Michael Eberhart Const. v. Curtin

• Decision Date: 22 January 2004
• Docket Number: No. 02-2083.,02-2083.
• Citation: 674 N.W.2d 123
• Parties: MICHAEL EBERHART CONSTRUCTION and United Fire and Casualty, Appellants, v. Trampes CURTIN, Appellee.
• Court: Iowa Supreme Court

674 N.W.2d 123

MICHAEL EBERHART CONSTRUCTION and United Fire and Casualty, Appellants, v. Trampes CURTIN, Appellee.

No. 02-2083.

Supreme Court of Iowa.

January 22, 2004.

J. Richard Johnson of White & Johnson, P.C., Cedar Rapids, for appellants. David L. Baker and Timothy Semelroth of Riccolo & Baker, P.C., Cedar Rapids, for appellee.

LARSON, Justice.

Iowa's workers' compensation commissioner awarded compensation benefits to Trampes Curtin, a former employee of Michael Eberhart Construction. The district court affirmed the award, and Eberhart and its insurance carrier, United Fire and Casualty (collectively the employer), appealed. The principal issues on appeal involve the commissioner's (1) application of the "odd-lot doctrine," (2) finding the claimant to be permanently and totally disabled, and (3) the district court's denial of a lien to Eberhart on Curtin's proceeds under an underinsured-motorist insurance policy. We affirm in part, reverse in part, and remand.

I. Facts and Prior Proceedings.

Trampes Curtin, foreman of Eberhart's concrete crew, was traveling on the job when the hood of the company truck flew open, and Curtin got out to fix it. While he was standing in front of the truck, a vehicle driven by a Karen Cooper struck the truck, causing both the truck and the Cooper vehicle to run over Curtin. As a result of Curtin's injuries, his doctor imposed these restrictions on his activities: no prolonged standing or sitting, no lifting over twenty pounds on a one-lift basis, no lifting over ten pounds on a frequent-lift basis, no work with his arms in front of him or over his head, no repetitive bending or stooping, and no work on scaffolds, ladders, or roofs.

These restrictions rendered Curtin a poor prospect for any employment requiring stringent physical activity, and this was the consensus of opinion among these parties and their witnesses. Curtin considered becoming a car salesman and hoped someday to own his own car lot. He decided to go back to school, despite his poor academic performance in the past and his limited intellectual level. (He had a D average in high school and an IQ of 94. In twelfth grade, he was considered learning disabled, and he was referred to the Iowa Division of Vocational Rehabilitation.) According to Curtin's testimony, his main problem is reading comprehension.

Despite these learning handicaps, Curtin was accepted as a student at Northeast Iowa Community College at its Calmar campus and performed well. He attended college for thirty hours, earning a cumulative grade point of 2.94. In Curtin's first semester, his courses included Principles of Management and Introduction to Business. His instructors rated his work from average to excellent, giving Curtin a combined grade point average (GPA) of 2.835. In the next semester, Curtin took Psychology of Human Relations, Principles of Marketing, Business Ethics, and Business Law. His instructors rated his work from above average to excellent. His GPA that semester was 3.583. In the next semester, Curtin took General Psychology, Microeconomics, Mathematics Fundamentals, and Introduction to Microcomputers, earning a GPA of 2.223. His instructors rated his performance as average to above average. Curtin's total combined GPA for the three semesters he attended college was 2.954, which was close to a B average. This was the picture portrayed in the discovery provided to the employer prior to the workers' compensation hearing.

John Suter, a former certified rehabilitation counselor, and Dr. Karma Gibson, a vocational case manager with Job Search, expressed opinions, based on Curtin's academic performance, that he had potential as a salesman, fast-food worker, management trainee, assistant manager, or electronics assembler. As the workers' compensation commissioner noted in his ruling, these experts "placed great emphasis on the claimant's success in community college in their opinion[s] that the claimant could be retrained and become employable." However, according to the commissioner's ruling, the true picture of Curtin's academic abilities was quite different. At the workers' compensation hearing, Curtin and his girlfriend, Lisa Eberhart (daughter of Curtin's employer), testified that Curtin's grades were misleading; they were based on take-home tests, some of which Lisa had taken for him, and Lisa had provided help on virtually all of his college work. In fact, Lisa testified Curtin's reliance on her help was so substantial he quit college when she started to go to college herself full-time and did not have the time to spend on Curtin's courses. This was in stark contrast to Curtin's deposition testimony in which he said he quit college because his back hurt him in class, he was tired of the commute to class, and he decided he did not like college after all. The truth, it appears, is that Curtin does not have the intellectual skills or intelligence he had claimed prior to the arbitration hearing. The effect of this evidence presented at the hearing cast serious doubt on Curtin's future employability based on additional education.

