Page 1 before the iowa industrial commissioner ____________________________________________________________ : RONALD D. BOYER, : : Claimant, : File Nos. 903811, 931391 : 931392, 931393 vs. : : A R B I T R A T I O N OSCAR MAYER FOODS : CORPORATION, : D E C I S I O N : Employer, : Self-Insured, : Defendant. : ____________________________________________________________ statement of the case Claimant Ronald D. Boyer filed petitions in arbitration seeking benefits under the Iowa Workers' Compensation Act as the result of alleged work injuries of March 8, 1988 (931391), March 22, 1988 (931392), April 4, 1988 (903811), and December 15, 1988 (931393). Defendant Oscar Mayer Foods Corporation is his self-insured employer. This cause came on for hearing in Des Moines, Iowa, on August 7, 1991. Claimant testified personally, as did his wife, Barbara Boyer. Joint exhibits 1 through 9 were received into evidence. issues The parties have stipulated that claimant sustained an injury arising out of and in the course of his employment on April 4, 1988, that the injury caused temporary disability (for which claimant has been compensated) and permanent disability, to a compensation rate of $305.01 per week, that affirmative defenses are not at issue, that entitlement to medical benefits is no longer in dispute, and that certain benefits were paid prior to hearing. The other three alleged injury dates are presented essentially as alternative dates should the agency find that the record supports a date other than April 4, 1988. The only issues presented for resolution include the nature (scheduled member v. body as a whole) and extent of claimant's permanent disability. findings of fact The undersigned deputy industrial commissioner finds: Claimant Ronald Boyer, just short of his 57th birthday on the stipulated injury date, is a 1951 high school graduate. Since leaving high school, he has taken courses Page 2 in welding, electricity and electric motors. Appropriate certification was earned. After leaving high school, claimant farmed for one summer, worked in maintenance for a meat packing concern for some 16 years, and began employment with Oscar Mayer Foods Corporation in 1967. He remained employed in maintenance and repair work and as an electrician until sustaining the subject work injury. Mr. Boyer is right-hand dominant. Before beginning work with Oscar Mayer, he had no history of shoulder problems. Prior to 1988, he may have had some left shoulder complaints, but operated under no medical restrictions. During the spring of 1988 (in an accident report, claimant wrote "1984," but this was merely a clerical error) a heavy chain guard fell on his head and shoulder, causing immediate left shoulder pain. Claimant continued to work until undergoing surgery on December 15 of that year, experiencing several additional strains or exacerbations to the shoulder. These minor events are the reason why alternate injury dates are presented, although this writer sees no reason not to accept the stipulation of the parties. After conservative treatment failed to relieve symptoms, claimant was referred to Peter D. Wirtz, M.D. On December 15, 1988, Dr. Wirtz performed surgery described as tendon repair, supraspinatus, rotator cuff, left shoulder; partial acromionectomy, left shoulder inferior; partial bursectomy, left subacromial bursa. Post-operative diagnosis was of rotator cuff tendon rupture supraspinatus tendon, inferior acromial spur. Surgical notes reflect that incision was carried both proximal and distal to the tip of the acromion and carried down through the deltoid muscle. Accordingly, it is found that the surgical procedure invaded the body as a whole. The Oscar Mayer plant closed in February 1989, while claimant was recuperating from surgery. Claimant never returned to work with defendant. The physical plant was purchased by another meat packing concern, but claimant has elected not to seek work there (although this is doubtless among the largest employers in the Perry, Iowa, area where he lives), apparently for reasons pertaining to labor relations. On June 7, 1989, Dr. Wirtz wrote that claimant had reached maximum medical benefit and had sustained a loss of motion equivalent to a 15 percent impairment of the upper extremity. However, Dr. Wirtz later wrote on June 26, 1991, that claimant had sustained a 19 percent impairment of that extremity due to loss of motion, and an additional 5 percent impairment due to weakness, totalling 24 percent. Symptoms were described as continuing with difficulty in lifting, loss of motion and strength in away from side elbow activities. Claimant's work capacity at that time was 20 Page 3 pounds elbow lifting and 10 pounds abduction activities, with symptoms noted in activities over shoulder height. Claimant was also seen for evaluation by Jerome G. Bashara, M.D., on May 17, 1991. Dr. Bashara assessed claimant as having sustained an eight percent impairment to the body as a whole and recommended restrictions against lifting in excess of 20 pounds above shoulder level or repetitive use of the left shoulder or upper extremity above shoulder level. Dr. Bashara also found weakness in abduction, loss of range of motion and noted marked crepitation on abduction. After claimant was released to return to work by Dr. Wirtz, he applied for and received job insurance benefits for 39 weeks. Twenty-six weeks were standard job insurance benefits, and thirteen weeks were federal supplemental benefits. Job Service requires two work search contacts per week for regular benefits and three per week for federal supplemental benefits. In each week, claimant was required to certify that he was able to work and available for work. However, he did not find another job and last actively sought work in approximately autumn, 1990. Nonetheless, claimant has not been entirely idle. He has farmed on what he describes as a "part-time" basis since 1960, when he moved to the acreage where he presently resides. He has continued farming in conjunction with his son Stanley since then. The farming operation, although perhaps not a huge corporate farming enterprise, is nonetheless substantial, both as a grain and a livestock operation. Claimant and his son farm some 200 acres (180 of which are rented) and claimant now has approximately 150 hogs in confinement. His son also raises hogs, but the record does not disclose the size of that operation. Claimant currently complains of pain on overhead lifting or repetitive use of the left shoulder. He is not currently seeing any physician or taking medication other than