserts the court should not have reviewed for an abuse of discretion, but instead should have solely considered whether the commissioner's decision was supported by substantial evidence.
Although this case is presented on appeal as an issue of whether the commissioner properly allowed Waters to amend his petition, we determine the issue is rather the scope of the issues presented by Waters's petition. As shown by the transcript of the administrative hearing, Waters never specifically sought to amend his petition. Generally, the jurisdiction of a court can be exercised only within the scope of the pleadings, except when new issues are raised by the evidence without objection. Estate of Randeris v. Randeris, 523 N.W.2d 600, 604 (Iowa Ct.App. 1994). UIHC objected to the issue of whether Waters suffered a cumulative injury, and thus, that issue was not tried by consent.
"An issue should not normally be considered on appeal in a civil proceeding unless fairly raised by the pleadings." City of Clinton v. Loeffelholz, 448 N.W.2d 308, 310 (Iowa 1989) (citing Buda v. Fulton, 261 Iowa 981, 989, 157 N.W.2d 336, 341 (1968)). We determine the commissioner had discretion to decide whether the cumulative injury issue was fairly raised by the pleadings. Where a ruling is not based on any statute or rule, it should be reviewed for an abuse of discretion. See Kurth v. Iowa Dep't of Transp., 628 N.W.2d 1, 5 (Iowa 2001). Furthermore, we review the commissioner's factual findings to determine whether they are supported by substantial evidence. See Harpole, 621 N.W.2d at 414. The issue in this case does not involve a statute, rule, or factual findings. We conclude the district court properly reviewed the commissioner's decision for an abuse of discretion.
III. Merits.
We turn to the issue of whether the district court properly determined the commissioner had abused its discretion by finding UIHC was not prejudiced by its consideration of the cumulative injury issue.
Under due process principles, notice should inform a party of the issues involved in order to prevent surprise at the hearing and allow an opportunity to prepare. Paulson v. Board of Med. Examiners, 592 N.W.2d 677, 680 (Iowa 1999). A showing of prejudice is essential to establishing a due process violation because the touchstone of due process is "fundamental fairness." Oscar Mayer Foods Corp. v. Tasler, 483 N.W.2d 824, 828 (Iowa 1992) (citing Wedergren v. Board of Dirs., 307 N.W.2d 12, 16 (Iowa 1981)). "It is fundamental, even where the rules of pleading apply, that a variance between pleading and proof is immaterial unless the complaining party establishes that he was thereby misled to his prejudice in maintaining his cause of action or defense." Coghlan v. Quinn Wire Iron Works, 164 N.W.2d 848, 851 (Iowa 1969).
We determine the commissioner abused its discretion in considering the cumulative injury issue, which was a new issue raised at the time of the administrative hearing. The defense against a claim of an acute injury is different than a defense against a claim of a cumulative injury. UIHC was prejudiced in its ability to investigate and argue the case because a cumulative injury requires different elements and proof than a traumatic injury. A cumulative injury develops gradually over time, while a traumatic injury occurs at a specific time. The employer was prejudiced by the commissioner's consideration of the case under a theory different than that which was anticipated. See Scott v. Grinnell Mut. Ins. Co., 653 N.W.2d 556, 563 (Iowa 2002).
We affirm the decision of the district court.