IBP, Inc. Vs. Lee Burress

IN THE SUPREME COURT OF IOWA
No. 07–1887

Filed March 5, 2010

IBP, INC.,

Appellee,

vs.

LEE BURRESS,

Appellant.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, Robert J.

Blink, Judge.

Employee challenges district court’s determination that his

brucellosis was an occupational disease and not an injury. DECISION

OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT

REVERSED; CASE REMANDED TO DISTRICT COURT WITH

INSTRUCTIONS TO REMAND TO INDUSTRIAL COMMISSIONER.

Jason D. Neifert of Max Schott & Associates, P.C., Des Moines, for

appellant.

Timothy A. Clausen and Sharese Manker of Klass Law Firm, L.L.P.,

Sioux City, for appellee.
 2

STREIT, Justice.

Pigs give us bacon and ham. They can also give meat packers

brucellosis. Lee Burress contracted brucellosis while working at IBP,

Inc.’s meat-packing plant. He did not discover he had the disease until

six years after he left IBP’s employment. Soon thereafter, he filed a

petition for workers’ compensation benefits. The deputy commissioner

determined brucellosis was an injury, not an occupational disease. The

commissioner affirmed. The district court reversed, concluding Burress

suffered from an occupational disease, not an injury. The court of

appeals reversed the district court. Because Burress contracted

brucellosis from a traumatic event, it is an injury, and his claim for

benefits was properly brought under Iowa Code chapter 85 (2009).1

Nonetheless, because the commissioner relied on an erroneous date to

trigger the commencement of the ninety–day period for giving notice of a

claim under chapter 85, we remand this case to the district court with

instructions to remand to the commissioner for a new determination of

the issue of Burress’ compliance with the ninety–day notice requirement.

I. Background Facts and Proceedings.

Lee Burress worked at IBP, Inc.’s meat-packing plant from 1987
until 1997. During his first few years working there, Burress worked as

a jowl and side shaver, a hog sticker (killing the hog by sticking a knife in

its throat), and a head dropper (cutting the head off the hog). These

positions involved significant contact with hogs and hog blood. On at

least one occasion, Burress cut his finger while dropping heads. During

his final eight years at IBP, Burress worked in the trolley room, where he

was responsible for running automated carts to various places within the

1
No substantive difference exists in the relevant current code sections and those
in force at the time the action arose. Therefore, all references are to the 2009 Iowa
Code unless otherwise indicated.
 3

plant. Although he did not have much contact with hogs in this position,

he would occasionally come into contact with hog blood. During these

eight years, he cut his finger and elbow and sustained a superficial

puncture wound to his face. Burress stopped working for IBP in

September 1997.

In July 2003, Burress began experiencing hip pain. The source of

the hip pain was unclear. Burress underwent hip surgery in September

2003 and developed an infection that lasted for several months. In

December 2003, Burress was diagnosed with brucellosis with

osteomyelitis. On April 13, 2004, Burress alerted IBP of a potential claim

by letter. In December 2004, Dr. William Nauseef explained by letter

that Burress contracted brucellosis from hog blood, with skin abrasions

being the most common “portal of entry.”

On January 3, 2005, Burress filed a workers’ compensation

petition alleging he had developed “chronic infection, hips, bone” as a

result of his “[c]ontact with blood products and tissue from slaughtered

hogs.” In its answer to the petition, IBP alleged the claimed injury is an

occupational disease, not an injury, under Iowa Code chapter 85A, and,

therefore, recovery is barred under section 85A.12. 2

Following a hearing, the deputy commissioner determined “[s]ince

it is most likely [Burress] contracted brucellosis as a result of trauma,

the injury is an injury under chapter 85, not an occupational disease.”

The deputy commissioner also found Burress did not become “aware of

the probable compensable character of his condition until sometime in

early December of 2004,” and his petition was filed within two years, as

2Under section 85A.12, an employer is relieved from liability one year after the

worker’s last exposure.
 4

prescribed by chapter 85. The deputy commissioner awarded Burress

permanent partial disability benefits.

IBP filed an application for rehearing, which the deputy

commissioner denied. On intra-agency appeal, the commissioner

affirmed and adopted the deputy commissioner’s arbitration decision

with one modification, that Burress met the definition of being

permanently and totally disabled and was thus entitled to permanent

total disability benefits.

IBP filed a petition for judicial review raising four issues:

(1) whether the agency erred in determining Burress’ brucellosis was an

injury, (2) whether the agency erred by holding Burress complied with

the statute of limitations and the ninety-day notice provision in Iowa

Code section 85.23, (3) whether the agency improperly adjusted Burress’

benefits from permanent partial to permanent total disability, and

(4) whether the agency erred in assessing a penalty against IBP.