aspirin. He indicates that his son assists with heavy or overhead lifting in their joint farming operation. conclusions of law The first issue to be determined is whether claimant's disability is to the arm, a scheduled member, or to the body as a whole. A scheduled member loss is compensated pursuant to the schedule set forth in Iowa Code section 85.34, which is presumed to include compensation for the reduced capacity to labor and earn. Schell v. Cent. Eng'g Co., 232 Iowa 421, 4 N.W.2d 399 (1942). An injury to the body as a whole is compensated industrially; that is, to the extent to which the injury reduces claimant's earning capacity. Second Injury Fund v. Hodgins, 461 N.W.2d 454 (Iowa 1990). A shoulder injury is an injury to the body as a whole if the injury affects the "body side" of the shoulder joint. Page 4 Lauhoff Grain v. McIntosh, 395 N.W.2d 834 (Iowa 1986). The agency has typically compensated shoulder injuries industrially on the basis that such injuries involve disability to the body as a whole. Streeter v. Iowa Meat Processing Co., file numbers 730461 and 809945 (App. Decn., March 31, 1989); Nazarenus v. Oscar Mayer & Co., II Iowa Industrial Commissioner Report 281 (1982); Houser v. A M Cohron & Sons, file number 851752 (Arb. Decn., July 18, 1990). Noting in particular that the surgical procedure undertaken by Dr. Wirtz invaded the body side of the joint (the acromion and deltoid were affected), it is held that claimant's injury must be compensated industrially. Functional impairment is an element to be considered in determining industrial disability which is the reduction of earning capacity, but consideration must also be given to the injured employee's age, education, qualifications, expe rience and inability to engage in employment for which he is fitted. Olson v. Goodyear Service Stores, 255 Iowa 1112, 125 N.W.2d 251 (1963). Barton v. Nevada Poultry, 253 Iowa 285, 110 N.W.2d 660 (1961). A finding of impairment to the body as a whole found by a medical evaluator does not equate to industrial disabil ity. This is so as impairment and disability are not syn onymous. Degree of industrial disability can in fact be much different than the degree of impairment because in the first instance reference is to loss of earning capacity and in the latter to anatomical or functional abnormality or loss. Although loss of function is to be considered and disability can rarely be found without it, it is not so that a degree of industrial disability is proportionally related to a degree of impairment of bodily function. Factors to be considered in determining industrial dis ability include the employee's medical condition prior to the injury, immediately after the injury, and presently; the situs of the injury, its severity and the length of healing period; the work experience of the employee prior to the injury, after the injury and potential for rehabilitation; the employee's qualifications intellectually, emotionally and physically; earnings prior and subsequent to the injury; age; education; motivation; functional impairment as a result of the injury; and inability because of the injury to engage in employment for which the employee is fitted. Loss of earnings caused by a job transfer for reasons related to the injury is also relevant. These are matters which the finder of fact considers collectively in arriving at the determination of the degree of industrial disability. There are no weighting guidelines that indicate how each of the factors are to be considered. There are no guidelines which give, for example, age a weighted value of ten percent of the total value, education a value of fifteen Page 5 percent of total, motivation - five percent; work experience - thirty percent, etc. Neither does a rating of functional impairment directly correlate to a degree of industrial disability to the body as a whole. In other words, there are no formulae which can be applied and then added up to determine the degree of industrial disability. It therefore becomes necessary for the deputy or commissioner to draw upon prior experience, general and specialized knowledge to make the finding with regard to degree of industrial dis ability. See Peterson v. Truck Haven Cafe, Inc., (Appeal Decision, February 28, 1985); Christensen v. Hagen, Inc., (Appeal Decision, March 26, 1985). Claimant was nearly 57 years of age at the time of his injury. This affects his earning capacity in at least two ways. On one hand, any reduction in wages would affect him for less time than a younger worker, since he was only approximately eight years from what is commonly considered retirement age. On the other hand, he may well be less attractive to potential employers due to his age, especially given his history of injury and medical restrictions suggested by Drs. Wirtz and Bashara. There are also mixed considerations with respect to claimant's motivation. While he sought work with two or three employers per week for some 39 weeks after being released by Dr. Wirtz (at least 91 contacts, although some may be duplicative), he substantially reduced his search for work after exhausting unemployment benefits and eventually gave up seeking work altogether. It is not an unreasonable inference that claimant's ongoing work search during those 39 weeks was in part inspired by necessity; without a work search, job insurance benefits terminate. Claimant now appears satisfied to devote his energies to his family farming operation. He is receiving a retirement pension of $266.00 per month from Oscar Mayer and expects to claim Social Security benefits at age 62, two years from now. Although claimant's farming operation has not been particularly profitable in the last two years, that is not a direct measure of earning capacity. Farming is an entrepreneurial enterprise which does not directly measure the value of one's labor. Farm management skills, general market conditions and various accounting techniques for tax purposes may all be equally important factors in determining the profitability of a farming enterprise. An important consideration in determining industrial disability is the way in which medical restrictions resulting from a work injury limit an individual's ability to perform the work that individual has performed in the past or work suitable by reason of transferrable skills. Claimant has worked essentially in farming and maintenance during his career. Although in some respects limited, it is Page 6 clear that he is able to continue farming to at least some substantial degree. His work in maintenance, and particularly