BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
 
 
                               
 
 ROBERT A. MORRIS,
 
                               
 
      Claimant,
 
 
 
 vs.
 
                                                File No. 891286
 
 MIKE BROOKS, INC.,
 
      
 
     Employer,                                   A P P E A L 
 
 
 
                                               D E C I S I O N 
 
 and
 
                                                                 
 
 GREAT WEST CASUALTY COMPANY,
 
 
 
      Insurance Carrier,
 
      Defendants.
 
 
 
 
 
      The record, including the transcript of the hearing before 
 
 the deputy and all exhibits admitted into the record, has been 
 
 reviewed de novo on appeal. The decision of the deputy filed July 
 
 12, 1991 is affirmed and is adopted as the final agency action in 
 
 this case.
 
 
 
 That claimant shall pay the costs of the appeal including the 
 
 transcription of the hearing. Defendants shall pay all other 
 
 costs.
 
 
 
 Signed and filed this 27th day of August, 1992.
 
 
 
 
 
 
 
 
 
 
 
                                        BYRON K. ORTON
 
                                   INDUSTRIAL COMMISSIONER
 
 
 
 Copies To:
 
 
 
 Mr. Donald G. Beattie
 
 Mr. Larry G. Wilson
 
 Attorneys at Law
 
 204 8th Street SE
 
 Altoona, Iowa  50009
 
 
 
 Mr. Stephen W. Spencer
 
 Attorney at Law
 
 218 6th Avenue  STE 300
 
 P O Box 9130
 
 Des Moines, Iowa  50306
 
 
 
 
 
 
 
 
 
 
 
 
                                                         9998
 
                                                         Filed August 27, 1992
 
                                                         BYRON K. ORTON
 
                                                         
 
 
 
                 BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
 
 
 ROBERT A. MORRIS,
 
 
 
      Claimant,
 
 vs.
 
                                                   File No. 891286
 
 MIKE BROOKS, INC.,
 
                                                    A P P E A L
 
      Employer,
 
                                                  D E C I S I O N
 
 and
 
 
 
 GREAT WEST CASUALTY COMPANY,
 
 
 
      Insurance Carrier, 
 
      Defendants.
 
      
 
      
 
      
 
 9998
 
      Summary affirmance of deputy's decision filed July 12, 1991.
 
            
 
 
            
 
            Page   1
 
            
 
            
 
            
 
            
 
            
 
                     before the iowa industrial commissioner
 
            ____________________________________________________________
 
                                          :
 
            ROBERT MORRIS,                :
 
                                          :
 
                 Claimant,                :
 
                                          :
 
            vs.                           :
 
                                          :      File No.  891286
 
            MIKE BROOKS, INC.,            :
 
                                          :  A R B I T R A T I O N
 
                 Employer,                :
 
                                          :      D E C I S I O N
 
            and                           :
 
                                          :
 
            GREAT WEST CASUALTY CO.,      :
 
                                          :
 
                 Insurance Carrier,       :
 
                 Defendants.              :
 
            ___________________________________________________________
 
            
 
                                   introduction
 
            
 
                 This is a proceeding in arbitration brought by Robert 
 
            Morris, claimant, against Mike Brooks, Inc., employer, and 
 
            Great West Casualty Company, insurance carrier, defendants 
 
            for benefits as a result of an injury that occurred on June 
 
            27, 1988.  A hearing was held in Des Moines, Iowa, on March 
 
            1, 1990, and the case was fully submitted at the close of 
 
            the hearing.  Claimant was represented by Larry G. Wilson.  
 
            Defendants were represented by Stephen W. Spencer.  The 
 
            record consists of the testimony of Robert Morris, claimant; 
 
            Bill Smith, claimant's witness; joint exhibits 1 through 14; 
 
            and defendants' exhibit A.  The deputy ordered a transcript 
 
            of the hearing.  Claimant's attorney filed claimant's 
 
            contentions on disputed issues at the time of the hearing.  
 
            Both attorneys submitted excellent posthearing briefs.
 
            
 
                                   stipulations
 
            
 
                 The parties stipulated that claimant sustained an 
 
            injury on June 27, 1988, which arose out of and in the 
 
            course of employment with employer and that the injury was a 
 
            cause of both temporary and permanent disability.
 
            
 
                                      issues
 
            
 
                 The parties submitted the following issues for 
 
            determination at the time of the hearing:
 
            
 
                 Whether claimant is entitled to temporary disability 
 
            benefits, and if so, the extent of benefits to which he is 
 
            entitled.
 
