1804, 2904, 3200, 3700 April 10, 1989 MICHAEL G. TRIER BEFORE THE IOWA INDUSTRIAL COMMISSIONER JIM D. ASAY, Claimant, vs. File Nos. 407508 448505 INDUSTRIAL ENGINEERING EQUIPMENT CO., R E V I E W - Employer, R E O P E N I N G and D E C I S I O N THE TRAVELERS INSURANCE COMPANY, Insurance Carrier, and SECOND INJURY FUND OF IOWA, Defendants. 1804, 2904, 3200, 3700 Claimant, who had lost use of one arm from polio during childhood, was awarded permanent total disability for a 1973 injury to the other arm. In 1980, he obtained employment. In 1981 and 1982, he was self-employed. Though claimant earned $65,000 in those three years, it was held that he remained permanent]y totally disabled because the employment was so sheltered, unique and adapted for claimant's physical condition that it was not competitive employment. Claimant was not shown capable of performing regular gainful employment in any well recognized branch of the labor market. BEFORE THE IOWA INDUSTRIAL COMMISSIONER JIM D. ASAY, Claimant, vs. File Nos. 407508 448505 INDUSTRIAL ENGINEERING EQUIPMENT CO., R E V I E W - Employer, R E O P E N I N G and D E C I S I O N THE TRAVELERS INSURANCE COMPANY, Insurance Carrier, and SECOND INJURY FUND OF IOWA, Defendants. INTRODUCTION This is a proceeding in review-reopening brought by the Second Injury Fund of Iowa. The employer is no longer a party to this proceeding. The Second Injury Fund alleges that there has been a change of condition that has occurred since the commissioner's appeal decision was entered on September 28, 1977, that claimant's degree of disability should be reevaluated and that claimant is no longer permanently and totally disabled. Claimant denies that there has been any substantial change in condition and contends that he remains totally disabled. The case was heard and fully submitted at Davenport, Iowa on July 6, 1988. The record in the proceeding consists of testimony from Jim D. Asay, Nolan Hamma, Steven Duffy and Jane Asay. Exhibits 1, 2, 3, 4, 5 and 7 were received. Official notice was taken of all prior decisions. ISSUES The issues for determination are whether there has been a substantial change in condition or circumstances which would permit reopening of the award which was previously made. Further, at the time of hearing, it was stipulated that claimant is now totally disabled, but defendants assert that the current total disability is related to a circulatory condition which claimant developed subsequent to the injuries which are the basis for this proceeding and which are unrelated to those injuries. REVIEW OF THE EVIDENCE ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 2 The following is a summary of evidence presented in this case. Of all the evidence received at the hearing, only that considered most pertinent to this decision is discussed. Conclusions about what the evidence showed are inevitable with any summarization. The conclusions in the following summary should be considered to be preliminary findings of fact. Jim D. Asay is a 53-year-old, married man who lives in Davenport, Iowa and has for the past 24 years. His educational achievement is limited to the eighth grade, although he completed a course in automotive electronics and carburetion at Scott Community College subsequent to his 1976 injury. The facts and circumstances relating to claimant's injuries of November 14, 1973 and February 16, 1976 are well described in the review-reopening decision and appeal decision which have been previously entered in this case. The most pertinent facts are that claimant contracted polio when he was five years of age. His left arm was severely afflicted by the disease and the only residual use of the arm or hand that remained was that claimant could, under some circumstances, use the left arm as a guide or as a device to steady articles. Despite what was essentially a total loss of use of his left arm, claimant was employed primarily as a mechanic. For approximately 15 years he was employed at the same location as an automotive transmission mechanic. Subsequently, he worked approximately nine years as an air compressor mechanic. He also has other mechanical skills and aptitudes. Claimant suffered two injuries to his right arm or wrist, the first in 1973 when a fracture resulted. The second was diagnosed as something in the nature of a strain or sprain. Following recuperation from the 1973 injury, claimant returned to employment at Industrial Engineering Equipment Company as an air conditioner mechanic. The right wrist remained symptomatic to the extent that claimant was never able to make a sustained, long-term return to full-time work. He was allowed to be off work whenever his right wrist was troublesome. Subsequent to the 1976 injury, the employer would not allow claimant to return to work. The first hearing in this case was conducted at Davenport, Iowa on May 13, 1976. The deputy industrial commissioner who heard the case at that time concluded that claimant was permanently totally disabled under the provisions of Iowa Code section 85.34(3) as a result of the 1976 injury. It was concluded that the 1973 injury had resulted only in temporary disability. The deputy's decision was appealed to the commissioner. The commissioner agreed that claimant was totally disabled, but attributed the total disability to the 1973 injury, pointing out that claimant had never made a sustained, long-term return to employment following that 1973 injury. The commissioner's rationale is found at pages 6 and 7 of that decision and is hereinafter set forth as follows: The Iowa position on total disability was presented in ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 3 Diederich v. Tri-City Railway Co., 219 Iowa 587, 594, 258 N.W. 899, 902 (1935) in which the court said that "disability may be only a twenty-five or thirty per cent disability compared with the one hundred