as an electrician or in the repair of electrical motors, is no doubt affected. Restrictions against heavy or repetitive lifting over the shoulder no doubt foreclose claimant from some mechanical maintenance jobs, but not others. For example, claimant may well be able to perform bench work in the repair of electrical motors. Claimant cannot return to his old job, since the plant has closed. It is unclear whether he could do the same work for the business presently operating that plant, since he has elected not to seek employment with that concern. The refusal of an employer to provide work following a work injury may justify the award of industrial disability or increase industrial disability. McSpadden v. Big Ben Coal Co., 288 N.W.2d 181 (Iowa 1980); Pigneri v. Ringland-Johnson-Crowley, file number 838742 (App. Decn., July 31, 1991). However, it was the plant closing that directly resulted in claimant's loss of job, not his injury. Claimant also asserts that he is an odd-lot employee under the theory adopted in Guyton v. Irving Jensen Co., 373 N.W.2d 101 (Iowa 1985). An odd-lot employee is one who is so limited in the work that individual may perform in quality, quantity and dependability, that a reasonably stable market for that work does not exist. A combination of factors should be considered, including age, intelligence, education, qualifications and experience. If the employee makes a prima facie showing of coming within the odd-lot category, the burden of proof shifts to the employer to produce evidence that suitable employment exists. The test is whether claimant is employable in a competitive labor market. Brown v. Nissen Corp., file number 837608 (App. Decn., November 30, 1989). The undersigned concludes that claimant has failed to meet his burden of proof in establishing that he is an odd-lot employee. Although there are doubtless jobs for which he was previously suited by experience and training which he can now not perform, it is probable that there are others claimant remains capable of performing. These include bench work in electrical motor repair and farming. Considering then all these factors in specific and the record otherwise in general, it is held that claimant has sustained a permanent partial disability equivalent to 25 percent of the body as a whole, or 125 weeks. order THEREFORE, IT IS ORDERED: In file numbers 931391, 931392, and 931393, claimant shall take nothing. Page 7 In file number 903811: Defendant shall pay unto claimant permanent partial disability benefits for one hundred twenty-five (125) weeks commencing June 15, 1989 at the stipulated rate of three hundred five and 01/100 dollars ($305.01) per week. All accrued weekly benefits shall be paid in a lump sum together with statutory interest thereon pursuant to Iowa Code section 85.30. Defendant shall have credit for benefits voluntarily paid prior to the filing of this decision. The costs of each action are assessed to defendant pursuant to rule 343 IAC 4.33. Defendant shall file claim activity reports as requested by this agency pursuant to rule 343 IAC 3.1. Signed and filed this ______ day of ____________, 1991. ______________________________ DAVID RASEY DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr. Robert E. McKinney Attorney at Law 480 6th Street P.O. Box 209 Waukee, Iowa 50263 Mr. Harry W. Dahl Attorney at Law 974 73rd Street Suite 16 Des Moines, Iowa 50312 5-1803; 1803.1 Filed September 10, 1991 DAVID RASEY before the iowa industrial commissioner ____________________________________________________________ : RONALD D. BOYER, : : Claimant, : File Nos. 903811, 931391 : 931392, 931393 vs. : : A R B I T R A T I O N OSCAR MAYER FOODS : CORPORATION, : D E C I S I O N : Employer, : Self-Insured, : Defendant. : ____________________________________________________________ 1803.1 Shoulder injury (rotator cuff repair) was found to cause disability to body as a whole. Surgery affected acromion and deltoid muscle. 5-1803 Industrial disability determined. BEFORE THE IOWA INDUSTRIAL COMMISSIONER ____________________________________________________________ : DOUGLAS STOREY, : : Claimant, : : vs. : : File No. 903982 REED'S PLUMBING & HEATING, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : AETNA CASUALTY AND SURETY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ STATEMENT OF THE CASE This is a proceeding in arbitration brought by Douglas Storey against his former employer Reed's Plumbing and Heating and its insurance carrier Aetna Casualty and Surety Insurance Company, based upon an injury that occurred on June 2, 1988. Claimant seeks compensation for permanent partial disability of his right shoulder as a result of that injury. An issue exists with regard to whether the injury is a scheduled injury of the arm or an injury to the body as a whole which should be compensated industrially. Claimant also seeks compensation for a left shoulder injury based upon a theory of cumulative trauma. Defendants dispute all liability for any left shoulder injury or condition. The case was heard at Des Moines, Iowa, on April 8, 1992. The evidence consists of testimony from Douglas Storey and jointly offered exhibits 1 through 27. FINDINGS OF FACT Having considered all the evidence received, together with the appearance and demeanor of the witnesses, the following findings of fact are made: Douglas Storey is a 38-year-old man who graduated from high school in 1971 and then briefly attended Grand View College. He worked for a time at John Deere and then entered the plumbing trade in 1976. At times he also drove semi-trucks or performed general construction labor, including concrete work. Storey commenced employment with Reed's Plumbing and Heating in February 1987 working as a plumber. He sometimes functioned as a working supervisor. On June 2, 1988, he tripped and fell while carrying fittings, landing on his right shoulder. He experienced the immediate onset of symptoms. Page 2 After several weeks of unsuccessful treatment, his medical care was transferred to Des Moines orthopedic surgeon Scott B. Neff, D.O. With the assistance of diagnostic tests, Dr. Neff diagnosed a torn rotator cuff (exhibit 9, page 5). A surgical repair was performed. As part of the surgical procedure the distal end of claimant's right clavicle was removed and acromioplasty was performed (ex. 10, pp. 4-5). Dr. Neff released claimant to return to work effective February 1, 1989, with restrictions, but the employer had no work available within those restrictions (ex. 9, pp. 11-15). On April 14, 1989, Dr. Neff lessened the restrictions