            
 
                 Whether claimant is entitled to permanent disability 
 
            benefits, and if so, the extent of benefits to which he is 
 
            entitled to include the commencement date of permanent 
 
            partial disability benefits.
 
            
 

 
            
 
            Page   2
 
            
 
            
 
            
 
            
 
                 The parties seek a determination of the proper rate of 
 
            compensation, more specifically, whether the rate should 
 
            include or exclude two bonuses paid to claimant during the 
 
            13 weeks prior to the injury.
 
            
 
                 Whether claimant is entitled to penalty benefits under 
 
            Iowa Code section 86.13(4).
 
            
 
                                 findings of fact
 
            
 
                   entitlement to temporary disability benefits
 
            
 
                 It is determined that claimant is entitled to 57.571 
 
            weeks of healing period temporary disability benefits for 
 
            the period from June 27, 1988, the date of the injury, 
 
            through August 3, 1989, the date on which the treating 
 
            physician determined that claimant had reached maximum 
 
            medical improvement (exhibit 2, page 4; defendants' ex. A, 
 
            p. 23).
 
            
 
                 Claimant, an over-the-road truck driver, severely 
 
            injured his right knee on June 27, 1988, when he fell off 
 
            the back of a truck and landed on his right leg and knee.  
 
            Claimant saw Gordon M. Arnott, M.D., the company physician, 
 
            the following day.  Dr. Arnott applied an elastic band, 
 
            prescribed medications, put claimant on crutches, and 
 
            referred claimant to Jerome G. Bashara, M.D., an orthopedic 
 
            surgeon.  On August 31, 1988, Dr. Bashara performed a 
 
            diagnostic and operative arthroscopy of the right knee with 
 
            a medial meniscectomy for a buckethandle tear and a limited 
 
            synovectomy of the anterior fat pad and medial retinaculum 
 
            (jt. ex. 2, p. 2; ex. 13, p. 9).  This was followed by 
 
            physical therapy and home physical therapy and claimant was 
 
            continued off work by Dr. Bashara on September 22, 1988.
 
            
 
                 On November 17, 1988, claimant continued to have knee 
 
            swelling, quad atrophy and mild effusion, but since claimant 
 
            had been gradually improving, Dr. Bashara released claimant 
 
            to light work activities on November 17, 1988, with the 
 
            restrictions that claimant should not engage in 
 
            over-the-road driving, sitting in one position for prolonged 
 
            periods of time, no climbing, no squatting, and no heavy 
 
            lifting (ex. 2, pp. 3 & 6; ex. 13, p. 14).  
 
            
 
                 In November of 1988, claimant began a commercial 
 
            business which was known as Morris Battery.  This business 
 
            sold batteries, performed auto body repair and painting work 
 
            and later repaired tires.  The business closed around the 
 
            first of April 1989.  Claimant testified that he never took 
 
            any money out of the business, the business lost $5000 and 
 
            that he owed several creditors substantial amounts of money.  
 
            Claimant denied that he performed physical work in this 
 
            business other than to lift and carry batteries on 
 
            approximately six occasions and he spray painted cars on a 
 
            few occasions.  Claimant further testified that he only 
 
            worked a half a day from 12 p.m. to 5 p.m., Monday through 
 
            Friday, with the exception that he did not work on 
 
            Thursday's at all.  
 
            
 
                 Claimant asserted that he performed only supervisory 
 

 
            
 
            Page   3
 
            
 
            
 
            
 
            
 
            work and that the physical work was performed by others, 
 
            with the exception of the spray painting and the six 
 
            batteries.  He testified that his son, Jim Morris; and his 
 
            employee, Bill Smith performed the physical labor.  He 
 
            stated the tire repair operations were handled entirely by 
 
            Mike Roberts.  Claimant related that he met the public; sold 
 
            batteries; ordered merchandise; performed the paperwork, 
 
            including the payroll; and supervised Bill Smith.  
 
            
 
                 Bill Smith testified that he did all of the physical 
 
            labor and that claimant called for him to lift and carry the 
 
            batteries.  He acknowledged that claimant spray painted the 
 
            cars, but not very many.  He verified that claimant's 
 
            activities were mainly paperwork.  Smith further verified 
 
            that claimant only worked half a day each day, six days a 
 
            week, with the exception of Thursday.
 
