Xenia Rural Water Dist. v. Vegors

• Citation: 786 N.W.2d 250
• Decision Date: 23 July 2010
• Docket Number: No. 09-0426.,09-0426.
• Parties: XENIA RURAL WATER DISTRICT and Emcasco Insurance Company, Appellees,v.Norman VEGORS, Appellant.
• Court: United States State Supreme Court of Iowa

786 N.W.2d 250

XENIA RURAL WATER DISTRICT and Emcasco Insurance Company, Appellees,v.Norman VEGORS, Appellant.

No. 09-0426.

Supreme Court of Iowa.

July 23, 2010.

Tom L. Drew of Drew Law Firm, P.C., Des Moines, and Kristin H. Johnson, Clive, for appellant.

Iris Post of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellee.

STREIT, Justice.

An employer claims it is not responsible for injuries sustained when a worker got hit by a truck driven by a fellow employee. The district court reversed the industrial commissioner's award of worker compensation benefits based on Iowa Code section 85.16(3) (2003), an affirmative defense for willful injury. We reverse the district court in part and remand the case to the industrial commissioner for a determination of whether the claimant proved he did not substantially deviate from the course of employment.

I. Background Facts and Prior Proceedings.

Norman Vegors worked as a machine inspector for Xenia Rural Water District, a company that installs rural water lines. Vegors was injured at work after a coworker, Casey Byrd, hit him with a pickup truck. Vegors had his hands full and “wiggled [his] butt” at Byrd. Vegors testified that he did so to acknowledge or say hi to Byrd. Vegors then leaned over the bed of his own truck. After this, Byrd attempted to bump Vegors with the mirror of his truck but instead hit Vegors with the truck bed.

Vegors testified that he and Byrd commonly acknowledged each other even when their hands were full, including, for example, waving the boom of the track hoe at the other. Xenia employees testified that Vegors had been involved in a prior incident for which he was disciplined and that he admitted to his supervisor that he and Byrd had just been goofing around.

Vegors sought workers' compensation benefits, and Xenia contested benefits, arguing Vegors was barred from recovering because he engaged in horseplay and asserting the affirmative defense of willful injury. The deputy commissioner held that Xenia, as the employer, had the burden to prove the defense of horseplay. The deputy commissioner found Vegors intended to shake his hind end as a means of communication and not to initiate, instigate, or participate in the horseplay which led to the injury, and, therefore, recovery of workers' compensation benefits was not barred. The commissioner affirmed the decision to award benefits and, although the deputy had not discussed it, separately addressed the affirmative defense found in section 85.16(3) barring compensation when injury is caused by the “willful act of a third party directed against the employee for reasons personal to such employee.” The commissioner held the defense did not apply because a coworker is not a third party.

Xenia sought judicial review. The district court addressed the question of whether “the agency erred in finding that petitioners did not meet their burden of proof that the claimant's alleged injury was the result of horseplay, and that the petitioners did not prove an affirmative defense pursuant to Iowa Code § 85.16(3).” The district court reversed and held Vegors was barred from receipt of benefits. Vegors appealed.

II. Scope of Review.

An appeal of a workers' compensation decision is reviewed under standards described in chapter 17A.19(10). Iowa Code § 86.26; Mosher v. Dep't of Inspections & Appeals, 671 N.W.2d 501, 508 (Iowa 2003). “We review the district court decision by applying the standards of the [Iowa] Administrative Procedure Act to the agency action to determine if our conclusions are the same reached by the district court.” Locate.Plus.Com, Inc. v. Iowa Dep't of Transp., 650 N.W.2d 609, 612 (Iowa 2002). A reviewing court may reverse the decision of the workers' compensation commissioner if it is unsupported by substantial evidence in the record. Iowa Code § 17A.19(10)( f ).

Under chapter 17A, when the legislature has “clearly ... vested” an agency with authority to interpret a statute, this court will only reverse a decision of statutory construction which is irrational, illogical, or wholly unjustifiable. Iowa Code § 17A.19(10)( l ). When the agency has not “clearly been vested” with such authority, this court will review questions of statutory interpretation for errors at law. Iowa Code § 17A.19(10)( c ).

