IN THE SUPREME COURT OF IOWA No. 18–1545
Submitted September 17, 2020—Filed October 23, 2020
BRIAN TERRY and LISA TERRY,
Appellants,
vs.
MEGAN DOROTHY,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Story County, Bethany
Currie, Judge.
Appellee seeks further review of the court of appeals decision
vacating the district court’s grant of summary judgment. DECISION OF
COURT OF APPEALS VACATED; DISTRICT COURT GRANT OF
SUMMARY JUDGMENT AFFIRMED.
Appel, J., delivered the opinion of the court, in which all justices
joined.
Sarah M. Baumgartner (argued) of Hedberg & Boulton, P.C.,
Des Moines, for appellants.
Charles A. Blades (argued) and Valerie A. Foote of Smith Mills
Schrock Blades Monthei, P.C., Cedar Rapids, for appellee. 2
APPEL, Justice.
In this case, we consider whether settlement documents submitted
to and approved by the workers’ compensation commissioner released
common law claims that the employee brought against a coemployee
alleging gross negligence. On a motion for summary judgment, the district
court found that the settlement precluded the employee from bringing the
gross negligence claim against the coemployee. The employee appealed.
We transferred the case to the court of appeals. The court of appeals
reversed. We granted further review. For the reasons expressed below, we
affirm the ruling of the district court dismissing the employee’s gross
negligence claim against the coemployee.
I. Factual and Procedural Background.
A. Introduction. On October 14, 2015, Brian Terry, an employee
of Lutheran Services in Iowa (LSI) was attacked by a client of LSI, allegedly
causing serious injuries. Brian filed a workers’ compensation claim
against LSI and its workers’ compensation carrier. The parties ultimately
resolved the workers’ compensation dispute in a compromise settlement.
Two settlement documents were presented to the Iowa Workers’
Compensation Commissioner pursuant to Iowa Code section 85.35(3)
(2015). One was titled “Compromise Settlement” and the other was titled
“Additional Terms of Settlement.” The commissioner ultimately approved
the settlement.
B. Settlement Documents Presented to Commissioner.
1. Compromise settlement. The compromise settlement declared
that “[t]he undersigned parties submit this Compromise Settlement
pursuant to Iowa Code [section] 85.35(3).” The compromise settlement
further described the dispute as follows: 3 A dispute exists under the Iowa Workers’ Compensation Law, which the parties seek to resolve by full and final compromise disposition of Claimant’s claim for benefits. The subject and nature of the dispute is whether Claimant’s alleged October 14, 2015 work injury caused permanent impairment and permanent disability and, if so, the extent of permanent disability.
The compromise settlement contained release language. It provided that “[i]n consideration of this payment, claimant releases and discharges
the above employer and insurance carrier from all liability under the Iowa
Workers’ Compensation Law for the above compromised claim.”
2. Additional terms of settlement. The parties also presented to the
commissioner a document entitled “Additional Terms of Settlement.” The
compromise settlement expressly incorporated the additional terms of
settlement.
The additional terms of settlement stated that the “[d]efendants [LSI
and West Bend Mutual Insurance] agree to pay Claimant [Brian Terry] a
lump sum of $45,000 in new money.” In return, the claimant, Brian,
agreed that,
the payment of $45,000 is acceptable to Claimant as a full and final compromised settlement, satisfaction, and final discharge of all claims and demands that may exist against Lutheran Services of Iowa, Inc, West Bend Mutual Insurance Company, and any of their . . . employees . . . by reason of his employment and by reason of all injuries or damages sustained by Claimant on or about October 14, 2015, through his association with the Released Parties.
The additional terms of settlement further provided, “In consideration of
this payment, Claimant releases and discharges the Released Parties from
all liability, including liability under Iowa Workers’ Compensation Law, for
the above injury or injuries . . . known or unknown . . . .”
C. Proceedings Before the District Court.
1. Brian and Lisa Terry petition. On October 12, 2017, Brian and
Lisa Terry filed a petition at law in district court. They sought to recover 4
damages from Megan Dorothy, a supervisor of Brian’s when he worked at
LSI, on a gross negligence theory. Count I of the petition alleged gross
negligence when Dorothy put Brian in a one-on-one situation with a client
where the likelihood of assault was probable and the situation ultimately
resulted in injuries to Terry. Count II of the petition alleged that the
traumatic brain injury suffered by Brian as a result of Dorothy’s gross
negligence had an adverse impact on the Terrys’ marriage.
