IN THE COURT OF APPEALS OF IOWA
No. 14-1648 Filed April 22, 2015
POLARIS INDUSTRIES, INC., Plaintiff-Appellant,
vs.
KEN E. SHARAR, Defendant-Appellee. ________________________________________________________________
Appeal from the Iowa District Court for Polk County, Lawrence P.
McLellan, Judge.
Polaris Industries, Inc. appeals from the district court’s affirmance of the
Iowa Workers’ Compensation Commission’s award of permanent partial disability
benefits to Ken Sharar. AFFIRMED.
D. Brian Scieszinski of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des
Moines, for appellant.
Matthew T.E. Early of Fitzgibbons Law Firm, L.L.C., Estherville, for
appellee.
Considered by Danilson, C.J., and Potterfield and Bower, JJ. 2
POTTERFIELD, J.
Polaris Industries, Inc. (“Polaris”) appeals from the district court’s
affirmance of the Iowa Workers’ Compensation Commission’s award of
permanent partial disability benefits to Ken Sharar.
I. Factual and Procedural Background
Sharar has been employed by Polaris since 2003. His work at Polaris, like
most of his employment history, primarily involved physical labor. On November
3, 2009, he fell while performing his work duties and sustained serious injuries to
his right shoulder. He underwent two surgeries and extensive physical therapy.
He returned to work on light duty but struggled with clerical tasks that required
the use of a computer.1 He eventually settled into a position operating an air lift.
He was able to perform these work tasks largely unassisted.
Sharar achieved maximum medical improvement (MMI) on February 21,
2011. The doctor who determined he had reached MMI opined Sharar suffered
“a total impairment rating of 5% of the right upper extremity due to his decreased
range of motion.” A second doctor performed an independent medical evaluation
of Sharar. He calculated a fifteen percent permanent impairment of the
extremity—equivalent to a nine percent whole-person impairment—and
estimated Sharar could lift thirty-five pounds using both hands. A vocational
consultant wrote in an evaluation of Sharar, “It is reasonably likely that he has
suffered a reduction in employability of 61% and a reduction in labor market
1 The record shows Sharar struggled with a learning disability and participated in special education classes throughout his elementary and secondary education. He has no post- secondary degree. 3
access of approximately 70%. This is reasonably expected to result in a loss in
earning capacity estimated at approximately 65%.”
Sharar filed for permanent partial disability benefits. A deputy
commissioner at the agency conducted a hearing. He found Sharar to have
sustained a forty percent loss of earning capacity and awarded him 200 weeks of
industrial disability benefits. Polaris appealed the decision of the deputy
commissioner, and the commissioner affirmed the award. Polaris petitioned the
district court for judicial review, and the court affirmed. Polaris now appeals from
the district court’s affirmance.
II. Standard and Scope of Review
We review for correction of errors at law. Kohlhaas v. Hog Slat, Inc., 777
N.W.2d 387, 390 (Iowa 2009). We review the district court decision by applying
the standards of the Iowa Administrative Procedure Act—Iowa Code chapter 17A
(2013)—to the agency action to determine if our conclusions are the same as the
district court’s. Id. at 390.
We review the agency’s factual findings for substantial evidence. Swiss
Colony, Inc. v. Deutmeyer, 789 N.W.2d 129, 133 (Iowa 2010). Substantial
evidence is “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). “Evidence is not insubstantial merely because the court could
draw a different conclusion from the record.” Swiss Colony, 789 N.W.2d at 133. 4
“The ultimate question is whether the record when viewed as a whole supports
the finding actually made.” Id. at 133–34.
III. Discussion
Iowa Code section 85.34(2)(u) provides:
In all cases of permanent partial disability other than those hereinabove described . . . , the compensation shall be paid during the number of weeks in relation to five hundred weeks as the reduction in the employee’s earning capacity caused by the disability bears in relation to the earning capacity that the employee possessed when the injury occurred.
We refer to a reduction in earning capacity as “industrial disability.” Westling v.
Hormel Foods Corp., 810 N.W.2d 247, 253 (Iowa 2012); see Diederich v. Tri-City
R. Co., 258 N.W. 899, 902 (Iowa 1935).
A determination of a reduction in earning capacity is an issue of fact. See,
e.g., Excel Corp. v. Smithart, 654 N.W.2d 891, 900–901 (Iowa 2002). “The focus
is not solely on what the worker can or cannot do; industrial disability rests on the
ability of the worker to be gainfully employed.” Clark v. Vicorp Restaurants, Inc.,
696 N.W.2d 596 (Iowa 2005) (citation omitted). “Several factors are
considered . . . includ[ing] the employee’s functional impairment, age, education,
intelligence, work experience, qualifications, ability to engage in similar
employment, and adaptability to retraining.” Keystone Nursing Care Center v.