            
 
                 When the insurance carrier learned from newspaper 
 
            advertisements that claimant was in business, they 
 
            terminated his temporary disability benefits on February 2, 
 
            1989, and did not pay him any benefits subsequent to that 
 
            date and prior to the hearing.
 
            
 
                 On February 16, 1989, claimant saw Dr. Bashara with 
 
            continued weakness, intermittent catching and some pain in 
 
            his right knee.  A second MRI was obtained on March 7, 1989, 
 
            and a second arthroscopic surgery was performed on March 15, 
 
            1989, with a subtotal medial meniscectomy for a retained 
 
            posterior horn tear and a limited synovectomy (ex. 2, p. 4; 
 
            ex. 5, p. 2; ex. 13, p. 17).  During the surgery Dr. Bashara 
 
            noted that claimant had a little bit of stretching of the 
 
            anterior cruciate ligament which he previously suspected 
 
            might be stretched, but not torn (ex. 13, p. 17).  
 
            
 
                 Dr. Bashara further testified that the second meniscus 
 
            tear was caused by the first arthroscopy which removed a 
 
            portion of the meniscus cartilage and changed the mechanics 
 
            inside of the knee joint.  The doctor further clarified that 
 
            it was not caused by the activities claimant performed in 
 
            the battery business.  He stated that it occurred shortly 
 
            after the first surgical procedure because he never did 
 
            recover normal function after the first arthroscopy.  He 
 
            said the reinjury occurred very soon after the first surgery 
 
            (ex. 13, pp. 18-20).  
 
            
 
                 Dr. Bashara continued to treat claimant in March, April 
 
            and June of 1989, and determined that he had reached maximum 
 
            medical improvement on August 3, 1989.  Dr. Bashara further 
 
            clarified that claimant never reached maximum medical 
 
            improvement after the first surgery until five months after 
 
            the second surgery on August 3, 1989.  He stated that 
 
            claimant was restricted from squatting, kneeling and 
 
            performing activities which aggravate his knees, such as 
 
            riding a jet ski, riding a three-wheeler, and playing golf 
 
            (ex. 2, p. 4; ex. 23, pp. 22-24).
 
            
 
                 The length of the healing period is determined by Iowa 
 
            Code section 85.34(1) which reads as follows:
 
            
 
                    Healing period.  If an employee has suffered a 
 

 
            
 
            Page   4
 
            
 
            
 
            
 
            
 
                 personal injury causing permanent partial 
 
                 disability for which compensation is payable as 
 
                 provided in subsection 2 of this section, the 
 
                 employer shall pay to the employee compensation 
 
                 for a healing period, as provided in section 
 
                 85.37, beginning on the date of injury, and until 
 
                 the employee has returned to work or it is 
 
                 medically indicated that significant improvement 
 
                 from the injury is not anticipated or until the 
 
                 employee is medically capable of returning to 
 
                 employment substantially similar to the employment 
 
                 in which the employee was engaged at the time of 
 
                 the injury, whichever occurs first.
 
            
 
                 Defendants contend that claimant returned to work when 
 
            he began the battery sales, body work and tire work business 
 
            in November of 1988.  
 
            
 
                 It is determined that claimant did not return to work 
 
            when he began the battery, body and tire business.
 
            
 
                 Temporary disability benefits are to compensate 
 
            employees for lost wages until they are able to return to 
 
            gainful employment.  Lawyer and Higgs, Iowa Workers' 
 
            Compensation--Law and Practice, section 13-1, page 105.  The 
 
            Morris Battery Company was not gainful employment.  Claimant 
 
            never took any money out of the business and, in addition, 
 
            lost $5000 during the period he was in business.
 
            
 
                 Furthermore, so much of Iowa Code section 85.34(1) 
 
            which states that the claimant is to receive benefits until 
 
            the employee has returned to work is construed to mean work 
 
            that claimant was performing at the time of the injury, or 
 
            in the alternative, some other substantial, gainful, 
 
            full-time employment from which the employee can earn a 
 
            living.  Donoho v. T & T Services, file number 722150 (filed 
 
            February 28, 1989).  It is determined that the Morris 
 
            Battery Company was not full-time employment for the reason 
 
            that claimant only worked there half a day from 12 p.m. to 5 
 
            p.m., five or six days a week, and did not work there at all 
 
            on Thursday.  Claimant's testimony is corroborated by Smith.  
 
            The testimony of claimant and Smith is not controverted, 
 
            contradicted, rebutted, or refuted by any other evidence.
 