2. District court ruling on motion for summary judgment. Dorothy
moved for summary judgment, seeking to dismiss the action. In her
moving papers, Dorothy asserted alternative grounds, including relying
upon “release language that releases plaintiffs’ co-employee gross
negligence claim against the defendant Dorothy.”
The district court granted Dorothy’s motion for summary judgment
on both contract and statutory grounds. According to the district court,
Mr. Terry lost any further rights to pursue damages under Iowa Code section 85.20 for gross negligence against a co- employee both because the Additional Terms of Settlement specifically include a release for all co-employees and because Iowa Code section 85.35(9) provides that a compromise settlement approved by the Commissioner is a final bar to any further rights under chapter 85 . . . .
The district court next turned to Lisa Terry’s consortium claim. The
district court reasoned that in order to bring a consortium claim, there
must be liability on the underlying claim that caused injuries to the other
spouse. Because the district court dismissed Brian’s gross negligence
claim, the district court reasoned that Lisa’s consortium claim must also
fail.
3. Decision of court of appeals. The Terrys appealed. We transferred
the case to the court of appeals. The majority in the court of appeals
reversed. The majority emphasized that a claim of gross negligence is a 5
common law claim distinct and apart from a workers’ compensation claim.
The majority thus reasoned that the statutory settlement before the
workers’ compensation commissioner extinguished all statutory claims
but a settlement with the workers’ compensation commissioner did not
release a common law claim of gross negligence against a coemployee.
While the majority recognized there might be a claim for summary
judgment based upon the contractual terms of the additional terms of
settlement, independent of any approval by the workers’ compensation
commissioner, the majority found that contractual theory was not before
the court. According to the majority, Dorothy exclusively relied upon the
premise that a gross negligence claim against a coemployee was part and
parcel of a workers’ compensation claim and that the commissioner’s
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IN THE SUPREME COURT OF IOWA No. 18–1545
Submitted September 17, 2020—Filed October 23, 2020
BRIAN TERRY and LISA TERRY,
Appellants,
vs.
MEGAN DOROTHY,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Story County, Bethany
Currie, Judge.
Appellee seeks further review of the court of appeals decision
vacating the district court’s grant of summary judgment. DECISION OF
COURT OF APPEALS VACATED; DISTRICT COURT GRANT OF
SUMMARY JUDGMENT AFFIRMED.
Appel, J., delivered the opinion of the court, in which all justices
joined.
Sarah M. Baumgartner (argued) of Hedberg & Boulton, P.C.,
Des Moines, for appellants.
Charles A. Blades (argued) and Valerie A. Foote of Smith Mills
Schrock Blades Monthei, P.C., Cedar Rapids, for appellee. 2
APPEL, Justice.
In this case, we consider whether settlement documents submitted
to and approved by the workers’ compensation commissioner released
common law claims that the employee brought against a coemployee
alleging gross negligence. On a motion for summary judgment, the district
court found that the settlement precluded the employee from bringing the
gross negligence claim against the coemployee. The employee appealed.
We transferred the case to the court of appeals. The court of appeals
reversed. We granted further review. For the reasons expressed below, we
affirm the ruling of the district court dismissing the employee’s gross
negligence claim against the coemployee.
I. Factual and Procedural Background.
A. Introduction. On October 14, 2015, Brian Terry, an employee
of Lutheran Services in Iowa (LSI) was attacked by a client of LSI, allegedly
causing serious injuries. Brian filed a workers’ compensation claim
against LSI and its workers’ compensation carrier. The parties ultimately
resolved the workers’ compensation dispute in a compromise settlement.
Two settlement documents were presented to the Iowa Workers’
Compensation Commissioner pursuant to Iowa Code section 85.35(3)
(2015). One was titled “Compromise Settlement” and the other was titled
“Additional Terms of Settlement.” The commissioner ultimately approved
the settlement.
B. Settlement Documents Presented to Commissioner.
1. Compromise settlement. The compromise settlement declared
that “[t]he undersigned parties submit this Compromise Settlement
pursuant to Iowa Code [section] 85.35(3).” The compromise settlement
further described the dispute as follows: 3 A dispute exists under the Iowa Workers’ Compensation Law, which the parties seek to resolve by full and final compromise disposition of Claimant’s claim for benefits. The subject and nature of the dispute is whether Claimant’s alleged October 14, 2015 work injury caused permanent impairment and permanent disability and, if so, the extent of permanent disability.
The compromise settlement contained release language. It provided that “[i]n consideration of this payment, claimant releases and discharges
the above employer and insurance carrier from all liability under the Iowa
Workers’ Compensation Law for the above compromised claim.”