The district court reversed the agency’s decision, concluding

Burress suffered from an occupational disease, not an injury. The court

determined Burress failed to file his petition within one year after the last

exposure, as required by Iowa Code section 85A.12. Burress appealed.

We transferred the case to the court of appeals, which reversed the

district court’s decision, finding the commissioner’s determination

Burress had suffered an injury was supported by substantial evidence.

IBP appealed.

II. Scope of Review.

We review the commissioner’s legal findings for correction of errors

at law. Iowa Code § 17A.19(10)(c), (m); Perkins v. HEA of Iowa, Inc., 651

N.W.2d 40, 43 (Iowa 2002). “Our task is to determine whether the

district court, acting in its appellate capacity in these judicial review
 5

proceedings, applied the law correctly.” Noble v. Lamoni Prods., 512

N.W.2d 290, 292 (Iowa 1994). We are bound by the commissioner’s

findings of fact so long as those findings are supported by substantial

evidence. Iowa Code § 17A.19(10)(f); Excel Corp. v. Smithart, 654 N.W.2d

891, 896 (Iowa 2002). Under Iowa Code section 17A.19(10), “a reviewing

court may reverse the decision of the workers’ compensation

commissioner if it is unsupported by substantial evidence in the record

or characterized by an abuse of discretion.” Univ. of Iowa Hosps. &

Clinics v. Waters, 674 N.W.2d 92, 95 (Iowa 2004).

“Substantial evidence” means the quantity and quality of
evidence that would be deemed sufficient by a neutral,
detached, and reasonable person, to establish the fact at
issue when the consequences resulting from the
establishment of that fact are understood to be serious and
of great importance.

Iowa Code § 17A.19(10)(f)(1). An abuse of discretion occurs when the

commissioner’s exercise of discretion is “clearly erroneous or rests on

untenable grounds.” Waters, 674 N.W.2d at 96.

III. Merits.

Today we must determine whether the brucellosis Burress

contracted is an injury or an occupational disease. The legislature has

set forth two workers’ compensation schemes: one for injuries under

Iowa Code chapter 85 and one for occupational diseases under chapter

85A. In order to qualify for workers’ compensation benefits under

chapter 85, the employee must demonstrate “(1) the claimant suffered a

‘personal injury,’ (2) the claimant and the respondent had an employer-

employee relationship, (3) the injury arose out of the employment, and

(4) the injury arose in the course of the employment.” Meyer v. IBP, Inc.,

710 N.W.2d 213, 220 (Iowa 2006). Comparatively, to recover under

chapter 85A, “the disease must be causally related to the exposure to
 6

harmful conditions of the field of employment,” and “those harmful

conditions must be more prevalent in the employment concerned than in

everyday life or in other occupations.” McSpadden v. Big Ben Coal Co.,

288 N.W.2d 181, 190 (Iowa 1980).

If Burress suffers from an occupational disease, his claim is barred

by the statute of repose. See Iowa Code § 85A.12 (“An employer shall not

be liable for any compensation for an occupational disease . . . unless

disablement or death results . . . within one year . . . after the last

injurious exposure to such disease in such employment . . . .”) However,

if his brucellosis is an injury, his claim is not barred by the statute of

repose, but instead subject to the two-year statute of limitations set forth

in section 85.26. See Iowa Code § 85.26(1); see also Swartzendruber v.

Schimmel, 613 N.W.2d 646, 650 (Iowa 2000) (holding the two-year

statute of limitations under Iowa Code section 85.26 does not begin to

run “until the employee discovers, or should discover in the exercise of

diligence, the nature, seriousness, and probable compensable character

of the injury or disease”).

Thus, whether Burress’ brucellosis is an injury or an occupational

disease is a key issue. Section 85A.8 defines occupational disease:

Occupational diseases shall be only those diseases
which arise out of and in the course of the employee’s
employment. Such diseases shall have a direct causal
connection with the employment and must have followed as
a natural incident thereto from injurious exposure
occasioned by the nature of the employment. Such disease
must be incidental to the character of the business,
occupation or process in which the employee was employed
and not independent of the employment. Such disease need
not have been foreseen or expected but after its contraction
it must appear to have had its origin in a risk connected with
the employment and to have resulted from that source as an
incident and rational consequence. A disease which follows
from a hazard to which an employee has or would have been
equally exposed outside of said occupation is not
compensable as an occupational disease.
 7

Although section 85A.8 defines occupational disease, chapter 85 does

not adequately define the term “injury.” Under section 85.61(4)(b), the

word “injury . . . shall not include a disease unless it shall result from

the injury and . . . shall not include an occupational disease as defined

in section 85A.8.”