            
 
                 This case is clearly distinguishable from Chinberg v. 
 
            Arrow Transportation Co., Vol 1., no. 3 State of Iowa 
 
            Industrial Commissioner Decisions, 525, 526 (1985) in which 
 
            claimant testified that he operated his business seven days 
 
            a week from 8 a.m. until 10 p.m. and in the summer he stayed 
 
            open as late as midnight on the weekend.  It is also 
 
            noteworthy that there was no indication that Chinberg should 
 
            be denied benefits when he worked helping his father at a 
 
            gas station by pumping gas on a part-time basi wish to 
 
            mitigate the amount of workers' compensation payments that 
 
            they would rightfully owe for the full healing period, then 
 
            the burden is on the employer to seek out the employee and 
 
            make the offer of light duty work.  
 
            
 
                 Claimant testified that he gave this release to light 
 
            duty on November 17, 1988, to the employer on the following 
 
            day, November 18, 1988 (transcript pages 54 & 55).  There is 
 
            no evidence that employer offered claimant any light duty 
 
            work.  Furthermore, the Supreme Court of Iowa has determined 
 
            that the healing period is not terminated even when the 
 
            defendant employer offers light duty work to the employee 
 
            which the employee declines.  Webb v. Lovejoy Construction 
 
            Co., II Iowa Industrial Commissioner Report, 430, 433 
 
            (1981).
 
            
 
                 Defendants contend that claimant had a duty to report 
 
            the fact to them that he began the Morris Battery business.  
 
            This too, is incorrect.  As a pure legal matter, claimant 
 
            cannot to be held to account for the fact that he did not 
 
            report the Morris Battery business to defendants.  There is 
 
            nothing in Iowa Code sections 85.33 or 85.34 or the 
 
            administrative law and common law interpretations of these 
 
            Code sections that require an employee receiving temporary 
 
            disability benefits to report part-time income, odd job 
 
            income or any other income on the employees own initiative.
 
            
 
                 Defendants did not allege or prove that they 
 
            communicated to claimant that he was under any obligation or 
 
            duty to report any work or income to them.  Donoho, file 
 
            number 722150, 12, 13 (filed February 28, 1989).  
 
            
 
                 Defendants also contend that they are entitled to a 
 
            credit for the temporary disability benefits that they paid 
 
            to claimant from November of 1988 to April of 1989, when he 
 

 
            
 
            Page   6
 
            
 
            
 
            
 
            
 
            was engaged in the battery, auto body and tire repair 
 
            business.  This too, is not correct.  The workers' 
 
            compensation law does not provide any statutory credit for 
 
            work performed or  earnings which an employee might make 
 
            while receiving temporary disability benefits.  To the 
 
            contrary, Iowa Code section 85.38 seeks to prevent 
 
            intrusions upon an employees entitlement to workers' 
 
            compensation benefits.  It provides as follows:
 
            
 
                 85.38 Reduction of obligations of employer.
 
            
 
                    1.  Contributions or donations.  The 
 
                 compensation herein provided shall be the measure 
 
                 of liability which the employer has assumed for 
 
                 injuries or death that may occur to employees in 
 
                 the employer's employment subject to the 
 
                 provisions of this chapter, and it shall not be in 
 
                 anywise reduced by contribution from employees or 
 
                 donations from any source.
 
            
 
                 Claimant was under no duty to voluntarily or 
 
            spontaneously report any part-time employment or earnings.  
 
            Likewise, claimant is not liable for any offset or credit 
 
            for the period of time he was engaged in the battery 
 
            business or for any income he might have earned in that 
 
            business.  Id.  Claimant certainly did not operate this 
 
            business surreptitiously because he placed ads in two local 
 
            newspapers in the area of his employment with employer, one 
 
            of which contained his picture.  
 
            
 
                 It is also noticed that defendants terminated 
 
            claimant's workers' compensation benefits and then 
 
            investigated later to justify the termination of benefits.  
 
            Denning v. Hyman Freightways, Inc., file number 751584 
 
            (filed May 23, 1989).  Proper procedure would have been to 
 
            conduct a proper investigation first and if the evidence 
 
            existed, then terminate the benefits.  Newspaper 
 
            advertisements that claimant had opened a business in 
 
            themselves would not establish that claimant had, in fact, 
 
            or in law, returned to work based on any known statute or 
 
            case at this time.
 