and again released claimant to return to work (ex. 9, p. 16; ex. 17, p. 17). Claimant did return to work as a plumber for Reed's Plumbing and Heating. On May 5, 1989, a follow-up examination with Dr. Neff was conducted. Dr. Neff characterized claimant's work of using a jackhammer and wheelbarrows of cement as risky. He recommended that it would be good if claimant were to change jobs (ex. 9, pp, 16-18; ex. 17, p. 19). When Dr. Neff examined claimant in April and May of 1989, there was no indication that claimant was having any problems with his left shoulder (ex. 17, pp. 17, 36, 38). Dr. Neff felt that the right shoulder result from the surgical treatment was very favorable. He noted the shoulder had been doing beautifully, but that it did have the expected weakness typical for the condition (ex. 9, pp. 21-24; ex. 17, p. 38). On May 5, 1989, Dr. Neff provided an impairment rating of 2 percent of the body as a whole (ex. 11, p. 6). Later, in December 1991, the right shoulder impairment was rated at 5 percent of the body as a whole based upon state of the art testing procedures (ex. 11, pp. 6, 9-13). Dr. Neff considered the 1991 testing procedures to be superior to the procedures used in 1989. The tests showed substantial limitations in claimant's ability to make use of his right arm and shoulder as well as his left arm and shoulder. Between the two, the right was more severely restricted. Claimant's work with Reed's Plumbing and Heating was largely commercial, a type of work described as being more heavy and strenuous than residential plumbing work. At hearing claimant related that part of the reason he left Reed's Plumbing and Heating and went to his next employer, Cook Plumbing and Heating, was to avoid the heavy type of work such as using jackhammers and wheelbarrows of cement in accordance with recommendations from Dr. Neff. While working for his next employer, Cook Plumbing, claimant apparently sustained an injury to his left shoulder in August 1989. That injury was subsequently evaluated and determined to be a torn rotator cuff. After working for Cook, claimant then obtained employment as a plumber with Lenhart Plumbing. Finally, on October 4, 1989, claimant ceased working as a plumber. At that time that he entered into the course of treatment for the left shoulder which resulted in the diagnosis and rotator cuff repair surgery. Page 3 Claimant has since enrolled in college at Iowa State University and is studying fish and wildlife biology. At the end of the first year, his grade point average was 2.74. Currently, his grade point average is in the range of 3.0. During the months that claimant worked at Reed's Plumbing and Heating, following his right shoulder repair surgery, he performed all of his assigned duties and did not experience any loss in his rate of pay or any loss of time from work due to the shoulder injury. He stated at hearing that he had no problems with his left shoulder or with his elbow or wrist while he was working at Reed's. He testified at hearing that he had no problem with his left shoulder prior to the traumatic injury that occurred while he was employed by Cook Plumbing. When cross-examined, claimant stated that he left Reed's for approximately 10 percent higher pay at Cook Plumbing and that leaving Reed's had nothing to do with his right shoulder. He characterized the work at Cook Plumbing as being substantially the same as at Reed's. Claimant stated that prior to his August 1989 injury with Cook Plumbing he had been able to do all of his duties and did not have problems with his left shoulder. He attributes his left shoulder problems to the Cook Plumbing injury. Claimant eventually left Cook Plumbing to work for Lenhart Plumbing. He attributed the change to a desire to relocate to a place closer to his home and stated that the change had nothing to do with either of his shoulders. Lenhart was strictly residential plumbing work. Claimant testified that his arms gave out while he was working for Lenhart Plumbing and that he left Lenhart for medical reasons. He stated that his left shoulder had continued to worsen following the injury with Cook Plumbing, but he stated that his right arm did not seem to deteriorate while he was employed by Lenhart Plumbing. Claimant stated that presently his right shoulder has a constant burning sensation that is not as bad as it had been previously. He stated that if he tries to lift with his right arm, higher than mid-chest, even something as light as a gallon of milk, he experiences pain down the front of his upper right arm. He complained of limited motion and reduced strength. Claimant stated that he is unable to perform plumbing work because it requires overhead lifting. He felt unable to perform truck driving due to the need to shift and turn a large steering wheel. He fells unable to perform construction labor. He stated that he is unable to do any job that he has done in the past due to his lack of use of his right arm. Claimant was unable to state if he could have continued to perform plumbing work if he had never injured his left shoulder. He stated that he probably could not have done so, despite the fact that he was actually doing plumbing work following recovering from the right shoulder injury. Page 4 Claimant has applied for and received social security disability benefits retroactive to the time he left work at Lenhart Plumbing. It is found to be unlikely that anything claimant did while employed by Reed's Plumbing and Heating produced the torn rotator cuff in his left shoulder. While he might have been exposed to some type of cumulative trauma, there is no showing that the trauma had produced any injury while at Reed's Plumbing and Heating. Claimant is, therefore, not entitled to any recovery from Reed's Plumbing and Heating based upon the condition of his left shoulder, a condition which arose subsequent to the right shoulder injury which is the subject of the remaining portions of this case. The evidence in this case shows that the injury was not so much to the claimant's right arm as it was to the shoulder girdle itself. He had a torn rotator cuff. His distal clavicle was excised. The anatomical point of injury, and the reason for the weakness and lost use of his right arm, has its basis in the impairment of the function of the shoulder girdle itself. Accordingly, the injury is one which should be evaluated industrially. CONCLUSIONS OF LAW It is the anatomical situs of the permanent injury or impairment which determines whether the schedules in section 85.34(2)(a) - (t) are applied. Lauhoff