Our case law has filled the gap and explained the differences

between an occupational disease and an injury.

“[A]n ‘injury’ is distinguished from a ‘disease’ by virtue of the
fact that an injury has its origin in a specific identifiable
trauma or physical occurrence or, in the case of repetitive
trauma, a series of such occurrences. A disease, on the
other hand, originates from a source that is neither
traumatic nor physical . . . .”

Noble, 512 N.W.2d at 295 (quoting Luttrell v. Indus. Comm’n, 507 N.E.2d

533, 541–42 (Ill. App. Ct. 1987)). Thus, the main distinction between an

injury and an occupational disease is the method of contraction.

“The statutory definition describes an occupational disease
in terms of a worker’s ‘exposure’ to conditions in the
workplace. . . . The term ‘exposure’ indicates a passive
relationship between the worker and his work environment
rather than an event or occurrence, or series of occurrences,
which constitute injury under the Worker’s Compensation
Act.”

Id. (quoting Duvall v. ICI Americas, Inc., 621 N.E.2d 1122, 1125 (Ind. Ct.

App. 1993)). We have also determined that, under certain

circumstances, a disease can be an injury for purposes of chapter 85.

“The contraction of disease is deemed an injury by accident
in most states if due to some unexpected or unusual event or
exposure. Thus, infectious disease may be held accidental if
the germs gain entrance through a scratch or through
unexpected or abnormal exposure to infection.”
 8

Perkins, 651 N.W.2d at 43–44 (quoting 3 Arthur Larson & Lex K. Larson,

Larson’s Workmen’s Compensation Law ch. 51, Scope, at 51–1 (2002)). 3

What types of diseases are strictly occupational diseases and not

injuries is debatable. Prior to 1973, chapter 85A restricted recovery for

occupational diseases to seventeen diseases specifically listed in Iowa

Code section 85A.9 (1971). See McSpadden, 288 N.W.2d at 190. In

1973, the legislature repealed that section and broadened the definition

of occupational disease in section 85A.8. Id.; see also 1973 Iowa Acts ch.

144, § 24. Currently, chapter 85A makes reference to only two diseases,

brucellosis in section 85A.11 and pneumoconiosis (“the characteristic

fibrotic condition of the lungs caused by the inhalation of dust particles”)

in section 85A.13. Our case law has permitted recovery for allergic

contact dermatitis and lead intoxication under chapter 85A. See Doerfer

Div. of CCA v. Nicol, 359 N.W.2d 428, 432 (Iowa 1984); Frit Indus. v.

Langenwalter, 443 N.W.2d 88, 91 (Iowa Ct. App. 1989). But see St.

Luke’s Hosp. v. Gray, 604 N.W.2d 646, 652 (Iowa 2000) (allergic

reactions may be considered injuries under chapter 85). In McSpadden,

we noted other states considered the following to be occupational

diseases: chronic bronchitis, kidney disorder and asthma caused by

inhalation of paint fumes, and pulmonary disease caused by inhalation

of smoke and fumes. McSpadden, 288 N.W.2d at 190–91 n.5. Although

3Iowa’s workers’ compensation statute, Iowa Code section 85.61, does not limit
compensable injuries to those that are “accidental,” and, therefore, it is broader than
statutes from other states that do contain an “accidental injury” limitation. See Ford v.
Goode, 240 Iowa 1219, 1222, 38 N.W.2d 158, 159 (1949) (interpreting 1946 statutory
provision, which is substantially similar to the 2009 provision); see also Perkins, 651
N.W.2d at 44 (“ ‘ “The injury to the human body here contemplated must be something,
whether an accident or not, that acts extraneously to the natural processes of nature,
and thereby impairs the health, overcomes, injures, interrupts, or destroys some
function of the body, or otherwise damages or injures a part or all of the body.” ’ ”
(quoting St. Luke’s Hosp. v. Gray, 604 N.W.2d 646, 650–51 (Iowa 2000) (emphasis
added))).
 9

chapter 85A no longer limits recovery for occupational diseases to a

specific schedule, section 85A.8 and our case law indicate an

occupational disease is generally acquired from repeated exposure to a

toxin in the workplace. See Doerfer, 359 N.W.2d at 432–33.

Other states have determined that “under the proper factual

situations the contraction of brucellosis can be characterized as an

accidental injury” rather than an occupational disease. Wilson Foods

Corp. v. Porter, 612 P.2d 261, 263 (Okla. 1980). Recognizing that “in

spite of being recognized as a disease, brucellosis can still be categorized

as a[n] accidental personal injury,” the Supreme Court of Oklahoma

determined an employee who contracted brucellosis through cracks in

his skin while working with cowhides had a compensable injury. Id.; see

also Baldwin v. Jensen-Salsbery Labs., 708 P.2d 556, 557–58 (Kan. Ct.

