Drake University v. Davis, No. 08-0639.

• Court: United States State Supreme Court of Iowa
• Writing for the Court: Wiggins
• Citation: 769 N.W.2d 176
• Parties: DRAKE UNIVERSITY and Employers Mutual Casualty Company, Appellants, v. Angela DAVIS, Appellee.
• Decision Date: 17 July 2009
• Docket Number: No. 08-0639.

769 N.W.2d 176 DRAKE UNIVERSITY and Employers Mutual Casualty Company, Appellants,
v.
Angela DAVIS, Appellee. No. 08-0639. Supreme Court of Iowa. July 17, 2009.

[769 N.W.2d 177]

David L. Jenkins of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellants.

Thomas J. Reilly and Kyle T. Reilly of Thomas J. Reilly Law Firm, P.C., Des Moines, for appellee.

WIGGINS, Justice.

The workers' compensation commissioner awarded an employee benefits for three separate injury dates. The employer and its insurance carrier sought judicial review of the agency action. The district court not only affirmed the decision of the agency, but also found the employer and its insurance carrier were not entitled to a credit for benefits paid by a group plan under Iowa Code section 85.38(2) (2005).¹ In this appeal, we find the employer and its insurance carrier were not deprived of procedural due process, substantial evidence supports the agency's decision, the permanent total disability benefits are not subject to apportionment under the workers' compensation statutes, the agency misapportioned the benefits due for the March 21, 2001, and July 31, 2002, injuries, and the district court should not have considered the credit for benefits issue. Therefore, we affirm in part the decision of the district court affirming the decision of the workers' compensation commissioner. However, we reverse that part of the district court judgment dealing with the apportionment of benefits for the March 21, 2001, and the July 31, 2002, injuries. Additionally, we vacate that part of the district court judgment dealing with the credit for benefits issue because the commissioner did not consider the issue at the agency level.

I. Background Facts and Proceedings.

A. Employment History. Angela

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Davis began working at Drake University² in the facility management area in May 1982. She worked at Drake moving up in pay scale and job title for twenty-two and one-half years until her termination on November 3, 2004. Davis started out as Facility Maintainer IV, the lowest position on the scale, doing custodial work in residence halls. Drake promoted her to Facility Maintainer III sometime in 1983. Drake promoted her again in 1985 to Facility Maintainer II in which position she trained new employees. Finally, Davis was promoted in 1990 to Facility Maintainer I, the top classification in the custodial field at Drake. Her responsibilities included answering the phone, arranging work schedules, training new employees, supervising student employees, and performing manual custodial work.

Although the university continued to promote her, it did have problems with her performance. Her employment records contained five disciplinary reports. Davis also had many run-ins with her boss, John Selin, the director of residential services throughout her time at Drake. Another supervisor claimed Davis did not respect her supervisors. Some of the complaints in Davis's employee file dealt with her job performance, but many more dealt with her interpersonal skills. At one point, Drake demoted her from Facility Maintainer I to Facility Maintainer II for creating a hostile work environment. Drake later bumped her back up to Facility Maintainer I status.

In September 2004, Drake claimed Davis left work early without finishing her work. Drake informed Davis that any further incident would result in disciplinary action against her. Drake terminated Davis on November 3 citing inflammatory and racist comments to coworkers as well as an ongoing pattern of inappropriate behavior toward supervisors and coworkers as the justification for the termination.

B. March 16, 2001, Injury. Davis's first injury occurred on March 16, 2001. She was shoveling snow outside a residential hall and felt a sharp pain down her back and leg. The doctors diagnosed a left L5-S1 herniated nucleus pulposus and performed a left L5-S1 diskectomy. After her recovery, the doctors gave Davis a ten percent permanent partial impairment rating and a permanent lift restriction of thirty-five pounds. Drake voluntarily paid her seventy-five weeks of permanent disability for this injury.

C. July 31, 2002, Injury. On July 31, 2002, while performing her duties vacuuming in the law school, Davis felt queasiness in her stomach and weakness in her leg. An MRI scan revealed left L5-S1 epidural fibrosis plus a small recurrent herniated nucleus pulposus. She received three epidural steroid injections for her injury. The doctor assented to Davis's return to work with a twenty-pound lift restriction and allowed her to do only lightweight vacuuming on an occasional basis. He also gave her a two percent permanent partial impairment rating. Drake voluntarily paid her ten weeks of permanent disability for this injury.

