Albers v. Gentry

CourtUnited States State Supreme Court of Iowa
Writing for the CourtVogel
Decision Date29 March 2006

Page 1

MARC ALBERS, Petitioner-Appellant,
MICHAEL GENTRY, Respondent-Appellee,
No. 6-081/05-0696
Court of Appeals of Iowa.
Filed March 29, 2006

Appeal from the Iowa District Court for Woodbury County, Dewie J. Gaul, Judge.

Marc Albers, Pyle Truck Lines, Inc. and Virginia Surety Company, Inc. appeal from the district court's order on judicial review affirming the agency's decision awarding Michael Gentry benefits. AFFIRMED.

Willis J. Hamilton of Hamilton Law Firm, P.C., Storm Lake, for appellant Marc Albers.

Steven M. Nadel of Ahlers & Cooney, P.C., Des Moines, for appellants Pyle Truck Lines, Inc. and Virginia Surety Company, Inc.

Ruth M. Carter of Carter Law Firm, Sioux City, for appellee.

Heard by Sackett, C.J., and Vogel and Mahan, JJ.


Marc Albers, and Pyle Truck Lines, Inc. along with its workers' compensation carrier, Virginia Surety Company, Inc., (together referred to as "Pyle Truck"), separately appeal from the district court's order on judicial review affirming the intra-agency appeal decision by the Iowa Workers' compensation Commissioner. As we determine the commissioner's factual findings are supported by substantial evidence to which the commissioner correctly applied the law, we affirm the district court's ruling upholding the commissioner's decision.

I. Background Facts and Proceedings.

Pyle Truck was a licensed trucking company or motor carrier, which in addition to hiring its own drivers, also used drivers of independent truck owners. Albers owned several trucks and referred drivers to Pyle Truck for purposes of driving Albers's trucks, while using Pyle Truck trailers and interstate permits. In 2001, Gentry answered an ad placed by Albers for a position as a truck driver. After consulting with Albers, Gentry was referred to Pyle Truck to fill out various forms and employment documents as well as undergo a physical examination and employment background check. When his training was complete, Gentry began driving one of Albers's trucks using Pyle Truck's trailers. In August 2001, Gentry was involved in an accident in North Carolina. He sustained significant injuries to his legs requiring above-the-knee amputation of his right leg as a result of the accident.

Gentry filed a petition for workers' compensation benefits against Albers, Pyle Truck, and Pyle's insurance carrier, Virginia Surety, with the Iowa Workers' compensation Commission. In the initial arbitration decision, the deputy commissioner determined that (1) Pyle Truck was Gentry's sole employer, (2) Gentry sustained a scheduled member injury to both legs resulting in a forty-four percent permanent partial disability, and (3) the weekly rate of compensation should be set at $211.06. On intra-agency appeal, the commissioner reached a different conclusion in determining that Albers and Pyle Truck exhibited joint control and supervision over Gentry and both were Gentry's employer.1 The commissioner also found Gentry's severe depression and post-traumatic stress disorder were "spillover effects" caused by the scheduled-member injuries to his legs, therefore causing permanent impairment to the body as a whole, and awarded benefits based upon industrial disability. He accordingly increased Gentry's permanent partial disability rating to eighty percent for loss of earning capacity. The commissioner also adjusted Gentry's rate of compensation by discounting the wages for weeks Gentry spent as a trainee that he found were not typical or customary earnings under Iowa Code section 85.36 (2001).

Albers and Pyle Truck petitioned the district court for judicial review of the final agency decision, challenging the commissioner's finding of joint employment, the increase in disability rating from the spillover effects of Gentry's mental health issues, and the change in compensation rate. The district court affirmed the commissioner's decision on the nature of the employment relationship as well as the extent of Gentry's injuries as both being factual determinations supported by substantial evidence. The district court also affirmed the commissioner's computation of the compensation rate by excluding Gentry's wages during his training period. Albers and Pyle Truck separately appeal.

II. Scope of Review.

We review a district court's review of agency action for correction of errors of law. Midwest Auto. III, L.L.C. v. Iowa Dep't of Transp., 646 N.W.2d 417, 422 (Iowa 2002). Our review is limited to determining whether the district court correctly applied the law in exercising its section 17A.19(8) judicial review function. Herrera v. IBP, Inc., 633 N.W.2d 284, 287 (Iowa 2001). We apply the standards of section 17A.19 to the agency action and determine whether our conclusions are consistent with those of the district court. Brown v. Quik Trip Corp., 641 N.W.2d 725, 727 (Iowa 2002). The factual findings regarding the award of benefits are within the agency's discretion, and we are bound by those findings of fact if supported by substantial evidence. Clark v. Vicorp Rests., Inc., 696 N.W.2d 596, 604 (Iowa 2005) (citing Iowa Code § 17A.19(10)(f) (2003)). Evidence is substantial when "'the quantity and quality of evidence would be deemed sufficient by a neutral, detached and reasonable person, to establish the fact at issue. . . .'" P.D.S.I. v. Peterson, 685 N.W.2d 627, 633 (Iowa 2004) (quoting Iowa Code § 17A.19(10)(f)(1) (2003)). Finally, the application of the law to the factual determinations in workers' compensation cases is "vested by a provision of law in the discretion of the agency," whereby we may only reverse if the agency's application of the law to those facts is "irrational, illogical, or wholly unjustifiable." Finch v. Schneider Specialized Carriers, Inc., 700 N.W.2d 328, 331 (Iowa 2005) (citations omitted). However, when the agency has not been vested with the final authority to interpret the law, we do not defer to the agency's interpretation of such law and review the agency's interpretation de novo. Hill v. Fleetguard, Inc., 705 N.W.2d 665, 670 (Iowa 2005).

III. Issues on Appeal.

A. Determination of Joint Employment.

Albers and Pyle Truck each argue on appeal that they are not joint employers, but that the other was the sole employer of Gentry at the time of the injury. The commissioner found, and the district court affirmed, that Albers and Pyle Truck jointly employed Gentry as they "shared supervisory control over [Gentry] and both shared in the economic benefit of his employment services."

Relying on the evidence adduced at hearing, the commissioner appears to have applied the multi-part test under Iowa law to determine Gentry's employment relationship with both Albers and Pyle Truck. See Caterpillar Tractor Co. v. Shook, 313 N.W.2d 503, 505 (Iowa 1981) (setting forth the five-part test for whether an employer-employee relationship exists). We agree with the district court and the agency that the following substantial evidence supports joint employment2 of Gentry: Albers placed the ad and initially recruited Gentry, promising to train him only if Gentry first qualified as a driver with Pyle Truck. Either Albers or Pyle Truck furnished all of the equipment, tractor, and trailer and paid all expenses of operating the truck. Albers believed that neither he nor Gentry had permission to haul for other carriers without prior approval and revenue-sharing by Pyle Truck. Albers set the amount of compensation Gentry was to receive for each load after receiving payment from Pyle Truck. While neither Albers nor Pyle Truck withheld payroll taxes on Gentry's income, Albers issued him a 1099 income tax form for the year 2001. Albers believed he had the authority to fire Gentry, but that Pyle Truck also had that authority.

Pyle Truck required Gentry to complete and sign an array of employment documents that not only referred to his employment relationship with Pyle Truck, but also included numerous company policies and regulations to which Gentry had to agree or face discipline from Pyle Truck.3 Pyle Truck exerted extensive control and direction over Gentry's day-to-day employment exceeding that which was required by...

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