Henriksen v. Younglove Const.

• Decision Date: 22 November 1995
• Docket Number: No. 94-1418,94-1418
• Citation: 540 N.W.2d 254
• Parties: Arthur J. HENRIKSEN, Appellant, v. YOUNGLOVE CONSTRUCTION and General Casualty Companies, Appellees.
• Court: Iowa Supreme Court

Page 254

540 N.W.2d 254

Arthur J. HENRIKSEN, Appellant, v. YOUNGLOVE CONSTRUCTION and General Casualty Companies, Appellees.

No. 94-1418.

Supreme Court of Iowa.

Nov. 22, 1995.

Dennis Mahr and Leslie D. Rynell, Sioux City, for appellant.

James E. Thorn, Council Bluffs, for appellees.

Considered en banc.

TERNUS, Justice.

Appellant, Arthur J. Henriksen, was injured on a job site in Nebraska while working for his Iowa employer, Younglove Construction, appellee. The industrial commissioner dismissed Henriksen's petition for Iowa workers' compensation benefits, concluding that Iowa had no jurisdiction of Henriksen's claim even though Henriksen was domiciled in Iowa. The district court upheld this determination. We think Henriksen's Iowa domicile was sufficient under Iowa Code section 85.71(1) (1989) to confer subject matter jurisdiction upon the Iowa industrial commissioner. Therefore, we reverse.

I. Background Facts.

Younglove Construction builds grain storage facilities and feed mills throughout the United States. Although its headquarters and only business office is in Sioux City, Iowa, it performs less than ten percent of its construction work in Iowa. In January 1989, the Sioux City office of Job Service of Iowa referred Henriksen, an Iowa resident, to Younglove for a job interview. Younglove interviewed Henriksen at its Sioux City office and hired him as a cement finisher for a project in South Sioux City, Nebraska.

In November 1989, Henriksen injured his back and neck while working on the Nebraska project. Despite his injury, he continued working until January 1990, when the project was substantially completed. Henriksen performed services for Younglove only in the State of Nebraska.

II. Procedural History.

Henriksen filed a petition for workers' compensation benefits in Iowa against Younglove and its workers' compensation carrier, appellee, General Casualty Companies. ¹ After a hearing before a deputy industrial commissioner, the deputy denied Henriksen benefits because his claim was not compensable under the Iowa Workers' Compensation Act. See Iowa Code § 85.71 (1989) (specifies circumstances under which injury sustained outside Iowa will be compensated under Iowa's Workers' Compensation Act). The industrial commissioner conducted a de novo review and adopted the deputy's opinion as the final agency action. This decision was affirmed on appeal to the district court. Henriksen appealed.

III. Standard of Review.

Our review of the industrial commissioner's rulings is for errors of law. Squealer Feeds v. Pickering, 530 N.W.2d 678, 681 (Iowa 1995). The proper interpretation of the workers' compensation statute is a question of law for this court. Aluminum Co. v. Quinones, 522 N.W.2d 63, 65 (Iowa 1994).

IV. Does the Industrial Commissioner Have Subject Matter Jurisdiction of Henriksen's Claim?

The compensability of an injury occurring outside the territorial limits of Iowa 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 the employee ... would have been entitled to the benefits provided by this chapter had such injury occurred within this state, such employee ... shall be entitled to the benefits provided by this chapter, provided that at the time of such injury:

1. The employment is principally localized in this state, that is, the employee's employer has a place of business in this or some other state and the employee regularly works in this state, or if the employee is domiciled in this state, or

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

3. The employee 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 the employee's employer, or

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

Iowa Code § 85.71 (1989). The circumstances of an employee's injury must fall within one of these categories for an out-of-state injury to be compensable. George H. Wentz, Inc. v. Sabasta, 337 N.W.2d 495, 500 (Iowa 1983).

Henriksen argues that Iowa has subject matter jurisdiction of his claim under section 85.71(1) based solely upon his domicile in Iowa. Thus, we must decide whether section 85.71(1) permits the receipt of Iowa workers' compensation benefits for an out-of-state injury based only upon the claimant's Iowa domicile. ²

A. Adoption of section 85.71. The Federal Occupational Safety and Health Act of 1970 authorized a national commission to study the adequacy of state workers' compensation laws. 29 U.S.C. § 676 (1970). In 1972, this commission issued a report containing eighty-two recommendations. Report of the Nat'l Comm'n on State Workmen's Compensation Laws 126-27 (1972). The commission called upon states to meet nineteen of the "essential" recommendations by July 1, 1975. Id. One of these recommendations was that an employee have a choice of where to file a workers' compensation claim:

We recommend that an employee or his survivor be given the choice of filing a workmen's compensation claim in the State where the injury or death occurred, or where the employment was principally localized, or where the employee was hired.