2. Additional terms of settlement. The parties also presented to the
commissioner a document entitled “Additional Terms of Settlement.” The
compromise settlement expressly incorporated the additional terms of
settlement.
The additional terms of settlement stated that the “[d]efendants [LSI
and West Bend Mutual Insurance] agree to pay Claimant [Brian Terry] a
lump sum of $45,000 in new money.” In return, the claimant, Brian,
agreed that,
the payment of $45,000 is acceptable to Claimant as a full and final compromised settlement, satisfaction, and final discharge of all claims and demands that may exist against Lutheran Services of Iowa, Inc, West Bend Mutual Insurance Company, and any of their . . . employees . . . by reason of his employment and by reason of all injuries or damages sustained by Claimant on or about October 14, 2015, through his association with the Released Parties.
The additional terms of settlement further provided, “In consideration of
this payment, Claimant releases and discharges the Released Parties from
all liability, including liability under Iowa Workers’ Compensation Law, for
the above injury or injuries . . . known or unknown . . . .”
C. Proceedings Before the District Court.
1. Brian and Lisa Terry petition. On October 12, 2017, Brian and
Lisa Terry filed a petition at law in district court. They sought to recover 4
damages from Megan Dorothy, a supervisor of Brian’s when he worked at
LSI, on a gross negligence theory. Count I of the petition alleged gross
negligence when Dorothy put Brian in a one-on-one situation with a client
where the likelihood of assault was probable and the situation ultimately
resulted in injuries to Terry. Count II of the petition alleged that the
traumatic brain injury suffered by Brian as a result of Dorothy’s gross
negligence had an adverse impact on the Terrys’ marriage.
2. District court ruling on motion for summary judgment. Dorothy
moved for summary judgment, seeking to dismiss the action. In her
moving papers, Dorothy asserted alternative grounds, including relying
upon “release language that releases plaintiffs’ co-employee gross
negligence claim against the defendant Dorothy.”
The district court granted Dorothy’s motion for summary judgment
on both contract and statutory grounds. According to the district court,
Mr. Terry lost any further rights to pursue damages under Iowa Code section 85.20 for gross negligence against a co- employee both because the Additional Terms of Settlement specifically include a release for all co-employees and because Iowa Code section 85.35(9) provides that a compromise settlement approved by the Commissioner is a final bar to any further rights under chapter 85 . . . .
The district court next turned to Lisa Terry’s consortium claim. The
district court reasoned that in order to bring a consortium claim, there
must be liability on the underlying claim that caused injuries to the other
spouse. Because the district court dismissed Brian’s gross negligence
claim, the district court reasoned that Lisa’s consortium claim must also
fail.
3. Decision of court of appeals. The Terrys appealed. We transferred
the case to the court of appeals. The majority in the court of appeals
reversed. The majority emphasized that a claim of gross negligence is a 5
common law claim distinct and apart from a workers’ compensation claim.
The majority thus reasoned that the statutory settlement before the
workers’ compensation commissioner extinguished all statutory claims
but a settlement with the workers’ compensation commissioner did not
release a common law claim of gross negligence against a coemployee.
While the majority recognized there might be a claim for summary
judgment based upon the contractual terms of the additional terms of
settlement, independent of any approval by the workers’ compensation
commissioner, the majority found that contractual theory was not before
the court. According to the majority, Dorothy exclusively relied upon the
premise that a gross negligence claim against a coemployee was part and
parcel of a workers’ compensation claim and that the commissioner’s
action in approving the settlement extinguished the gross negligence
claim. A dissent, however, agreed that a gross negligence claim against a
coemployee was not a statutory claim under Iowa Code section 85.20 but
reasoned that the contract theory was, in fact, addressed by the district
court and sufficiently presented on appeal to provide a basis to affirm the
district court.
II. Standard of Review.
This case involves review of a district court’s order on a motion for
summary judgment. A district court’s summary judgment ruling is
reviewable for correction of errors at law. Bandstra v. Covenant Reformed
Church, 913 N.W.2d 19, 36 (Iowa 2018).
III. Discussion.
A. Summary Judgment Based On Statutory Theory. We first
consider whether a gross negligence claim against a coemployee is a
statutory claim that is extinguished under Iowa Code section 85.20 when
the workers’ compensation commissioner approved settlement of the 6
statutory claim. Dorothy points out that an approved compromise and
settlement is a final bar “without qualification or limitation” to all further
rights under the workers’ compensation statutes. Bankers Standard Ins.
v. Stanley, 661 N.W.2d 178, 181–82 (Iowa 2003). In contrast, the Terrys’
assert that a gross negligence claim against a coemployee is a common law
claim that is outside the scope of the workers’ compensation statutes and,
as a result, a settlement of Brian Terry’s statutory workers’ compensation
claims does not extinguish the gross negligence and consortium claims.