per cent perfect man, but, from the standpoint of his ability to go back to work to earn a living for himself and his family, his disability is a total disability. . . ." This position was reiterated [sic] in Dailey v. Pooley Lumber Co., 233 Iowa 758, 764-65, 10 N.W.2d 569, (1943) wherein (although recognizing that injury to a scheduled member is arbitrarily compensable according to the schedule) total disability was described as: an inability of the individual, . . .to earn - not a mere inability of a certain member to function. It may arise solely from some injury to or loss of a scheduled member; or it may result from some injury of wider extent. . . . . Permanent total disability. . . .may be caused by some scheduled injury, even though no other part of the body except the scheduled member be affected. This may happen because of lack of training, age, or other condition peculiar to the individual. Professor Arthur Larson in 2 Larson, Workmen's Compensation Law, [section] 58.51 at 10-107 (1976) states total disability "is not to be interpreted literally as utter and abject helplessness. Evidence that claimant has been able to earn occasional wages or perform certain kinds of gainful work does not necessarily rule out a finding of total disability nor require that it be reduced to partial." Larson further suggests the modern rule may be summarized as follows: "An employee who is so injured that he can perform no services other than those which are so limited in quality, dependability, or quantity that a reasonably stable market for them does not exist, may well be classified as totally disabled." The record presented in this case leads this commissioner to conclude that claimant was 100 percent permanently totally disabled as a result of his first injury in spite of the fact that he was able to do some work as shown by his own testimony. . . . Obviously, the services which claimant was able to provide were limited in quantity and dependability rendering his ability to earn a living such that he could be classified as totally disabled. (Asay, Appeal Decision, September 28, 1977, pages 6 and 7) Claimant apparently did not engage in any significant employment from 1976 until 1980 when Nolan Hamma, a person with whom claimant had worked when he was a transmission mechanic, offered claimant employment. Hamma had been in the transmission repair business since 1956. In 1980, Hamma broke his hand and employed claimant to help rebuild transmissions. Initially it was on a part-time basis, but it became full-time. Hamma ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 4 testified that claimant performed the same type of work in his shop as what claimant had done when they were both employed at the transmission shop on LeClaire Street. Hamma testified that he had performed the heavy work for claimant during the recent period of employment, but that claimant also had assistance with heavy work at the LeClaire Street shop. Hamma testified that he noticed no real difference in claimant's abilities when the recent employment was compared to the work performed at the LeClaire Street shop. Hamma acknowledged, however, that at times claimant would have problems with his wrist, that it would swell up and that claimant would not come to work. Hamma also stated that at times claimant worked as if he were in pain. Hamma related that claimant favored his right arm at times when they were employed at the LeClaire Street shop. Hamma surmised that claimant probably performed heavier work at the LeClaire Street shop than he performed when working for Hamma. Claimant testified that, following the hearing in 1973, he allowed the wrist to heal for a couple of years during which time he was unable to work on transmissions or anything else. Claimant's rate of compensation is only $91.00 per week. He stated that he was forced to return to work in order to eat. Claimant testified that he started working for Nolan Hamma in 1979 on a part-time basis. Claimant stated that he helped with transmissions. Claimant related that he needed assistance from Hamma for things that he could do by himself prior to the injuries. Claimant related that, while working with Hamma, his right wrist would occasionally swell to where he was unable to even pick up a cup of coffee. In 1982, claimant purchased Hamma's transmission repair business. Claimant worked out of Hamma's building for approximately a year, paying Hamma $1,000 per month rent for use of the building and of Hamma's tools. Claimant hired Donnie Weston, Hamma's son-in-law, to help perform the work. Claimant stated that he could not afford to keep paying the $1,000 per month rent to Hamma so he built his own garage; hired others to perform the heavy part of the work and continued to operate his own transmission repair service until 1985. Claimant developed problems with his left leg and other physical ailments which were diagnosed in early 1984 when he was diagnosed-with bilateral internal carotid occlusions, a severe circulatory disorder (exhibit 7). Claimant underwent bypass surgery, but has not been allowed by his physicians to resume any type of moderate or heavy activity. Claimant testified that, when he returned to work with Hamma, his right wrist was not improved in comparison to the condition it had been in at the time of hearing in 1976. Claimant stated that he developed some arthritis in the right arm for which he sought treatment in Belvedere, Illinois in 1982. Claimant testified that when he operated his own shop, he had two employees who did 70%-80% of the actual work with claimant supervising. Claimant related that in operating his own business, his wife and bookkeeper did the record keeping and that Hamma would come to the shop at times to help. Claimant testified that no doctor has ever told him that his right wrist has improved since 1976. ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 5 Jan Asay, claimant's spouse since 1973, testified that, from 1976 until claimant went to work for Hamma, they lived on ADC. She stated that claimant continues to have problems with his right arm. She related that it is bothered by heat or cold. She stated that at times it swells up clear to the elbow and that it happens more frequently than a couple weeks per year. Jan Asay stated that, when claimant worked, transmission jacks and power tools were available, that Hamma did heavy work and that claimant did a lot of running for parts. Jan Asay testified that claimant's grip is reduced since the injuries. She stated that, prior to his injuries, she had seen claimant lift a transmission onto a bench using only one hand. Claimant's spouse related that Harold Gonyard is a long-time friend who has a transmission shop and that claimant sometimes hangs out at the shop and refers business to Harold. Steven Duffy was employed as an independent insurance adjustor and investigator in 1986. Duffy stated that, in the last week of January, 1986, he performed an activity check of claimant's home and observed the home and a building where it appeared that automotive work was being performed. Duffy testified that he inquired about transmission work and that claimant then phoned him and said that it would have to be worked on at a different location. Duffy stated that he checked out the location described and found a building and a pickup truck with a plaque on the door which stated "Harold's Transmission Service." Duffy testified that no one was around Asay's garage at the time when he observed it and that he did not know if t was open for business. On April 1, 1987, claimant was evaluated at the Iowa Occupational Medicine Corporation at the Mercy Hospital Medical Occupation Evaluation Center in Des Moines, Iowa. The physical examination states that claimant had good grip strength in his right upper extremity, but that he lacked approximately 45 degrees in dorsiflexion and 30 degrees in palm reflection. It was noted that claimant had good pronation and supination and good flexion-extension. X-rays showed permanent impairment in claimant's right wrist. Claimant was determined to have a permanent impairment of 10%-15% of the right hand. Claimant was also determined to have poor reading skills. Other testing procedures were employed. Those test results found no alternative vocational opportunities for claimant, but when claimant's skills as an automatic transmission mechanic were used, some light work possibilities were identified, including machine operation, machine tending, inspection occupations and light bench mechanics, gas meter checker, battery charger tester, dump operator and security guard. The list did not take into account claimant's circulatory problems, but the vocational consultant concluded that even for those identified job titles and vocational areas, claimant might well require selective placement due to his atrophic left upper extremity. The consultant stated that alternative vocational possibilities for claimant would depend upon claimant's own personal interests and motivation. ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 6 Joshua Kimelman, D.O., the orthopedist who performed the physical examination of claimant's right wrist, recommended that claimant be limited to occupations which were either sedentary or light with lifting 20 maximum and frequently lifting of up to 10 pounds (exhibit 3). APPLICABLE LAW AND ANALYSIS Issue preclusion, formerly referred to as res judicata, applies in administrative proceedings. Board of Supervisors, Carroll County v. Chicago & Northwestern Transportation Co., 260 N.W.2d 813 (Iowa 1977). Review-reopening under Code section 86.14(2) is an exception to the normal rules of preclusion. A party seeking review-reopening of an award must demonstrate, by a preponderance of the evidence, that a change of condition has occurred subsequent to that initial award. Fischer v. W. F. Priebe & Co., 178 Iowa 611, 118 N.W.2d 570 (1962); Stice v. Consolidated Ind. Coal Co., 228 Iowa 1031, 1035, 291 N.W. 452 (1980). Such a change of condition is not limited to a physical change of condition. A change in earning capacity subsequent to the original award also constitutes a change which permits review-reopening. McSpadden v. Big Ben Coal Co., 288 N.W.2d 181 (Iowa 1980); Blacksmith v. All-American, Inc. 290 N.W.2d 348 (Iowa 1980). The change must be something which was not anticipated at the time of the initial award. It must be something which was unknown and could not have been discovered by the exercise of reasonable diligence. Meyers v. Holiday Inn of Cedar Falls, Iowa, 272 N.W.2d 24 (Iowa App. 1978); Gosek v. ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 7 Garmer and Stiles Co. 158 N.W.2d 731 (Iowa 1968); Bousfield v. Sisters of Mercy, 249 Iowa 64, 86 N.W.2d 109 (1957). There is no direct evidence in the record of this case which clearly shows any unanticipated physical change in the condition of claimant's right wrist. Dr. Kimelman recently assigned a 10%-15% impairment rating of the hand. While the previous appeal decision found a 20% permanent partial disability of the right upper extremity, that determination, however, was made upon ratings which ranged from 5% to 65% with two physicians rating claimant at 20%. None of those same physicians have given a new rating in this case. The rating from Dr. Kimelman is not at substantial variance with the 20% rating previously determined in the appeal decision. Interestingly, Dr. Kimelman found claimant's range of motion in dorsiflexion and palmar flexion to be substantially more limited than it was at the time of the evaluations which were relied upon when the appeal decision was entered in 1977. Claimant's description of his ability to use his right arm does not present any