App. 1985) (brucellosis considered accidental injury where employee cut

his hand and then touched a tool contaminated with brucella); Mid-South

Packers, Inc. v. Hanson, 178 So. 2d 689, 690–91 (Miss. 1965)

(contamination through cuts and scrapes on maintenance worker’s

hands considered to be accidental injury and not an occupational

disease because “contraction of [brucellosis] was an occurrence which

was not expected, designed, or intentionally caused”).

Here, the deputy commissioner, whose findings were adopted by

the commissioner, determined Burress’ brucellosis was an injury and not

a disease.

The evidentiary record indicates [Burress] was exposed to
brucellosis in an event that occurred unexpectedly. The
event, most likely a cut to [his] hand and exposure to blood,
was sudden, traumatic, and of a brief duration. It might be
said that workers in a hog packing plant have a greater than
average risk of contracting brucellosis, but that risk is the
result of risk from a traumatic injury under circumstances
 10
that result in infection of the disease as a consequence of
trauma.

IBP contends the commissioner’s decision that Burress’ brucellosis was

an injury, and not an occupational disease, was not supported by

substantial evidence. Arguing that since Iowa Code section 85A.11

discusses brucellosis, 4 and that Iowa Code section 85.61(4)(b) defines
“injury” as excluding occupational diseases, IBP asserts brucellosis can

never be considered an injury under chapter 85.
First, we disagree with IBP and the district court that brucellosis
can never be an injury. Just because brucellosis is listed in Iowa Code
section 85A.11 does not mean brucellosis is always considered an

4Entitled “Diagnosis for brucellosis,” section 85A.11 reads

1. When any employee is clinically diagnosed as having
brucellosis (undulant fever), it shall not be considered that the employee
has the disease unless the clinical diagnosis is confirmed by:

a. A positive blood culture for brucella organisms, or

b. A positive agglutination test which must be verified by not less
than two successive positive agglutination tests, each of which tests shall
be positive in a titer of one to one hundred sixty or higher. Said
subsequent agglutination tests must be made of specimens taken not
less than seven nor more than ten days after each preceding test.

2. The specimens for the tests required herein must be taken by a
licensed practicing physician or osteopathic physician, and immediately
delivered to the university hygienic laboratory of the Iowa department of
public health at Iowa City, and each such specimen shall be in a
container upon which is plainly printed the name and address of the
subject, the date when the specimen was taken, the name and address of
the subject’s employer and a certificate by the physician or osteopathic
physician that the physician took the specimen from the named subject
on the date stated over the physician’s signature and address.

3. The state hygienic laboratory shall immediately make the test
and upon completion thereof it shall send a report of the result of such
test to the physician or osteopathic physician from whom the specimen
was received and also to the employer.

4. In the event of a dispute as to whether the employee has
brucellosis, the matter shall be determined as any other disputed case.
 11

occupational disease. Our case law has established that a disease can
be an injury for purposes of chapter 85 when “ ‘the germs gain entrance
through a scratch or through unexpected or abnormal exposure to
infection.’ ” Perkins, 651 N.W.2d at 43–44 (quoting 3 Arthur Larson &
Lex K. Larson, Larson’s Workmen’s Compensation Law ch. 51, Scope, at
51–1). In Perkins, we determined the employee’s hepatitis C was an
injury because her “infection was linked to a sudden, specific incident of
exposure.” Id. at 43. Such is the case here. It would be inconsistent to
preclude recovery for a disease that was most likely acquired through a
similar unexpected trauma only because section 85A.11 explains how a
diagnosis of brucellosis should be confirmed. There is nothing in the
record to indicate that Burress contracted brucellosis through a passive
exposure to conditions in the workplace. Noble, 512 N.W.2d at 295.
Burress did not contract brucellosis through prolonged or passive
exposure; it only took one traumatic exposure. As the expert’s
description of how brucellosis is acquired indicates, “[t]he portal of entry
[for brucellosis] is through abrasions in skin, most commonly, during
handling of infected animals or their carcasses. There is risk of aerosol
transmission in slaughter houses as well, although this appears to be
less common.”
Further, just because Burress cannot pinpoint when the injury
specifically occurred does not mean he did not suffer an injury. In Gray,
we determined the employee’s latex allergy to be an injury despite the
fact the employee had not been injured on a specific date, but rather was
exposed to the allergen on a frequent basis in the course of employment.
604 N.W.2d at 652. Here, the record reveals Burress was exposed to a
significant amount of hog blood while dropping heads and sticking hogs
and occasionally came into contact with hog blood in the trolley room. In
all probability, he contracted brucellosis during one of these incidents.
 12

