Hawk v. Jim Hawk Chevrolet-Buick, Inc.

• Decision Date: 25 July 1979
• Docket Number: CHEVROLET-BUIC,No. 62286,INC,62286
• Citation: 282 N.W.2d 84
• Parties: Mary Jean HAWK, Appellee, v. JIM HAWK, and Universal Underwriters Insurance Company, Appellants, and Iowa Industrial Commissioner, Respondent.
• Court: Iowa Supreme Court

Page 84

282 N.W.2d 84

Mary Jean HAWK, Appellee, v. JIM HAWK CHEVROLET-BUICK, INC., and Universal Underwriters Insurance Company, Appellants and Iowa Industrial Commissioner, Respondent.

No. 62286.

Supreme Court of Iowa.

July 25, 1979.

Rehearing Denied Aug. 24, 1979.

Verne Lawyer of Lawyer, Lawyer & Jackson, Des Moines, and Kenneth Sacks of Perkins, Sacks & Hannan, Council Bluffs, for appellee.

Considered en banc.

McGIVERIN, Justice.

Mary Jean Hawk claims workers' compensation death benefits based upon the injury and death of her husband, James Hawk II, on September 28, 1973 in a private airplane crash near the Council Bluffs airport. The main question in this appeal is whether commission of "an unusual and rash act" by an employee which results in injury causes that injury not to arise out of and in the course of the employment within the meaning of the workers' compensation law. The deputy industrial commissioner held the death compensable. In a review decision, however, the industrial commissioner applied the unusual and rash act doctrine to deny compensation. On judicial review the district court reversed the industrial commissioner. We affirm the district court.

This is another phase of the same airplane accident that was the subject of Jim Hawk Chevrolet-Buick, Inc. v. Insurance Company of North America, 270 N.W.2d 466 (Iowa 1978), wherein we denied recovery under a property insurance policy on the aircraft.

We are bound by the industrial commissioner's findings of fact when they are supported by substantial evidence.

Our initial problem, which will be discussed later, involves the form of the industrial commissioner's review decision. In considerable detail the commissioner stated the facts and law pertaining to Hawk's death and claimant's entitlement to benefits. Near the end of the lengthy decision, however, the commissioner specifically labeled only the following as "findings of fact":

It is found and held as findings of fact:

That the decedent was at a prohibited place at the time of his accident and therefore not in the course of his employment.

That the actions of the decedent constitute a hazardous rash and unusual act and therefore did not arise out of his employment.

Therefore, recovery must be and is hereby denied to the claimant.

To assist in understanding the issues, we state the operative facts on which there is no substantial disagreement among the parties and commissioner.

The decedent, James Hawk II, was president, sole stockholder, chief operating officer and an employee of Jim Hawk Chevrolet-Buick, Inc., an automobile sales dealership in Denison that sold vehicles throughout southwest Iowa. He lived in Denison with his wife, Mary Jean Hawk, and two children.

On September 27, 1973 Hawk flew his private plane to Council Bluffs on business for his company. On September 28, at about 2:30 a. m., Hawk was killed when his plane crashed shortly after takeoff on an intended return trip to Denison.

At the time of the fatal crash Hawk held a student pilot certificate. He had logged 53.9 hours of flight time involving 20.2 solo hours and .8 nighttime hours. He was restricted by his student certificate to a radius of 25 miles from the Denison airport, although he could be "signed off" by the instructor for solo cross country flights. On the days relevant here, however, Hawk had not been "signed off." Log books show Hawk had been last authorized for cross country flight on September 4, 1973.

On September 27 Hawk and his business associate, Mark Crampton, drove to the Denison airport. Each drove a separate car in order that a car could be left at the airport for Hawk's use the next day. According to Crampton, Hawk planned to return to Denison in the early morning hours and use the waiting vehicle to return to his home where Crampton would meet him and accompany him to work for a sales meeting at 9:00 a. m.

Hawk left the Denison airport that afternoon and arrived in Council Bluffs around 5:45 p. m. He was met at the airport by Robert McIntyre, a car dealer. They proceeded from the airport to McIntyre's place of business where they examined two cars Hawk was considering for his customers.

After discussing the cars, McIntyre and Hawk went to the Lakeshore Country Club for dinner. Upon arrival the two men encountered friends with whom they ate and drank. Before dinner Hawk discussed the sale of two vehicles with William Cutler, another friend and business associate, with whom he had planned to meet in Council Bluffs.

