Kostelac v. Feldman's, Inc.

• Citation: 497 N.W.2d 853
• Decision Date: 24 March 1993
• Docket Number: No. 91-1755,91-1755
• Parties: Suzanne Williams KOSTELAC, Appellee, v. FELDMAN'S, INC., Employer, and Great American Insurance Companies, Insurance Carrier, Appellants.
• Court: United States State Supreme Court of Iowa

Page 853

497 N.W.2d 853

Suzanne Williams KOSTELAC, Appellee, v. FELDMAN'S, INC., Employer, and Great American Insurance Companies, Insurance Carrier, Appellants.

No. 91-1755.

Supreme Court of Iowa.

March 24, 1993.

Rehearing Denied April 19, 1993.

David Shinkle, Des Moines, for appellants.

Charles T. Patterson and John C. Gray, Sioux City, for appellee.

Considered en banc.

NEUMAN, Justice.

On judicial review of agency action the district court reversed the industrial commissioner's refusal to award workers' compensation benefits to a plaintiff whose spouse committed suicide. The employer has appealed. We now reverse.

I. Background.

On September 14, 1982, Dean Williams took his own life by allowing his car to run in the closed garage at his home. His wife, plaintiff Suzanne Williams, brought this action to recover workers' compensation benefits for his death. She claimed that Dean's suicide was the end result of a major depressive disorder brought on by his employment with defendant Feldman's, Inc.

The hearing before the agency revealed the following facts. Dean Williams graduated from college in 1956 with a degree in business administration and marketing. He held a series of retail sales jobs before joining Feldman's, Inc. in about 1965. During the years preceding his employment by Feldman's, Dean experienced two significant work-related events that appeared to trigger brief periods of depression. One was the failure of a retail store Dean briefly operated in Moline, Illinois. Another was the loss of his job as sales representative when his employer combined sales territories and eliminated his position.

Eventually Dean's father-in-law offered him a job at Feldman's, Inc., a family-owned clothing store in northwest Iowa. The company owned two stores, one in Storm Lake and the other in Spencer. Dean took over management of the Storm Lake store. He and Mr. Feldman worked together successfully and the businesses prospered. Dean put in long hours at the store and apparently derived a great deal of satisfaction from his work. Lay witnesses described him as cheerful, gregarious and actively involved in the community.

When Mr. Feldman died in 1973, Suzanne's mother assumed ownership of the business. Mrs. Feldman had no prior experience or training but she took an active role in the corporation. Although Dean managed both stores he tended to defer to Mrs. Feldman's judgment as the owner.

The severe downturn in the agricultural economy during the late 1970s and early 1980s had a correspondingly negative impact on retail businesses in northwest Iowa. Declining sales put Feldman's behind in its accounts payable and led to employee layoffs. The company's lines of credit dried up and it was eventually unable to purchase new merchandise. The Spencer store, which had long been a drain on the more profitable Storm Lake store, was ultimately closed over Mrs. Feldman's strong objection. Eventually the Storm Lake store also took on the appearance of a failing business.

During this period Dean became increasingly depressed. He ceased active management of the Storm Lake store, abdicating the day-to-day responsibilities to the bookkeeper. When he did come to the store he avoided contact with customers. He began sleeping a lot and consumed more alcohol than usual. He no longer expressed interest in socializing with friends.

Approximately two weeks before his death, Dean was confronted by Mrs. Feldman and her banker in an emotionally charged meeting at his home. They blamed Dean entirely for the business failure. They accused him of embarrassing the Feldman name and gave him an ultimatum to either buy the store or close it. Any attempted explanations by Dean were rudely rebuffed. Eventually he broke down. Afterward he told Suzanne that the situation was hopeless. He was fifty-two years old and felt he could not start over again. Thereafter he completely withdrew from any contact with work, friends, or family.

On September 13, Dean's mood seemed to lighten unexpectedly. He went to the store for the first time in several days, paid some bills and cleared his desk. When Suzanne left for work the next morning Dean was still asleep. She returned home at dinnertime to find him behind the wheel of his car, dead of carbon monoxide poisoning.

Three psychiatrists testified in what the industrial commissioner described as a "psychological autopsy." None of them had known Dean before his death. Based on the record sketched above, each concluded that Dean had been suffering from a major depressive disorder for some period of time before his death. All agreed that Dean's mental processes would have been adversely affected by biochemical changes accompanying the depression. The two experts who testified for Suzanne linked the depression to Dean's unshakable feeling of personal responsibility for the failure of Feldman's, Inc. They believed Dean knowingly chose suicide but his decision could not be considered intentional because it was the product of an irrational mind.