Craddock, 705 N.W.2d 299, 306 (Iowa 2005). We may also consider the
employee’s pre- and post-injury earnings, though “[a] reduction in earning
capacity can be shown even though the employee’s actual earnings have
increased.” Id. 5
Polaris does not contest that Sharar is entitled to some amount of
industrial disability benefits, but it contends the award of forty percent is
excessive and not supported by substantial evidence. However, on our review of
the record and consideration of the applicable factors, we find substantial
evidence to support the agency’s determination. Sharar’s functional impairment
prevents him from engaging in heavy physical labor, and most of his prior work
experience and qualifications relate to physical labor. At the time of the hearing,
Sharar was forty-eight years old and high-school educated. The record shows
he experienced difficulties adapting to retraining and learning new skills.
Although Sharar’s actual earnings at the time of the hearing were higher than at
the time of the injury, the report of the vocational consultant indicates that
Sharar’s earning capacity in the general labor market had decreased.
Polaris relies on two cases to argue that Sharar is not entitled to forty
percent industrial disability “as a matter of law”: Wright v. MidAmerican Energy
Co., No. 01-0312, 2002 WL 987870, at *3 (Iowa Ct. App. May 15, 2002), and
Mayhew v.
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IN THE COURT OF APPEALS OF IOWA
No. 14-1648 Filed April 22, 2015
POLARIS INDUSTRIES, INC., Plaintiff-Appellant,
vs.
KEN E. SHARAR, Defendant-Appellee. ________________________________________________________________
Appeal from the Iowa District Court for Polk County, Lawrence P.
McLellan, Judge.
Polaris Industries, Inc. appeals from the district court’s affirmance of the
Iowa Workers’ Compensation Commission’s award of permanent partial disability
benefits to Ken Sharar. AFFIRMED.
D. Brian Scieszinski of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des
Moines, for appellant.
Matthew T.E. Early of Fitzgibbons Law Firm, L.L.C., Estherville, for
appellee.
Considered by Danilson, C.J., and Potterfield and Bower, JJ. 2
POTTERFIELD, J.
Polaris Industries, Inc. (“Polaris”) appeals from the district court’s
affirmance of the Iowa Workers’ Compensation Commission’s award of
permanent partial disability benefits to Ken Sharar.
I. Factual and Procedural Background
Sharar has been employed by Polaris since 2003. His work at Polaris, like
most of his employment history, primarily involved physical labor. On November
3, 2009, he fell while performing his work duties and sustained serious injuries to
his right shoulder. He underwent two surgeries and extensive physical therapy.
He returned to work on light duty but struggled with clerical tasks that required
the use of a computer.1 He eventually settled into a position operating an air lift.
He was able to perform these work tasks largely unassisted.
Sharar achieved maximum medical improvement (MMI) on February 21,
2011. The doctor who determined he had reached MMI opined Sharar suffered
“a total impairment rating of 5% of the right upper extremity due to his decreased
range of motion.” A second doctor performed an independent medical evaluation
of Sharar. He calculated a fifteen percent permanent impairment of the
extremity—equivalent to a nine percent whole-person impairment—and
estimated Sharar could lift thirty-five pounds using both hands. A vocational
consultant wrote in an evaluation of Sharar, “It is reasonably likely that he has
suffered a reduction in employability of 61% and a reduction in labor market
1 The record shows Sharar struggled with a learning disability and participated in special education classes throughout his elementary and secondary education. He has no post- secondary degree. 3
access of approximately 70%. This is reasonably expected to result in a loss in
earning capacity estimated at approximately 65%.”
Sharar filed for permanent partial disability benefits. A deputy
commissioner at the agency conducted a hearing. He found Sharar to have
sustained a forty percent loss of earning capacity and awarded him 200 weeks of
industrial disability benefits. Polaris appealed the decision of the deputy
commissioner, and the commissioner affirmed the award. Polaris petitioned the
district court for judicial review, and the court affirmed. Polaris now appeals from
the district court’s affirmance.
II. Standard and Scope of Review
We review for correction of errors at law. Kohlhaas v. Hog Slat, Inc., 777
N.W.2d 387, 390 (Iowa 2009). We review the district court decision by applying
the standards of the Iowa Administrative Procedure Act—Iowa Code chapter 17A
(2013)—to the agency action to determine if our conclusions are the same as the
district court’s. Id. at 390.
We review the agency’s factual findings for substantial evidence. Swiss
Colony, Inc. v. Deutmeyer, 789 N.W.2d 129, 133 (Iowa 2010). Substantial
evidence is “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). “Evidence is not insubstantial merely because the court could
draw a different conclusion from the record.” Swiss Colony, 789 N.W.2d at 133. 4
“The ultimate question is whether the record when viewed as a whole supports
the finding actually made.” Id. at 133–34.