Grain v. McIntosh, 395 N.W.2d 834 (Iowa 1986); Blacksmith v. All-American, Inc., 290 N.W.2d 348 (Iowa 1980); Dailey v. Pooley Lumber Co., 233 Iowa 758, 10 N.W.2d 569 (1943). Soukup v. Shores Co., 222 Iowa 272, 268 N.W. 598 (1936). When disability is found in the shoulder, a body as a whole situation may exist. Alm v. Morris Barick Cattle Co., 240 Iowa 1174, 38 N.W.2d 161 (1949). In Nazarenus v. Oscar Mayer & Co., II Iowa Industrial Commissioner Report 281 (App. 1982), a torn rotator cuff was found to cause disability to the body as a whole. It is concluded that claimant's disability should be evaluated industrially under Code section 85.34(2)(u). Since claimant has an impairment to the body as a whole, an industrial disability has been sustained. Industrial disability was defined in Diederich v. Tri-City Ry. Co., 219 Iowa 587, 258 N.W.2d 899 (1935) as follows: "It is therefore plain that the legislature intended the term `disability' to mean `industrial disability' or loss of earning capacity and not a mere `functional disability' to be computed in the terms of percentages of the total physical and mental ability of a normal man." Functional impairment is an element to be considered in determining industrial disability which is the reduction of earning capacity, but consideration must also be given to the injured employee's age, education, qualifications, experience, motivation, loss of earnings, severity and situs of the injury, work restrictions, inability to engage in employment for which the employee is fitted and the Page 5 employer's offer of work or failure to so offer. Olson v. Goodyear Serv. Stores, 255 Iowa 1112, 125 N.W.2d 251 (1963); McSpadden v. Big Ben Coal Co., 288 N.W.2d 181 (Iowa 1980); Barton v. Nevada Poultry Co., 253 Iowa 285, 110 N.W.2d 660 (1961). Compensation for permanent partial disability shall begin at the termination of the healing period. Compensation shall be paid in relation to 500 weeks as the disability bears to the body as a whole. Section 85.34. 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, Thirty-fourth Biennial Report of the Industrial Commissioner 218 (1979); 2 Larson Workmen's Compensation Law, sections 57.21 and 57.31. Orthopedic surgeon James V. Nepola, M.D., stated that when a person who has experienced a torn rotator cuff has customarily been employed in a labor intensive occupation that it is generally advisable for the person to seek vocational rehabilitation in order to enter a type of work which is not labor oriented (ex. 18, p. 21). As indicated by Dr. Neff, even successful rotator cuff repair surgery often leaves the affected person with a lack of ability to perform overhead work. The fact that claimant remained employed by Reed's Plumbing and Heating and was able to perform his job does not mean that he was able to perform all aspects of the plumbing occupation or everything which he had been able to do prior to the injury. He clearly had reduced strength. It is common for plumbing to require overhead work. It is also common for plumbing to require quite heavy work. It would not have been imprudent for claimant to have changed occupations following his right shoulder injury. It became imperative that he do so after his left shoulder injury imposed itself upon the right shoulder injury. He could no longer use his left arm to compensate for the right. The decision in this case is to be based upon the situation that existed following recovery from the right shoulder injury, but as though the left shoulder had not occurred. That situation is one in which the claimant had reduced ability to use his right arm, reduced ability to perform overhead work with the right arm and reduced strength in his right arm. Those are all substantial limitations for a person who makes a living with his hands. Page 6 The fact that he was able to perform without loss of actual earnings, is evidence that the degree of disability is relatively small, yet it appears as though he were able to do so only by being highly motivated as to work in excess of what was really prudent for him in view of the weakened state of his right shoulder. Under circumstances such as these, the postinjury level of earnings is not a particularly strong indicator of actual earning capacity if the level of earnings is achieved through performing work activities which are injurious or likely to produce further medical problems. With only an impaired right shoulder, the claimant could probably have remained in the plumbing occupation, but he would have been limited in the jobs he could perform or accept. He was not capable of performing the full range of plumbing activities. When all the foregoing factors of industrial disability are considered, it is determined that Douglas Storey sustained a 20 percent reduction in his earning capacity and a 20 percent permanent partial disability under the provisions of Iowa Code section 85.34(2)(u). This entitles him to recover 100 weeks of compensation for permanent partial disability. ORDER It is therefore ordered that defendants pay Douglas A. Storey one hundred (100) weeks of compensation for permanent partial disability at the stipulated rate of two hundred twenty-four and 70/100 dollars ($224.70) per week payable commencing April 18, 1989. Defendants are entitled to credit for the seven and four-sevenths (7 4/7) weeks of permanent partial disability compensation previously paid and shall pay the remaining amount in a lump sum together with interest pursuant to Code section 85.30 computed from the date each weekly payment came due until the date it is actually paid. It is further ordered that defendants pay the costs of this action pursuant to 343 IAC 4.33. It is further ordered that defendants file claim activity reports as requested by this agency pursuant to rule 343 IAC 3.1. Signed and filed this ____ day of October, 1992. ______________________________ MICHAEL G. TRIER DEPUTY INDUSTRIAL COMMISSIONER Copies to: Mr. Tom Drew Attorney at Law West Towers Office Complex 1200 35th St. STE 500 Page 7 West Des Moines, Iowa 50265 Mr. Timothy C. Hogan Attorney at Law 4th Floor, Equitable Bldg Des Moines, Iowa 50309 1803.1 1803 Filed October 2, 1992 Michael G. Trier BEFORE THE IOWA INDUSRIAL COMMISSIONER ____________________________________________________________ DOUGLAS STOREY, Claimant, vs. File No. 903982 REED'S PLUMBING & HEATING, A R B I T R A T I O N Employer, D E C I S I O N and AETNA CASUALTY AND SURETY, Insurance Carrier, Defendants. ___________________________________________________________ 1803.1 Torn rotator cuff with excision of distal clavicle found to be injury to the body as a whole. 