Swiss Colony Inc. v. Deutmeyer

• Citation: 789 N.W.2d 129
• Decision Date: 07 October 2010
• Docket Number: No. 09-0810.,09-0810.
• Parties: SWISS COLONY, INC., and Sentry Insurance, Appellees, v. Kent J. DEUTMEYER, Appellant.
• Court: United States State Supreme Court of Iowa

789 N.W.2d 129

SWISS COLONY, INC., and Sentry Insurance, Appellees,

v.Kent J. DEUTMEYER, Appellant.

No. 09-0810.

Supreme Court of Iowa.

Aug. 6, 2010.

Rehearing Denied Oct. 7, 2010.

COPYRIGHT MATERIAL OMITTED.

Mark J. Sullivan of Reynolds & Kenline, L.L.P., Dubuque, for appellant.

Steven T. Durick and Joseph M. Barron of Peddicord, Wharton, Spencer, Hook, Barron & Wegman, LLP, Des Moines, for appellees.

APPEL, Justice.

Employee appeals and employer cross-appeals from the district court's decision affirming in part and reversing in part the final decision of the workers' compensation commissioner. The parties challenge the commissioner's findings that claimant “earned less” than the usual weekly earnings of a full-time adult laborer in his field and suffered a sixty percent permanent industrial disability as not supported by substantial evidence. The employer further asserts entitlement to a credit for overpayment of weekly benefits on future permanency benefits for this injury. For the reasons expressed below, we affirm in part and reverse in part the district court judgment and remand the case for further proceedings.

I. Factual and Procedural Background.

Kent Deutmeyer was severely injured while working at the Swiss Colony warehouse and distribution facility on July 29, 2005. The injury occurred when Deutmeyer's left leg struck a pole or beam while he was operating a forklift. The damage to the foot and lower leg was so extensive that the extremity was amputated below the knee. After three months, Deutmeyer was fitted with a prosthesis, which has since been replaced. Deutmeyer continues to suffer from hip and low back pain and has difficulty with his gait. He also suffers from “phantom leg syndrome,” which causes him to feel as if his lost toes are being crushed.

At the time of his injury, Deutmeyer was a twenty-two-year-old laborer with a high school education. He worked at Swiss Colony an average of thirty hours a week at $9.25 an hour, though he had indicated in his application an availability for thirty-seven hours a week. His job responsibilities included operating a forklift, lifting heavy loads up to one hundred pounds, and standing on his feet for most of the day. Deutmeyer considered himself to be a full-time employee of Swiss Colony.

During the time he worked at Swiss Colony, Deutmeyer also worked at Webber Metals. Deutmeyer worked an average of forty to forty-five hours a week at Webber Metals at $13.65 an hour with benefits. His principal responsibility was to operate a CNC machine, which required constant standing in order to feed parts into the machine, deburring finished parts, and stacking parts on pallets.

Deutmeyer returned to work at both Webber Metals and Swiss Colony following his injury, albeit with different responsibilities. Eventually he quit each position, in part due to his injuries and in part due to his desire to work the day shift. Deutmeyer thereafter worked a series of jobs, generally for lower wages than before his injury. At the time of the hearing, claimant was working full time at IWI at $7.50 an hour and at Taco Bell at $6.20 an hour about ten to twenty hours a week.

Deutmeyer filed a claim for workers' compensation on August 30, 2006. He submitted medical reports from two physicians, Dr. Sergio Mendoza, his primary physician, and Dr. Thomas Hughes, an occupational medicine physician. Dr. Mendoza concluded that Deutmeyer suffered a thirty percent functional disability as a result of his injury. Although Dr. Mendoza did not prescribe any work restrictions, he did outline long-term recommendations for Deutmeyer's safety. Dr. Hughes also concluded that Deutmeyer suffered a thirty percent functional disability. Dr. Hughes, however, determined that Deutmeyer was now ill-suited for numerous types of manual employment.

After a hearing, the workers' compensation deputy issued the arbitration decision. The deputy concluded that Deutmeyer suffered a sixty percent loss of his earning capacity as a result of the work injury. Next, the deputy concluded that Deutmeyer's weekly benefits should be calculated according to Iowa Code section 85.36(9) (2005) because he was a part-time employee at Swiss Colony. Classifying Deutmeyer as a part-time employee allowed the deputy to consider the claimant's “total employment,” including his salary at Webber Metals, in calculating the amount of his weekly benefits. Finally, the deputy determined that based on the parties' stipulation, Deutmeyer had been overpaid for healing period and permanent disability benefits. While the deputy granted the employer a credit for the healing period overpayments, he denied Swiss Colony a credit for the excess permanent disability payments for this injury. The deputy determined that a credit can only be taken against any future entitlement to permanency benefits for a subsequent injury should claimant return to employment at Swiss Colony. The deputy's decision was affirmed in whole by the workers' compensation commissioner.

