City of Maxwell & Emcasco Ins. Co. v. Marshall

967 N.W.2d 566 (Table)

CITY OF MAXWELL and EMCASCO Insurance Company, Petitioners-Appellees/Cross-Appellants,

v.Dennis M. MARSHALL, Respondent-Appellant/Cross-Appellee.

No. 20-0916

Court of Appeals of Iowa.

Filed October 20, 2021

Mark S. Soldat of Mark S. Soldat, PLC, West Des Moines, and Robert A. Nading of Nading Law Firm, Ankeny, for appellant.

D. Brian Scieszinski of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellees.

Heard by Bower, C.J., and Vaitheswaran and Schumacher, JJ.

SCHUMACHER, Judge.

Dennis Marshall appeals the district court's ruling on judicial review affirming the workers’ compensation commissioner's denial of his request for penalty benefits. The City of Maxwell, with its insurer, EMCASCO Insurance Company (together "the employer"), cross-appeals on the issues of healing period benefits and its request to present additional evidence during the judicial review proceedings. Because the employer did not pay Marshall healing period benefits late, he is not entitled to penalty benefits. There is substantial evidence in the record to support the commissioner's determination of the time period for Marshall's receipt of healing period benefits. The district court did not abuse its discretion in denying the employer's request to remand the case to the commissioner for the presentation of additional evidence. We affirm the district court's decision affirming the commissioner's rulings on the issues raised in the appeal and the cross-appeal.

I. Background Facts & Proceedings

Marshall was a volunteer firefighter for the City of Maxwell. On December 11, 2013, while responding to an emergency call, Marshall slipped on ice and fell, injuring his back. An MRI showed he had a large disk herniation. Marshall had three back surgeries in 2014—on January 27, February 19, and April 28. On January 17, 2015, Dr. Lynn Nelson stated Marshall reached maximum medical improvement (MMI).

Marshall continued to have problems with his back, but the employer would not authorize additional treatment due to Dr. Nelson's determination that Marshall had reached MMI. Marshall sought an independent medical evaluation, which was performed on August 4 by Dr. Robin Sassman. Dr. Sassman concluded Marshall had not yet reached MMI and recommended an additional surgical evaluation.

The employer authorized an evaluation by Dr. David Boarini, who did not recommend additional surgery. Dr. Boarini suggested "weight loss, an exercise plan, and use of appropriate medication." An evaluation by Dr. David Strothman on January 6, 2017, recommended removal of the fusion instrumentation from an earlier surgery. This procedure was performed on April 10, as well as a revision decompression.

Marshall filed a petition seeking workers’ compensation benefits. A hearing was held on August 9, 2017. At that time there was no finding that Marshall reached MMI following his April 10 surgery and Marshall had not returned to work. The deputy workers’ compensation commissioner granted Marshall's motion to bifurcate the proceedings, so only the issues of healing period benefits and penalty benefits were to be heard. The parties stipulated that the issue of permanent disability was not ripe at the time of the hearing.

The deputy determined Marshall was entitled to healing period benefits from January 17, 2015, to April 10, 2017, the time period between when Dr. Nelson stated he reached MMI and when Dr. Strothman performed the fourth back surgery.¹ The deputy denied Marshall's request for penalty benefits, finding the employer was not consistently late paying weekly benefits.² The deputy denied Marshall's request for a rehearing on the issue of penalty benefits.

The employer appealed the deputy's decision, and Marshall cross-appealed. The workers’ compensation commissioner affirmed and adopted the deputy's decision. The commissioner denied Marshall's request for a rehearing.

The employer and Marshall filed petitions for judicial review. On March 5, 2019, the employer filed a request to remand the case to the commissioner for the consideration of additional evidence that was not available at the time of the agency hearing on August 9, 2017. Marshall resisted the employer's request. The district court denied the request to remand the case. On April 28, 2020, the district court affirmed the decision of the commissioner. The court denied the parties’ motions pursuant to Iowa Rule of Civil Procedure 1.904(2). Marshall appeals, and the employer cross-appeals.

II. Standard of Review

"In exercising judicial review of the agency's action, the district court acts as an appellate court, and its review is circumscribed by Iowa Code chapter 17A." Johnston v. Iowa Dep't of Transp. , 958 N.W.2d 180, 183–84 (Iowa 2021). "When reviewing the district court's decision, ‘we apply the standards of [c]hapter 17A to determine whether the conclusions we reach are the same as those of the district court. If they are the same, we affirm; otherwise, we reverse.’ " Niday v. Roehl Transp., Inc. , 934 N.W.2d 29, 34 (Iowa Ct. App. 2019) (alteration in original) (citation omitted).

