Shane A. Schoenberger v. Acuity, A Mutual Insurance Company and Zephyr Aluminum Products

• Court: Court of Appeals of Iowa
• Decided: April 12, 2023
• Docket: 22-1613
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 22-1613 Filed April 12, 2023

SHANE A. SCHOENBERGER, Petitioner-Appellant,

vs.

ACUITY, A MUTUAL INSURANCE COMPANY, and ZEPHYR ALUMINUM PRODUCTS, Respondents-Appellees. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, David Nelmark, Judge.

A claimant appeals the district court’s error-preservation finding on judicial

review of workers’ compensation proceedings. REVERSED AND REMANDED.

Thomas M. Wertz and Mindi M. Vervaecke of Wertz Law Firm, Cedar

Rapids, for appellant.

Stephanie L. Marett of Nyemaster Goode, P.C., Des Moines, for appellee.

Considered by Vaitheswaran, P.J., and Greer and Chicchelly, JJ. 2

CHICCHELLY, Judge.

This appeal concerns the narrow question of error preservation in the

administrative law context. Shane Schoenberger contends the district court erred

in finding he did not preserve error on the issue of whether he was entitled to

industrial disability benefits for a combined shoulder and arm injury. Upon our

review of the proceedings before the Iowa Division of Workers’ Compensation, we

find the issue was preserved. Accordingly, we reverse and remand to the agency

for adjudication on the merits of this issue.

I. Background Facts and Proceedings.

Since 2001, Schoenberger has worked through a union as a journeyman

carpenter for various employers. Except for intermittent layoffs, he has worked for

Zephyr Aluminum Products since 2007. Zephyr is insured by its co-defendant

Acuity. On September 18, 2017, Schoenberger sustained an injury while working

for Zephyr. After physical therapy and a subacromial injection failed to resolve his

shoulder pain, Schoenberger underwent arthroscopic surgery on his left shoulder,

which consisted of labral debridement with biceps tenotomy, arthroscopic

acromioplasty with conversion of type I acromion, and a mini-open rotator cuff

repair. He spent some time off work altogether, returned part-time on light duty,

and eventually resumed working full-time for Zephyr with some permanent

restrictions.

Schoenberger applied for permanent partial disability benefits as a result of

the injury. The parties obtained a total of three independent medical evaluations

between November 2018 and August 2020, which each opined as to the

percentages of impairment to Schoenberger’s left upper extremity and body as a 3

whole. Notably, one of the examining physicians explained that Schoenberger’s

arm would not be as functional but did not distinguish the impairment rating beyond

the upper-left-extremity or body-as-a-whole categories. Schoenberger’s reported

symptoms ranged from left shoulder and biceps pain to numbness in the triceps

area, tingling from the elbow through the left hand, and problems working at or

above chest level, gripping and grasping, and using power tools. Testing in

October 2019 showed ulnar neuropathy at the left elbow, which the subsequent

medical evaluation opined was a sequela to the work injury and related surgery.

On June 21, 2021, the deputy workers’ compensation commissioner filed

an arbitration decision, which found that Schoenberger failed to prove the

stipulated work injury extended beyond his left shoulder into the body as a whole,

and therefore he was not entitled to receive industrial disability benefits. Pursuant

to Iowa Code section 85.34(2)(n) (2017), the deputy commissioner found

Schoenberger sustained permanent scheduled member disability to nineteen

percent of the left shoulder, and this disability entitled Schoenberger to receive

seventy-six weeks of permanent partial disability benefits.

Schoenberger appealed to the workers’ compensation commissioner,

arguing the deputy commissioner erred in finding his injury did not extend beyond

the left shoulder and qualify for industrial disability benefits under

section 85.34(2)(v). The commissioner filed an appeal decision on March 7, 2022.

Although the commissioner’s decision affirmed the finding that Schoenberger

failed to prove the injury extends beyond his left shoulder into the body as a whole

and therefore does not qualify for industrial disability benefits, the decision failed

to specifically address Schoenberger’s assertion that his injury qualifies for 4

industrial disability benefits because it constitutes a combined shoulder and arm

injury. Because Schoenberger had not previously and explicitly raised the

question of a combined shoulder and arm injury or secured a ruling thereon, the

district court found that error on this issue was not preserved and affirmed the

commissioner’s decision on judicial review. Schoenberger filed a timely appeal.

II. Review.

“We review a district court decision reviewing agency action to determine if

we would reach the same result as the district court in our application of the Iowa

Administrative Procedure Act.” Staff Mgmt. v. Jimenez, 839 N.W.2d 640, 653

(Iowa 2013). “Further, ‘we review the commissioner’s interpretation of Iowa Code

chapter 85 for correction of errors at law instead of deferring to the agency’s

interpretation’ because the legislature has not clearly vested the commissioner

with authority to interpret that chapter.” Chavez v. MS Tech. LLC, 972 N.W.2d

662, 666 (Iowa 2022) (citation omitted). “Nevertheless, we accept the

commissioner’s factual findings when supported by substantial evidence.” Id.

