Heartland Express, Inc. v. Terry

• Decision Date: 05 July 2001
• Docket Number: No. 99-1477.,99-1477.
• Citation: 631 N.W.2d 260
• Parties: HEARTLAND EXPRESS, INC., Petitioner-Appellant, v. George T. TERRY, Respondent-Appellee. George T. Terry, Petitioner-Appellant, v. Heartland Express, Inc., Respondent-Appellee.
• Court: Iowa Supreme Court

631 N.W.2d 260

HEARTLAND EXPRESS, INC., Petitioner-Appellant, v. George T. TERRY, Respondent-Appellee.

George T. Terry, Petitioner-Appellant, v. Heartland Express, Inc., Respondent-Appellee.

No. 99-1477.

Supreme Court of Iowa.

July 5, 2001.

Joseph M. Barron and Stephen W. Spencer of Peddicord, Wharton, Thune & Spencer, Des Moines, for Heartland Express, Inc.

Paul J. McAndrew, Iowa City, for George T. Terry.

LAVORATO, Chief Justice.

The decisive issue in this workers' compensation proceeding is whether the Industrial Commissioner had subject matter jurisdiction over the claimant's claim for workers' compensation benefits and his claim for alternate medical care. Because we conclude such jurisdiction was lacking, we affirm a district court ruling reversing the commissioner's award of benefits. We vacate another district court ruling affirming the commissioner's award of alternate medical care.

I. Facts.

On February 2, 1994, George T. Terry, a Georgia resident, saw a newspaper advertisement in the Atlanta Journal-Constitution for employment as a truck driver with Heartland Express, Inc., an Iowa company headquartered in Coralville, Iowa. In responding to the advertisement, Terry called the Heartland terminal in Forest Park, Georgia. Later, Terry filled out an application at this terminal and turned it into an employee at the terminal, who told Terry that he would forward the application to Coralville for approval. As instructed, Terry called this employee two days later and was told he was hired.

As a truck driver for Heartland, Terry covered a number of states, including Iowa. He picked up and dropped loads in Iowa three to four times per month. Some months, Terry did not come into Iowa at all. Terry took dispatch orders out of Coralville three to seven times per week, sent completed logs to Iowa, and received his pay from Iowa.

On October 4, 1995, Terry was driving for Heartland in Louisiana. When he tried to lock the double doors of his semi-trailer in hurricane winds, the right door came loose, striking him in the forehead. The blow knocked him unconscious. Later, with some difficulty stemming from dizziness and nausea, Terry drove to Memphis, Tennessee. On October 6, he returned to Atlanta, Georgia, where he saw a doctor on October 11. The doctor determined that Terry had suffered a brain injury.

Within days of the injury, Heartland filed an Iowa First Report of Injury. In December 1995, Heartland filed an Iowa First Supplemental Claim Activity Report and began paying weekly benefits.

II. Proceedings.

On August 2, 1996, Terry filed an original notice and petition before the Iowa Industrial Commissioner. A deputy workers' compensation commissioner held a hearing on May 28, 1998, by which time Heartland had paid over 138 weeks of benefits. Heartland contended there was a lack of subject matter jurisdiction.

On June 15, the deputy issued an arbitration decision. The deputy ruled that (1) amendments to Iowa Code section 85.71 (1995) found in 1997 Iowa Acts, chapter 106, section 1, did not apply retroactively and (2) the commissioner had subject matter jurisdiction over Terry's claim pursuant to Iowa Code section 85.71 (1995).

Additionally, the deputy found that Terry had suffered permanent partial disability and ordered that Heartland pay Terry healing period benefits for 96.57 weeks at the rate of $331.54 per week for the period from October 5, 1995 through August 12, 1997. The deputy also ordered Heartland to pay Terry permanent partial disability benefits for 325 weeks at the rate of $331.54 per week beginning August 13, 1997. The deputy allowed Heartland a credit against the award for weekly benefits that Heartland had already paid.

Heartland appealed the decision to the Iowa Industrial Commissioner.

Throughout all of this time, Heartland had been providing Terry's neurological care and treatment in his hometown of Athens, Georgia, through Dr. Antonio DaCunha, a neurologist in Athens. In October 1998, Terry moved to Senoia, Georgia, which is approximately 120 miles from Dr. DaCunha's office. Before the move, Dr. DaCunha recommended that Terry continue his care with Dr. Kenneth Lazarus. Dr. Lazarus' office is approximately ten miles from Terry's home in Senoia. Heartland refused to authorize treatment by Dr. Lazarus, insisting that Terry continue his treatment with Dr. DaCunha.