1803 Thirty-eight-year-old plumber with right torn rotator cuff awarded 20 percent permanent partial disability even though he had returned to work without loss of actual earnings. The work was shown to be in excess of his capabilities and likely to have produced further injury. He was not able to perform the full range of duties of his trade. Medical recommendations were that he change to a less labor intensive occupation. Page 1 before the iowa industrial commissioner ____________________________________________________________ : ROBERT MUHM, : : Claimant, : : vs. : : File No. 904085 RHINERS PLUMBING, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : AETNA CASUALTY & SURETY : COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ STATEMENT OF THE CASE This is a proceeding in arbitration upon the petition of claimant, Robert Muhm, against his employer, Rhiners Plumbing, and its insurance carrier, Aetna Casualty and Surety Company, defendants. The case was heard on April 16, 1992, in Des Moines, Iowa, at the office of the industrial commissioner. The record consists of the testimony of claimant. The record also consists of the testimonies of David Reynolds, David Lycke, Shelly Muhm, and Donald Muhm. Additionally, the record consists of joint exhibits 1-5. issue The sole issue to be determined is whether claimant's work injury is the cause of any permanent disability and, if so, the nature and extent of the permanent disability. findings of fact The deputy, having heard the testimony and considered all the evidence, finds: Claimant is 33 years old and married. He has a high school diploma. Subsequent to his high school graduation, claimant had engaged in strenuous labor, primarily in the construction industry. He held various laboring positions. Claimant commenced employment with defendant in June of 1988. His work was physically demanding and he engaged in heavy lifting. He testified he had no difficulties performing the lifting involved. On most jobs, claimant received $7.00 per hour, however, on projects under the Davis-Bacon Act, claimant earned $10 per hour. On the date in question, claimant fell through a flat bed trailer while carrying equipment. As he was falling Page 2 through the hole, he twisted his back. Claimant testified he felt excruciating pain in his lower back. Claimant continued to work that day, as well as the subsequent day. He indicated at the hearing that he was unable to engage in all of his job functions. On October 5, 1988, claimant sought chiropractic care from Glen D. Madsen, D.C., P.C. Dr. Madsen diagnosed claimant's condition as: CONCLUSION: Faulty vertebral posture places great stress on the lumbar disc that were injured with the force of the fall. PROGNOSIS:Patient has an injury to the ligaments and disc. There is slow improvement in the overall condition. The degree of permanent disability is difficult to predict at this time. (Ex. E, p. 14) Claimant continued conservative care for a period of time. Approximately one month later defendants referred claimant to William R. Boulden, M.D., P.C. Dr. Boulden diagnosed claimant's condition as "Significant myofascial pain and tightness." (Ex. A, p. 1) Dr. Boulden treated claimant in a conservative fashion. The physician recommended mobilization and a work hardening project (Ex. A). According to the testimony of Thomas Bower, L.P.T., claimant provided submaximal effort and performance (Ex. 4, p. 6). Mr. Bowers testified that claimant had no change in his functional capacity after the program but that claimant did have increased mobility. After the work hardening program, Dr. Boulden opined claimant had reached maximum medical improvement on February 2, 1989. Dr. Boulden also opined that: "At this time, I feel the patient has a 5% impairment of the spine based on the fact of myofascial pain, tightness and aggravation of degenerative disc disease." Dr. Boulden did not release claimant to return to work at his former job. Dr. Boulden wrote in his report of February 2, 1989: "[W]e do not feel that he can return to previous work, since it is too abusive to his back, and with the symptoms that he is stating." For purposes of evaluation, claimant went to see Jerome G. Bashara. He diagnosed claimant with: 1) Musculoligamentous strain, cervical spine 2) Musculoligamentous strain, lumbar spine 3) Rule out lumbar disc injury. Page 3 Dr. Bashara calculated an impairment rating for claimant. Dr. Bashara opined: "I would give the patient a 3% permanent partial physical impairment of his body as a whole related to his neck injuries." Dr. Bashara additionally opined: "I would give the patient a 5% permanent/partial physical impairment of his body as a whole related to his lower back injury or lumbar disc injury." On December 2, 1991, claimant saw Martin S. Rosenfeld, D.O., for purposes of an evaluation. Dr. Rosenfeld concurred with Dr. Boulden that claimant had a 5 percent functional impairment. In his report, Dr. Rosenfeld wrote: Films are reviewed. Impression: 1) Chronic lumbo-sacral strain. 2) Probable right sciatica. Recommendations at this time would include a trial course of epidural steroid injections, a course of Elavil or other anti-depressant medication for chronic pain, and weight reduction. I would agree with the other two consultants that there is no surgical lesion present at this time. Due to a negative history of problems prior to the injury of October, 1988 I would feel that this injury is the cause of his chronic and current back condition. I would think that he did, indeed, reach maximum medical healing sometime in 1989 as described in the other consultant's letters, although the above recommended treatment should help relieve some of his symptoms, but not change his overall problem. I feel that he does, indeed, have a five (5%) percent physical impairment to the body as a whole as a result of the October, 1988 injury. I would feel that he needs to maintain his restrictions of no manual labor and continued duty work. (Ex. G, p. 2) After claimant's release from Dr. Boulden on February 2, 1991, claimant did not start working until July of 1990. At that time, claimant was hired as a waiter at a then open restaurant. Claimant worked 25-30 hours per week. However, business slowed and claimant obtained work through a temporary agency. Later, claimant obtained his present position as a cook at Glenn's Restaurant. Since the date of his hire, claimant has been working as a cook. He is the person who is responsible for setting up the kitchen, working the