The employer understandably claims it was surprised by the change in Curtin's evidence. In his deposition, Curtin had stated that Lisa had encouraged him to answer the open-book tests and that she had suggested sources he could consider to answer the questions. He denied that she actually did the work for him. At the arbitration hearing, however, the evidence was quite clear she actually took some of the tests for him.

In addition to confronting this surprise development, the employer faced a request by Curtin, after the record was closed, to amend his petition to assert the "odd lot" doctrine. The employer resisted the amendment, unsuccessfully, and it now raises the amendment as an issue on appeal.

II. The Odd-Lot Amendment.

[1 2] Under [the odd-lot] doctrine a worker becomes an odd-lot employee when an injury makes the worker incapable of obtaining employment in any well-known branch of the labor market. An odd-lot worker is thus totally disabled if the only services the worker can perform are "so limited in quality, dependability, or quantity that a reasonably stable market for them does not exist."

Guyton v. Irving Jensen Co., 373 N.W.2d 101, 105 (Iowa 1985) (quoting Lee v. Minneapolis St. Ry., 230 Minn. 315, 320, 41 N.W.2d 433, 436 (1950)). In adopting the doctrine, we noted that

[b]efore today we were not required to decide whether a presumption exists that suitable work is available to an oddlot employee or whether evidence must be adduced on that subject.

We adopt the burden of proof allocation enunciated in [a workers' compensation authority] statement of the general rule. We emphasize that this rule merely allocates the burden of production of evidence. It is triggered only when the worker makes a prima facie case for inclusion in the odd-lot category:

It is normally incumbent upon an injured [worker], at a hearing to determine loss of earning capacity, to demonstrate a reasonable effort to secure employment in the area of ... residence. Where testimony discloses that a reasonable effort was made, the burden of going forward with evidence to show the availability of suitable employment is on the employer and carrier.

Id. (quoting Employers Mut. Liability Ins. Co. v. Indus. Comm'n, 25 Ariz.App. 117, 119, 541 P.2d 580, 582 (1975)).

Guyton stated the rationale for this burden-shifting rule:

[T]he employer ordinarily is in a better position than the worker to determine whether the labor market offers opportunities to persons in the odd-lot category. The overriding reason for requiring evidence of employment opportunities is because there is no presumption that merely because the worker is physically able to do certain work such work is available.

373 N.W.2d at 106 (citations omitted).

The practical effect of this burden-shifting rule is that when a claimant is an odd-lot employee, we presume that no jobs are available unless the employer introduces evidence of such work. Nevertheless, the ultimate burden of persuasion on the issue of industrial disability always remains on the employee.

Second Injury Fund v. Nelson, 544 N.W.2d 258, 267 (Iowa 1995) (citing Guyton, 373 N.W.2d at 105). The Idaho court explained the odd-lot doctrine by contrasting it with proof of industrial disability in other cases:

There are two methods by which a claimant may establish a permanent disability. First, a claimant may prove a total and permanent disability if his or her medical impairment together with the nonmedical factors total 100%. If the Commission finds that a claimant has met his or her burden of proving 100% disability via the claimant's medical impairment and permanent nonmedical factors, there is no need for the Commission to continue. The total and permanent disability has been established at that stage.

The second method by which a claimant may prove total and permanent disability is for the claimant to demonstrate that he fits within the definition of an odd-lot worker. The odd-lot doctrine comes into play when the claimant has proved something less than 100% disability. The odd-lot category exists for those persons who are so injured as to be unable to perform services other than "those which are so limited in quality, dependability or quantity that a reasonably stable market for them does not exist."

Boley v. Indus. Special Indem. Fund, 130 Idaho 278, 281, 939 P.2d 854, 857 (1997) (quoting Dehlbom v. Indus. Special Indem. Fund, 129 Idaho 579, 582, 930 P.2d 1021, 1024 (1997)) (other citations omitted).

Curtin argues that it did not matter that the deputy allowed the odd-lot amendment because his evidence established total and permanent disability with or without application of the odd-lot doctrine. While this argument might have merit if the...