Allen v. Allen Water and Wastewater Engineering, Inc.
| Decision Date | 19 June 1996 |
| Docket Number | No. 94-1376,94-1376 |
| Parties | Sandra Kay ALLEN, Individually and as Executor of the Estate of Thomas F. Allen, Appellant, v. ALLEN WATER AND WASTEWATER ENGINEERING, INC., and Kemper Insurance Company, Appellees. |
| Court | Iowa Supreme Court |
Roger W. Stone of Simmons, Perrine, Albright & Ellwood, P.L.C., Cedar Rapids, for appellant.
Craig A. Levien and Jean Dickson Feeney of Betty, Neuman & McMahon, L.L.P., Davenport, for appellees.
Considered by McGIVERIN, C.J., and LAVORATO, SNELL, ANDREASEN, and TERNUS, JJ.
The issue before us on further review is whether the district court or the industrial commissioner must decide an issue involving an indemnification amount in this workers' compensation case. The district court and court of appeals concluded the amount of indemnity to which the insurer was entitled is a question of fact and, therefore, the case must be remanded to the industrial commissioner for resolution. We affirm.
I. Background facts and proceedings. Petitioner Sandra Kay Allen (Allen) is the surviving spouse of Thomas Allen, a professional engineer and late president and an employee of Allen Water and Wastewater Engineering, Inc. (Wastewater). Thomas was killed in an automobile accident (in which Allen was a passenger) on January 13, 1990. Wastewater's workers' compensation insurer was Kemper Insurance Company.
After the accident, the estate of Thomas Allen brought a third-party wrongful death action against the negligent tortfeasors whose vehicle struck the Allen vehicle and caused the death of Thomas Allen. The estate received a settlement of $70,000 from the tortfeasors' automobile insurers in the wrongful death action.
Apart from the wrongful death settlement, Allen sought and was denied workers' compensation benefits from Kemper for her husband's death. Thereafter, Allen filed a claim for workers' compensation death benefits, see Iowa Code § 85.31 (1993), with the Iowa industrial commissioner's office against the employer, Wastewater, and its insurer, Kemper. In March 1993, after litigating the disputed claim, Allen was awarded death benefits arising out of the work-related death of her husband.
At the arbitration hearing on Allen's workers' compensation claim, Kemper asserted its indemnity rights, for any sums it would have to pay Allen, under Iowa Code section 85.22(1) (1993) from the $70,000 recovery Thomas' estate received from the tortfeasors. 1 Allen agreed that statute created such rights as claimed by Kemper. Allen and Kemper only disputed the amount of indemnity Kemper was entitled to in the event it was ordered to pay Allen benefits. 2
Relying on our decision in Fisher v. Keller Industries, Inc., 485 N.W.2d 626 (Iowa 1992), the industrial commissioner believed that Kemper had no indemnity rights under section 85.22(1) for benefits not yet paid and, therefore, denied Kemper's request for indemnification from the proceeds of Thomas' estate's wrongful death settlement. Based on this conclusion, the commissioner did not decide the amount of Kemper's indemnity entitlement. The commissioner also made other rulings not challenged on this appeal.
Both Allen and Kemper filed petitions in district court for judicial review of the commissioner's decision. See Iowa Code §§ 17A.19, 86.26 (1993). The district court reversed the commissioner's ruling that denied Kemper's request for indemnification. Relying on our decision in Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993), the court concluded Kemper was entitled to indemnity but did not specify the amount. The court remanded the case to the industrial commissioner for a determination of the amount of indemnity to which Kemper was entitled. Stated another way, the court remanded the case with instructions for the commissioner to determine the value of Kemper's indemnity entitlement that it held existed.
Allen appealed the district court's decision. See Iowa Code § 17A.20; Iowa R.App.P. 1. We transferred Allen's appeal to the court of appeals. See Iowa Code § 602.4102(2). That court affirmed the decision of the district court.
We granted Allen's application for further review. See id. § 602.4102(4). We review the district court's legal conclusions for correction of errors at law. Iowa R.App.P. 4.
On further review, Allen contends the decisions of the district court and court of appeals to remand the case to the industrial commissioner to determine the value of Kemper's indemnity entitlement, under Iowa Code section 85.22(1), must be reversed, based on language in Thomas v. Hansen, 524 N.W.2d 145 (Iowa 1994). Allen contends the present case, instead, should have been remanded to the district court to determine Kemper's indemnity amount.
