Gallo v. Penford Prods. Co.

829 N.W.2d 590

Larry GALLO, Petitioner–Appellant,

v.PENFORD PRODUCTS COMPANY and Zurich American Insurance, Respondents–Appellees.

No. 12–1472.

Court of Appeals of Iowa.

March 13, 2013.

Appeal from the Iowa District Court for Linn County, Ian K. Thornhill, Judge.

An injured employee appeals from the district court's decision affirming the agency's determination that he suffered a sixty percent loss of earning capacity and the denial of his claim that the work injury caused his depression. AFFIRMED.

Emily Anderson and Pressley W. Henningsen of Riccolo & Semelroth, P.C., Cedar Rapids, for appellant.

Jessica Cleereman and Patrick McNulty of Grefe & Sidney, P.L.C., Des Moines, for appellees.

Heard by VAITHESWARAN, P.J., and TABOR and MULLINS, JJ.

MULLINS, J.

We consider whether substantial evidence supports the workers' compensation commissioner's decision that employee Larry Gallo suffered a loss of earning capacity of sixty percent and that his depression was not caused by his work injury. The district court affirmed the commissioner's ruling and so do we.

I. Background Facts

On February 5, 2005, Gallo injured his lower back dislodging a fifty-pound bag of product from a palletizer machine while at work for Penford Products Company (Penford). He treated with Dr. Brady at the St. Luke's Work Well Clinic, was taken off work for one week, and put on Percocet, a narcotic pain reliever. Gallo suffered additional back strains at work on March 8 and March 16, 2005, for which he continued to see Dr. Brady. An MRI showed minor disk bulging. On referral, Dr. Muow determined surgery was not necessary at that time.

In April 2005, Gallo saw Dr. Urbi, a physician in the same clinic as his personal physician, Dr. Boyles. Gallo stated he experienced extreme back pain when he bent over to pick up clothing at home. Dr. Urbi prescribed another painkiller. Four days later Gallo returned to the clinic and saw Dr. Boyles, who prescribed hydrocodone and muscle relaxants.

On May 16, 2005, Gallo again saw Dr. Brady with complaints of worsening symptoms after lifting at work. A senior production manager from Penford had accompanied Gallo to his initial hospital visit two days earlier, apparently concerned because Gallo had just finished his last prescription of Percocet when he reinjured himself in the first half-hour of his shift. An MRI revealed a new right side disk fragment and a herniated disk at L4–L5. On referral, Dr. Mouw assessed Gallo as a surgical candidate and performed a discectomy on May 18, 2005.

Gallo continued to report worsening pain after his surgery. On July 5, 2005, he underwent a trial transforaminal nerve block. That same month Dr. Boyles prescribed Lortab after Gallo claimed he hurt his back moving a refrigerator at home. Approximately one week later, Gallo returned stating he strained his back when he sneezed at home. Dr. Boyles again prescribed Lortab with one refill. On August 5, Gallo saw his wife's physician, Dr. Alberts, claiming Dr. Brady was out of town and he was unable to get a refill of his pain medication. Dr. Alberts prescribed Lortab. On August 10, 2005, Gallo had a second nerve block. On August 22, he returned to Dr. Boyles' office for more pain medication and received another prescription for Lortab.

On or about September 25, 2005, Gallo was arrested for impersonating a physician to obtain prescription pain medication. Both Drs. Boyles and Brady refused to continue treating Gallo after his arrest.

Gallo has a history of drug abuse. He underwent treatment in 1997 for addiction to narcotic pain relievers dating back to 1995. He has also admitted to abusing recreational and prescription drugs including marijuana, morphine, and hydrocodone. After Gallo's arrest, Dr. Brady noted Gallo had specifically asked for Percocet during his first appointment on February 7, 2005. Dr. Brady believed Gallo's addiction to Percocet was likely a problem before that visit.

On October 11, 2005, Gallo checked into the Sedlacek Center for substance abuse treatment. On October 21, 2005, he saw Dr. Alberts for symptoms of depression. Gallo told Dr. Alberts about his drug rehabilitation program. Gallo began taking prescription anxiety medication, an antidepressant, and a sleep aid.

On multiple occasions between March and June 2006, Gallo treated for lower back pain in the Mercy Medical Center emergency room and received prescriptions including Lortab, ibuprofen, and hydrocodone. He did not report his history of prescription medication abuse to Mercy staff and claimed he did not have a family physician, even though Dr. Alberts was treating him at that time.

