IN THE COURT OF APPEALS OF IOWA
No. 14-0565
Filed January 14, 2015
JBS SWIFT & COMPANY and
ZURICH AMERICAN INSURANCE
COMPANY,
Petitioners-Appellants,
vs.
WAYNE HEDBERG,
Respondent-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Randy V. Hefner,
Judge.
Appeal from the district court decision on judicial review, affirming the
agency’s award of permanent total disability benefits. REVERSED AND
REMANDED.
Jennifer A. Clendenin and Nicholas J. Pellegrin of Ahlers & Cooney, P.C.,
until withdrawal, then Mark A. King of Patterson Law Firm, L.L.P., Des Moines,
for appellants.
Nathaniel R. Boulton of Hedberg & Boulton, P.C., Des Moines, for
appellee.
Heard by Mullins, P.J., and Bower and McDonald, JJ.
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McDONALD, J.,
JBS Swift & Company and Zurich American Insurance Company,
(hereinafter “employer” or “Swift”) appeal from the district court ruling affirming
the agency’s award of permanent and total disability benefits to workers’
compensation claimant Wayne Hedberg.
I.
Hedberg commenced employment with Swift in 1990. In 2010, Hedberg
sustained a work-related injury to his right shoulder and filed a claim for workers’
compensation benefits. During the agency proceeding, the parties stipulated to
the following facts:
Hedberg sustained an injury to his right shoulder and arm on May
7, 2010. After his injury Hedberg continued working in light-duty
positions within his temporary work restrictions until his surgery on
December 31, 2010. Hedberg moved to Minnesota on January 3,
2011. As of March 28, 2011, Swift notified Hedberg there was work
available to him within his temporary work restrictions, but did not
provide job descriptions. Swift notified Hedberg there was work
available for him within his permanent work restrictions. Hedberg
did not return to work at Swift after his December 31, 2010 surgery
and did not seek other employment. Hedberg was notified on
August 8, 2011, that he was deemed a voluntary quit for failing to
report back to work.
Hedberg moved to Minnesota following his December 31 surgery because
he was unable to care for himself following the unexpected death of his wife in
December 2010. Hedberg’s inability to care for himself following his wife’s death
was unrelated to his work injury. Instead, the record reflects Hedberg suffered a
variety of conditions for most of his life—including cerebral lupus, mild cerebral
palsy, and significant hearing impairment—that required him to have the
assistance of others. Because of these and other conditions, Hedberg’s family
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decided Hedberg would move to Minnesota to live with his younger brother.
Hedberg testified if his wife had not died, he would have stayed in Iowa and
continued to work at Swift.
After Hedberg’s surgery in December 2010, two doctors provided opinions
regarding Hedberg’s work restrictions and impairment rating. Dr. Neff was
Hedberg’s treating physician/surgeon; Dr. Bansal performed an independent
medical evaluation. On May 23, 2011, Dr. Neff stated, “I am pleased with his
progress; but I agree he will never have the same shoulder that he had before,
and repetitive intensive overhead activity is not going to be possible.” In his
evaluation on July 20, 2011, with Hedberg having attained maximum medical
improvement, Dr. Neff opined:
I am not certain how best to proceed determining impairment
evaluation for the right upper extremity. Active range of motion
done by the patient upon request shows significant disparity
between passive motion.
In light of the above, I do not feel comfortable attributing
impairment based on range of motion loss. The 5th edition of the
AMA Guides reflects a 10% impairment attributable as a result of
AC joint resection arthroplasty; and consequently, it is my opinion
that he has a 10% impairment to the right upper extremity as a
result of AC joint resection arthroplasty and a 1% impairment to the
right upper extremity as a result of elbow range of motion loss.
There is no impairment attributed as a result of cubital tunnel
syndrome.
Consequently, adding these he has an 11% impairment to
the right upper extremity as a result of his ongoing circumstance.
Dr. Bansal recommended the following restrictions: “no lifting greater than lifting
up to 15 pounds along with no lifting over shoulder level or away from her [sic]
body . . . ; no frequent lifting, pushing, or pulling . . . ; no pushing, pulling greater
than 20 lbs.” Dr. Bansal gave Hedberg a 10% upper extremity impairment rating
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for his right shoulder, with a 16% impairment of the whole person, and a 6.7%
upper extremity rating for his right elbow, with a 4% rating of the whole person.
Two experts conducted vocational evaluations of Hedberg: Carma
Mitchell, retained by Hedberg; and Lana Sellner, retained by Swift. In her report,
Mitchell opined:
Mr. Hedberg has an excellent employment record and has worked
the past 20 years despite problems with his hearing and speech.
