Second Injury Fund Of Iowa Vs. Jackie George

• Court: Supreme Court of Iowa
• Decided: August 10, 2007
• Docket: 58 / 05-1957
• Status: Published

Opinion

IN THE SUPREME COURT OF IOWA No. 58 / 05-1957

Filed August 10, 2007

SECOND INJURY FUND OF IOWA,

Appellant,

vs.

JACKIE GEORGE,

Appellee.

On review from the Iowa Court of Appeals.

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

Staskal, Judge.

The Second Injury Fund requests further review from a court of

appeals decision affirming its liability. DECISION OF COURT OF APPEALS

VACATED; DISTRICT COURT JUDGMENT REVERSED AND CASE

REMANDED WITH DIRECTIONS.

Thomas J. Miller, Attorney General, and Shirley A. Steffe, Assistant

Attorney General, for appellant.

Corey J.L. Walker of Walker & Billingsley, Newton, for appellee. 2

WIGGINS, Justice.

On further review the Second Injury Fund asks us to decide whether

a prior injury to a left leg qualifies as a first loss under Iowa Code section

85.64 (1999). The Fund also asks us to decide whether a bilateral injury

will qualify as a second loss under section 85.64. Because the claimant’s

injury to her left leg in May 1996 qualifies as first loss under section 85.64,

and the claimant’s injury to her right leg in a subsequent bilateral injury

qualifies as a second loss under section 85.64, we agree with the decision of

the workers’ compensation commissioner that Fund liability is involved.

I. Background Facts and Proceedings.

The facts relevant to this further review proceeding are as follows. On

December 12, 2001, Jackie George filed a petition against her employer,

Xerox Company, and its insurance carrier claiming she was entitled to

benefits due to leg and knee injuries sustained in both her legs. George

claimed these injuries occurred on June 21, 2000, while she was employed

at Xerox repairing copy machines as an associate customer service

engineer. Within this petition George also made a claim against the Second

Injury Fund. George claimed she could receive benefits from the Fund

because of three prior injuries.

Before the hearing George voluntarily dismissed her employer and its

insurance company without prejudice, leaving only the Fund as the

defendant to the action. At the hearing George testified she had not entered

into any settlement agreement with Xerox. However, after the hearing the

Fund provided the deputy commissioner with documentation detailing

Xerox’s settlement with George. The deputy commissioner took official

notice of the settlement. The settlement demonstrates Xerox made twenty 3

weeks of payments to George for a four percent permanent partial disability

due to her June 21, 2000, bilateral lower extremity impairment.

Also before the hearing George and the Fund stipulated an

employer/employee relationship existed between George and Xerox at the

time of her bilateral injury, and George did sustain an injury on June 21,

2000, arising out of and in the course of her employment with Xerox.

At the hearing George testified about a previous injury. She testified

that on May 3, 1996, while working for Xerox, she tore her left meniscus

and pinched a nerve in the groin of her left leg. A doctor performed a left

knee scope with partial medial meniscectomy and medial femoral chondral

shaving. After her surgery the doctor placed George on light-duty work,

restricting her ability to squat. The doctor’s notes indicate three months

after the surgery George progressed enough for her to return to full-time

work. However, the doctor noted George continued to have meralgia

paresthetica—numbness in the lateral aspect of her thigh. Without

considering the meralgia paresthetica, George’s doctor gave her a four

percent impairment rating to the lower extremity. George then obtained an

additional impairment rating of three percent from another doctor for a total

impairment of seven percent to her left leg. George provided documentation

from the workers’ compensation commissioner that due to the May 3, 1996,

injury she was paid permanent partial disability for a seven percent

impairment to her left knee.

Concerning her June 21, 2000, injury George testified she sustained

a bilateral knee injury when she knelt in front of a copy machine to begin a

repair. George saw her family doctor that day. She later saw an orthopedic

surgeon who immediately placed her on restricted light-duty work. On

August 18 the orthopedic surgeon performed arthoscopic surgery on her left 4

knee. Six weeks after the left knee arthoscopic surgery the doctor

performed the identical procedure on George’s right knee. George reported

that neither surgery helped her symptoms and she continued to have

“constant pain in [her] knees.” George testified her knees were worse after

the surgeries than before.

George was diagnosed with patella malacia femoral. The orthopedic

surgeon suggested a total knee replacement; however, the other consulting

physicians disagreed. A more experimental procedure was also suggested

by the orthopedic surgeon, and likewise not endorsed by any of the other

physicians. At the time of the hearing no further medical care was

scheduled for George’s knees. George testified she took Advil for pain, but

at that time was under no other type of treatment for her knees.