            
 
                 If defendants wanted to terminate healing period 
 
            benefits, it was entirely possible for them to obtain a 
 
            written statement from Dr. Bashara or an independent medical 
 
            examiner that either (1) claimant could return to work, (2) 
 
            claimant had reached maximum medical improvement, or (3) 
 
            claimant could perform work in substantially similar 
 
            employment.  Defendants, however, terminated claimant's 
 
            benefits without this evidence.  Claimant testified that the 
 
            termination of workers' compensation benefits caused a 
 
            severe financial hardship which among other things caused 
 
            him to sell a pickup truck, a motorcycle and one car in 
 
            order to obtain money to live on (tr. p. 81).  
 
            
 
                 Claimant's proposition that self-employment income is 
 
            not used to determine whether claimant has returned to work 
 
            or not is not correct either.  The case cited by claimant 
 
            determined whether self-employment income should be used in 
 
            order to determine the rate of compensation rather than 
 

 
            
 
            Page   7
 
            
 
            
 
            
 
            
 
            whether claimant had returned to work or not.  Winters v. Te 
 
            Slaa, I Iowa Industrial Commissioner Report, 367 ( App. Dec. 
 
            1981). 
 
            
 
                 In conclusion, it is determined that claimant is 
 
            entitled to 57.571 weeks of workers' compensation benefits 
 
            from June 27, 1988, the date of the injury, through the date 
 
            the treating physician determined that he had attained the 
 
            maximum medical improvement on August 3, 1989.
 
            
 
                   entitlement to permanent disability benefits
 
            
 
                 It is determined that claimant is entitled to 35.2 
 
            weeks of permanent partial disability benefits based upon a 
 
            16 percent permanent impairment to his right knee.
 
            
 
                 The knee is treated as an injury to the leg.  Wichers 
 
            v. McKee Company, 223 Iowa 853, 273 N.W. 872 (1937).  Total 
 
            compensation for a leg is 220 weeks.  Iowa Code section 
 
            85.34(2)(o).  Sixteen percent of 220 weeks is 35.2 weeks.
 
            
 
                 Dr. Bashara stated, "I would give Mr. Morris a 14% 
 
            permanent/partial physical impairment of his right lower 
 
            extremity related to his right leg injury with subsequent 
 
            surgery." (ex. 2, p. 5).  This rating was given on October 
 
            27, 1989.  Dr. Bashara testified in his deposition on 
 
            February 26, 1990, just two days prior to the hearing, that 
 
            his 14 percent permanent partial physical impairment rating 
 
            of the right lower extremity would be his opinion at the 
 
            time of the deposition.  He said it was based on the loss of 
 
            the meniscus and a mild loss of motion to the knee (ex. 13, 
 
            pp. 24 & 25).
 
            
 
                 Sinesio Misol, M.D., an orthopedic surgeon and 
 
            independent evaluator for claimant, on February 21, 1990, 
 
            again just a few days prior to the hearing, determined that 
 
            claimant was entitled to a 17.5 percent permanent impairment 
 
            based upon the Guides to the Evaluation of Permanent 
 
            Impairment, third edition, published by the American Medical 
 
            Association.  Dr. Misol said 10 percent was allocated to the 
 
            absence of the medical meniscus and 7.5 percent for the 
 
            attenuated anterior cruciate ligament (ex. 3, p. 1).
 
            
 
                 Peter Wirtz, M.D., another orthopedic surgeon and 
 
            independent evaluator for defendants, examined claimant and 
 
            gave a report, but did not address the issue of permanent 
 
            impairment (ex. 12).  
 
            
 
                 Dr. Bashara did not say whether he used the AMA Guides, 
 
            the orthopedic surgeon's guides, some other guides or no 
 
            guides at all.  He did indicate that no impairment existed 
 
            on account of the anterior cruciate ligament stretching (ex. 
 
            13, p. 25).
 
            
 
                 Wherefore, based upon the ratings of Dr. Bashara and 
 
            Dr. Misol and the fact that claimant testified that his 
 
            right knee hurts all of the time, that it is very weak and 
 
            that it is necessary to go up stairs a half step at a time 
 
            (tr. p. 99), it is determined that claimant is entitled to a 
 
            16 percent permanent functional impairment of the right leg.  
 

 
            
 
            Page   8
 
            
 
            
 
            
 
            
 
            Sixteen percent of 220 weeks equals 35.2 weeks of permanent 
 
            partial workers' compensation disability benefits.
 