cook line, and for closing the kitchen. The supervisors have made special accommodations for claimant. Claimant is not required to perform heavy lifting, sweeping or mopping. He is not required to lift filled kettles. Page 4 conclusions of law 3); Barton v. Nevada Poultry, 253 Iowa 285, 110 N.W.2d 660 (1961). A finding of impairment to the body as a whole found by a medical evaluator does not equate to industrial disability. Impairment and disability are not synonymous. The degree of industrial disability can be much different than the degree of impairment because industrial disability references to loss of earning capacity and impairment references to anatomical or functional abnormality or loss. Although loss of function is to be considered and disability can rarely be found without it, it is not so that a degree of industrial disability is proportionally related to a degree of impairment of bodily function. Factors to be considered in determining industrial dis ability include the employee's medical condition prior to the injury, immediately after the injury, and presently; the situs of the injury, its severity and the length of the healing period; the work experience of the employee prior to the injury and after the injury and the potential for rehabilitation; the employee's qualifications intellectually, emotionally and physically; earnings prior and subsequent to the injury; age; education; motivation; functional impairment as a result of the injury; and inability because of the injury to engage in employment for Page 5 which the employee is fitted. Loss of earnings caused by a job transfer for reasons related to the injury is also relevant. Likewise, an employer's refusal to give any sort of work to an impaired employee may justify an award of disability. McSpadden v. Big Ben Coal Co., 288 N.W.2d 181 (Iowa 1980). These are matters which the finder of fact considers collectively in arriving at the determination of the degree of industrial disability. There are no weighting guidelines that indicate how each of the factors are to be considered. Neither does a rating of functional impairment directly correlate to a degree of industrial disability to the body as a whole. In other words, there are no formulae which can be applied and then added up to determine the degree of industrial disability. It therefore becomes necessary for the deputy or commissioner to draw upon prior experience as well as general and specialized knowledge to make the finding with regard to degree of industrial disability. See Christensen v. Hagen, Inc., Vol. 1 No. 3 State of Iowa Industrial Commissioner Decisions 529 (App. March 26, 1985); Peterson v. Truck Haven Cafe, Inc., Vol. 1 No. 3 State of Iowa Industrial Commissioner Decisions 654 (App. February 28, 1985). Compensation for permanent partial disability shall begin at the termination of the healing period. Compensation shall be paid in relation to 500 weeks as the disability bears to the body as a whole. Section 85.34. The treating orthopedic surgeon has opined that claimant has a 5 percent permanent impairment. An evaluating physician, Dr. Bashara, has rated claimant as having 3 percent functional impairment to the neck, and a 5 percent functional impairment rating because of the October work injury. Another evaluating physician has opined that claimant has a 5 percent functional impairment rating because of the October work injury. The three physicians concur that claimant is permanently impaired. The undersigned is in agreement. Claimant argues that he has an industrial disability. Again, the undersigned is in agreement. Claimant is industrially disabled. He can no longer engage in heavy labor, including construction work. For most of his career, claimant has worked in the construction field at $7 to $10 per hour. Claimant is now precluded from these types of jobs. Claimant is restricted to positions where the heavy lifting is greatly curtailed. His skills in the building trades, for the most part, are non-transferable. Claimant has few skills outside of the construction industry. Claimant's former jobs have mostly been unskilled. He has no training beyond the high school level. Claimant is currently employed as an assistant cook. He is receiving on-the-job training. The food service industry is notoriously low in wages for its employees. After one year of employment, claimant is only earning $6.50 per hour. He works between 35-40 hours per week. Claimant is working for an employer who is willing to Page 6 accommodate claimant. The present employer is to be commended. Claimant's continued employment is likely; he is well respected by his employer. Claimant is an exemplary employee. Occasionally, he is required to take a sick day because of his back. Therefore, in light of the foregoing, as well as in light of the testimony and this deputy's observations of claimant, it is the determination of the undersigned that claimant has a 20 percent permanent partial disability. He is entitled to 100 weeks of benefits at the stipulated rate of $190.40 per week. order THEREFORE, it is ordered: Claimant is entitled to one hundred (100) weeks of permanent partial disability benefits at the stipulated rate of one hundred ninety and 40/100 dollars ($190.40) per week and commencing on February 3, 1989. Accrued benefits are to be paid in a lump sum together with statutory interest at the rate of ten percent (10%) per year. Costs are taxed to defendants pursuant to rule 343 IAC 4.33. Defendants shall file a claim activity report as requested by this division and pursuant to rule 343 IAC 3.1. Signed and filed this ____ day of May, 1992. ________________________________ MICHELLE A. McGOVERN DEPUTY INDUSTRIAL COMMISSIONER Page 7 Copies To: Mr Mark S Pennington Attorney at Law 620 Fleming Bldg Des Moines IA 50309 Mr Timothy C Hogan Attorney at Law 4th Flr Equitable Bldg Des Moines IA 50309 1803 Filed May 21, 1992 Michelle A. McGovern before the iowa industrial commissioner ____________________________________________________________ : ROBERT MUHM, : : Claimant, : : vs. : : File No. 904085 RHINERS PLUMBING, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : AETNA CASUALTY & SURETY : COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ 1803 Claimant was awarded a 20% permanent partial disability for an injury he sustained to his lower back. For most of his career, claimant was a construction worker. Claimant cannot return to the construction field. He is restricted to positions where heavy lifting is curtailed. Claimant's skills in the building trades, for the most