In sum, Allen does not dispute the district court and court of appeals conclusion that Kemper has indemnity rights inherent under section 85.22(1); she disputes, however, that the industrial commissioner is the proper tribunal to decide the amount of Kemper's indemnity entitlement.
In its resistance to Allen's application for further review, Kemper contends the district court and court of appeals were correct to remand the case to the industrial commissioner to determine the amount of Kemper's indemnity entitlement. Without expressing its view on the relevance of the Thomas case relied on by Allen, Kemper simply contends the issue presents a question of fact to be determined by the agency, not the district court, where the indemnity claim first arose.
As we believe the court of appeals and district court decisions are not in conflict with the Thomas case or any established Iowa law, we affirm the remand of the case to the industrial commissioner to set the amount of Kemper's workers' compensation indemnity entitlement.
II. Indemnity under Iowa Code section 85.22(1). In administrative actions, such as the present workers' compensation case, it is generally accepted that questions of fact are to be resolved by the agency and are given substantial weight on judicial and other appellate review. See Bearce v. FMC Corp., 465 N.W.2d 531, 534 (Iowa 1991). Allen apparently does not dispute Kemper's belief that the amount of indemnity, as opposed to a right to indemnity, under Iowa Code section 85.22(1), is a question of fact. Allen's argument on further review rests on one sentence in our Thomas decision in which we stated the following: "Indeed it is always for the court, not the agency, to determine matters of indemnity." Thomas, 524 N.W.2d at 148.
If viewed in isolation, this statement would appear to support Allen's contention that we should remand the present case to the district court, as opposed to the commissioner. After further analysis of the Thomas case, however, it is clear to us that Allen has taken the statement out of context and the holding of the Thomas decision does not support Allen's argument for remand to the district court.
A. Thomas v. Hansen. In Thomas, petitioner Edward Thomas, an electrician employed by Leo Morgan, sustained injuries while working under a construction contract at Iowa Beef Products, Inc. (IBP). Id. at 146. Thomas sought tort damages from IBP as a result of his injuries. Id. at 148. At some point, Thomas and IBP agreed to settle the tort claim. In addition to Thomas' tort claim against IBP, he sought workers' compensation benefits for his injury from Hansen & Sons Welding, a construction company involved in a joint venture with Thomas' employer (who carried no workers' compensation insurance) at the time of the accident. Hansen denied Thomas' claim for benefits and the case proceeded to an arbitration hearing.
During the workers' compensation litigation, Thomas presented the proposed settlement with IBP to the industrial commissioner for approval. Along with the settlement proposal, Thomas contended Hansen was not entitled to indemnity (in the event the agency awarded him workers' compensation benefits) under Iowa Code section 85.22(1) from the IBP settlement because Hansen had not yet paid him any workers' compensation benefits. Id. at 147. In granting approval of the settlement, the commissioner rejected Thomas' indemnity argument and ruled that Hansen was entitled to indemnity from the proceeds of the IBP settlement. Id. at 147-48.
On judicial review, Hansen contended Thomas' application to the commissioner to approve his settlement with IBP (to which Thomas' original request for an order denying indemnity to Hansen was attached) was a petition for a declaratory ruling that became final as Thomas did not appeal it within thirty days. Id. at 148. The district court rejected Thomas' argument and concluded it could consider the issue of Hansen's right to indemnity on judicial review. We affirmed on the grounds that the commissioner's approval of the settlement was not a final agency action and, therefore, Thomas had no reason to appeal that order within thirty days.
In so ruling, we stated that Thomas, 524 N.W.2d at 148. We then concluded "[t]he district court was correct in holding the indemnity question was not time barred and was for its determination." Id.
B. Analysis. Read in the context of the facts of Thomas, we do not believe the above conclusions precluded the district court and the court of appeals in the present case from remanding the case to the industrial commissioner for a determination of the amount of Kemper's indemnity entitlement. In Thomas, at issue was a party's right to indemnity under Iowa Code section 85.22(1), not what the proper amount of that indemnity, if granted, should be. We believe the former issue is a question of law and the latter issue is a question of fact.
In addition to the Thomas procedural and factual situation involving the district court's determination of a party's right to indemnity, indemnity issues are frequently raised or...
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