Gallo continued to work at Penford in a light capacity until January 21, 2007. He worked approximately fifty-six hours per week. On January 22, 2007, Penford terminated Gallo's employment upon discovering his criminal conviction for impersonating a physician to obtain prescription medications for a work-related injury, which constituted “falsifying company records.”

Several physicians and therapists evaluated Gallo to determine his level of impairment. Neurologist Richard Neiman, M.D., gave Gallo an independent medical examination pursuant to Iowa Code section 85.39 (2009) on October 25, 2006, and assigned a 19.5 percent permanent whole body impairment rating. Dr. Brian Johns at Mercy Medical Center Occupational Health began treating Gallo for back pain on December 4, 2006. He performed a functional capacity evaluation on March 6, 2007, and found Gallo was at maximum medical improvement (MMI) and capable of working in the medium category as defined by the U.S. Department of Labor.

Dr. Garrells examined Gallo for his medical disability determination for the Social Security Administration. Dr. Garrells found Gallo could occasionally stoop, climb, crouch, and lift up to twenty pounds, and he could frequently lift up to ten pounds. He advised Gallo to alternate sitting and standing, and to limit pushing and pulling to the weights listed for lifting. Dr. Uy examined Gallo for his disability determination for the Railroad Retirement Board and placed him at MMI. Both Dr. Garrells and Dr. Uy determined Gallo's education and skills were not transferable to work other than the manual labor he had performed in the past.¹

Gallo met with two vocational experts who reached conflicting opinions regarding his employability. At Penford's request Gallo met with vocational consultant Steve Mootz in November 2007. Mootz stated he found several job openings in the medium category that matched Gallo's qualifications and instructed him to apply. Mootz found Gallo unwilling to fully participate. Gallo claims several of those jobs were not appropriate for his limitations. The commissioner noted that at that time Gallo was receiving more than $5000 per month in disability benefits from the Railroad Retirement Board, Social Security disability, and workers' compensation. The commissioner believed those substantial benefits may have contributed to Gallo's lack of cooperation and motivation to find work.

Gallo retained Kent Jayne as an expert witness to conduct a vocational assessment. He did not hire Jayne to help him find work. Jayne concluded that Gallo's age, limited skill set, and physical limitations made it unlikely that he could return to competitive employment.

At his attorney's request Gallo saw psychiatry and neurology specialist Dr. Aagesen to evaluate the cause of his depression. These visits took place on December 11, 2008, and March 30, 2009. Dr. Aageson found Gallo suffered from major depressive disorder, panic attacks, and social anxiety disorder. Dr. Aagesen attributed Gallo's depression and substance abuse to his February 5, 2005 work injury. During his earlier visits with Dr. Alberts, Gallo had at various times reported difficulty sleeping, feeling up and down, and lacking ambition to do anything. Dr. Alberts, however, did not treat Gallo for depression until after his September 2005 arrest.

II. Prior Proceedings

On June 9, 2008, Gallo filed a petition in arbitration for workers' compensation benefits for his February 5, 2005 back injury. The parties stipulated Gallo sustained a work-related injury arising out of and in the scope of his employment on February 5, 2005. The parties disputed the nature and extent of the permanency benefits at issue and other medical benefits to which Gallo may have been entitled. On November 30, 2010, the deputy workers' compensation commissioner found that Gallo suffered a “permanent partial disability” ² of sixty percent. The deputy found that Gallo's work injury was not a significant cause of his depressive disorder.

Gallo appealed the arbitration decision claiming the deputy commissioner erred in failing to find that he was permanently and totally disabled, in finding that he was not a credible witness, and in finding that his depression was not work-related. On November 8, 2011, without additional comment, the commissioner issued a final agency decision adopting the portions of the November 30, 2010 arbitration decision relating to the issues on intra-agency appeal.

Gallo petitioned the district court for judicial review. On August 7, 2012, the district court affirmed the final agency decision.

III. Standard of Review

Iowa Code chapter 17A governs judicial review of the decisions of the workers' compensation commissioner. Iowa Code § 86.26; Mycogen Seeds v. Sands, 686 N.W.2d 457, 463 (Iowa 2004). In reviewing a district court's decision on appeal, we apply the standards of chapter 17A to determine whether the conclusions we reach are the same as those of the district court. Mycogen Seeds, 686 N.W.2d at 464.

The court is bound by the agency's factual determinations when they are supported by “substantial evidence in the record before the court when that record is viewed as a whole.” Iowa Code § 17A.19(10)(f). “Substantial evidence” is statutorily defined as: “[T]he quantity and quality of evidence that would be deemed sufficient...