            
 
                                       rate
 
            
 
                 It is determined that the proper rate of compensation 
 
            is $284.95 per week based upon the fact that the two bonus 
 
            payments which claimant received in the 13 weeks prior to 
 
            the injury are determined to be a regular bonus and not an 
 
            irregular bonus.  Iowa Code section 85.61(12).
 
            
 
                 The parties stipulated that if the rate calculation 
 
            were to include the bonus, claimant's gross weekly wage 
 
            would be $496 per week and that his rate would be $284.95 
 
            based upon a single person with one exemption.
 
            
 
                 Claimant testified that a number of employers pay 21 
 
            cents a mile, however, this employer paid 17 cents a mile, 
 
            but then allowed additional mileage pay for getting your 
 
            paper work in on time and for low fuel consumption.  
 
            Claimant testified that all drivers got these bonuses and 
 
            that they were paid regularly once a month (tr. pp. 60-63 
 
            and 87-89).  On April 29, 1988, he received $115.75 and on 
 
            June 24, 1988, he received $73.40.  A bonus which is paid 
 
            regularly, even though in varying amounts, is properly 
 
            included in the determination of rate under Iowa Code 
 
            section 85.61(12).  Marcks v. Richmond Gordman, file number 
 
            679369 (App. Dec. June 29, 1988).  Claimant is entitled to 
 
            the bonus even though it was established unilaterally by the 
 
            employer.  Hendrickson v. Keller Industries, file number 
 
            931142 (December 21, 1990).
 
            
 
                 A bonus which is an integral part of defendants' 
 
            overall compensation system paid to all employees, which is 
 
            available to be paid every month, is a regular bonus to be 
 
            included in the calculation of rate.  Lewis v. Dee Zee 
 
            Manufacturing, file number 797154 (filed September 11, 
 
            1989).  Claimant's testimony established that the bonus was 
 
            a regular bonus and not an irregular bonus.  The bonus was 
 
            available to all employees who qualified and it was paid 
 
            once a month.  These bonus provisions were in effect for 
 
            each and every pay period.  This component of claimant's 
 
            compensation was explained to him at the time he began work 
 
            for the employer as a regular part of his pay if he 
 
            qualified for it.  Claimant's testimony was not 
 
            controverted, contradicted, rebutted, or refuted.
 
            
 
                 This rate is confirmed to be an accurate rate for a 
 
            gross wage of $496 for a single person with one exemption.  
 
            Guide to Iowa Workers' Compensation Claim Handling, July 1, 
 
            1987.
 
            
 
                 Wherefore, it is determined that claimant is entitled 
 
            to a rate of $284.95 per week.
 
            
 
                 Defendants implied that claimant engaged in some form 
 
            of wrong doing because they overpaid his benefits because he 
 
            had shown that he was entitled to 12 exemptions on his W-4 
 
            form.  This may or may not be true.  The evidence is 
 
            insufficient to make a determination.  However, W-4 forms 
 

 
            
 
            Page   9
 
            
 
            
 
            
 
            
 
            are used to endeavor to have sufficient withholding at the 
 
            time when the tax is due.  Employees frequently use the 
 
            number of exemptions to adjust their withholding to 
 
            accomplish this goal.  Zero exemptions is commonly used on 
 
            W-4 forms even though it is obviously not the true number of 
 
            exemptions to which the taxpayer is entitled.  
 
            
 
                 Defendants might have prevented the overpayment if they 
 
            had investigated whether this unusual amount of exemptions 
 
            was in fact correct for workers' compensation purposes.  A 
 
            simple telephone statement from either the employer or the 
 
            employee would have cleared up this unusual circumstance, 
 
            but the insurance carrier failed to properly investigate 
 
            this matter which certainly called for investigation.  It is 
 
            entirely possible that 12 exemptions would produce the 
 
            proper amount of withholding to cover claimant's income 
 
            taxes.
 
            
 
                                 penalty benefits
 
            
 
                 Even though claimant was severely effected by the 
 
            premature termination of his temporary disability benefits 
 
            and the late payment of his permanent disability benefits 
 
            (he contended that he also lost his house), it is, 
 
            nevertheless, determined that this early termination and 
 
            late commencement did not occur without reasonable or 
 
            probable cause or excuse.  Iowa Code section 86.13(4).
 
            
 
                 Defendants contended that after claimant saw Dr. 
 