This refusal prompted Terry to file an application for alternate medical care on April 21, 1999. In the application, Terry requested that he be permitted to continue his neurological treatment with Dr. Lazarus. Terry also requested that Heartland pay for Viagra prescriptions ordered by Dr. DaCunha.

On April 22, Heartland filed a resistance to the application. Heartland also offered to continue Terry's treatment with Dr. Richard Bernstein of Atlanta, Georgia. Dr. Bernstein's office is approximately sixty miles from Terry's home in Senoia.

Following a hearing on the application, a deputy workers' compensation commissioner ordered, on May 3, that Heartland "provide reasonable and necessary medical care in the person of Dr. Lazarus." The deputy found that this was necessary to treat Terry's injury "`without undue inconvenience to the employee' because of distance combined with the nature of Terry's malady." See Iowa Code § 85.27. The deputy also ordered that Heartland "furnish reasonable and necessary medications prescribed for treatment of Terry's condition, including the drug Viagra."

Finally, the deputy refused to rule on Heartland's contention that the commissioner lacked subject matter jurisdiction over the application for alternate medical care. The deputy noted that the issue had already been resolved in the earlier arbitration decision that was then on appeal to the commissioner. The deputy refused to rule, explaining that "no deputy workers' compensation commissioner has authority to overrule any other deputy." Because of a prior "order of delegation of authority" issued by the commissioner, the alternate medical care decision was deemed the final agency action.

On June 2, Heartland filed a petition for judicial review in the district court. Heartland challenged the deputy commissioner's award of medical care from Dr. Lazarus and medications, including the drug Viagra. Heartland also alleged that the deputy commissioner erred in finding the commissioner had subject matter jurisdiction of the dispute.

On June 17, Terry filed a "motion for judgment" requesting the alternate medical care decision be affirmed. Heartland resisted the motion and asked that the court remand the matter to the commissioner for review of the subject matter jurisdiction issue. Heartland requested in the alternative that the district court stay the matter pending the commissioner's determination of the arbitration appeal. Additionally, Heartland argued that under either Iowa Code section 85.71 or amended section 85.71, the agency lacked subject matter jurisdiction over the claim.

On September 7, district judge Jack D. Levin denied Heartland's request for stay or remand. Additionally, the court sustained Terry's motion for judgment and affirmed the deputy commissioner's decision regarding alternate medical care. Heartland appealed from this ruling.

Meanwhile, on November 30, the chief deputy workers' compensation commissioner issued a ruling, affirming all aspects of the deputy commissioner's arbitration decision without separate analysis, except for the question of subject matter jurisdiction.

In a separate analysis on the subject matter jurisdiction issue, the chief deputy commissioner first determined that the 1997 amendments to Iowa Code section 85.71 apply prospectively—not retrospectively. For this reason, the chief deputy commissioner concluded that those amendments did not apply to this claim because the injury occurred before the amendments were enacted.

The chief deputy commissioner next determined that under section 85.71, the commissioner had subject matter jurisdiction over Terry's claim. In reaching that determination, the chief deputy commissioner found that at the time of the injury Terry was working under a contract of hire made in Iowa and his employment was not principally localized in Georgia or any other state, per the requirements of Iowa Code section 85.71.

Finally, the chief deputy commissioner concluded that even if the 1997 amendments were applicable, the commissioner still had subject matter jurisdiction because, before his injury, Terry spent a substantial part of his working time working for Heartland in Iowa.

On December 29, Heartland petitioned for judicial review in the district court. Among other things, Heartland alleged that the chief deputy commissioner erred in finding the agency had subject matter jurisdiction over Terry's claim.

On May 18, 2000, district judge Glenn E. Pille issued a ruling reversing the decision of the chief deputy commissioner. The court first determined that Iowa Code section 85.71 and the 1997 amendments were "more substantive than procedural," and on this basis concluded that the amendments should apply prospectively only.

However, the court then determined that the commissioner lacked subject matter jurisdiction over Terry's claim under the preamendment version of Iowa Code section 85.71(2) because "the contract for hire did not take place in Iowa." In light of this finding, the court concluded that it was unnecessary to reach the issue of whether Terry's employment was principally localized in any state.

Terry appealed from this ruling. Later, we consolidated the two appeals.

III. Issues.

The pivotal issue on appeal is whether the commissioner had subject matter jurisdiction over Terry's arbitration and alternate medical care claims. This issue raises two questions. First, are the 1997 amendments to Iowa Code section 85.71 applicable to Terry's claim? Second, under either the amended or original version of Iowa Code section 85.71, did the district court err...