Id. R2.11.

In 1973 and 1974, Iowa amended its workers' compensation laws in response to the commission's recommendations. Harry W. Dahl, The Iowa Workmen's Compensation Law & Federal Recommendations, 24 Drake L.Rev. 336, 336 (1975). Included in these amendments was section 85.71, a provision for extraterritorial coverage of Iowa's workers' compensation statute. Id. at 351-52; see 1973 Iowa Acts ch. 144, § 29.

We have observed in prior cases that section 85.71 was based upon section 7 of the model Comprehensive Workmen's Compensation and Rehabilitation Law drafted by the Council of State Governments. Wentz, 337 N.W.2d at 500; Iowa Beef Processors, Inc. v. Miller, 312 N.W.2d 530, 533 (Iowa 1981). The model act defines principally localized employment:

A person's employment is principally localized in this or another state when (1) his employer has a place of business in this or such other state and he regularly works at or from such place of business, or (2) if clause (1) foregoing is not applicable, he is domiciled and spends a substantial part of his working time in the service of his employer in this or such other state.

Council of State Governments Model Act, Comprehensive Workmen's Compensation & Rehabilitation Law § 7(d)(4) (1963) (hereinafter "model act"). Thus, a worker's employment is "principally localized" in a particular state under the model act under two distinct sets of circumstances: (1) the employer has a place of business in the state and the employee regularly works at or from that place of business; or (2) the employee is domiciled in the state and spends a substantial part of his working time in that state.

At this point, it is helpful to recall the precise language of the Iowa statute focusing on employment principally localized in Iowa:

1. The employment is principally localized in this state, that is, the employee's employer has a place of business in this or some other state and the employee regularly works in this state, or if the employee is domiciled in this state....

Iowa Code § 85.71(1) (1989). It is apparent that the Iowa legislature adopted some, but not all, of the language suggested in the model act. Harry W. Dahl, The Model Iowa Workers' Compensation Act--Time For Change, 30 Drake L.Rev. 693, 723 (1980) (hereinafter "1980 Dahl Article"). Like the model act, the Iowa statute applies to out-of-state injuries where the employer has a place of business in Iowa or some other state ³ and the employee regularly works in Iowa. However, with respect to the second alternative, the Iowa statute omits the requirement that the employee "spends a substantial part of his working time in the service of his employer in this or such other state" and merely requires Iowa domicile.

Mr. Dahl, a former Iowa industrial commissioner, discusses this discrepancy between the Iowa act and the model act in his 1980 article:

Because the Iowa legislature did not use all of the language of the Council of State Governments draft, there arose an aberration which resulted in a rule that domicile of the employee in Iowa was alone sufficient to entitle him to benefits under the Iowa Workers' Compensation Act. The purpose of the [model act] was to avoid any employee "falling between the cracks" by not being covered under the law of any state. However, the Iowa amendment went further than that, and now is used as a supplemental source of workers' compensation benefits because Iowa benefits are greater than those in neighboring states.

....

Neither the National Commission nor the Council of State Governments contended that domicile in a state alone was sufficient to give jurisdiction; there had to be domicile plus a substantial part of working time in the state. The Iowa General Assembly left out that part of the Council of State Governments draft which defines "principally localized" in the alternative as domicile plus a substantial part of working time in the State of Iowa. This may mean that "domicile" (or residence) is what the legislature intended.

1980 Dahl Article, 30 Drake L.Rev. at 723 (emphasis added). Prior to any Iowa cases interpreting section 85.71(1), our industrial commissioner ruled that domicile independently conferred subject matter jurisdiction. E.J. Kelly, Comments on Iowa Beef Processors, Inc. v. Miller--Extraterritorial Employment Injuries & Subject Matter Jurisdiction Under Section 85.71(1), 32 Drake L.Rev. 145, 146 & n. 9 (1983) ("relying on what was considered to be the clear wording of the statute, and in the absence of any judicial precedent, the commissioner concluded that the...