September 14, 2004, Injury. Davis alleges her third injury occurred on September 14, 2004. Davis was working in the field house that day and was pulling trash across the floor when she felt queasy. She filled out an incident report of the injury. The incident report contained no statement as to the specifics of her injury, but she thought she told her supervisor how the injury occurred. The incident report stated Davis was going to Concentra Medical

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Center, but also said her disability was ongoing and began on March 16, 2001. Davis's supervisor filled out the incident report and Davis signed it.

At Concentra, Davis reported that her injury occurred around 8 a.m. and was from repetitive use of the vacuum and lifting more than twenty pounds of trash. Concentra referred her to her previous doctor. She reported to this doctor that the onset of pain had increased on September 14, 2004. She denied a specific injury. The doctor diagnosed her with having a herniated nucleus pulposus and spondylolisthesis. The doctor opined the spondylolisthesis was not work-related, but the herniated nucleus was related to her work activities. He recommended surgical intervention.

Davis decided on November 2 to proceed with surgery. Drake fired her the next day. Drake sought a second opinion before authorizing any surgery. Davis told the doctor retained by Drake about the specific incident of dragging trash in the field house and the pain she felt after that point. On November 17 the second doctor opined Davis's current complaints related back to the original injury in March 2001. The second doctor acknowledged his opinion was based on his review of a July 2002 MRI and he did not have her recent MRI to study.

Based on this report, Drake would not authorize her surgery. Additionally, Drake informed Davis that Drake had no notice of increased back pain or the specific September 14 incident; therefore, it would be denying her claim for the surgery and any other subsequent treatment. Without Drake's authorization, Davis had the surgery on November 22. Davis also had a permanent implantation of a dorsal column stimulator on August 15, 2005. A third physician rated Davis's injury. He gave Davis an impairment rating of twenty-six percent for the September 14, 2004, injury, which includes a three percent impairment based on the pain from the dorsal stimulator.

Davis also saw a psychologist. The psychologist diagnosed Davis with major depression disorder and opined her depression was related to her work injury. He further opined Davis's depression limited her ability to function in a normal society, and that she would likely require indefinite psychological care in the future.

Again, Drake referred Davis to a psychiatrist for a second opinion. He found Davis had a twenty-plus year history of interpersonal relationship problems. Further, he opined the idea that her depression stemmed from injuries lacked credence because she did not seek treatment and no psychiatric diagnosis indicated Davis was unable to work.

E. Proceedings before the Iowa Workers' Compensation Commissioner.

Davis filed her petitions in September 2004 as files 5012800, 5012801, and 5012802. File number 5012800 alleges an injury date of March 16, 2001, with shoveling snow as the cause of the injury. File number 5012801 lists the injury date as July 31, 2002, and alleges vacuuming as the cause of the injury. File number 5012802 alleges repetitive use of back at work as the cause with an injury date of September 14, 2004.

Davis amended her petition in file number 5012802 on November 22. In that amended petition Davis stated that on September 14, 2004, as she "carried out her work duties `dragging a bag of trash,' her back and leg pain was intensified and thus she reported her injury." Davis asked to amend the "petition to reflect the cumulative process by which her injury occurred culminating with the intensified pain she felt on 9/14/04 when she was

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dragging a bag of trash." She also amended her petition to include a claim for penalty benefits under Iowa Code section 86.13 stating Drake failed to provide reasonable justification for refusing to commence weekly and medical benefits.

Prior to the hearing, the parties filed hearing reports in each of the files. The deputy commissioner approved each hearing report by signing an order. The orders confirmed the parties' stipulation that the injuries of March 16, 2001, and July 31, 2002, arose out of and were in the course of employment. The orders also confirmed the March 16, 2001, injury caused a permanent disability and the commencement date for the permanent partial disability benefits for this injury would be July 21, 2001. The orders further confirmed the parties did not dispute that Drake paid Davis seventy-five weeks of compensation for this injury. Finally, the orders confirmed the parties' stipulation that the commencement date for the permanent partial disability benefits for the July 31, 2002, injury would be August 21, 2002, and that Drake had paid Davis ten weeks of compensation.

The orders indicated the following issues relevant to this appeal...