George H. Wentz, Inc. v. Sabasta

• Decision Date: 17 August 1983
• Docket Number: No. 67605,67605
• Citation: 337 N.W.2d 495
• Parties: GEORGE H. WENTZ, INC., d/b/a Wentz Plumbing and Heating Co., Employer, and The St. Paul Insurance Company, Insurance Carrier, Appellants, v. Steven W. SABASTA, Claimant, and Robert C. Landess, Iowa Industrial Commissioner, Appellees.
• Court: Iowa Supreme Court

Page 495

337 N.W.2d 495

GEORGE H. WENTZ, INC., d/b/a Wentz Plumbing and Heating Co., Employer, and The St. Paul Insurance Company, Insurance Carrier, Appellants, v. Steven W. SABASTA, Claimant, and Robert C. Landess, Iowa Industrial Commissioner, Appellees.

No. 67605.

Supreme Court of Iowa.

Aug. 17, 1983.

James E. Thorn, John M. French, and William R. Hughes, Jr., of Stuart, Tinley, Peters, Thorn, Smits & Sens, Council Bluffs, for appellants.

Harry H. Smith, MacDonald Smith, and LeRoy J. Sturgeon, Sioux City, for appellee Steven W. Sabasta.

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

REYNOLDSON, Chief Justice.

In this Iowa Code chapter 17A review of proceedings before the Iowa Industrial Commissioner, we must determine whether, under Iowa Code section 85.71, the commissioner properly awarded Iowa workers' compensation benefits to an employee injured outside the boundaries of Iowa. District court and court of appeals affirmed the commissioner's award. On further review, we vacate the court of appeals decision, and reverse that of the district court.

Employer, mechanical contractor George H. Wentz, Inc., is a Nebraska corporation with its principal place of business in Lincoln, Nebraska. Claimant Steven W. Sabasta, an asbestos worker, was at all pertinent times a resident of Sioux City, Iowa. In early April 1979, claimant contacted the business agent of Asbestos Worker's Local 57, headquartered in Sioux City, and was told a job was available at employer's work site in Sioux Falls, South Dakota. Claimant reported to employer's foreman at the Sioux Falls site, filled out income tax forms, and commenced work. April 26, 1979, claimant sustained personal injury during the course of his employment at the Sioux Falls jobsite. Employer had not engaged in any construction projects in Iowa during the five-year period prior to claimant's injury, and had no registered agent in Iowa at the time. Claimant had performed no services for employer within this state.

Pursuant to the Nebraska Workmen's Compensation Act, claimant was paid disability benefits of $155 per week for a period of forty-five weeks by employer and its insurer, The St. Paul Insurance Company. Employer and its insurer also paid claimant's hospital and medical expenses. Claimant suffers no permanent disability or impairment.

May 23, 1979, claimant petitioned for award of benefits under the Iowa Workers' Compensation Act, Iowa Code chapter 85. Appearing specially, the employer alleged the commissioner lacked subject matter jurisdiction over the claim and personal jurisdiction over employer, and that an award of Iowa workers' compensation benefits would constitute a deprivation of property without due process of law. A deputy commissioner overruled the special appearance, finding claimant's Iowa domicile sufficient basis for assertion of subject matter jurisdiction. Following arbitration, a deputy commissioner found personal jurisdiction over employer based on Iowa Code section 17A.12 notice provisions, and awarded claimant disability benefits of $265 per week for a period of forty-four and five-sevenths weeks. Employer appealed to the commissioner. Exercising a delegated authority pursuant to Iowa Code section 86.3, a deputy commissioner affirmed the arbitration decision. Employer's constitutional argument was not addressed by the agency on grounds it lacked authority to do so.

On employer's petition for judicial review, district court affirmed the agency's finding it had subject matter jurisdiction, and refused to strike down Iowa Code sections 17A.12 or 85.71 on employer's constitutional challenge. When the employer appealed we transferred the case to the court of appeals. That court affirmed on grounds claimant's hiring in Iowa supported subject matter jurisdiction, and presence of an Iowa contract coupled with employer's designation of an Iowa business agent constituted sufficient conduct in the state to support assertion of personal jurisdiction.

I. We recently summarized the scope of our review in workers' compensation cases as follows:

Our scope of review is limited by Iowa Code sections 17A.19 and .20. The commissioner's findings have the effect of a jury verdict, and we broadly apply them to uphold his decision. Ward v. Iowa Department of Transportation, 304 N.W.2d 236, 237-38 (Iowa 1981). The commissioner's determination of a question of law is entitled to careful consideration, but is subject to our review. Id. at 238; McDowell v. Town of Clarksville, 241 N.W.2d 904, 907 (Iowa 1976). We have a duty to correct the district court's errors of law as well. Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162, 165 (Iowa 1982); Jackson County Public Hospital v. Public Employment Relations Board, 280 N.W.2d 426, 429 (Iowa 1979); Iowa R.App.P. 4.