(citation omitted) (cleaned up).

III. Discussion.

Schoenberger argues that he properly preserved error because different

error preservation rules apply in the administrative law context. We agree with this

premise but disagree that it leads directly to Schoenberger’s requested result.

Normally, for an issue to be preserved, a party must present it and have it ruled upon before a court will review the issue on appeal. See Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (“It is a fundamental doctrine of appellate review that issues must ordinarily be both raised and decided by the district court before we will decide them on appeal.”). 5

The rule is different for administrative law cases. The final agency action in a workers’ compensation case is not the deputy’s decision, but the decision of the workers’ compensation commissioner. See Iowa Code § 86.24(5) (2013). We have held a party preserves error on an issue before an agency if a party raises the issue in the agency proceeding before the agency issues a final decision and both sides have had an opportunity to address the issue. See Office of Consumer Advocate v. Iowa State Commerce Comm’n, 465 N.W.2d 280, 283 (Iowa 1991) (finding a party preserved error by raising an issue in a petition for rehearing).

Jimenez, 839 N.W.2d at 647. Based on this principle, Schoenberger contends that

raising his industrial disability argument based on the combination of shoulder and

arm injuries on appeal to the commissioner, and thereby giving the defendants an

opportunity to respond, was sufficient. We acknowledge that this scenario could

be true in some instances. However, another key element is necessary: having

raised the issue at the earliest possible opportunity. See Off. of Consumer Advoc.,

465 N.W.2d at 283 (finding issue preserved despite not being initially plead before

the agency because it was raised to the agency “at the earliest possible

opportunity”).

Consistent therewith, rule 876–4.28(7) of the Iowa Administrative Code

describes the scope of issues on appeal before the workers’ compensation

commissioner:

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, except as provided in rule 876—4.29(86,17A). An issue will not be considered on appeal if the issue could have been, but was not, presented to the deputy workers’ compensation commissioner. An issue raised on appeal is decided de novo and the scope of the issue is viewed broadly. If the ruling from which the appeal was taken made a choice between alternative findings of fact, conclusions of law, theories of recovery or defenses and the alternative selected in the ruling is challenged as an issue on appeal, 6

de novo review includes reconsideration of all alternatives that were available to the deputy.

(emphasis added). This rule highlights that failing to obtain a ruling from the deputy

commissioner is not fatal so long as the matter was raised. See Boehme v.

Fareway Stores, Inc., 762 N.W.2d 142, 146 (Iowa 2009) (clarifying that

presentation to the deputy commissioner does not require obtaining a ruling from

the deputy in order to preserve the issue for further review).

Here, Schoenberger’s claim to the deputy commissioner centered on

whether his injury was to the scheduled member shoulder or extended beyond it.

The deputy commissioner summarized the issue as follows:

One of the main issues in this case is if claimant’s injury extends to the body as a whole, and is compensated as an industrial disability under Iowa Code section 85.34(2)(v), or if the injury is limited to the shoulder and is compensated as a functional loss under Iowa Code section 85.34(2)(n).

In this way, the question of industrial disability under Iowa Code section 85.34(2)(v)

was indeed presented at the earliest opportunity, which in this case, was to the

deputy commissioner. Zephyr contends that

adding a whole new body part for consideration with respect to the nature and extent of injury is not an “alternative theory” that is incident to, dependent upon, or already encompassed within the issues expressly raised to the deputy commissioner on whether a shoulder injury only is a scheduled member or body as a whole injury.

(citing Iowa Admin. Code r. 876–4.28(7)). However, we find that the broad scope

to be embraced on appeal pursuant to rule 876–4.28(7) supports otherwise.

Essentially, Schoenberger went from arguing that his injury extended

beyond the shoulder to the body as a whole to arguing the injury extended beyond

the shoulder by way of the arm injury specifically. He was not permitted to add a 7

whole new body part, introduce additional evidence, or claim a new injury. The

record already contained evidence pertaining to symptoms below the shoulder

area, such as the sequela injury involving ulnar neuropathy at the elbow.

Therefore, we agree with Schoenberger’s characterization of his appellate

argument to the commissioner as “additional ammunition for the same

argument . . . made below—not a new argument advanced on appeal.” See JBS

Swift & Co. v. Ochoa, 888 N.W.2d 887, 893 (Iowa 2016).

Because Schoenberger presented the broad issue to the deputy

commissioner, it was preserved for the commissioner’s review on direct appeal.

The commissioner did not explicitly find the issue waived but failed to address the

argument altogether. In such circumstances, we encourage claimants to file an

application for rehearing pursuant to rule 876–4.24 of the Iowa Administrative

Code. Nonetheless, in light of our special preservation rules for administrative

proceedings, we find the issue was preserved for the district court. See Jimenez,

839 N.W.2d at 647. Accordingly, we reverse the ruling on judicial review and

remand to the agency for a determination on the merits of this issue.

