Heritage Care and Rehabilitation and Midwest Employer's Insurance Company v. Debra True

IN THE COURT OF APPEALS OF IOWA

No. 14-0579
Filed March 11, 2015

HERITAGE CARE AND REHABILITATION
and MIDWEST EMPLOYER’S INSURANCE
COMPANY,
Petitioners-Appellants,

vs.

DEBRA TRUE,
Respondent-Appellee.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, Brad McCall, Judge.

An employer appeals the district court’s judicial review decision affirming

the decision of the workers’ compensation commissioner. AFFIRMED.

David E. Schrock and Caitlin R. Kilburg of Scheldrup, Blades, Schrock &

Smith, P.C., Cedar Rapids, for appellants.

Jean Mauss of Schott, Mauss & Associates, P.L.L.C., Des Moines, for

appellee.

Considered by Mullins, P.J., and Bower and McDonald, JJ.
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MULLINS, P.J.

Heritage Care and Rehabilitation, and Midwest Employer’s Insurance

Company (employer) appeal the district court’s judicial review decision that

affirmed the award of workers’ compensation benefits to Debra True. The

employer asserts the district court and workers’ compensation commissioner

incorrectly determined that True’s claim for permanency benefits was not barred

by the statute of limitations. The employer also claims the agency’s decision that

True sustained a thirty-percent industrial disability is not supported by substantial

evidence or is the result of an irrational, illogical, or wholly unjustifiable

application of law to the facts. Because we agree with the district court’s

decision that True’s claim is not barred by the statute of limitations and the award

of thirty-percent industrial disability is supported by substantial evidence, we

affirm.

I. Background Facts and Proceedings.

True began working in 2007 as a dietary aide for the employer. She

injured her right shoulder while taking out the trash in 2010. Medical treatment

was provided for a short time. True did not miss any days of work due to the

injury, so no weekly workers’ compensation benefits were paid. On March 1,

2011, True filed a petition with the workers’ compensation commissioner seeking

medical benefits under Iowa Code section 85.27 (2011) for the injury. The case

was set for a hearing on February 24, 2012.

Prior to that hearing on January 20, 2012, True filed a motion to amend

her petition to include a claim for temporary and permanent disability benefits,
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among other things. True also submitted, and the commission accepted, a

$100.00 filing fee. The deputy workers’ compensation commissioner assigned to

this case initially denied the motion to amend concluding, “To allow amendment

as claimant moves would be to condone trial by surprise. Claimant may file a

separate arbitration petition for hearing at another date.” Subsequent motions to

reconsider were also denied.

The case proceeded to hearing on February 24, 2012, where the deputy

ultimately reconsidered the ruling after it was brought to the deputy’s attention

that the $100.00 filing fee was paid and accepted with the motion to amend.

Because the fee was accepted, the deputy concluded the agency had deemed

the motion to amend to be a petition in arbitration, that filing had occurred prior to

the running of the statute of limitations, and therefore, True should be permitted

to make a claim for weekly benefits. The deputy then continued the hearing until

May 21, 2012, to permit the employer time to develop its case to meet the new

allegations of permanent disability.

After the hearing, the deputy issued a decision awarding a thirty-percent

industrial disability to True. The employer appealed to the commissioner, who

summarily affirmed the award of benefits and also affirmed the deputy’s decision

regarding the motion to amend. The commissioner concluded because True

already had a petition on file for the same date of injury, she did not need to file a

separate petition to seek weekly benefits but simply needed to amend her

petition currently on file and pay the filing fee required. Because True did just
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that, the commissioner found True fully complied with the administrative rules

regarding the timeliness and form of filing a petition in arbitration.

The employer filed a judicial review petition with the district court

challenging the agency’s ruling on the statute of limitations issue and the award

of benefits. The district court affirmed the agency’s decision, and the employer

now appeals.

II. Scope and Standard of Review.

Our scope of review in judicial review cases is for correction of errors at

law. Iowa R. App. P. 6.907. Iowa Code section 17A.19 governs judicial review

of agency decisions. The district court acts in an appellate capacity when it

exercises its judicial review power. Neal v. Annett Holdings, Inc., 814 N.W.2d

512, 518 (Iowa 2012). We apply the same standards of section 17A.19(10) when

we review the district court’s decision to determine whether we reach the same

conclusions as the district court. Id. If our conclusions are the same, we affirm;

otherwise, we reverse. Id.

Our standard of review depends on the issues raised on appeal.

Jacobson Transp. Co. v. Harris, 778 N.W.2d 192, 196 (Iowa 2010). “Because of

the widely varying standards of review, it is ‘essential for counsel to search for

and pinpoint the precise claim of error on appeal.’” Id.

The employer’s claim that the agency erred in concluding True’s motion to

amend and $100.00 payment satisfied the requirements of the applicable statute

of limitations found in section 85.26 is a challenge the agency’s ultimate

conclusion. A challenge to the agency’s ultimate conclusion is a challenge to the
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agency’s application of law to facts. See Meyer v. IBP, Inc., 710 N.W.2d 213,

219 (Iowa 2006). Under section 17A.19(10)(m), we review the agency’s

application of law to the facts to determine if it is “irrational, illogical, or wholly

unjustifiable.” We allocate some deference to the agency, but less than we give

the agency’s factual findings. Larson Mfg. Co. v. Thorson, 763 N.W.2d 842, 850

(Iowa 2009).