However, because Burress’ brucellosis did not manifest itself until 2003,
six years after his last reported work-related injury, it is difficult to link
contracting the disease to one specific injury. The states that have
considered the contraction of brucellosis an injury have permitted
recovery despite the fact that the claimant was not able to pinpoint the
specific incident of exposure that resulted in contraction of the disease.
See Mid-South Packers, 178 So. 2d at 691 (contamination through cuts
and scrapes on maintenance worker’s hands considered to be an
accidental injury); Wilson Foods, 612 P.2d at 264 (employee who
contracted brucellosis through cracks in his skin while working with
cowhides had a compensable injury).
Our case law reveals that contact with infected blood is an “injury”
under Iowa Code chapter 85. In Perkins, the claimant was infected with
hepatitis C when she was sprayed with blood while working on a patient.
Perkins, 651 N.W.2d at 42. We determined this “sudden, specific
incident of exposure” to be an injury despite the fact that Perkins was
not “injured” per se. Id. at 43–44. The injury was being doused with
infected blood, not being accidentally cut. Id. In our case, Burress
testified he was frequently sprayed with and soaked in blood while
shaving and slaughtering hogs. Should our analysis of whether Burress
sustained an identifiable injury under Iowa Code chapter 85 be any
different because he sustained multiple injuries (numerous unexpected
contacts with hog blood), none of which he was able to specifically link to
his brucellosis? We doubt our conclusion in Perkins would have been
any different had Perkins come into contact with a patient’s infected
blood on more than one occasion.
Despite the fact that brucellosis is discussed in chapter 85A, the
record supports the conclusion Burress probably acquired brucellosis
from contact with infected hog blood. There is substantial evidence
 13

supporting the commissioner’s determination that Burress’ contraction
of brucellosis is an injury, not an occupational disease: Burress’
testimony indicating various cuts (portals of entry) and frequent contact
with hog blood while working at IBP and the expert’s description of how
brucellosis is usually acquired. IBP did not present any evidence
indicating Burress had contracted brucellosis in a manner consistent
with the definition of occupational disease in section 85A.8. It simply
relied on the reference to brucellosis in section 85A.11. There is
substantial evidence in the record supporting the commissioner’s
decision Burress contracted brucellosis from a traumatic occurrence:
the entry of infected hog blood into Burress’ body.
IV. Additional Issues.

IBP petitioned the district court for judicial review of four issues.

The district court dismissed the case based on a determination that

Burress suffered an occupational disease for which the statute of repose

had run. The district court did not reach the additional three issues. We

reverse the district court’s determination, and therefore, three issues

remain. “ ‘[W]here the district court has not reached certain issues

because they were deemed unnecessary to the decision under the

rationale it elected to invoke,’ we may ‘in the interest of sound judicial

administration’ decide the issues where they have been fully briefed and

argued.” Chauffeurs, Teamsters & Helpers, Local Union No. 238 v. Iowa

Civil Rights Comm’n, 394 N.W.2d 375, 378 (Iowa 1986) (quoting Barnes v.

Iowa Dep’t of Transp., 385 N.W.2d 260, 263 (Iowa 1986)). The additional

issues here were fully briefed before the district court. Additionally, the

factual record is complete. In contested cases, the district court may not

hear additional factual evidence apart from the agency record. 5 Iowa

5Prior to the judicial review hearing date, a party may make application to the

court for leave to present additional evidence if it is material and there were good
 14

Code § 17A.19(7). Based on the briefing and the complete factual record,

we choose to address the remaining issues.

A. Discovery Rule. IBP argues the agency inappropriately

applied the discovery rule to the two-year statute of limitations and Iowa

Code section 85.23, which provides that employees must give their

employers notice of injuries within ninety days. The discovery rule can

be applied to both the statute of limitations and the ninety-day notice

requirement. See Orr v. Lewis Cent. Sch. Dist., 298 N.W.2d 256, 258

(Iowa 1980). IBP bore the burden to prove non-compliance with the

statute of limitations or ninety-day notice provision and Burress bore the

burden to establish any discovery rule exception. Ranney v. Parawax

Co., 582 N.W.2d 152, 154 (Iowa 1998). Burress established the

discovery rule applies here because the nature of the initial traumatic

event, the entry of infected hog blood into his body, was not such that

Burress should have realized it produced a compensable injury. See

Johnson v. Heartland Specialty Foods, 672 N.W.2d 326, 328 (Iowa 2003)

(“Under the discovery rule, the time within which a proceeding must be

commenced does not begin to run until the claimant, as a responsible

person, should recognize the nature, seriousness, and probable

compensable character of the condition.”). Burress was first diagnosed

with brucellosis in December 2003 and filed a workers’ compensation

claim against IBP in January 2005, well within the two-year statute of

limitations even if we assume he first became aware of the connection

between brucellosis and his work at IBP at the time of his diagnosis.

