Hormel Foods Corp. v. Tamayo-Perez

• Docket Number: 23-0212
• Decision Date: 20 December 2023
• Parties: HORMEL FOODS CORP., Plaintiff-Appellant/Cross-Appellee, v. YUNIOR TAMAYO-PEREZ, Defendant-Appellee/Cross-Appellant
• Court: Iowa Court of Appeals

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HORMEL FOODS CORP., Plaintiff-Appellant/Cross-Appellee,
v.
YUNIOR TAMAYO-PEREZ, Defendant-Appellee/Cross-Appellant

No. 23-0212

Court of Appeals of Iowa

December 20, 2023

Appeal from the Iowa District Court for Polk County, Robert B. Hanson, Judge.

Parties appeal and cross-appeal a ruling on judicial review of agency action.

Abigail A. Wenninghoff of Kuper, Wenninghoff &Block, PC, LLO, Omaha, Nebraska (until withdrawal), and Alison E. Stewart and Jordan R. Gehlhaar of Peddicord Wharton, LLP, West Des Moines for appellant/cross-appellee.

Jennifer M. Zupp of Zupp and Zupp Law Firm, P.C., Denison, for appellee/cross-appellant.

Heard by Tabor, P.J., and Badding and Chicchelly, JJ.

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BADDING, JUDGE

In this procedurally confusing case that has eschewed a basic tenet of our workers' compensation system-"to provide prompt compensation to employees who receive a work injury"-we are asked to decide issues mostly focused on the commission's "subject matter jurisdiction and statutory authority" in alternatemedical-care proceedings under Iowa Code section 85.27(4) (2021). See Bell Bros. Heating &Air Conditioning v. Gwinn, 779 N.W.2d 193, 202 (Iowa 2010).

The employer, Hormel Foods Corp., claims that once employee Yunior Tamayo-Perez's application for alternate medical care was dismissed by the agency without prejudice, he could not file other applications requesting the same treatment. The district court rejected this claim, as do we. Hormel alternatively claims the court erred in concluding judicial estoppel applied, declining to stay agency action, and proceeding with entry of judgment. We reach the same conclusion as the court on each of these issues. Finally, we agree with Tamayo-Perez on his cross-appeal that the court erred in concluding the agency lacked authority to rule on a new application for alternate care filed while the judicial review proceedings were pending.

I. Background Facts and Proceedings

In December 2019, Tamayo-Perez sustained an injury to his lower back while working at Hormel. Hormel agreed the injury was work-related and authorized treatment for the back condition. In July 2021, Tamayo-Perez applied for alternate medical care under Iowa Code section 85.27(4) for his "[l]ow back, with radiculopathy to legs," seeking spinal-cord-stimulation treatment that he alleged Hormel was delaying. The application noted that Dr. Allen Eckhoff, the

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authorized treatment provider, mentioned this treatment as an option in February and formally recommended it in May. Hormel filed a form answer, checking the box to "admit liability for the claim" but noting that it "has now authorized requested treatment." Tamayo-Perez voluntarily dismissed the petition without prejudice the next day.

Tamayo-Perez filed a second application for alternate care in September, alleging-as to the spinal-cord-stimulation treatment-that Hormel's third-party administrator and case manager "have been actively interfering with treatment recommendations and not scheduling care in a timely manner." As with the first application, this one identified the affected body part as "[l]ow back with radiculopathy," which "caused need for care to" the "T and L spine." In its answer, Hormel again admitted liability for the claim relating to the "back/spine" but submitted it tried to schedule the necessary appointments,^[1] with any delays being due to Dr. Eckhoff. Following a hearing on October 11, a deputy commissioner granted Tamayo-Perez's application and ordered Hormel to "promptly authorize any and all treatment recommended by the authorized treating physicians, Dr. Eckhoff and Dr. Kopp, for his work-related condition, including but not limited to his scheduled MRIs and his psychological evaluation."

Shortly after the deputy's ruling, Tamayo-Perez filed a third petition for alternate care, asking to see a different physician for his psychological evaluation because she could conduct it sooner. For the third time, Hormel admitted liability for the claim relating to the "back/spine" but denied that an order for alternate care

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was necessary. While the deputy granted the application, it found Tamayo-Perez's counsel "may have jumped the gun to some degree" by filing before Hormel's counsel had a chance to discuss the request with her client.