He has sought treatment in an effort to improve the functioning of
his right shoulder and upper extremity. The 69% loss of access to
the labor market is based on the physical restrictions Mr. Hedberg
has from his work related injury. When looking at Mr. Hedberg as a
whole with all his limitations his employment options are extremely
limited. It is my opinion that with the functional limitations and pain
and numbness Mr. Hedberg describes when trying to use his right
shoulder and upper extremity along with his limited intellectual
functioning, hearing loss and speech impediment he would not be
able to obtain or sustain full-time competitive employment.
Sellner’s report was admitted into evidence as part of Exhibit K. Sellner’s
report includes a labor market survey of suitable employment in Minnesota and
Iowa as well as a survey of positions at Swift. The report included seven job
descriptions of permanent positions at Swift. Referring specifically to the seven
positions described in the report, Sellner opined “these occupations identified are
viable and within Dr. Neff’s restrictions. If one considers Dr. Bansal’s restrictions,
the occupations identified continue to be viable with the exception [of two of
them].” The report also notes the seven identified positions were not the only
positions available because “other positions maybe [sic] suitable as well.”
Hedberg’s workers’ compensation claim proceeded to hearing. In its
arbitration decision, the deputy commissioner noted Sellner’s report included jobs
at Swift. The arbitration decision found that Swift offered Hedberg suitable light
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duty work beginning March 28, 2011, and concluded that Swift was thus not
liable for healing period benefits between March 28 and July 20, 2011. The
deputy commissioner also found that Swift offered Hedberg permanent
employment within Hedberg’s restrictions, that Hedberg did not accept the
employment, and that Hedberg was not an odd-lot employee. The arbitration
decision found Hedberg had an 80% industrial disability but was not permanently
and totally disabled. The parties appealed.
The intra-agency appeal was decided by the commissioner’s designee.
The appeal decision adopted the arbitration decision with a “modification as to
the extent of claimant’s permanent disability.” The commissioner’s designee
found and concluded Hedberg’s injury “permanently disable[d] him from
performing work within his experience, training, education, and physical
capacities. Therefore, claimant is entitled to an award of permanent total
disability benefits.” In support of the award of permanent total disability benefits,
the commissioner’s designee stated that Swift failed to provide any descriptions
of the work available to Hedberg and that Sellner failed to conduct a market
survey of the jobs available at Swift:
No further explanation of the jobs that Swift stood ready to provide
to the claimant appear in the record. There is a joint stipulation that
the claimant was notified there was work available for him within his
permanent restrictions in 2011. Even Lana Sellner, the vocational
rehabilitation consultant hired by the defendants, did not provide
any jobs from the defendants in her labor market survey. While Ms.
Sellner did identify several jobs available to people who would be
limited to the light to medium duty work activity, she did not indicate
in her report which jobs claimant could actually perform with his
hearing and speech impediments.
The appeal decision continued:
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There was no evidence provided herein that actual job openings
were available to claimant within the very narrow categories
identified in the vocational report by Ms. Sellner, nor was there any
credible basis to believe that this worker with his limited education,
significant work restrictions, and a work history only in menial
physical labor would be a successful candidate for such positions,
should they actually exist.
The commissioner’s designee continued:
There was no competitive employment that the claimant could
believably work following his shoulder injury. Despite the offers
made by the defendants, none of them had any detail even when
both Dr. Neff and the counsel for the claimant requested it. The
lack of response by the defendants suggests the positions were
make work at best.
Swift petitioned for judicial review, and the district court affirmed the
agency’s action. The district court summarized Swift’s contentions as follows: (1)
the deputy commissioner failed to give any weight to the report of Lana Sellner of
Care Solutions regarding the extent of Hedberg’s industrial disability, and (2) the
deputy commissioner failed to reconcile the award of permanent and total
disability benefits with prior appeal decisions refusing such awards after an
employer offered suitable work. The court conducted substantial evidence
review and determined the appeal decision “was not illogical, unreasonable,
arbitrary or capricious, or inconsistent with prior agency action.”
II.
Iowa Code chapter 17A governs our review of the agency’s decision. See
Iowa Code § 86.26 (2013); Mike Brooks, Inc. v. House, 843 N.W.2d 885, 888
(Iowa 2014). The district court acts in an appellate capacity to correct errors of
law when reviewing the agency’s decision. See Watson v Iowa Dep’t of Transp.,
829 N.W.2d 566, 568 (Iowa 2013); Ludtke v. Iowa Dep’t of Transp., 646 N.W.2d
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62, 64 (Iowa 2002). “On appeal, we apply the standards of chapter 17A to
determine whether we reach the same conclusions as the district court. If we
reach the same conclusions, we affirm; otherwise we may reverse.” See
Watson, 829 N.W.2d at 568 (citation omitted).