            Bashara on November 17, 1988, he did not see him again until 
 
            February 16, 1989, a period of three months.  February 16, 
 
            1989, was two weeks after defendants had terminated 
 
            benefits.  Defendants disputed whether the complaints made 
 
            on February 16, 1989, were due to the original injury and 
 
            surgery or whether they were due to an injury which claimant 
 
            might have sustained while operating the battery sales, body 
 
            work and tire work business.  Defendants disputed both 
 
            liability for the second arthroscopy and, likewise, the 
 
            amount of permanent disability which they might owe.  They 
 
            also asserted they were entitled to a credit for the 
 
            overpayments which they had made for using the wrong rate 
 
            and for paying claimant while he was in business.
 
            
 
                 Generally, penalty benefits are not awarded where there 
 
            is a legitimate dispute on either causation or the extent of 
 
            impairment.  Just v. HyGrade Food Products Corp., IV Iowa 
 
            Industrial Commissioner Reports, 190 (App. Dec. 1984).  
 
            Likewise, in more recent times it has been determined that 
 
            penalty benefits are not due where defendants assert a claim 
 
            that is fairly debatable.  Seydel v. U of I Physical Plant, 
 
            file number 818849, (App. Dec. November 1, 1989); Stanley v. 
 
            Wilson Foods, file number 753405 (App. Dec. August 23, 
 
            1990).  Defendants contended and established that it was not 
 
            possible to have their contentions resolved until they 
 
            obtained the deposition from Dr. Bashara just two days prior 
 
            to the hearing.  The reasons for the delay in getting Dr. 
 
            Bashara's opinion appear to be attributable to the actions 
 
            of both parties (ex. 14).  Even though defendants were 
 
            incorrect in contending they were entitled to a credit for 
 
            the payments they made while claimant was in business, it 
 

 
            
 
            Page  10
 
            
 
            
 
            
 
            
 
            cannot be said that their position was not fairly debatable.
 
            
 
                 Consequently, it is determined that claimant is not 
 
            entitled to penalty benefits under Iowa Code section 
 
            86.13(4).
 
            
 
                                CONCLUSIONS of law
 
            
 
                 Wherefore, based upon the foregoing and following 
 
            principles of law, these conclusions of law are made:
 
            
 
                 That claimant is entitled to 57.571 weeks of healing 
 
            period benefits.  Iowa Code section 85.34(1).
 
            
 
                 That claimant is entitled to 35.2 weeks of permanent 
 
            partial disability benefits.  Iowa Code section 85.34(2)(o).
 
            
 
                 That the proper rate of compensation is $294.95 per 
 
            week.  Iowa Code sections 85.36 and 85.61(12).
 
            
 
                 That claimant is not entitled to penalty benefits.  
 
            Iowa Code section 86.13(4).
 
            
 
                                      order
 
            
 
                 THEREFORE, IT IS ORDERED:
 
            
 
                 That defendants pay to claimant fifty-seven point five 
 
            seven one (57.571) weeks of healing period benefits at the 
 
            rate of two hundred eighty-four and 95/100 dollars ($284.95) 
 
            per week in the total amount of sixteen thousand four 
 
            hundred four and 86/100 dollars ($16,404.86) commencing on 
 
            June 27, 1988.
 
            
 
                 That defendants pay to claimant thirty-eight point two 
 
            weeks of permanent partial disability benefits at the rate 
 
            of two hundred eighty-four and 95/100 dollars ($284.95) per 
 
            week in the total amount of ten thousand thirty and 24/100 
 
            dollars ($10,030.24) commencing on August 4, 1989.  Teel v. 
 
            McCord, 394 N.W.2d 405 (1986).
 
            
 
                 That defendants are entitled to a credit for thirty-two 
 
            (32) weeks of benefits paid to claimant at the rate of three 
 
            hundred twenty-eight and 90/100 dollars ($328.90) per week 
 
            in the total amount of ten thousand five hundred twenty-four 
 
            and 80/100 dollars ($10,524.80).
 
            
 
                 That all accrued benefits are to be paid in a lump sum.
 
            
 
                 That interest will accrue pursuant to Iowa Code section 
 
            85.30. 
 
            
 
                 That the costs of this action, including the cost of 
 
            the attendance of the court reporter at hearing and the cost 
 
            of the  transcript, are charged to defendants pursuant to 
 
            rule 343 IAC 4.33 and Iowa Code section 86.19(1).
 
            
 
                 That defendants file claim activity reports as 
 
            requested by this agency.  Rule 343 IAC 3.1.
 
            
 

 
            
 
            Page  11
 
            
 
            
 
            
 
            
 
                 Signed and filed this ____ day of July, 1991.
 