substantial change from the descriptions that were given in the 1976 hearing. What did occur subsequent to 1976 is that claimant was hired by an old coworker, Nolan Hamma, to help out in Hamma's shop at a time when Hamma himself was suffering from a broken hand. The arrangement moved from part-time to full-time. There were times, however, when claimant did not work due to the symptoms affecting his right hand. This is a factual situation which was not at great divergence from the situation that existed when claimant worked for Industrial Engineering Equipment Company between the 1973 and 1976 injuries. The further occurrence subsequent to 1976 is that claimant acquired and operated his own transmission repair service, albeit with others performing most of the actual labor and with claimant acting in a supervisory role. Claimant's income tax returns, exhibit 5, show that in 1980 he earned $15,723.10 from his business operation. In 1981, the net profit was $23,208.72. In 1982, the net profit was $27,872.00. It was at that point that claimant's health deteriorated due to the circulatory condition, the business became unprofitable and subsequently closed. The evidence from Steven Duffy does not show claimant to have been engaged in any gainful activity in 1986. It does not conflict with testimony given by claimant or claimant's spouse. There is no evidence to indicate that the circulatory condition is any way causally connected to claimant's 1973 or 1976 injuries. The law regarding total disability is well established as set forth by the industrial commissioner in his appeal decision in 1977. The test of permanent total disability in a workers' compensation setting has long been established and may be summarized as follows: When the combination of factors considered in determining industrial disability precludes the worker from obtaining regular, stable employment in which he can earn a living for himself, his disability is a total disability. Guyton v. Irving Jensen Co., 373 N.W.2d 101, 103 (Iowa 1985); McSpadden v. Big Ben Coal Co., 282 N.W.2d 181, 192 (Iowa 1980); Diederich v. Tri-City R. Co., 219 Iowa 587, 594, 258 N.W. 899, ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 8 902 (1935). There are few individuals in our society whose earning capacity is zero. There are numerous examples of individuals with severe physical impairments, even quadriplegics, who are able to produce some level of earnings. The key is whether the individual has the ability to perform the physical and mental exertions necessary to obtain and hold stable, continuing employment in a well-known branch of the labor market. The competitive labor market is the setting in which the determination is to be made, not a setting where some benevolent employer makes accommodations or a setting where a selective placement is the only source of employment. Jim D. Asay has a great deal of valuable expertise in the field of automotive transmissions. That expertise has not changed appreciably since 1976. Asay has essentially no use of his left arm now and did not in 1976. Asay has limited use of his right hand much as he did in 1976. Industrial disability or loss of earning capacity is a concept that is quite similar to impairment of earning capacity, an element of damage in a tort case. Impairment of physical capacity creates an inference of lessened earning capacity. The basic element to be determined, however, is the reduction in value of the general earning capacity of the person, rather than the loss of wages or earnings in a specific occupation. Post-injury earnings create a presumption of earning capacity. The earnings are not synonymous with earning capacity and the presumption may be rebutted by evidence showing the earnings to be an unreliable indicator. Carradus v. Lange, 203 N.W.2d 565 (Iowa 1973); Holmquist v. Volkswagon of America, Inc., 261 N.W.2d 516 (Iowa App. 1977) A.L.R.3d 143; Michael v. Harrison County, 34th Biennial Report, 218 (1979): 2 Larson Workmen's Compensation Law, sections 57.21 and 57.31. Claimant's record of earnings for 1980, 1981, and 1982 are strong evidence that claimant was not totally disabled. That evidence is, however, rebutted by the fact that claimant's only employment was arranged through accommodations of a long-time acquaintance. It is also rebutted by the fact that claimant was not able to manage the business himself and needed the assistance of his wife and bookkeeper. Claimant was certainly able to perform some physical activities which were beneficial to the businesses, but the actual labor and work was performed by others whom he hired. The situation in which claimant was able to earn the earnings which he achieved in 1980, 1981, and 1982 was in a very specialized, unique setting. It was a setting wherein claimant could refrain from working when he needed to do so. It was a setting where he could rely upon others to perform functions which are integral parts of the overall process of transmission repair which were beyond his own capabilities. When the entire situation is examined, it becomes apparent that claimant's work, although economically rewarding, was not a job that is found in any well-known branch of the competitive labor market. Claimant could not succeed financially based solely upon his supervisory skills. He still has those skills at the present time, yet is clearly totally disabled due to the impact of his circulatory ailment. There is precedent for the proposition that income from a business owned by the claimant is irrelevant to the issue of total disability. 