Continental Telephone Co. v. Colton, 83-730

• Decision Date: 16 May 1984
• Docket Number: No. 83-730,83-730
• Citation: 348 N.W.2d 623
• Parties: CONTINENTAL TELEPHONE COMPANY, Employer, and Travelers Insurance Companies, Insurance Carrier, Appellees, v. Paul D. COLTON, Appellant, and Industrial Commissioner, Respondent.
• Court: Iowa Supreme Court

Page 623

348 N.W.2d 623

CONTINENTAL TELEPHONE COMPANY, Employer, and Travelers Insurance Companies, Insurance Carrier, Appellees, v. Paul D. COLTON, Appellant and Industrial Commissioner, Respondent.

No. 83-730.

Supreme Court of Iowa.

May 16, 1984.

Marvin V. Colton, Albia, for appellant.

John N. Moreland and Timothy J. McKay, Ottumwa, for appellees.

Considered by REYNOLDSON, C.J., and McCORMICK, SCHULTZ, CARTER, and WOLLE, JJ.

CARTER, Justice.

Respondent employee appeals from a district court order in a workers compensation proceeding remanding the proceeding to the industrial commissioner for a redetermination of his disability. Only two issues need to be considered on the appeal. These are (1) whether the appeal should be dismissed on the ground that it is not taken from a final judgment, and (2) whether the district court erred in not sustaining the employee's motion to dismiss the petition for judicial review on the ground that the employer and insurance carrier had failed to exhaust their administrative remedies. We consider these matters separately.

I. Finality of Order from Which Appeal was Taken.

The appellees have moved to dismiss the appeal on the ground that the order of the district court from which the appeal was taken is not a final judgment as contemplated by Iowa Rule of Appellate Procedure 1(a). This contention is based on the decision in Rubendall v. Brogan Construction Co., 253 Iowa 652, 657, 113 N.W.2d 265, 268 (1962).

In the Rubendall case, we determined, on facts clearly distinguishable from the present case, that an order of the district court reviewing a decision of the industrial commissioner and remanding the case back to the commissioner for additional findings was interlocutory. We need not decide whether we continue to adhere to the views expressed in Rubendall because there has been an intervening comprehensive revision of applicable statutory law by reason of the enactment of the Iowa Administrative Procedure Act, effective in 1975.

It is now provided in Iowa Code section 17A.19(8) (1983) that on judicial review of agency action, the court "may affirm the agency action or remand to the agency for further proceedings. The court shall reverse, modify, or grant any other appropriate relief from the agency action...." Section 17A.20 provides:

An aggrieved or adversely affected party to the judicial review proceeding may obtain a review of any final judgment of the district court under this chapter by appeal to the supreme court. The appeal shall be taken as in other civil cases, although the appeal may be taken regardless of the amount involved.

We interpret the quoted language from section 17A.19(8) as providing what disposition may be made in a final judgment of the district court. The statute contemplates that a final judgment may provide for remand to the agency for further proceedings. A judgment so providing is nonetheless a final judgment for purposes of appeal under section 17A.20 and Iowa Rule of Appellate Procedure 1(a). A contrary holding could in some instances deprive a party aggrieved by an erroneous order of remand of an effective right of appellate review.

There may, of course, be instances where the district court is authorized to make an interlocutory order remanding the case to the agency for further proceedings. See section 17A.19(7). If this is done, however, we believe that it is incumbent upon the court to note that the remand is of a limited nature and that the court is retaining jurisdiction. Clearly, this was not the situation in the present case. We conclude that the present appeal is from a final judgment. Appellees' motion to dismiss the appeal is overruled.

II. Exhaustion of Administrative Remedies.

The petition of the employer and insurance carrier for judicial review of agency action in the present case was taken from a decision of a deputy industrial commissioner. No attempt was made to first seek review of the deputy's decision by the industrial commissioner.

The employee urged in the district court that it was without jurisdiction under Iowa Code section 17A.19(1) to review a decision of a deputy industrial commissioner. It based this claim on the following grounds: (a) Iowa Code section 86.26 (1983) provides that judicial review shall be from "decisions or orders of the industrial commissioner"; (b) section 86.3 limits the extent to which a deputy industrial commissioner may issue a decision which is final for purposes of judicial review; and (c) there has not been an exhaustion of administrative remedies sufficient to satisfy the requirements of section 17A.19(1). The district court rejected these contentions relying in part on our decision in LeaseAmerica Corp. v. Iowa Department of Revenue, 333 N.W.2d 847 (Iowa 1983).

Section 86.26 provides that "[j]udicial review of decisions or orders of the industrial commissioner may be sought in accordance with the terms of chapter 17A." Section 86.3 states:

Notwithstanding the provisions of chapter 17A, in the absence or disability of the industrial commissioner, or when written delegation of authority to perform specified functions is made by the commissioner, the deputies shall have any necessary specified powers to perform any necessary or specified duties of the industrial commissioner pertaining to his or her office. Notwithstanding the definitions and terms of chapter 17A, pertaining to the issuance of final decisions, when the above circumstances exist a deputy commissioner shall have the power to issue a final decision as if issued by the agency.

Our review of the statutes relied on by the employee convinces us that, except in those circumstances delineated in section 86.3, a petition for judicial review will not lie from a decision of a deputy industrial commissioner, even where that decision has become final by reason of passage of time. This conclusion could well be based solely on the language of sections 86.26 and 86.3. Because, however, there appears to be some misreading of our LeaseAmerica decision, we believe we should reconcile the result in that case with the decision which we reach in the present case.

LeaseAmerica involved judicial review of a decision of the Department of Revenue in a dispute over assessment of use taxes. The petition for judicial review was taken from the decision of a hearing officer which had become the final decision of the agency under section 17A.15(3) when not appealed within the agency. At that time, an agency rule (730 I.A.C. 7.17(5)) expressly provided that under such circumstances, the hearing officer's decision became the final decision of the agency for purposes of judicial review. In addition, the taxpayer in LeaseAmerica had been expressly advised by the agency that this was the case.

In spite of the administrative rule making the hearing officer's decision the subject of judicial review, the district court in LeaseAmerica dismissed the petition on the ground that no appeal had been taken to the director of revenue. The district court concluded in that case that finality and exhaustion are separate requirements for judicial review under section 17A.19(1). It concluded that there had been no exhaustion of administrative remedies because of the failure to take an intra-agency appeal to the director.

Both the taxpayer and the agency appealed the district court's order of dismissal in LeaseAmerica, each contending that the directive of the agency rule should be honored in order to rescue the...