The crux of the parties’ dispute in this appeal is the nature of the question
presented and the standard of review. Hedberg argues the sole issue on appeal
is whether the appeal decision is supported by substantial evidence. Under this
standard, we are bound by the agency’s factual determinations if supported by
“substantial evidence in the record before the court when that record is viewed as
a whole.” Iowa Code § 17A.19(10)(f); see Watson, 829 N.W.2d at 568 (setting
forth standard); Cedar Rapids Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839, 845
(Iowa 2011) (setting forth standard). On substantial evidence reivew, our task “is
not to determine whether the evidence supports a different finding; rather, our
task is to determine whether substantial evidence . . . supports the findings
actually made.” See id. Swift contends this case does not present a routine
question of substantial evidence review. Instead, Swift argues the agency failed
to consider a relevant and important matter; took action that was unreasonable,
arbitrary, capricious, or an abuse of discretion; and reached a decision that is a
product of illogical reasoning. See Iowa Code § 17A.19(10)(f), (i), (j), (m), & (n).
Specifically, Swift asserts the agency failed to consider and/or explicitly misstated
record evidence; failed to consider Hedberg’s refusal of full-time work within his
permanent work restrictions; and failed to consider Hedberg voluntarily left his
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employment for reasons unrelated to his work injury. Swift has the better of the
argument.
The record reflects the commissioner’s designee simply ignored or
overlooked record evidence. The appeal decision correctly notes the “arbitration
decision and the defendants’ arguments that claimant is employable seem[] to
stem from the job offer made by the defendants for sedentary work which would
be within claimant’s work restrictions.” The appeal decision then states “[t]here is
no description in the record what kind of work this entailed” and there is “[n]o
further explanation of the jobs that Swift stood ready to provide to the claimant
appear in the record.” The commissioner’s designee goes on to state “[e]ven
Lana Sellner, the vocational rehabilitation consultant hired by the defendants, did
not provide any jobs from the defendants in her labor market survey.” All three
statements regarding the state of the record are demonstrably incorrect.
Sellner’s report includes job descriptions and other information for seven
positions in Swift’s ham boning, kill, and cut departments. The appeal decision
also states Sellner “did not indicate in her report which jobs claimant could
actually perform with his hearing and speech impediments.” Again, the agency’s
statement of the record is demonstrably incorrect. Page 4 of Sellner’s report
concludes: “It should be noted these occupations identified are viable and within
Dr. Neff’s restrictions. If one considered Dr. Bansal’s restrictions, the
occupations identified continue to be viable with the exception of [two positions].”
Page 2 of the report explicitly accounts for Hedberg’s “hearing loss and speech
impediment.” The overlooked evidence is not immaterial; the heart of the appeal
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decision is based upon the designee’s conclusion that Swift failed to provide
evidence of available work and that this purported failure of proof demonstrated
Swift had only make-work available for Hedberg.
The deference afforded the agency on substantial evidence review is
predicated on the assumption the agency reviewed and considered the evidence
in reaching its decision. Where the record affirmatively discloses the agency did
not review and consider the evidence, as is the case here, then substantial
evidence review is inapplicable. The agency is entitled to reconcile competing
evidence, not ignore competing evidence. We thus conclude the commissioner’s
designee’s action is unreasonable, arbitrary, capricious, an abuse of discretion,
and the product of illogical reasoning. See Iowa Code § 17A.19(10)(i), (j), (m), &
(n); Meyer v. IBP, Inc., 710 N.W.2d 213, 225 (Iowa 2006) (“We have said that the
commissioner commits error by failing to weigh and consider all of the
evidence.”); Armstrong v. State of Iowa Bldgs. and Grounds, 382 N.W.2d 161,
165 (Iowa 1986) (stating it is reversible error for the commissioner to fail to
“weigh and consider all the evidence”); Buttrey v. Second Injury Fund, No. 11-
0205, 2011 WL 4578449, at *8 (Iowa Ct. App. Oct. 5, 2011) (stating an agency’s
“opinion grounded upon inaccurate facts does not warrant the deference
normally accorded”); Beef Prods., Inc. v. Rizvic, No. 10-2083, 2011 WL 3688976,
at *6 (Iowa Ct. App. Aug. 24, 2011) (holding commissioner’s decision was
“illogical, irrational, and wholly unjustifiable” where commissioner’s findings relied
on misstatements of record evidence).
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When the commissioner fails to consider all the evidence, the appropriate
remedy is “remand for the purpose of allowing the agency to re-evaluate the
evidence” unless the facts are established as a matter of law. Armstrong, 382
N.W.2d at 165; see also Meyer, 710 N.W.2d at 225 (stating the remedy for failure
to consider all evidence “is to remand the case for a decision by the
commissioner on the existing record”); Rizvic, 2011 WL 3688976, at *6 (affirming
district court’s remand to agency). Here, we cannot conclude the relevant facts
are established as a matter of law. Accordingly, this matter shall be remanded
for the purpose of allowing the agency to make a decision based on the existing
record.
III.
For the foregoing reasons, we reverse the decision of the district court and
remand this case to the agency for a decision based on the totality of the existing
record.
REVERSED AND REMANDED.