2 Larson Workmen's Compensation Law, section 57.51(e). This agency has held that self-employment ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 9 earnings are not earnings from work as an employee as defined in Iowa Code section 85.61(2). Winters v. Te Slaa, I Iowa Industrial Commissioner Report, 367 (App. Decn., 1981). While claimant was employed by Hamma, the evidence also shows that claimant was paid based upon the revenues that he generated. He was, in essence, self-employed even when working for Hamma. He filed his 1980 income tax return as a self-employed individual. It is particularly important in the consideration of this case that no evidence has been introduced to show that claimant was employable on a regular, sustained, full-time basis in any well-known branch of the competitive labor market. The presumption or inference that is raised by claimant's earnings has been overcome by the unique circumstances in which those earnings occurred. This decision considers claimant's capabilities as they existed immediately prior to the time that the circulatory disorder manifested itself. FINDINGS OF FACT 1. Claimant's physical condition has not changed appreciably since 1976, other than for the circulatory disorder which is not causally connected to the injuries for which compensation has been awarded. 2. During the years 1980, 1981, and 1982, claimant engaged in self-employed business activities from which he experienced net profits totalling in excess of $65,000. 3. Those earnings were obtained in a unique, specialized situation which permitted claimant to make use of his knowledge and expertise in the field of automotive transmissions without performing the full range of physical activities normally conducted by individuals who engage in the occupation of automotive transmission mechanics. 4. Jim D. Asay, considering only the condition of his upper extremities, and excluding all disability related to his circulatory disorder, is not regularly, stably employable in any well-recognized branch of the competitive labor market in the geographic area in and surrounding Davenport, Iowa. Asay is not physically capable of generating sufficient earning capacity to be self-supporting. CONCLUSIONS OF LAW 1. The Second Injury Fund has failed to prove, by a preponderance of the evidence, that there has been any substantial change in claimant's condition or circumstances that occurred subsequent to 1976 which reduced his degree of industrial disability from that which existed in 1976. 2. The evidence concerning the circumstances in which claimant's earnings in 1980, 1981 and 1982 were obtained rebuts the presumption of earning capacity which would normally result from those earnings. 3. Jim D. Asay is permanently and totally disabled under the provisions of Code section 85.34(3) and has been so disabled continuously since 1976. ASAY V. INDUSTRIAL ENGINEERING EQUIPMENT CO. Page 10 ORDER IT IS THEREFORE ORDERED that the Second Injury Fund of Iowa continue to pay claimant ninety-one and 00/100 dollars ($91.00) per week as compensation for permanent total disability without interruption from March 27, 1979. IT IS FURTHER ORDERED that the costs of this proceeding are assessed against the Second Injury Fund of Iowa. Signed and filed this 10th day of April, 1989. MICHAEL G. TRIER DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr. Seymore Raben Attorney at Law 306 Northwest Bank Building 101 West Second Street Davenport, Iowa 52801 Ms. Joanne Moeller Assistant Attorney General Tort Claims Division Hoover State Office Building Des Moines, Iowa 50319 BEFORE THE IOWA INDUSTRIAL COMMISSIONER GARY TEEL, Claimant, vs. File No. 411444 HAROLD R. McCORD, D E C I S I 0 N Employer, 0 N and R E M A N D FARM BUREAU MUTUAL INSURANCE COMPANY, Insurance Carrier, Defendants. STATEMENT OF THE CASE This case has been remanded by a district court decision filed October 23, 1985. The district court remanded this case: ...for a determination of the interest award at the rate of 10% on all weekly benefits due to the claimant commencing with the first week of permanent partial disability which was due at the termination of the initial healing period on May 7, 1974 and on all weekly compensation for permanent partial disability due each week thereafter except for those times during which he was paid healing period benefits, until the full 150 weeks of compensation had been paid. (Pages 5-6). The district court decision was subsequently affirmed by the supreme court. The supreme court sets out a brief procedural history of this case at the beginning of its decision: Gary Teel, a truck driver employed by Harold R. McCord, was severely burned while refueling a truck on February 4, 1974. Pursuant to a memorandum of agreement, he received weekly healing-period payments from his employer until he returned to work on May 7. Over a year later, however, Teel underwent surgery to alleviate the disability that resulted from his burns, and again was unable to work. He again received weekly payments until his return. In 1976 Teel petitioned the industrial commissioner to determine the nature and extent of his permanent partial disability. Two years passed, and then Teel underwent the first of several more operations. Following each one he received weekly payments for the varying periods of time he was unable to work. In 1980, after the last operation, the extent of his disability finally became known. He returned to work for good on February 14, 1981. In 1982 a hearing was held on the petition he filed in 1976. On September 30 a deputy industrial commissioner awarded him 150 weeks of compensation for a permanent partial disability, with interest. The employer and his insurer, Farm Bureau Mutual Insurance Company, then sought a declaratory judgment on the date from which the interest was to accrue. Another deputy industrial commissioner held that it accrued from the date of the award: September 30, 1982. This rule was affirmed on appeal to the industrial commissioner. The district court reversed this ruling, however, holding that the interest accrued from the date Teel returned to work after his injury: May 7, 1974. The court remanded