Swiss Colony sought judicial review in the district court. While the district court affirmed the commissioner's finding that Deutmeyer suffered a sixty percent industrial disability, it determined that substantial evidence did not support the commissioner's finding that Deutmeyer was a part-time employee at Swiss Colony. The district court noted that under the commissioner's own admission, there was no evidence in the record that the claimant earned less than the usual earnings of a full-time adult laborer in his field. According to the district court, instead of relying on evidence presented at the hearing, the commissioner based his conclusion that Deutmeyer was a part-time employee on the commissioner's personal knowledge of the average work week. As a result, the district court remanded the case to the commissioner either for additional evidence or to select a rate calculation supported by the record. Finally, the district court determined that Swiss Colony was entitled to a credit for overpayment of permanency benefits for this injury. The district court found Iowa Code section 85.34(5) inapplicable and concluded that the employer was entitled to a credit based on notions of equity and the public policy underlying Iowa's workers' compensation scheme. Both parties appealed to this court.

II. Standard of Review.

We review decisions of the workers' compensation commissioner according to the Iowa Administrative Procedure Act, Iowa Code chapter 17A. The issues in this case concern the agency's interpretation of a statute and its factual determinations. We have previously found that the legislature did not delegate the interpretation of chapter 85 to the commissioner. Mycogen Seeds v. Sands, 686 N.W.2d 457, 464 (Iowa 2004). As a result, in the past we have “not give[n] the agency any deference regarding its interpretation and [were] free to substitute our judgment de novo for the agency's interpretation.” Id.; see Iowa Code § 17A.19(10)( c ).

We recently refined the analysis required to determine whether the legislature clearly vested an agency with the authority to interpret a particular statute or phrase in a statute. Renda v. Iowa Civil Rights Comm'n, 784 N.W.2d 8, 11 (Iowa 2010) (noting that the proper inquiry is whether the agency has been vested with authority to interpret a phrase or individual statute rather than the entire legislative scheme). First, we must determine whether the legislature has explicitly granted the agency authority to interpret the disputed statute or phrase. Id. at 11. Here, as in most cases, there is no such express grant of authority in Iowa Code section 85.34(5). In the absence of such an explicit grant of authority, we must determine whether the legislature, nevertheless, “clearly” vested the agency with the power to interpret the statute by implication. Iowa Code § 17A.19(10)( c ).

Using the refined standard in Renda, we are not convinced the legislature intended to vest the commissioner with the authority to interpret Iowa Code section 85.34(5). In order for this court to find that a statute or phrase has been “clearly” vested with an agency by implication, such an intention must be unambiguously manifest. The test is akin to finding an implied contractual term. Cf. Wells Dairy, Inc. v. Am. Indus. Refrigeration, Inc., 762 N.W.2d 463, 470 (Iowa 2009) (noting in order to find an implied contractual term there must be “unmistakable intent”). Such an intention is not apparent in the language or structure of section 85.34(5). As a result, the commissioner's interpretation is not entitled to deference, and we are free to substitute our interpretation de novo. Iowa Code § 17A.19(10)( c ).

This court reviews an agency's factual findings for substantial evidence. Id. § 17A.19(10)( f). The code defines substantial evidence as:

the quantity and quality of evidence that would be deemed sufficient by a neutral, detached, and reasonable person, to establish the fact at issue when the consequences resulting from the establishment of that fact are understood to be serious and of great importance.

Id. § 17A.19(10)( f)(1). Evidence is not insubstantial merely because the court could draw a different conclusion from the record. Arndt v. City of Le Claire, 728 N.W.2d 389, 393 (Iowa 2007). The ultimate question is whether the record when viewed as a whole supports the finding actually made. Fischer v. City of Sioux City, 695 N.W.2d 31, 34 (Iowa 2005).

III. Discussion.

On appeal to this court, the parties allege four errors. Deutmeyer claims that the district court erred in (1) concluding that there was no substantial evidence to support the commissioner's finding that he was a part-time employee and (2) allowing Swiss Colony credit for overpayment of weekly benefits. Swiss Colony conversely asserts that the district court erred in (1) remanding the case to the agency on the part-time benefits issue and (2) concluding that substantial evidence supported...