REVERSED AND REMANDED.

Vaitheswaran, P.J., concurs; Greer, J., dissents. 8

GREER, Judge (dissenting).

Shane Schoenberger contests the district court ruling that his claim for

benefits under Iowa Code section 85.34(2)(v) (2021) was not preserved. 1 In his

requested relief in the appellate brief here, Schoenberger commented that the

“[c]ommissioner did a de novo review and still only awarded the functional

impairment rating to the shoulder,” yet requested that we “remand[] back to the

[a]gency for a determination of whether Schoenberger’s injury falls within the

industrial disability analysis with two schedule [sic] injuries to his shoulder and arm

combined.” Schoenberger concedes he first raised the legal theory that the

combined injuries to the shoulder and arm were separate scheduled injuries in his

appellate brief to the commissioner, but we note he initially addressed the arm and

shoulder complaints2 with the deputy commissioner under the theory that the arm

dysfunction, along with the shoulder injury, would require a finding of injury to the

person as a whole. The deputy commissioner noted:

One of the main issues in this case is if claimant’s injury extends to the body as a whole, and is compensated as an industrial disability under Iowa Code section 85.34(2)(v), or if the injury is limited to the shoulder and is compensated as a functional loss under Iowa Code section 85.34(2)(n).

So, I part ways with the majority on the approach we should take given the

record and the legal issues before us. The commissioner affirmed the deputy

1 Both parties point to cases that, in their analysis, answer the error-preservation question. Given that those cases, which were considered by the district court, could take us on different paths, clarity might be helpful here if resolution depended on error preservation. 2 At all stages of the case, Schoenberger describes his work injuries as including:

“his rotator cuff, left superior labrum, supraspinatus tendon, left biceps long head tendon, and sequela to the left elbow, and left ulnar nerve causing symptomatology from elbow to fingertips.” 9

commissioner’s ruling that considered whether the work injury was solely to the

shoulder, such that Iowa Code section 85.34(2)(n) (2021) applies, or was a

constellation of injuries under section 85.34(2)(v). See Chavez v. MS Tech. LLC,

972 N.W.2d 662, 668 (Iowa 2022) (“These rules of statutory construction guide our

conclusion that ‘shoulder’ under section 85.34(2)(n) must be defined in the

functional sense to include the glenohumeral joint as well as all of the muscles,

tendons, and ligaments that are essential for the shoulder to function.”). Both

theories required a finding that the arm and hand complaints were work-related

injuries, along with the shoulder injury.

As for the record made below, Schoenberger offered medical evidence over

the arm and hand symptoms to show those injuries should be considered along

with the shoulder injury to allow compensation under 85.34(2)(v). In an

independent medical examination by his expert, Dr. John Kuhnlein, the doctor

opined less definitively, that:

The ulnar forearm, hand, and finger symptoms developed after the surgery with no other known cause for these symptoms, and so while the cause for the symptoms has not been formally defined at this time, it is more likely that they are related to the surgery that was performed for this work injury, and so therefore would be related to the original September 18. 2017, injury as a sequela to that injury.

Still, two medical evaluators providing medical reviews for the employer, Dr. David

Field and Dr. James Nepola, evaluated the left arm and hand complaints as not

related to the work injury and shoulder issues. So, although the legal theory was

presented differently before the deputy commissioner than it was before the

commissioner on appeal, the underlying proof required for either theory was

developed and considered by the deputy commissioner. Yet, the deputy 10

commissioner found (and the commissioner affirmed and adopted) that only the

shoulder issues were work-related injuries requiring compensation under the Iowa

Workers’ Compensation statute. We give great deference to the commissioner’s

determination that Schoenberger suffered only one work-related injury. See Cedar

Rapids Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839, 844 (Iowa 2011) (“Our decision

is controlled in large part by the deference we afford decisions of administrative

agencies. Medical causation presents a question of fact that is vested in the

discretion of the workers’ compensation commissioner.”). And without a second

injury, Schoenberger cannot be entitled to industrial disability benefits. See Iowa

Code § 85.34(2)(n) (including “shoulder” in the statutory list of scheduled member

injuries); Chavez, 972 N.W.2d at 666–67 (“Disabilities resulting from injuries other

than those listed in paragraphs (a) through (u) of section 85.34 are considered

unscheduled injuries that allow for benefits based on the injury to the body as a

whole and are evaluated according to the industrial method.”); accord Chavez, 972

N.W.2d at 670–71 (refusing to consider claimant’s argument that she was entitled

to industrial disability benefits because she injured two scheduled members, her

shoulder and arm, because substantial evidence supported the commissioner’s

finding that the claimant failed to prove a second injury).

Given our deference to the agency, I would affirm the commissioner’s ruling

over the compensation for the work-related shoulder injury.