Despite these efforts to secure the spinal-cord-stimulation treatment, the record discloses that Tamayo-Perez ultimately decided not to pursue it. Instead, on April 27, 2022, Tamayo-Perez filed a fourth application for alternate medical care. He alleged that Dr. Eckhoff recommended additional care on April 18- including physical therapy; treatment from a pain management physician; "and an evaluation with a physical medicine and rehabilitation provider, to consider osteopathic manipulative therapy"-but Hormel denied further care based on a stale opinion by orthopedic spine and trauma surgeon Dr. Todd Harbach. This time, in its answer filed the next day, Hormel checked the box to "den[y] liability for the claim," specifying in the space provided on the form that it "den[ied] any additional treatment for the back as unrelated to the work injury per the attached medical opinions."

The attached medical opinions started with one from Dr. Harbach on January 28, 2021, that stated Tamayo-Perez did not need "any further supervised treatment" for his "degenerative back, which may flare up and give him troubles from time to time." That opinion was followed by another from Dr. Harbach in June, containing the following diagnosis based on his one-time examination of Tamayo-Perez: "The patient aggravated a pre-existing degenerative condition and L4-L5 and L3-L4. Work will not cause degeneration of the discs, but it can aggravate it and this aggravation is temporary in nature." Dr. Harbach did not "believe that aggravation of a pre-existing degenerative condition warrants an impairment" and

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placed Tamayo-Perez at maximum medical improvement on "the date I saw him [on] January 28, 2021." The last opinion from Dr. Harbach came in February 2022, after Hormel asked him to review more medical records for Tamayo-Perez. After doing so, Dr. Harbach stated:

The records I have reviewed today did not change my opinions that I have previously written. I believe the records I reviewed today are not unexpected as a slow progression in the treatment of patient's lumbar spine that is degenerating over time and continues to give him difficulties. All the treatment that has been done and treatment that is being recommended is all reasonable.

On May 6, the deputy dismissed the application "without prejudice" because of Hormel's "denial of liability," citing R.R. Donnelly &Sons v. Barnett, 670 N.W.2d 190, 197 n.2 (Iowa 2003) (noting commissioner has no ability to decide alternate-care claim unless compensability of the injury is conceded). The deputy explained Tamayo-Perez could obtain reasonable medical care from the provider of his choice and seek reimbursement "using regular claim proceedings."

A few days later, Tamayo-Perez filed an "application for rehearing due to judicial estoppel," arguing Hormel could not change its position on liability after conceding it in the prior alternate-care proceedings absent a "significant change in facts," which was not present. Hormel resisted, arguing it was not changing its position on whether the injury itself was work-related but denying that the newly requested care was related to that injury. The deputy denied rehearing on May 12 because there "is no rule or statutory provision which specifically allows rehearing of a dismissal without prejudice." However, the deputy commented that "since the petition [for alternate medical care] was dismissed without prejudice, the

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appropriate remedy for the claimant is to refile his petition and specifically assert the issue of judicial estoppel."

Tamayo-Perez did so less than two hours later. The May 12 application alleged: "Authorized, treating physician has recommended additional care. Even though defendants have admitted liability twice in prior alternate care rulings, and said admissions have been judicially-accepted, defendants now say they are denying further medical care, for inappropriate reasons." In its answer, Hormel again denied liability and "any additional treatment for the back as unrelated to the work injury." Hormel also requested that the petition be dismissed as "barred by the principles of res judicata and/or claim preclusion." Expanding on that position at the hearing on the application, Hormel argued the "entire hearing is improper" because the same application had been dismissed at the beginning of the month. The deputy disagreed, telling the parties that the hearing would proceed "so I can get enough evidence to determine whether the principles of judicial estoppel apply, and also look at the underlying evidence in the case." Each party then offered exhibits on the alternate-care issue, which were admitted by the deputy.^[2]

In its ruling, the deputy identified two issues: (1) "whether the defendant is barred from denying liability based upon the principle of judicial estoppel" and (2) "whether the claimant is entitled to alternate medical care," specifically the "treatment recommended by Allen Eckhoff, M.D., an authorized treating

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physician." On the first issue, the deputy determined that Hormel's admissions of liability to Tamayo-Perez's second and third applications for alternate care, which were accepted by the agency in granting that care, estopped Hormel from denying liability for further treatment, with no significant change in facts that would allow Hormel to change its position. On the second issue, the deputy found the

evidence supports the claimant's request for alternate medical care. He has moved out of state and his treating doctor has recommended referral to a new pain specialist in addition to some additional

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