Beier Glass Co. v. Brundige, 329 N.W.2d 280, 282 (Iowa 1983). Because we address constitutional issues only when other grounds are not dispositive, Iowa Beef Processors, Inc. v. Miller, 312 N.W.2d 530, 532 (Iowa 1981); Schmitt v. Iowa Department of Social Services, 263 N.W.2d 739, 744 (Iowa 1978), we first address the issue of subject matter jurisdiction.

II. The industrial commissioner's subject matter jurisdiction over workers' compensation claims based on injuries sustained outside the state is governed by Iowa Code section 85.71:

If an employee, while working outside the territorial limits of this state, suffers an injury on account of which he, or in the event of his death, his dependents, would have been entitled to the benefits provided by this chapter had such injury occurred within this state, such employee, or in the event of his death resulting from such injury, his dependents, shall be entitled to the benefits provided by this chapter, provided that at the time of such injury:

1. His employment is principally localized in this state, that is, his employer has a place of business in this or some other state and he regularly works in this state, or if he is domiciled in this state, or

2. He is working under a contract of hire made in this state in employment not principally localized in any state, or

3. He is working under a contract of hire made in this state in employment principally localized in another state, whose workers' compensation law is not applicable to his employer, or

4. He is working under a contract of hire made in this state for employment outside the United States.

District court affirmed the commission's finding of subject matter jurisdiction under section 85.71(1), based solely on claimant's domicile. Following the district court ruling in this case, however, we held in Iowa Beef Processors, Inc. v. Miller that Iowa domicile is insufficient to entitle a worker injured during the course of employment outside the state to Iowa benefits, absent some "meaningful connection between domicile and the employer-employee relationship." 312 N.W.2d at 534. On appeal, the parties thus narrow their arguments to the issue whether the requisite connection existed between claimant's domicile and their employer-employee relationship.

Claimant's previous award of benefits under Nebraska workers' compensation law does not preclude award of benefits under our compensation law. In workers' compensation cases it is unnecessary to identify the jurisdiction with the greatest contacts and interest. The test is not whether Iowa's interest exceeds or excludes those of other states, but whether Iowa's interest is itself sufficient, based on analysis of our workers' compensation statutes. Any amounts awarded in this state, however, would be subject to credit to the extent of the award already paid under Nebraska law. ¹ Director, Office of Workers' Compensation Programs, United States Department of Labor v. National Van Lines, Inc., 613 F.2d 972, 981 (D.C.Cir.1979), cert. denied, 448 U.S. 907, 100 S.Ct. 3049, 65 L.Ed.2d 1136 (1980); Ryder v. Insurance Co. of North America, 282 So.2d 771, 773-74 (La.App.1973); Restatement (Second) of Conflict of Laws § 182, comments a, b (1971); 4 A. Larson, The Law of Workmen's Compensation § 85 (1982); 99 C.J.S. Workmen's Compensation § 22, at 148-49 (1958).

Extraterritorial operation of workers' compensation statutes is an area of considerable variation. Application of any particular state's workers' compensation act to injuries suffered outside the state is dependent on the language and policy of its statutes. 99 C.J.S. Workmen's Compensation at § 22, at 144; Restatement (Second) of Conflict of Laws at § 181, comment b. Although we apply our statute broadly, we nonetheless are bound by its requirements. Halstead v. Johnson's Texaco, 264 N.W.2d 757, 759 (Iowa 1978).

Court of appeals ruled claimant's contract of employment was consummated through hiring in Iowa, and relied on Haverly v. Union Construction Co., 236 Iowa 278, 18 N.W.2d 629 (1945), in affirming district court's jurisdictional ruling. In Haverly this court held making of an employment contract in Iowa would support award of Iowa benefits despite occurrence of the injury during employment performed entirely outside the state. 236 Iowa at 284-90, 18 N.W.2d at 633-36. Court of appeals found no change in Iowa law since Haverly, because Iowa Code section 85.71 "does [not] address the issue ... whether contracts of hire made by an Iowa resident for work principally localized in another state entitle a worker to protection under Iowa's workmen's compensation laws." Court of appeals deemed it unnecessary to decide whether claimant's employment was localized in any state pursuant to Iowa Code section 85.71(2).

We think Iowa law on extraterritorial application of our workers' compensation act has changed since the Haverly decision, and the rule of that case no longer is valid. Haverly was based on the concept of implied acceptance by the parties of terms of the Iowa act, based on its "elective and contractual nature," 236 Iowa at 286-88, 18 N.W.2d at...