III. Discussion
Iowa Code section 85.34(2)(u) provides:
In all cases of permanent partial disability other than those hereinabove described . . . , the compensation shall be paid during the number of weeks in relation to five hundred weeks as the reduction in the employee’s earning capacity caused by the disability bears in relation to the earning capacity that the employee possessed when the injury occurred.
We refer to a reduction in earning capacity as “industrial disability.” Westling v.
Hormel Foods Corp., 810 N.W.2d 247, 253 (Iowa 2012); see Diederich v. Tri-City
R. Co., 258 N.W. 899, 902 (Iowa 1935).
A determination of a reduction in earning capacity is an issue of fact. See,
e.g., Excel Corp. v. Smithart, 654 N.W.2d 891, 900–901 (Iowa 2002). “The focus
is not solely on what the worker can or cannot do; industrial disability rests on the
ability of the worker to be gainfully employed.” Clark v. Vicorp Restaurants, Inc.,
696 N.W.2d 596 (Iowa 2005) (citation omitted). “Several factors are
considered . . . includ[ing] the employee’s functional impairment, age, education,
intelligence, work experience, qualifications, ability to engage in similar
employment, and adaptability to retraining.” Keystone Nursing Care Center v.
Craddock, 705 N.W.2d 299, 306 (Iowa 2005). We may also consider the
employee’s pre- and post-injury earnings, though “[a] reduction in earning
capacity can be shown even though the employee’s actual earnings have
increased.” Id. 5
Polaris does not contest that Sharar is entitled to some amount of
industrial disability benefits, but it contends the award of forty percent is
excessive and not supported by substantial evidence. However, on our review of
the record and consideration of the applicable factors, we find substantial
evidence to support the agency’s determination. Sharar’s functional impairment
prevents him from engaging in heavy physical labor, and most of his prior work
experience and qualifications relate to physical labor. At the time of the hearing,
Sharar was forty-eight years old and high-school educated. The record shows
he experienced difficulties adapting to retraining and learning new skills.
Although Sharar’s actual earnings at the time of the hearing were higher than at
the time of the injury, the report of the vocational consultant indicates that
Sharar’s earning capacity in the general labor market had decreased.
Polaris relies on two cases to argue that Sharar is not entitled to forty
percent industrial disability “as a matter of law”: Wright v. MidAmerican Energy
Co., No. 01-0312, 2002 WL 987870, at *3 (Iowa Ct. App. May 15, 2002), and
Mayhew v. Tri County, Inc., No. 5035006 (Iowa Workers’ Comp. Comm’n Oct. 4,
2011) (appeal decision). We first note that a determination of the extent of
Sharar’s loss of earning capacity is an issue of fact, not of law. Because we are
reviewing a determination of fact, we do not agree with Polaris’s assertion that
the agency’s award is “inconsistent with [its] prior practice and precedents.”
What Polaris describes as inconsistencies between Sharar’s case and his cited
cases are simply different findings of fact based upon the circumstances unique
to each case. 6
The two cases to which Polaris cites are factually distinguishable from the
case before us. In Wright, the employee had developed new skills at work that
expanded his potential employment opportunities. Wright, 2002 WL 987870, at
*3. His injury did not negatively impact his ability to work in his field, and “[a]
comparison between [his] potential earning capacity prior to the accident and his
earning potential after the accident reveal[ed] no change.” Id. The record before
us shows Sharar has been unable to develop new skills to improve his
employability. His injury impacts his ability to engage in physical labor, and his
earning capacity has decreased. Wright does not undermine the agency’s
determination.
In Mayhew, the agency found that its initial award of forty percent
industrial disability was too high because some percentage of the employee’s
loss of earning capacity resulted from a non-work-related injury. Mayhew, No.
5035006, slip op. at 2. Our record does not reflect Sharar has suffered an injury
outside of work that negatively impacted his earning capacity, and Mayhew has
no applicability in this case.
Polaris next argues the agency improperly speculated as to Sharar’s
future earnings in making its determination. In its consideration of Sharar’s
adaptability to retraining, the agency found, “[Sharar’s] ability to retrain appears
to be rather limited and his ability to access the labor market if he were not
employed by Polaris would be clearly diminished.” Polaris has mischaracterized
this finding as the agency’s speculation that Sharar is “likely to lose his job at
Polaris.” The agency’s statement is not speculation as to Sharar’s future
employment at Polaris; rather, it is a proper consideration of one factor bearing 7
upon Sharar’s employability in the general labor market in the abstract based on
his condition at the time of the hearing.
We, like the district court, find substantial evidence supports the agency’s
award of forty percent industrial disability. We further find the agency did not
engage in any improper speculation in reaching its conclusion. We affirm.
AFFIRMED.