the case to the commissioner. He was instructed to determine the amount of interest due Teel, starting with the first week he returned to work, and excluding those weeks he received healing-period payments. From this judgment the employer and insurer have now appealed. See generally Iowa Code SS 17A.20(1985). We affirm. - Teel v. McCord, 395 N.W.2d 405, 406 (Iowa 1986). The record on remand consists of the review-reopening decision and the filings and stipulations of the parties in the declaratory proceeding. ISSUE The issue on remand is the amount of interest due to the claimant commencing with the first week of permanent partial disability which was due at the termination of the initial healing period on May 7, 1974 and on weekly compensation for permanent partial disability due each week thereafter, except for those times during which he was paid healing period benefits, until the full 150 weeks of compensation had been paid. REVIEW OF THE EVIDENCE In a December 2, 1983 letter to Deputy Industrial Commissioner Moranville which was filed with this agency on December 5, 1983, defendants stipulated the following with regard to claimant's post-accident work record: "That the work record of the claimant, post-accident, regarding healing period is the same as set forth by attorney Cosgrove in his Exhibit "A", attachment to his letter dated September 1, 1983, a copy of which is attached hereto." The exhibit A referred to in this stipulation states: WORK RECORD OF THE CLAIMANT - POST-ACCIDENT The employer furnished, at the time of the hearing, an exhibit reflecting the amounts of healing period benefits from the time of the accident of February 4, 1974, to February 13, 1981. There was no claim for any healing period benefits after February 13, 1981. That exhibit reflected as follows: TEEL V. HAROLD R. MC CORD Page 3 Claimant was unable to work during the following periods and received benefits as shown for each period. During the interval of time between any period listed here, the claimant was engaged in some sort of employment on a full-time basis. 2-4-74 to 5-7-74 ... 9-24-75 to 11-12-75... 2-23-78 to 5-14-78... The review-reopening decision awarded benefits at the rate of $84 per week. APPLICABLE LAW The applicable law is set out in the statement of the case portion of this decision. ANALYSIS Using the stipulated periods of post-accident work the 150 weeks is calculated as follows: Times Claimant Worked Number of receiving no healing period Weeks 5-7-74 to 9-24-75 72.286 11-12-75 to 5-8-77 77.714 Total 150 The 1987 Guide to Iowa Workers' Compensation Claim Handling describes how to compute interest on late payments: Three steps are usually necessary to compute the interest due on past due weekly benefits. In the first step the principal changes from week to week, while in the second step, the principal remains constant because all payments are accrued. Step 1 -- compute the interest while the benefits are payable by applying the following instructions to the 10% interest table on page 141 of this booklet: Locate the number of weeks during which the benefits are payable in column A. Locate the interest multiplier from that line in column B. Multiply the weekly benefit amount by the interest multiplier to determine the interest payable. Example: 52 weeks at $200.00 per week interest multiplier is 2.55 $200.00 x 2.55 = $510.00 of interest (Guide to Iowa Workers' Compensation Claim Handling 1987, pages VI and VII). TEEL V. HAROLD R. MC CORD Page 4 Applying this step to the facts in this case, the interest while the benefits are payable is calculated as follows (the number of weeks will be rounded to the next whole number): Number of Rounded Interest x Rate = Interest Weeks Multiplier 72.286 72 4.9154 x 84 = $412.89 77.714 78 5.7750 x 84 = 485.10 Total = $897.99 Step 2 -- compute the interest from the end of the period during which benefits are payable until the date the benefits are actually paid by using the following formula: I = P x R x T I = interest P = principal--total number of weeks/days of compensation due multiplied by the compensa- tion rate R = rate of interest (10%) T = time--number of weeks from end of period during which benefits are payable until date of payment, divided by 52 (Ibid., page VII). The principal is calculated as follows: Number of x Rate Principal Weeks 72.286 x 84 $ 6,072.02 77.714 x 84 6,527.98 Total 150 x 84 12,6000.00 The principal ($12,600) was paid by defendants on March 29, 1983. The interest after the benefits are due through March 29, 1983 is calculated as follows: Principal x Interest x Time = Interest Rate in years 6,072.02 x .10 x 392/52 $4,577.37 6,527.98 x .10 x 307.429/52 3,860.19 Total $8,437.56 Step 3 -- add the two types of interest together. (Ibid., page VII). The amount of interest that was due on March 29, 1983 is $897.98 + $8,437.56 = $9,335.54. Defendants owe this amount plus interest at the rate of 10 percent per year until it is ultimately paid. FINDINGS OF FACT TEEL V. HAROLD R. MC CORD Page 5 1. Claimant's rate of compensation is $84 per week. 2. Claimant was awarded 150 weeks of permanent partial disability benefits in the review-reopening decision filed September 30, 1982. 3. Claimant worked from May 7, 1974 through September 24, 1975 and was not paid permanent partial disability benefits for this period until March 29, 1983. 4. Claimant worked from November 12, 1975 through May 8, 1977 and was not paid permanent partial disability benefits for this period until March 29, 1983. 5. On March 29, 1983, claimant was paid $12,600 for the 15 weeks of permanent partial disability he was awarded. 