IBP argues, however, that Burress became aware of the

compensable nature of his brucellosis when he was first diagnosed on

reasons for the failure to present it; however, such evidence will then be presented
before the agency. Iowa Code § 17A.19(7). No such application was made in this case.
 15

December 16, 2003, and that this was more than ninety days prior to the

date on which IBP received notice. IBP received notice of a potential

claim by letter on April 13, 2004. The ninety-day notice period does not

begin until Burress became aware of the compensable nature of his

injury. See Orr, 298 N.W.2d at 257–58. The agency applied the

discovery rule and held the ninety-day notice requirement did not begin

to run until December 8, 2004, the date on which Dr. Nauseef wrote a

letter asserting the causal link between brucellosis and IBP. This

determination is not supported by substantial evidence because Burress

was aware of the potential connection earlier, as indicated by the April

13, 2004 letter from Burress’ attorney alerting IBP to the potential claim.

See Ranney, 582 N.W.2d at 156–57 (holding the discovery rule does not

require an expert opinion of causation, but instead, limitations begin to

run when the employee discovers the nature, seriousness, and probable

compensable character of the injury or disease).

The record suggests Burress did not become aware of the

connection between his brucellosis and his work at IBP on the date of his

diagnosis, contrary to IBP’s argument. Although Dr. Ver Heul

commented in his dictated notes regarding the December 16, 2003

diagnosis that “interestingly” Burress had worked in a packing plant,

nothing in the record indicates Burress was informed of his doctor’s

private musings. Burress testified Dr. Ver Heul did not explain how

Burress may have contracted the disease when he informed Burress of

the diagnosis. Burress also testified that he first learned of the

connection from Dr. Nauseef at an educational medical presentation he

attended with Dr. Nauseef. Burress testified he was not certain of the

exact date, but thought it took place in June 2004. Given the April 2004
 16

letter, Burress’ counsel has noted that Burress was likely mistaken as to

the date of the presentation he attended with Dr. Nauseef.

Based on the record, it may be possible to determine that Burress

first became aware of the nature, seriousness, and compensable nature

of his brucellosis within the ninety days prior to the date on which he

gave notice, April 13, 2004. Medical records of Burress’ appointments

indicate that Burress became more aware of the nature, seriousness, and

compensable nature of his disease in March and April. Burress testified

he did not learn of the connection between brucellosis and his work at

IBP from Dr. Ver Heul, who made the diagnosis. Instead, Burress

testified he learned of the connection from Dr. Nauseef. Billing records

from the University of Iowa, Dr. Nauseef’s employer, include bills from

November 2003, prior to the diagnosis of brucellosis, and then no bills

until March 2004, within the ninety days prior to the April 13, 2004

letter. In March, doctors’ notes indicate that Burress sought to find work

that could accommodate him, but that his employer would not let him go

back to work while he was using a cane. A doctor’s note from April 8,

2004, states that Burress was “obviously a little bit discouraged” because

he learned the day before from another physician that his brucellosis

was “a life-threatening situation and he was going to require a major

surgical procedure.” Also, the April letter explained that while Burress

had recently been diagnosed with brucellosis, he had “only more

recently” been informed of the connection to his work at IBP. See

Holmquist v. Volkswagen of Am., Inc., 261 N.W.2d 516, 523 (Iowa Ct.

App. 1977) (holding letter that came into evidence without objection may

be used to establish any material fact).

Because we have no factual findings by the commissioner in this

regard, we remand to the commissioner for a determination of whether
 17

Burress complied with the ninety-day notice statute. See Armstrong v.

State of Iowa Bldgs. & Grounds, 382 N.W.2d 161, 165 (Iowa 1986) (“A

ground for remand arises when the court determines that the agency

action is unsupported by substantial evidence in the record made before

the agency,” and the court is unable to determine the facts as a matter of

law.); McDowell v. Town of Clarksville, 241 N.W.2d 904, 909 (Iowa 1976)

(“The proper disposition, however, was not for the court to find the facts

but rather to return the case to the Commissioner for decision on the

record already made.”).

B. Extent of Disability. IBP argues the agency erred by

adjusting the benefits from permanent partial disability to permanent

total disability because Burress did not file a cross-appeal within the

agency. IBP claims the commissioner’s review was limited under Iowa

Administrative Code rule 876—4.28(7) to the specific issues identified in

IBP’s brief, and therefore, the commissioner could not consider the

disability award unless Burress filed a cross-appeal. Burress responds

that IBP appealed “each and every finding, ruling, and order entered by

the Deputy Workers’ Compensation Commissioner” in its notice of

appeal. Under IBP’s interpretation, Burress would have been required to

file a cross-appeal before receiving IBP’s brief.