The employer also claims the district court erred by concluding substantial

evidence supported the agency’s findings True sustained a thirty-percent

industrial disability. When the challenge is whether substantial evidence

supports the agency’s decision, our review is governed by section 17A.19(10)(f).

As factual findings are clearly vested in the discretion of the agency, “we defer to

the commissioner’s factual determinations if they are based on ‘substantial

evidence in the record before the court when that record is viewed as a whole.’”

Id. (citing Iowa Code § 17A.19(10)(f)). “[T]he question before us is not whether

the evidence supports different findings than those made by the commissioner,

but whether the evidence ‘supports the findings actually made.’” Id. (citation

omitted).

The employer also challenges the agency’s ultimate conclusion that True

sustained a thirty percent industrial disability. Again, this challenge is to the

agency’s application of law to the facts, which under section 17A.19(10)(m) will

be reviewed to determine if it is “irrational, illogical, or wholly unjustifiable.”

III. Statute of Limitations.

Iowa Code section 85.26(1) provides:
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An original proceeding for benefits under this chapter or
chapter 85A, 85B, or 86, shall not be maintained in any contested
case unless the proceeding is commenced within two years from
the date of the occurrence of the injury for which benefits are
claimed or, if weekly compensation benefits are paid under section
86.13, within three years from the date of the last payment of
weekly compensation benefits.

Because True was not paid weekly benefits for her injury, she had two years to

file for benefits with the commission. True filed a petition with the commission

seeking medical benefits on March 1, 2011. Three days prior to the running of

the statute of limitations, True sought to amend her petition to add a claim of

permanency benefits arising from the same injury. With the motion to amend,

True paid the $100.00 filing fee required for petitions seeking weekly benefits; no

such filing fee was required for her petition seeking medical benefits only. See

Iowa Admin. Code r. 876-4.8(2). True’s motion to amend was eventually granted

by the deputy, who stated at the February hearing, “Unfortunately, once we

accepted that check, there was another player, and for that reason, I feel I need

to reconsider, and I will accept that as an appropriate filing within the statute.”

The deputy concluded the motion to amend was “properly deemed as an original

notice and petition in arbitration.” In the deputy’s written ruling following the May

hearing, the deputy stated:

Claimant has been paid no weekly benefits for her injury.
Claimant filed an original notice and petition for medical benefits on
March 1, 2011. She filed a motion to amend the original notice and
petition on January 20, 2012, seeking to amend to include a petition
in arbitration. Simultaneously with the filing of that amendment,
claimant submitted and the division of workers’ compensation
accepted the $100.00 required as a filing fee for an arbitration
petition. Claimant did not file an actual petition in arbitration until
February 28, 2012, and then at the direction of the undersigned.
Nevertheless, the submission of the filing fee with the motion to
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amend to a petition in arbitration coupled with this division’s
acceptance of the fee were sufficient to toll the statute of limitations
as of January 20, 2012.

On intra-agency appeal, the commissioner stated:

Upon review of the record of this matter it is concluded that
claimant fully, as opposed to substantially, complied with the
administrative rules relating to the timeliness of her petition and the
payment of the applicable filing fee. Claimant filed an original
notice and petition (Form 100) on March 1, 2011 seeking benefits
pursuant to Iowa Code section 85.27. No filing fee was required for
such filing. Prior to the statute of limitations applicable to this date
of injury, claimant filed a motion to amend the pending petition
(Form 100) to include new issues for arbitration pursuant to Iowa
Code section 86.14. At that time 876 IAC rule 4.8(2)(a) required
the payment of a filing fee of $100.00. Claimant paid that filing fee
on January 20, 2012, prior to the statute of limitations. The division
accepted the filing fee and the petition as amended by motion was
properly filed. The administrative rules require no further action in
order to timely file a petition for arbitration with the division when an
existing petition for the same date of injury is already on file. Had
claimant not timely paid the filing fee, the administrative rules grant
the division authority to toll the statute of limitations to order
payment of the filing fee within a limited time. Herein claimant
timely filed her amended petition and paid the correct filing fee.
The amendment and filing fee were timely and therefore claimant
complied with the administrative rules relating to the timeliness of
her petition and the payment of the applicable filing fee.

The employer asserts this ruling was in error because True was required

to file an original notice and petition for permanency benefits prior to the statute

of limitations running, not just a motion to amend. In support of its claim, the

employer cites to Iowa Code section 85.26(3) which provides:

Notwithstanding chapter 17A, the filing with the workers’
compensation commissioner of the original notice or petition for an
original proceeding or an original notice or petition to reopen an
award or agreement of settlement provided by section 86.13, for
benefits under this chapter or chapter 85A or 85B is the only act
constituting “commencement” for purposes of this section.
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However, nothing in this section requires an injured worker to file a separate

original notice and petition for each type of benefit the injured worker requests.