While at the club Hawk and McIntyre were invited to a stag party for a friend in Omaha. McIntyre declined but Hawk left with Harry Sayers, another auto dealer. Before Hawk left, McIntyre offered him a place to stay for the night.

Sayers testified he and Hawk stayed at the party about one hour until 11:30 or 12:00 p. m. when they left for Sayers' office. Although both men had drinks at the party, neither continued drinking thereafter. Sayers and Hawk visited at Sayers' office on auto sales conditions and other matters until 1:30 a. m. when Hawk decided to return to the airport and fly back to Denison. The two men argued over whether Hawk should fly back at that hour. Because Hawk insisted on leaving, Sayers agreed to take him to the airport.

Weather conditions at the Council Bluffs airport in the early morning hours of September 28, 1973 were not good for flying. Although ground visibility was between four and five miles, the sky was overcast with rain and fog. Hawk told his friend Sayers to wait while Hawk circled the airport to check out the weather. The plane disappeared up into the fog and then crashed. Hawk was dead at the scene.

Analysis of body fluid drawn from Hawk's body showed a blood alcohol content of .147 per cent ethyl alcohol. FAA regulations prohibit flight within eight hours following alcohol consumption.

Charles Hawley, Hawk's flight instructor, testified Hawk was not instructed to fly by instruments and could not have interpreted any instrument readings. Hawley further testified that, according to FAA studies, noninstrument pilots who fly without the horizon in sight inevitably develop vertigo and lose control of the craft regardless of prior consumption of alcoholic beverages.

Mary Jean Hawk filed an application for arbitration of her claim for dependent's workers' compensation benefits with the industrial commissioner. After receiving an adverse review decision from the commissioner who had reversed the deputy, she filed petition for judicial review in district court. The court ruled workers' compensation should be awarded. Appeal to us by the employer and insurance carrier is under section 17A.20, The Code 1977.

The following issues are presented for our review:

(1) Whether the commissioner's findings and holdings that the death of Hawk did not arise out of and in the course of his employment are findings of fact or conclusions of law; and

(2) Whether the commissioner's conclusions that the actions of Hawk were unusual and rash and that he was in a prohibited place are legally sufficient to bar recovery of workers' compensation benefits.

I. Effect of the commissioner's findings and holdings. As an initial step to resolution of this case, we must determine which issues are factual and which issues are legal. This distinction is critical in evaluating the binding force of agency determinations on the district court and, in turn, the binding force of agency determinations on us. Once this distinction is clear, we will proceed to evaluate the merits of the unusual and rash act doctrine which is the crux of this case.

District court review of agency fact findings in this case is governed by section 17A.19(8)(f), which provides:

8. 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, equitable or legal and including declaratory relief, if substantial rights of the petitioner have been prejudiced because the agency action is:

f. In a contested case, unsupported by substantial evidence in the record made before the agency when that record is viewed as a whole . . . .

This substantial evidence test is the same standard which applied to review of agency action prior to enactment of the Iowa Administrative Procedure Act. Both before and after enactment of section 17A.19(8)(f), the court stands obligated to review the record as a whole to determine the reasonableness of agency findings. City of Davenport v. Public Employment Relations Board, 264 N.W.2d 307 (1978). "Evidence is substantial when a reasonable mind would accept it as adequate to reach a conclusion." Id. at 311.

In order for an injury or death to be compensable, it must occur within the scope of employment. Injury or death within the scope of employment, in turn, must both arise out of and occur in the course of employment. § 85.3, The Code. McClure v. Union, et al., Counties, 188 N.W.2d 283, 287 (Iowa 1971). See Cedar Rapids Community School v. Cady, 278 N.W.2d 298, 299 (Iowa 1979).

The determination whether an injury or death arose out of or in the course of employment consists of a mixed question of law and fact. The operative events which gave rise to the injury or death are questions of fact. Where these issues are either resolved or undisputed, and supported by substantial evidence, the legal question whether the facts justify an award or denial of benefits remains. This distinction was made in McClure where we said:

The industrial commissioner's findings of facts are conclusive where the evidence is in dispute or reasonable minds may differ on the inferences fairly drawn from the facts. . . . However, where the facts are not in dispute and different inferences could not be reasonably drawn therefrom it becomes a question of law and the court is not bound by the commissioner's findings or conclusions.

188 N.W.2d at 284.

In the present case...