6. On March 29, 1983, $9,335.54 in interest had accrued on the 150 weeks of permanent partial disability awarded in the review-reopening decision. CONCLUSION OF LAW Defendants owed claimant $9,335.54 in interest on March 29, 1983 for the 150 weeks of permanent partial disability benefits awarded to claimant. ORDER THEREFORE, it is ordered: That defendants pay to claimant nine thousand three hundred thirty-five and 54/100 dollars ($9,335.54) plus interest at the rate of ten percent (10%) per year from March 29, 1983 until it is ultimately paid. Signed and filed this 22nd day of February, 1988. DAVID E. LINQUIST INDUSTRIAL COMMISSIONER Copies To: Mr. Joe Cosgrove Attorney at Law 813 Frances Building Sioux City, Iowa 51101 TEEL V. HAROLD R. MC CORD Page 6 Mr. Robert Laubenthal Mr. Curtis Hewett Attorneys at Law 370 Midlands Mall P.O. Box 249 Council Bluffs, Iowa 51502 3800 Filed February 22, 1988 DAVID E. LINQUIST BEFORE THE IOWA INDUSTRIAL COMMISSIONER GARY TEEL, Claimant, vs. File No. 411444 HAROLD R. McCORD, D E C I S I 0 N Employer, 0 N and R E M A N D FARM BUREAU MUTUAL INSURANCE COMPANY, Insurance Carrier, Defendants. 3800 The issue in this remand was the amount of interest due the claimant commencing with the first week of permanent partial disability which was due at the termination of the initial healing period and on weekly compensation for permanent partial disability due each week thereafter, except for those times during which he was paid healing period benefits until the full 150 weeks of compensation had been paid. See Teel v. McCord, 395 N.W.2d 405, 406 (Iowa 1986). The 1987 Guide to Iowa Workers' Compensation Claim Handling describes how to compute interest on late payments. Page 1 before the iowa industrial commissioner ____________________________________________________________ : EDDIE WILLARD RICE, (DEC) : ANDREA C. RICE, Spouse, : : Claimant, : : vs. : : File No. 422180 BITUCOTE PRODUCTS COMPANY, : : C O M M U T A T I O N Employer, : : D E C I S I O N and : : AETNA INSURANCE COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ This is a proceeding for a partial commutation brought by Andrea C. Rice, widow of Eddie Willard Rice deceased (claimant) commenced with the filing of a petition on June 22, 1990 against Bitucote Products Company (Bitucote), employer and Aetna Insurance Company (Aetna),(collectively defendants) Bitucote's insurer for worker's compensation benefits. Eddie Willard Rice died as a result of a work related injury on September 25, 1974. On February 5, 1991, the matter came on for hearing in Des Moines, Iowa. The parties appeared as follows: the claimant in person and by her counsel Jeffrey G. Flagg of Des Moines, Iowa and Bitucote and Aetna by their counsel Charles E. Cutler of Des Moines, Iowa. The record in this proceeding consisted of the following: 1. The live testimony of the claimant. 2. Joint exhibits 1-10. At the close of all evidence, the case was deemed fully submitted. stipulations The parties stipulated to the following matters at the time of the hearing: An employer-employee relationship existed between claimant and employer at the time of Eddie Willard Rice's death. Eddie Willard Rice died on September 25, 1974 from an injury which arose out of and in the course of employment. Page 2 The death caused a temporary disability The death caused a permanent disability. The rate of compensation, in the event of an award, is $87.96. At the time of Eddie Willard Rice's death he was married and entitled to 5 exemptions. Issues The only issue for resolution is as follows: 1. Whether claimant is entitled to a partial commutation of her remaining benefits. facts After considering all of the evidence and the arguments of counsel, the undersigned makes the following findings of fact and conclusions of law. 1. Eddie Willard Rice died on September 25, 1974 while working. At the time of his death, Andrea C. Rice was 28.994 years old. Mrs. Rice was born on November 2, 1945. Since the sixth anniversary of Eddie Willard Rice's death to the date of this decision, 10.71 years have passed. 2. At the time of the hearing, Mrs. Rice was 45.41 years of age. She is employed by Marriott Hotel as a housekeeper. She earns approximately $5.15 per hour. At the time of the hearing she was working on a reduced work week of 32 hours per week. Her hours should have increased to 40 hours per week toward the end of February 1991. 3. Prior to claimant's first commutation request, claimant was paid $87.96 per week. Sometime before 1986 claimant received a partial commutation of 103 weeks. This commuted amount is contained in the agency records and is judicially noticed for purposes of this decision. The second partial commutation was in 1986. Claimant was awarded 69 weeks of benefits. Claimant used the proceeds from that commutation to buy a car and assist her mother. The award amount in dollars was approximately $6,000. 4. The third partial commutation occurred in 1989. Claimant received a partial commutation in the amount of 41 weeks or approximately $3,000. Claimant again purchased a car and repaid some indebtedness. Currently, the car is not working and claimant has acquired new indebtedness. 5. Claimant has received 818.286 weeks of weekly benefit payments to the date of the filing of the partial commutation petition. Claimant was paid $2,752.27 shortly after the hearing on February 5, 1991 was completed. This totals 31.29 weeks of benefits. Claimant has received 849.576 weeks of compensation benefits.(1) For purposes of this partial commutation request, claimant is entitled to a gross benefit amount equal to 1404.99 weeks based on the table in rule 343 IAC 6.3(3).