            
 
            
 
            
 
            
 
                                          ______________________________
 
                                          WALTER R. McMANUS, JR.
 
                                          DEPUTY INDUSTRIAL COMMISSIONER    
 
            
 
            Copies to:
 
            Mr. Larry Wilson 
 
            Mr. Donald G. Beattie
 
            Attorneys at Law
 
            204 8th St. SE
 
            Altoona, Iowa  50009
 
            
 
            Mr. Stephen Spencer
 
            Attorney at Law
 
            PO Box 9130
 
            Des Moines, Iowa  50306-9130
 
            
 
            
 
 
            
 
            Page   1
 
            
 
            
 
            
 
            
 
                      1802 51803 3001 3002 3003 4002.2
 
                      Filed July 12, 1991
 
                      Walter R. McManus, Jr.
 
            
 
                     before the iowa industrial commissioner
 
            ____________________________________________________________
 
                                          :
 
            ROBERT MORRIS,                :
 
                                          :
 
                 Claimant,                :
 
                                          :
 
            vs.                           :
 
                                          :      File No.  891286
 
            MIKE BROOKS, INC.,            :
 
                                          :  A R B I T R A T I O N
 
                 Employer,                :
 
                                          :      D E C I S I O N
 
            and                           :
 
                                          :
 
            GREAT WEST CASUALTY CO.,      :
 
                                          :
 
                 Insurance Carrier,       :
 
                 Defendants.              :
 
            ___________________________________________________________
 
            
 
            1802
 
            Claimant awarded healing period benefits from date of injury 
 
            until treating physician said he attained maximum medical 
 
            improvement.
 
            It was determined that claimant had not returned to work 
 
            when he opened a battery, body and tire business because it 
 
            was not substantial, gainful, full-time employment at which 
 
            claimant earned a living.  Claimant took no money out of the 
 
            business, lost $5000 and ended up owing several others 
 
            substantial amounts of money.  Furthermore, claimant only 
 
            worked half days, five or six days a week, and did not work 
 
            at all on Thursday.  The doctor had returned claimant to 
 
            light work with certain restrictions and his work in the 
 
            battery, body and tire business was mainly clerical and 
 
            supervisory in nature and within the doctors restrictions.
 
            Defendants were not correct that claimant should have sought 
 
            out light duty with employer.
 
            Defendants were not correct that claimant was required to 
 
            report to them he went into business or what his earnings 
 
            were from the business.
 
            Defendants were not correct that they were entitled to a 
 
            credit for the temporary disability benefits paid to 
 
            clamiant while he was in business.
 
            If defendants wanted to terminate temporary disability 
 
            benefits they should have obtained a statement from a 
 
            physician that one of the conditions in section 85.34(1) had 
 
            occurred.
 
            Several cites are given for these determinations.
 

 
            
 
            Page   2
 
            
 
            
 
            
 
            
 
            
 
            51803
 
            Treating physician awarded 14 percent permanent impairment 
 
            to the right leg.  Claimant's evaluator awarded 17.5 
 
            percent.  A third evaluator did not address permanency.  
 
            Claimant awarded 16 percent permanent partial disability to 
 
            the right leg.
 
            
 
            3001 3002 3003
 
            It was determined that the bonus that claimant received on 
 
            two occasions within the 13 weeks prior to the injury, 
 
            $115.75 and $73.40, were a regular bonus and not an 
 
            irregular bonus.  The bonuses for timely paperwork and low 
 
            fuel consumption were an integral part of employer's 
 
            compensation system, paid to all employees who qualified for 
 
            them, they were paid once a month, and they were explained 
 
            as part of the regular pay system when claimant started with 
 
            employer.  Several cites.  Defendants' allegation that 
 
            claimant had done something wrong by putting 12 exemptions 
 
            on his W-4 form when, in fact, he was only entitled to one 
 
            exemption was not proven by defendants.
 
            
 
            4002.2
 
            Although defendants were incorrect on several of the matters 
 
            on which they disputed liability and disability, it could 
 
            not be said that their position was not fairly debatable.  
 
            Delays in obtaining the information to make a correct 
 
            decision on liability were attributable to both parties.  No 
 
            penalty benefits awarded.  Several cites.
 
            Defendants were criticized for terminating benefits first 
 
            and then making a proper investigation later and for failing 
 
            to investigate the proper number of exemptions when it was 
 
            inordinately high.