After her 2000 bilateral knee injury and subsequent treatment,

George’s physicians placed permanent restrictions on her movement. They

recommended no lifting over thirty pounds, no kneeling, no squatting, no

stairs, and no ladders. One physician recommended sedentary work only.

The consulting physicians gave George impairment ratings for her

bilateral injury. George was given a five percent impairment rating of the

lower extremity, applied to each of her knees by one physician. Another

physician gave George a two percent whole body impairment rating for each

knee. A third physician found George suffered from a five percent

impairment of each of the lower extremities, translating to a two percent

impairment of the whole body for each knee. This doctor also found George

suffered an additional two percent impairment due to her pain levels.

Taking all the above facts into consideration, the workers’

compensation commissioner found the May 3, 1996, left knee injury

qualified as a first loss under section 85.64. The commissioner also held 5

the bilateral nature of the second injury did not disqualify the second injury

as a second loss under section 85.64 because “[i]n the present injury

[George]’s right leg was also damaged and constitutes a qualifying loss.”

The Fund sought judicial review of the commissioner’s decision and a

stay of the enforcement of agency action. The district court stayed

enforcement of the commissioner’s decision pending its judicial review. On

judicial review, the district court concluded substantial evidence supported

the agency determination that the May 1996 injury was a qualifying first

loss. Additionally, the court agreed the bilateral injury qualified as a second

loss under section 85.64. In reaching this conclusion the district court

used a different analysis of section 85.64 than that of the commissioner. In

other words, the court affirmed the decision of the commissioner for

different reasons than those used by the commissioner.

The Fund appealed. At the Fund’s request the district court stayed

enforcement of its decision without bond pending the Fund’s appeal to our

court. George cross-appealed the stay. We transferred the appeals to the

court of appeals. The court of appeals affirmed the district court’s judicial

review determination on the same grounds as the district court. The court

of appeals also affirmed the stay order. The Fund sought further review.

II. Issues.

In its application for further review the Fund claims the commissioner

erred in concluding George’s May 1996 injury was a qualifying first loss

under section 85.64. The Fund also claims the commissioner erred in

determining that a bilateral injury will not disqualify the second injury as a

second loss under section 85.64.

In our discretion we can review any issue raised on appeal regardless

of whether a party seeks further review of that issue. In re Marriage of 6

Ricklefs, 726 N.W.2d 359, 361-62 (Iowa 2007). George did not request

further review of the court of appeals’ decision regarding the stay.

Accordingly, we find it unnecessary to address the stay issue because on

remand we are ordering the district court to lift the stay and enforce the

commissioner’s decision.

III. Scope of Review.

When a district court reviews agency action, it must do so pursuant

to the Iowa Administrative Procedure Act. IBP, Inc. v. Harpole, 621 N.W.2d

410, 414 (Iowa 2001). This court reviews a district court’s judicial review of

agency action “to determine if we would reach the same result as the

district court in our application of the Act.” Arndt v. City of Le Claire, 728

N.W.2d 389, 393 (Iowa 2007).

This court may reverse, modify, affirm, or remand to the agency for

further proceedings if the agency’s action is erroneous under a ground

specified in the Act and a party’s substantial rights have been prejudiced.

Iowa Code § 17A.19(10). This court “broadly and liberally construe[s] the

commissioner’s findings to uphold, rather than defeat the commissioner’s

decision.” Second Injury Fund v. Bergeson, 526 N.W.2d 543, 546 (Iowa

1995). Evidence should not be considered “insubstantial merely because

the court may draw different conclusions from the record.” Arndt, 728

N.W.2d at 393. IV. Analysis.

A. The Second Injury Fund. The legislature established the Fund in order to encourage the employment of disabled persons “by making the

current employer responsible only for the disability the current employer

causes.” Second Injury Fund v. Shank, 516 N.W.2d 808, 812 (Iowa 1994). 7

The Second Injury Compensation Act is found at Iowa Code sections

85.63 through 85.69. Section 85.64 outlines the liability of the Fund. It

states: If an employee who has previously lost, or lost the use of, one hand, one arm, one foot, one leg, or one eye, becomes permanently disabled by a compensable injury which has resulted in the loss of or loss of use of another such member or organ, the employer shall be liable only for the degree of disability which would have resulted from the latter injury if there had been no pre-existing disability. In addition to such compensation, and after the expiration of the full period provided by law for the payments thereof by the employer, the employee shall be paid out of the “Second Injury Fund” created by this division the remainder of such compensation as would be payable for the degree of permanent disability involved after first deducting from such remainder the compensable value of the previously lost member or organ.