It is within the commissioner’s authority to re-consider and modify

issues on inter-agency appeal. Under Iowa Code section 86.24, the

commissioner reviews the deputy commissioner’s determination de novo

and “may affirm, modify or reverse . . . or the commissioner may remand

the decision.” See Giere v. Aase Haugen Homes, Inc., 259 Iowa 1065,

1070, 146 N.W.2d 911, 914 (1966). This court has previously held that

an award may be increased in favor of the non-appealing claimant by the

commissioner. Jarman v. Collins-Hill Lumber & Coal Co., 226 Iowa 1247,
 18

1249–51, 286 N.W. 526, 527–28 (1939). While it is within the

commissioner’s statutory authority to adjust an award, IBP argues that

the commissioner neglected to follow procedural rules implemented by

the agency, and therefore, the decision was improper.

Iowa Administrative Code rule 876—4.28(7) states the “appeal will

consider the issues presented for review by the appellant and cross-

appellant in their briefs and any issues necessarily incident to or

dependent upon the issues that are expressly raised.” Rule 876—4.28(7)

contemplates issues being raised by an appellant or cross-appellant. The

rules also provide a mechanism for filing a cross-appeal. See Iowa

Admin. Code r. 876—4.27. Although issues are viewed broadly, see Iowa

Admin. Code r. 875—4.28(7), and once raised, any issue can be resolved

in favor of the non-appealing party, IBP limited the issues raised to what

are essentially affirmative defenses and did not challenge whether and to

what extent Burress was disabled by his injury.

The rule providing a mechanism for a cross-appeal conflicts with

the rule for defining issues by the briefs because Burress would have

been required to file a cross-appeal before learning of the issues

designated in IBP’s brief. When faced with a procedural situation the

agency rules do not clearly address, this court has been guided by

general provisions. See Aluminum Co. of Am. v. Musal, 622 N.W.2d 476,

478–79 (Iowa 2001) (holding when parties appeal but fail to file briefs,

commissioner may define issues without following timely notice provision

as long as parties are given notice and an opportunity to be heard).

The commissioner has broad authority in agency appeals. Iowa

Code section 17A.15(3) provides that in an appeal, an “agency has all the

power which it would have in initially making the final decision except as

it may limit the issues on notice to the parties or by rule.” Additionally,
 19

“ ‘[t]he key to pleading in an administrative process is nothing more than

opportunity to prepare and defend’ ” and “ ‘[t]he test is fundamental

fairness, not whether the notice meets technical rules of common law

pleading,’ ” Waters, 674 N.W.2d at 97 (quoting James R. Lawyer & Judith

Ann Graves Higgs, Iowa Workers’ Compensation—Law & Practice § 21-7,

at 231 (3d ed. 1999) (first quotation); Oscar Mayer Foods Corp. v. Tasler,

483 N.W.2d 824, 828 (Iowa 1992) (second quotation)). IBP was not

deprived of fundamental fairness: it was informed of the additional issue

in Burress’ brief and had the opportunity to file a reply brief within ten

days. See Iowa Admin. Code r. 876—4.28(1). Although the language of

rule 876—4.28(7) could be interpreted to require Burress to file a cross-

appeal, given the disparity in timing when a party such as IBP files a

generalized and comprehensive notice of appeal, it was not improper for

the commissioner to consider the additional issue.

IBP argues that even if it was not improper for the commissioner to

consider the percentage of disability, the determination of permanent

total disability is not supported by substantial evidence. The

commissioner properly noted that permanent total disability occurs

“when the injury wholly disables the employee from performing work that

the employee’s experience, training, education, intelligence, and physical

capacities would otherwise permit the employee to perform.” See IBP,

Inc. v. Al-Gharib, 604 N.W.2d 621, 633 (Iowa 2000). Burress was fifty

years old at the time of the hearing, had a high school degree, and had

spent his life working as a manual laborer or skilled trade person. Dr.

Jochims found a twenty percent impairment to the body as a whole. He

explained that Burress is restricted from bending, climbing ladders,

lifting more than twenty pounds, any kneeling or crawling, and standing

for periods of time greater than fifteen minutes. Dr. Jochims opined that
 20

Burress’ disability “virtually eliminated any type of standing job or

walking job.” Burress testified that he did not believe he could return to

work at any of his prior jobs because of his physical restrictions. He also

testified that it was painful for him to sit for any extended period of time.