True did “commence” a proceeding within the applicable two-year statute of

limitations for an injury to her right shoulder by filing an original notice and

petition on March 1, 2011. This original notice and petition sought only medical

benefits at the time, but True later sought to amend that petition to add a request

for permanency benefits, among other things. There is no statutory or

administrative rule requiring True to file a separate petition for each type of

workers’ compensation benefit she seeks from the employer arising out of the

same injury. The commissioner concluded a motion to amend was the proper

procedural course to take when a petition alleging the same injury for the same

date against the same employer is already on file, and we agree.1

The administrative rule permitting petitions to be amended in workers’

compensation cases is identical to the civil procedure rule that governs general

civil actions in state court. Compare Iowa Admin. Code r. 876-4.9(5) with Iowa

R. Civ. P. 1.402(4). Both provisions state that leave to amend pleadings are to

be freely given when justice requires. “Amendments are the rule and denials

1
The employer spends a great deal of time criticizing the deputy’s change in position on
the motion to amend and the seemingly conflicting rulings. However, we do not review
the deputy’s decision when the case is before us on judicial review. We review the final
decision of the agency, which in this case is the commissioner’s appeal decision. See
Staff Mgmt. v. Jimenez, 839 N.W.2d 640, 647 (Iowa 2013) (“The final agency action in a
workers’ compensation case is not the deputy’s decision, but the decision of the workers’
compensation commissioner.”); see also Iowa Code § 86.24(5) (“The decision of the
workers’ compensation commissioner is final agency action.”). Therefore, we need not
address or justify the various rulings of the deputy commissioner on this issue, except to
say that the motion to amend was eventually granted by the deputy and the
commissioner affirmed this decision concluding the worker fully complied with the
administrative rules relating to the timeliness of her petition and the payment of the
applicable filing fee.
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[are] the exception.” Ackerman v. Lauver, 242 N.W.2d 342, 345 (Iowa 1976).

The motion to amend was filed before the statute of limitations had run. The

motion added a claim, not a party, to the litigation. The employer was given

timely notice of the new claim such that it was not defending a stale claim. The

employer was not prejudiced by the amendment because the hearing was

continued several months to permit the employer to meet the new allegations.

See Estate of Kuhns v. Marco, 620 N.W.2d 488, 491 (Iowa 2000) (noting an

amendment to a petition relates back to the date of the original pleading so long

as it does not offend the policies of the statute of limitations). We conclude the

agency’s decision to permit the amendment here is not irrational, illogical, or

wholly unjustifiable. See Iowa Code § 17A.19(10)(m).

IV. Industrial Disability.

Next, the employer challenges the agency’s award of thirty percent

industrial disability to True as not supported by substantial evidence and as an

irrational, illogical and wholly unjustifiable application of law to the facts. See id.

§ 17A.19(10)(f), (m). The employer claims the evidence shows True returned to

the job she held prior to the injury, has been able to perform that job without

restrictions, and does not require further treatment for her injury. The employer

asserts this indicates True did not sustain any industrial disability as a result of

the injury.

True had an independent medical evaluation (IME) that assigned an

eleven percent permanent partial impairment rating due to the limited range of

motion and strength deficits in her right arm. The IME restricted True to no lifting
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greater than fifteen pounds rarely, ten pounds occasionally, and no lifting over

the shoulder or at a full extension. True was also restricted against frequent

lifting, pushing, or pulling and restricted from pushing or pulling greater than

twenty pounds. The same IME recommended True undergo rotator cuff surgery.

True testified that her job duties have changed since the injury. She no

longer unloads the trailer on a regular basis, and when she has helped out on

occasion, she will only lift the light items. The cooler/freezer at work has

changed since her injury to permit heavier items to be stored closer to the

ground. Smaller pans are being used in the kitchen for cooking, and the

employees have been instructed to empty the trash cans more frequently to

prevent them from getting too heavy. While these changes were not instituted

due to her injury, the changes are the reason True has been able to continue to

work full time without special accommodations. True also testified she had to

quit her part-time job at a bakery due to the injury because she was no longer

able to lift the trays of baked goods over her head.

True offered a vocational evaluation opinion, which concluded she had

lost access to ninety-six percent of the jobs she had access to prior to the injury.

The employer offered its own vocational expert who opined True had a ten to

fifteen percent loss of labor market access. The deputy commission found

“neither vocational opinion was particularly helpful.”2 The deputy concluded True

had residual industrial capacity as she is able to perform her work duties without

2
We note the commissioner, in the appeal decision, summarily affirmed and adopted the
deputy’s decision regarding the assessment of industrial disability as the final agency
decision.
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special accommodations, but she has also clearly lost earning capacity as she is

now restricted from overhead and heavy work activities. The deputy noted

True’s age and the fact that she had to give up her part-time work. The deputy

also stated that the restrictions imposed would preclude True from some food

server and food preparation jobs that were in her prior work experience. The

deputy then assigned a thirty percent industrial disability.

We conclude substantial evidence supports the factual findings of the

agency and the agency’s award of thirty percent industrial disability is not

irrational, illogical, or wholly unjustifiable. We therefore affirm the district court’s

judicial review decision affirming the agency’s award in this case.

AFFIRMED.