Any benefits received by any such employee, or to which the employee may be entitled, by reason of such increased disability from any state or federal fund or agency, to which said employee has not directly contributed, shall be regarded as a credit to any award made against said second injury fund as aforesaid.

Iowa Code § 85.64.

In order for George to prove section 85.64 is applicable to her loss,

she must establish:

(1) she has either lost, or lost the use of a hand, arm, foot, leg, or eye;

(2) she sustained the loss, or loss of use of another such member or organ through a work related—that is, compensable—injury; and

(3) there is some permanent disability from the injuries.

Shank, 516 N.W.2d at 812-13 (citing Anderson v. Second Injury Fund, 262

N.W.2d 789, 790 (Iowa 1978)). 8

B. Whether George’s May 1996 injury was a qualifying first loss under

section 85.64. To qualify as a first loss for purposes of section 85.64, the

first loss does not need to be work-related. Shank, 516 N.W.2d at 812.

Additionally, the first loss need not be a total loss or loss of use. Irish v.

McCreary Saw Mill, 175 N.W.2d 364, 368 (Iowa 1970). In 1990 the Fund

again asked this court to hold that the first loss must be “at minimum, ‘a

substantial loss that acts as a handicap to one’s employability.’ ” Second

Injury Fund v. Braden, 459 N.W.2d 467, 469 (Iowa 1990). In Braden we

decided not to retreat from our prior position and held that a scheduled

injury under section 85.34(2) affecting a hand, arm, foot, leg, or eye is a

qualifying first loss. Id. at 469-70. The reason for allowing a scheduled

injury affecting a hand, arm, foot, leg, or eye to be a qualifying first loss is

because a scheduled injury evaluates an injured person’s permanent partial

disability by determining the loss of physiological capacity of the affected

body part. Bergeson, 526 N.W.2d at 547. We see no reason to retreat from

our long-standing law that a scheduled injury under section 85.34(2)

affecting a hand, arm, foot, leg, or eye is a qualifying loss.

The record clearly establishes the May 1996 injury to George’s left leg

was a scheduled injury. The doctor rated it as a scheduled injury and the

employer paid it as a scheduled injury. Accordingly, the commissioner was

correct in holding the injury to the left leg qualified as a first loss under

section 85.64.

C. Whether a bilateral injury will qualify as a second loss under section

85.64. In his decision, the commissioner held that the bilateral nature of a

second injury will not disqualify the claimant from recovery under section 85.64. To decide this issue we must interpret the phrase “which has

resulted in the loss of or loss of use of another such member or organ” 9

contained in section 85.64. The legislature did not vest discretion with the

agency to interpret this section. Accordingly, we must determine if we will

defer to the agency’s interpretation pursuant to section 17A.19(11)(b). If a

statute is clear, detailed, does not need special expertise for adequate

comprehension, and is not highly technical, we will not defer to the agency’s

interpretation of a statute. Mosher v. Dep’t of Inspections & Appeals, 671

N.W.2d 501, 510-11 (Iowa 2003). “Our goal in interpreting the workers’

compensation act ‘is to determine and effectuate the intent of the

legislature.’ ” United Fire & Cas. Co. v. St. Paul Fire & Marine Ins. Co., 677

N.W.2d 755, 759 (Iowa 2004) (citation omitted). We accomplish this goal by

looking to the language the legislature has chosen. Id. We also place “a

reasonable or liberal construction which will best effect, rather than defeat,

the legislature’s purpose.” Id.

A plain reading of the statute requires us to interpret the phrase

“which has resulted in the loss of or loss of use of another such member or

organ” to mean a loss to another such member regardless if the second loss

includes other injuries. This interpretation furthers the statute’s legislative intent by imposing liability on the current employer only for the degree of

disability caused by the current loss, and if the employee has previously

been disabled, shifting the remaining liability for any remaining

compensable disability to the Second Injury Fund. Consequently, we agree

with the commissioner’s decision, but disagree with the district court and

court of appeals analysis. We hold the bilateral nature of a second injury

will not disqualify the claimant from recovery under section 85.64.

V. Disposition.

Because the claimant’s loss in May 1996 qualifies as first loss under

section 85.64 and we agree with the commissioner’s decision holding the 10

bilateral nature of a second injury will not disqualify the second injury as a

second loss under section 85.64, we vacate the decision of the court of

appeals, reverse the judgment of the district court, and remand the case to

the district court. On remand the district court should enter a judgment

affirming the decision of the commissioner on the grounds used by the

commissioner to reach his decision, lift its stay of the agency action, and

enter judgment for George on the workers’ compensation commissioner’s

decision.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT

JUDGMENT REVERSED AND CASE REMANDED WITH DIRECTIONS.