Burress explained that he might try to open a small engine repair

business with the help of Iowa Vocational Rehabilitation Services, but

also testified to the difficulties of successfully opening such a shop.

We have previously held similar evidence provides substantial

evidence of a permanent total disability. See Al-Gharib, 604 N.W.2d at

635 (holding substantial evidence supported permanent total disability

where commissioner relied on prior work experience as welder and

physical laborer and inability to perform such work in the future, ninth-

grade level of functioning, and doctor testimony that claimant was

“virtually unemployable”); see also Dailey v. Pooley Lumber Co., 233 Iowa

758, 765–66, 10 N.W.2d 569, 573–74 (1943) (considering claimant’s

functional disability of seventy-five to one hundred percent, age of sixty-

five, limited education, and non-performance of physical labor since

injury to uphold award of permanent total disability); Diederich v. Tri-City

Ry., 219 Iowa 587, 594, 258 N.W. 899, 902 (1935) (holding claimant

suffered permanent total disability where functional disability was only

twenty-five or thirty percent, claimant was fifty-nine years of age,

claimant had little or no education, and the injury kept the claimant

from performing physical work). Based on the similar evidence here, we

hold the commissioner’s determination of permanent total disability was

supported by substantial evidence.

C. Penalty. IBP also challenges the commissioner’s imposition of

a fifty percent penalty of unpaid benefits ($6,922.50). In support, the

agency stated:
 21
In a letter, dated December 13, 2004, claimant’s counsel,
based on Dr. Nauseef’s letter of December 8, 2004, requested
defendant to voluntarily accept claimant’s claim or to give
notice of the reasons for denial. This request was repeated
in a letter dated December 27, 2004. Defendant did raise
affirmative defenses during hearing under Iowa Code
sections 85.23 and 85.26. There is no evidence that
defendants have an opinion contrary to that of Dr. Nauseef.
There is no evidence defendant communicated any basis of
the denial of claim to claimant. For the reasons detailed
above, a penalty of 50 percent is appropriate. Claimant is
owed $6,922.50 in penalty from defendant. (52 weeks x
$266.25 x 50 percent).

IBP argues the commissioner relied only on IBP’s failure to inform

Burress of the reason for its denial of his claim, which “is not an

independent ground for awarding penalty benefits.” Keystone Nursing

Care Ctr. v. Craddock, 705 N.W.2d 299, 308 (Iowa 2005). In response,

Burress argues the statement “[t]here is no evidence that defendants

have an opinion contrary to that of Dr. Nauseef” demonstrates the

agency’s decision was not only based on IBP’s failure to give notice of

denial to Burress but also on IBP’s failure to rebut the medical opinion

on causation.

The standard for assessing a penalty based on non-payment of

benefits is whether the employer has reasonable cause or excuse, which

exists if either (1) the delay was necessary for the insurer to
investigate the claim or (2) the employer had a reasonable
basis to contest the employee’s entitlement to benefits. A
“reasonable basis” for denial of the claim exists if the claim is
“fairly debatable.”

Christensen v. Snap-On Tools Corp., 554 N.W.2d 254, 260 (Iowa 1996).

Given the express reference to brucellosis in the occupational

disease statute, see Iowa Code § 85A.11, IBP had a reasonable basis to

believe Burress’ brucellosis would be classified as an occupational

disease and his claim dismissed because of the one-year statute of
 22

repose. IBP had a reasonable basis to contest the employee’s entitlement

to benefits, and therefore, imposition of a penalty was improper.

V. Conclusion.

Because Burress contracted brucellosis from a traumatic event, it

is an injury, not an occupational disease, and his claim is not barred

under the statute of repose applicable to occupational disease claims.

We hold the commissioner’s factual finding regarding application of the

discovery rule to the ninety-day notice provision was unsupported by

substantial evidence. We remand to the district court with instructions

to remand the case to the commissioner for reconsideration of the ninety-

day notice provision on the record previously made. Additionally,

(1) Burress filed his claim within the statute of limitations governing

work-related injuries; (2) it was not an abuse of discretion for the

commissioner to consider the extent of Burress’ disability on intra-

agency appeal, and substantial evidence supported an award of

permanent total disability; and (3) the award of penalty benefits was

improper because IBP had a reasonable basis to contest Burress’

entitlement to benefits. Costs on appeal are assessed seventy-five

percent to IBP and twenty-five percent to Burress.

DECISION OF COURT OF APPEALS VACATED; DISTRICT

COURT JUDGMENT REVERSED; CASE REMANDED TO DISTRICT

COURT WITH INSTRUCTIONS TO REMAND TO INDUSTRIAL

COMMISSIONER.