(2) (1) . Since claimant's last commutation was for 41 weeks, weekly payments should have resumed, on approximately August 1, 1990. This presumption is based on an October 18, 1989 approval date for the last commutation. However, at the time of the hearing, the implication given by questions directed to claimant suggested that payments had not resumed. Aetna subsequently made a lump sum payment shortly after the hearing in this matter and paid claimant 31.29 weeks of benefits. However, since the true nature of this payment is unknown and this writer has no way to discern from agency records the exact number of weeks that have been paid in this matter, for the purposes of this decision, the paid weeks on the claimant's petition and the additional amount paid after the hearing will be used to calculate claimant's net award of weekly benefits available for commutation. (2). Since claimant is making her request for a partial commutation 16 years after the death of her spouse, the appropriate column to use is Column F. See Rule 343 IAC 6.3(3). According to the regulation, claimant's remaining weekly benefits are determined by finding claimant's age in the table at the time of decedent's death and then adding the number of years from the sixth anniversary of the decedent's death to the date of the award of the partial commutation and moving down Column F one line for each year to find the gross number of weeks the claimant would be entitled to commute. In this case, the number of years from the sixth anniversary of the death of Eddie Willard Rice (September 25, 1980) to the date of the award (May 30, 1991) is 10.71 years. Counting 10 lines down from the number of weeks in Column F for a person aged 28, claimant is entitled to commute 1,404.99 weeks of benefits Page 3 6. Claimant is requesting a net partial commutation of $45,000 in order to purchase a house and a car. Claimant believes that she can purchase a car for $10,000 to $12,000 and a house for $30,000. The amount claimant intends to spend apparently does not contemplate an award of attorney fees from the commuted amount since claimant intends to use the entire amount for the proposed purchases. conclusions of law The only issue for resolution is whether claimant is entitled to a partial commutation of some of the remaining benefits she is entitled to as a result of her husband's death. Iowa Code section 85.45 governs commutations. This section provides in pertinent part that future payments of compensation may be commuted to a present worth lump sum payment if the claimant is able to meet the following conditions: a. The period during which compensation is payable can be definitely determined. b. The commutation is in the best interest of the claimant. c. In the case of a surviving spouse, future benefits that may be commuted shall not exceed the number of weeks which shall be indicated by probability tables designated by the industrial commissioner. Each time a claimant seeks a partial commutation, the life expectancy and remarriage table is consulted anew. Claimant's life expectancy and remarriage potential is not static. There is no concept of total entitlement for a surviving spouse collecting death benefits because, presumably the survivor will be entitled to a weekly amount until death. See Iowa Code section 85.31(1991). A total entitlement concept is limited to the times when the survivor wants to commute the remaining actuarial value of benefits based upon the statistical likelihood of death or Page 4 remarriage. Moreover, in reviewing the life expectancy and remarriage table in the regulations, there is no total weekly entitlement that equals 1670.03 weeks. Consequently, since this value is not a legal value it will be disregarded for purposes of this decision. See e.g. Piippo v. Kellum, File No. 861388, Slip op. at 1 (Iowa Ind. Comm'r Arb. December 5, 1990) (Where parties stipulated to a rate, the rate was disregarded because it was nonexistent). In this instance, based upon the information contained in the life expectancy and remarriage table, claimant is entitled to a gross benefit amount of 1404.99 weeks of benefits. 849.576 weeks of benefits have been paid. Claimant has a remainder of 555.414 weeks of benefits to commute. If claimant was seeking a full commutation, claimant would be entitled to receive $29,991.84 (340.9713 x $87.96 = $29,991.83554). In order for claimant to reach a net commuted value of $45,000.00, claimant would have to commute 2,148 weeks (511.6101 x $87.96 = $45,001.22). Since these amounts exceed the number of weeks that claimant has remaining, the partial commutation cannot be approved. See, Zuetlau v. M.& J.R. Hakes, 34 Biennial Report, Iowa Industrial Commissioner 351 (1979) (Failure to properly calculate award is a ground for denial of approval). The question of whether claimant should receive a partial commutation based on the standards set forth in Dameron v. Neumann Bros., Inc., 339 N.W.2d 160, 164 (Iowa 1983); Diamond v. Parsons Co., 129 N.W.2d 608, 616-17 (Iowa 1964), will not be addressed since the award claimant seeks is beyond the scope of her entitlement. Order THEREFORE, it is ordered: 1. That claimant, Andrea C. Rice petition for approval of a partial commutation is denied. 2. The costs of this action shall be assessed to Andrea C. Rice. 3. Bitucote and Aetna shall file claim activity reports as required by rule 343 IAC 3.1. Signed and filed this ____ day of May, 1991. ________________________________ ELIZABETH A. NELSON DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr Jeffrey G Flagg Page 5 Attorney at Law 2716 Grand Avenue Des Moines Iowa 50312 Mr Charles E Cutler Attorney at Law 729 Ins Exchange Bldg Des Moines Iowa 50309 5-3303 Filed May 30, 1991 ELIZABETH A. NELSON before the iowa industrial commissioner ____________________________________________________________ : EDDIE WILLARD RICE, (DEC), : ANDREA C. RICE, Spouse, : : Claimant, : : vs. : : File No. 422180 BITUCOTE PRODUCTS COMPANY, : : C O M M U T A T I O N Employer, : : D E C I S I O N and : : AETNA INSURANCE COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ 5-3303 Partial commutation was denied. Claimant miscalculated the number of remaining weeks that she had available to commute. See, Zuetlau v. M. & J.R. Hakes, 34 Biennial Reprot, Iowa Industrial Commissioner 351 (1979).