On this point, we agree with the Terrys. Prior to 1973, the statutory
immunity from claims under our workers’ compensation statute after
settlement applied only to employers and not to coemployees. Craven v.
Oggero, 213 N.W.2d 678, 680–81 (Iowa 1973) (en banc). Thus, as of 1973,
an employee could bring a common law claim against coemployees based
on tort theories. In 1974, the statute was amended to extinguish common
law claims against coemployees except for those founded in gross
negligence. See 1974 Iowa Acts ch. 1111, § 1 (codified at Iowa Code
§ 85.20 (1975)); Gourley v. Nielson, 318 N.W.2d 160, 160–61 (Iowa 1982).
Thus, the common law claims against coemployees for gross negligence
survived the amendment and are not within the scope of our workers’
compensation statutes.
B. Summary Judgment Based on Contract Theory. We now turn
to the separate and independent question of whether, as a matter of
contract law, the settlement documents in this case extinguished Brian’s
gross negligence claim and Lisa’s consortium claim. As a preliminary
matter, we must address whether the contract theory is properly before
the court. 7
We first examine the ruling of the district court. The district court
expressly ruled in favor of Dorothy on both statutory and contract
grounds. The district court, among other things, declared that,
the plain language of contract (here, the Compromise Settlement including the Additional terms of Settlement), Mr. Terry released all employees of LSI—including Ms. Dorothy—from any and all claims of injuries that he may have against them. Therefore, Ms. Dorothy is entitled to summary judgment on Mr. Terry’s claim of gross negligence.
Plainly, the contract was preserved in the district court.
We now turn to the question of whether the contract theory was
waived by Dorothy on appeal. The header of the argument section in
Dorothy’s brief broadly declares without limitation that the district court
correctly granted summary judgment in favor of the defendant. The
discussion that follows admittedly concentrates most of its firepower on
the statutory theory that we have rejected.
Yet, the contract theory was also clearly presented in Dorothy’s
appellate brief. Dorothy stated that “plaintiff Brian Terry’s compromise
settlement agreement with LSI is a contract and the principles of contract
law apply.” After citing various cases explaining basic principles of
contract law, Dorothy argued “[w]ith the above principles in mind, it is
clear that plaintiff Terry released any claim he might have against the
defendant Dorothy involving his work place injury.” Dorothy further
claims that because she “is one of the employees covered by the language
in the settlement documents, her motion for summary judgment [was]
properly granted.” Certainly, this is enough to raise the contract theory
on appeal. “Our issue preservation rules are not designed to be
hypertechnical.” Griffin Pipe Prods. Co. v. Bd. of Rev., 789 N.W.2d 769,
772 (Iowa 2010). 8
We now turn to the merits of the contract theory. “A release is a contract, and its validity is governed by the usual rules relating to contract.” Stetzel v. Dickenson, 174 N.W.2d 438, 439 (Iowa 1970). The intent of the parties controls, and unless the contract is ambiguous, intent is determined by the plain language of the contract. Verne R. Houghton Ins. Agency v. Orr Drywall Co., 470 N.W.2d 39, 42 (Iowa 1991). It is, of course, true that the compromise settlement is limited to release of workers’ compensation claims. Considered in isolation, this document would not provide a basis for summary judgment. But, in addition, the parties executed the additional terms of settlement. Here, much broader release language is employed. The additional terms of settlement releases all employees of LSI from any and all liability. The language is broad, unqualified, and not ambiguous. It certainly extinguishes common law claims. And, although Lisa was not a signatory to the additional terms of settlement, her claim depends on the validity of the underlying claim of her spouse. 1 As a result, although the district court’s ruling was flawed when it reasoned that a statutory workers’ compensation claim extinguishes common law gross negligence claims against a coemployee, the district court properly ruled that, as a matter of contract, the language in the additional terms of settlement extinguished Brian’s gross negligence claim and Lisa’s consortium claim. IV. Conclusion. For all the above reasons, we affirm the order of the district court granting summary judgment against the plaintiffs in this matter. DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT GRANT OF SUMMARY JUDGMENT AFFIRMED.
1The appellants did not raise the issue of whether Lisa’s signature was required to release her loss of consortium claim. We therefore do not consider the issue.