The workers' compensation commissioner is generally charged by the legislature with the duty to “[a]dopt and enforce rules necessary to implement” workers' compensation laws. Iowa Code § 86.8. 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); see also Rojas v. Pine Ridge Farms, L.L.C., 779 N.W.2d 223, 231 (Iowa 2010) (“It is well-settled law that the legislature did not clearly vest the workers' compensation commissioner with the power to interpret the workers' compensation statutes.”). We recently clarified in Renda v. Iowa Civil Rights Commission, 784 N.W.2d 8, ---- (Iowa 2010), that the court must also determine whether the agency has been vested with authority to interpret the relevant phrases and individual statutes. Here, the agency's analysis involved the interpretation of Iowa Code section 85.3(1) to determine whether the employee's injuries were sustained “arising out of and in the course of the employment.” The agency also interpreted Iowa Code section 85.16(3), specifically the term “third party.”

Although the legislature has not provided an explicit written statement regarding the workers' compensation commissioner's authority, we must determine whether the legislature clearly vested the agency with authority to interpret the statutes at issue. Iowa Code § 17A.19(10)( c ), ( l ). After examining chapter 85, we find the workers' compensation commissioner is not clearly vested with the authority to interpret Iowa Code sections 85.3(1) and 85.16(3). As noted in Renda, “we have not concluded that a grant of mere rulemaking authority gives an agency the authority to interpret all statutory language.” Renda, 784 N.W.2d at 13. There is no language in either statutory section indicating a desire by the legislature to vest the commissioner with authority to interpret the subsections at issue. See Iowa Code §§ 85.3(1), 85.16(3). Additionally, the relevant terms-“arising out of and in the course of the employment” and “third party”-have “an independent legal definition that is not uniquely within the subject matter expertise of the agency.” Renda, 784 N.W.2d at 14. Therefore, we review the agency's statutory interpretation here for errors at law. Iowa Code § 17A.19(10)( c ).

III. Merits.

A. Burden to Establish Horseplay or Lack Thereof. Xenia, Vegors's employer, argued Vegors cannot be compensated because he engaged in horseplay. The deputy commissioner held that Xenia had the burden to demonstrate horseplay because it is a defense. The deputy commissioner then determined Vegors had not engaged in horseplay. The commissioner affirmed the deputy commissioner but did not address the proper burden. Upon judicial review, the district court reversed the agency and held the claimant bears the burden to demonstrate that the injury arose out of and in the course of employment and therefore, to demonstrate the injury was not the result of horseplay. It appears the district court did not reach an ultimate conclusion on the merits of whether Vegors's alleged horseplay bars recovery because the court went on to hold Vegors's recovery was barred under a separate affirmative defense, which we will address below.

Employers are required to compensate employees for “personal injuries sustained by an employee arising out of and in the course of the employment.” Iowa Code § 85.3(1). The injured employee has the burden of proving by a preponderance of the evidence that the injuries arose out of and in the course of employment. See Quaker Oats Co. v. Ciha, 552 N.W.2d 143, 150 (Iowa 1996). The phrase “arising out of” refers to the cause and origin of the injury. See Miedema v. Dial Corp., 551 N.W.2d 309, 311 (Iowa 1996). The phrase “in the course of” refers to the time, place, and circumstances of the injury. Id.

Prior cases of this court suggest the injured employee must show he or she was not engaged in horseplay as part of the burden to demonstrate the injury arose out of and in the course of employment. See Ford v. Barcus, 261 Iowa 616, 623, 155 N.W.2d 507, 511 (1968) (“Horseplay which an employee voluntarily instigates and aggressively participates in does not arise out of and in the course of his employment and therefore is not compensable.”); Wittmer v. Dexter Mfg. Co., 204 Iowa 180, 185, 214 N.W. 700, 702 (1927) (“We conclude there was evidence supporting the finding of the commissioner that the appellee voluntarily participated in the play-the jostling-that caused his fall and injury, and that the injury did not arise out of his employment.”).

These opinions are consistent with treatment of the horseplay issue in other jurisdictions. Some jurisdictions bar compensation for certain types of horseplay based on the “arising out of employment” language. See Lincoln v. Whirlpool Corp., 151 Ind.App. 190, 279 N.E.2d 596, 601 (1972) (“[W]here the ‘horseplay’ was not acquiesced in by the employer, not a natural condition of the employment, and where, in fact; the employee participated in the ‘horseplay,’ and was not, therefore, an innocent victim ... we have consistently denied compensation in such cases for the reason that such activity does not arise out of the employment.”); 2 Arthur Larson & Lex K. Larson Larson's Workers' Compensation Law § 23.07, at 23-13 (2009) [hereinafter Larson's ]. Larson's suggests the proper analysis is to look at horseplay as potentially outside the “course” of employment because of a deviation. 2 Larson's § 23.07, at 23-13. We agree the proper analysis is whether the claimant substantially deviated from the course of employment, as will be...