III. Penalty Benefits

The parties stipulated that Marshall's injury occurred on December 11, 2013. Marshall contends that the first compensation week was December 12 to 18, and the second compensation week was December 19 to 25. He asserts that he should have been paid each week following this schedule. Marshall states that the employer improperly determined his weekly benefits began after eleven days. He contends that he was consistently paid late due to this error and should be awarded penalty benefits under Iowa Code section 85.13(4) (2015).³ In order to receive penalty benefits, Marshall has the burden to show his benefit payments were late. See Drahozal v. Envoy Air, Inc. , No. 20-0027, 2021 WL 1661150, at *8 (Iowa Ct. App. Apr. 28, 2021).

A challenge to the commissioner's decision concerning penalty benefits is a challenge "to the ultimate conclusion made by the agency and is therefore a challenge to the agency's application of law to the facts." Dunlap v. Action Warehouse , 824 N.W.2d 545, 557 (Iowa Ct. App. 2012). "[T]he commissioner's application of law to the facts as found by the commissioner will not be reversed unless it is irrational, illogical, or wholly unjustifiable." Id. (alteration in original) (citation omitted); see also Iowa Code § 17A.19(10)(m). When the issue on appeal concerns the agency's application of the law to the facts, then we review for "whether the agency abused its discretion by, for example, employing wholly irrational reasoning or ignoring important and relevant evidence." Meyer v. IBP, Inc. , 710 N.W.2d 213, 219 (Iowa 2006).

Section 85.30 provides, "Compensation payments shall be made each week beginning on the eleventh day after the injury, and each week thereafter during the period for which compensation is payable." The Iowa Supreme Court stated, "[S]ection 85.30 provides for an eleven-day grace period following [an] injury to allow an evaluation and investigation of the injury and a determination of the correct weekly compensation rate before the first compensation payment is due." Robbennolt v. Snap-On Tools Corp. , 555 N.W.2d 229, 235 (Iowa 1996). "The due date for the first week of healing period compensation is the eleventh day after the injury." Goodman v. Snap-On Tools Corp. , No. 03-0414, 2004 WL 2066941, at *3 (Iowa Ct. App. Sept. 9, 2004). "The subsequent due dates fall on the day after the end of each compensation week thereafter, that is, the eighth day after the first day of each subsequent compensation week." Id. (citing Robbennolt , 555 N.W.2d at 235 ).

The deputy determined:

The first weekly benefit payment is due on the eleventh day according to Iowa Code section 85.32. [The employer] appear[s] to have voluntarily commenced benefits on the second day after the injury and paid weekly thereafter, rending each of their benefit payments ... to be paid on time or early. [Marshall's] analysis of the commencement of benefits is legally inaccurate. [The employer's] contention and practice in this case is accurate and certainly [the employer] had a reasonable basis for their commencement and payment of benefits .... Therefore, I perceive no basis for an award of penalty benefits for [the employer's] commencement of benefits and payment earlier than the statutory requirement of the eleventh day.

The commissioner "affirm[ed] the deputy commissioner's conclusion that [Marshall's] analysis of the commencement of benefits is legally inaccurate." The commissioner concluded there was no basis for penalty benefits to be awarded in this case. The district court determined the commissioner's interpretation of section 85.30 "was neither irrational nor erroneous."

We conclude the commissioner properly determined Marshall did not meet his burden to show the healing period benefits received from the employer were late. See Drahozal , 2021 WL 1661150, at *8. The payments were timely under section 85.30. Because the payments were not late, Marshall is not entitled to penalty benefits under section 86.13(4).

IV. Healing Period Benefits

In the cross-appeal, the employer claims the commissioner erred by finding Marshall was entitled to healing period benefits for the time period from January 17, 2015, when Dr. Nelson stated Marshall reached MMI, to April 10, 2017, when Dr. Strothman performed the fourth back surgery. It states that Marshall could have multiple MMI dates and intermittent healing periods. The employer asserts that Marshall reached MMI following his third surgery but then had another healing period following his fourth surgery. It disputes the commissioner's finding that Marshall was entitled to healing period benefits for the entire time period from January 17, 2015, to April 10, 2017.

The commissioner's factual findings are upheld on appeal if they are supported by substantial evidence when the record is viewed as a whole. Evenson v. Winnebago Indus., Inc. , 881 N.W.2d 360,...