A third psychiatrist, testifying on behalf of the employer, stated that he could not attribute Dean's major depressive disorder or his suicide to his employment without more information about the prior episodes of alleged depression and other environmental factors at work in Dean's life. He agreed that it was possible Dean's depression stemmed from his employment at Feldman's, Inc., but could not state within a reasonable degree of medical certainty that it was the probable cause. This doctor believed it was possible that Dean's mood disorder would have occurred at this time in his life irrespective of his employment or any other life activities.

From this record the industrial commissioner concluded that Suzanne failed in her burden to prove that Dean suffered an injury arising out of his employment. The commissioner further determined that, even if Dean's depression resulted from his work, recovery was barred by Iowa Code section 85.16(1) (1981) which provides:

No compensation under this chapter shall be allowed for an injury caused:

1. By the employee's willful intent to injure himself or to willfully injure another.

On Suzanne's petition for judicial review, the district court reversed the industrial commissioner's decision. It concluded that Dean's death was the probable result of his employment and that the commissioner's contrary conclusions were arbitrary and without substantial support in the record. This appeal by the employer followed.

II. Scope of review.

Our decision is largely controlled by the limited scope of review applicable to decisions from an administrative agency. The review is for correction of errors at law, not de novo, and the findings of the industrial commissioner have the effect of a jury verdict. Giere v. Aase Haugen Homes, Inc., 259 Iowa 1065, 1070, 146 N.W.2d 911, 914 (1966). The burden rested upon the claimant to show by a preponderance of evidence that the injury arose out of and in the course of employment. Anderson v. Oscar Mayer & Co., 217 N.W.2d 531, 535 (Iowa 1974). "[A] possibility is insufficient; a probability is necessary." Id. The question is whether the commissioner's decision is supported by substantial evidence in the record made before the agency. Schreckengast v. Hammermills, Inc., 369 N.W.2d 809, 811 (Iowa 1985). Evidence is substantial if a reasonable mind would accept it as adequate to reach a conclusion. John Deere Dubuque Works of Deere & Co. v. Weyant, 442 N.W.2d 101, 105 (Iowa 1989). The possibility of drawing inconsistent conclusions from the same evidence does not mean an agency's decision lacks substantial support. Id. In the case of conflict in the evidence we are not free to interfere with the commissioner's findings. Schreckengast, 369 N.W.2d at 811. We are not bound, however, by an agency's erroneous conclusions of law. King v. City of Mount Pleasant, 474 N.W.2d 564, 565 (Iowa 1991).

III. Issues on appeal.

The case first requires us to review under what circumstances, if any, suicide will trigger survivors' benefits under our workers' compensation law. We must then decide whether the evidence warrants the district court's reversal of the industrial commissioner's findings on causation.

A. In 1959 this court adopted the then-prevailing rule for recovery of workers' compensation benefits in the case of a traumatically induced mental injury resulting in suicide:

Claimant having pleaded and proved suicide must get around the statutory provision that compensation shall not be allowed for an injury caused by the employee's willful intent to injure himself. To do this she must prove the mental condition of her decedent at the time of the suicidal act was such that he was motivated by an uncontrollable impulse or in a delirium of frenzy, without conscious volition to produce death.

Schofield v. White, 250 Iowa 571, 581, 95 N.W.2d 40, 46 (1959). The industrial commissioner applied this standard in the case before us.

In the intervening years since Schofield, society's heightened understanding of mental illness has prompted most jurisdictions to move away from the doctrine's harsh reliance on proof of "uncontrollable impulse" or "delirium of frenzy." It has generally been replaced as majority rule by a chain-of-causation test in which compensability turns upon proof that an employment-related injury caused the deranged mental state which, in turn, caused the suicide. 1A A. Larson, The Law of Workmen's Compensation § 36.00 (1985).

We are persuaded that this shift in emphasis from proof that an employee acted in an impulsive, frenzied state to proof that but for an employment-related mental injury--however expressed--the employee would not have committed suicide, is a more sound way of dealing with the "willful injury" issue of section 85.16(1). Critics of the former rule point out that it required a claimant to prove the deceased employee met the M'Naghten standard of insanity, thereby mixing a...