part, are non-transferable. Claimant's former jobs have mostly been unskilled. He has no training beyond the high school level. Claimant is currently employed as a second cook. He is receiving on-the-job training. He makes $6.50 per hour and works 35-40 hours per week. 1803 Filed November 26, 1990 LARRY P. WALSHIRE before the iowa industrial commissioner ____________________________________________________________ : RICHARD L. BERDING, : : Claimant, : : vs. : : File Nos. 832396 & 904266 PACKERLAND PACKING CO., INC., : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : CIGNA INSURANCE CO., : : Insurance Carrier, : Defendants. : ___________________________________________________________ 1803 - Enrollment in retraining program and effect on industrial disability. Participation in a retraining program is no measure of its success but its probable success may be shown by other evidence. Page 1 before the iowa industrial commissioner ____________________________________________________________ : LOREN A. BROMMEL, : : Claimant, : : vs. : : File No. 904291 SANCHEZ STRUCTURES, INC., : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : CIGNA, : : Insurance Carrier, : Defendants. : ____________________________________________________________ statement of the case This is a proceeding in arbitration upon the March 1, 1989 petition of claimant Loren A. Brommel for benefits under the Iowa Workers' Compensation Act from his employer, Sanchez Structures, Inc., DBE, and its insurance carrier, Cigna Insurance Companies. This cause came on for hearing in Des Moines, Iowa, on April 25, 1991. Claimant failed to appear at hearing for reasons unknown. He was aware of the scheduled hearing, but missed two recent appointments with his attorney, one on the morning of April 25. Counsel sought permission to dismiss without prejudice, but the request was denied under Iowa Rule of Civil Procedure 215. To justify dismissal immediately prior to hearing, claimant must show some cause other than mere whim. No testimony was received. The record consists of claimant's exhibits 1 and 2 and joint exhibits 3 through 9, inclusive. issues The parties entered into an extensive stipulation. It was agreed that claimant sustained an injury arising out of and in the course of his employment with Sanchez Structures on September 12, 1988, and that the injury caused both temporary (from October 3, 1988 through July 14, 1989) and permanent disability to the arms bilaterally. Medical benefits are not in dispute. The appropriate rate of weekly benefits is $354.05. Defendants voluntarily paid 75 weeks, 3 days of compensation at the stipulated rate prior to hearing. The sole issue presented for resolution is the extent of claimant's permanent disability to both arms. Page 2 findings of fact The undersigned deputy industrial commissioner, having considered all of the evidence submitted, finds: Loren A. Brommel developed bilateral numbness and tingling in the fingers, loss of grip and swelling bilaterally, symptoms greater on the right, while employed by Sanchez Structures as an ironworker. This work required repetitious and physically demanding use of the hands. After referral to Douglas S. Reagan, M.D., claimant underwent carpal, ulnar and cubital tunnel releases on the right side on November 1, 1988, and on the left side on January 24, 1989. At the time of his deposition on April 2, 1990, claimant continued to have symptomatology described by evaluating physician Jerome G. Bashara, M.D., (on April 13, 1990) as follows: He continued to experience bilateral numbness and tingling, stiffness, loss of grip and strength, pain in his wrists, elbows, and shoulders. He noted dropping objects easily, difficulty with lifting, pushing, pulling, using a hammer, etc. Cold, damp weather would affect his symptoms. He also noted muscle spams [sic], swelling and tenderness. On July 13, 1989, Dr. Reagan wrote that claimant was able to return to work with no repetitive activities and avoidance of heavy lifting. On the same day, his chart notes reflect his view that claimant had sustained an eight percent partial impairment of the whole person. Dr. Reagan's willingness to assess permanent impairment indicates that the restrictions imposed on the same date are also permanent. On September 26, 1989, Dr. Reagan's chart notes reflect that, at defendant Cigna's request, he had noted claimant's permanent partial impairment to equal seven percent of each upper extremity. Chart notes of January 11, 1990, reflect Dr. Reagan's view that claimant has greater difficulty with the left upper extremity than the right upper extremity. He did not indicate why each arm was given an identical impairment rating. Evaluating physician Bashara diagnosed bilateral ulnar neuropathy at the elbow, right carpal tunnel and ulnar tunnel nerve compressions with mild restriction of motion at the left elbow and wrist and left ulnar tunnel and median nerve compression at the wrist with mild to moderate restriction of motion at the elbow and wrist. He assessed claimant as having sustained an eight percent permanent partial impairment of the right upper extremity and an eleven permanent partial impairment of the left upper extremity. conclusions of law Page 3 As has been seen, the only issue to be determined is the extent of permanent disability. Dr. Reagan, the treating surgeon, initially imposed an eight percent permanent partial impairment of the whole person. Under Iowa law, this would entitle claimant to 40 weeks of benefits. He then re-assessed claimant as having sustained a seven percent permanent partial impairment of each arm. Dr. Reagan does not state why he lowered his initial impairment rating. If claimant's condition improved, there may well be entitlement to additional healing period benefits. Furthermore, Dr. Reagan's assessment does not seem consistent with his recognition that claimant's symptomatology is worse on the left side than the right. Dr. Bashara assesses eight percent and eleven percent impairments to the right and left arms, respectively. While this is not greatly dissimilar to the impairment rating assessed by Dr. Reagan, it is more persuasive because it takes into account the greater severity of claimant's symptoms on the left side and seems more consistent with the physical restrictions imposed by Dr. Reagan ("no repetitive activities and avoidance of heavy lifting") and claimant's reported degree of residual symptomatology. It is held that claimant sustained disability equivalent to eleven percent of the left arm and eight percent of the right arm. Pursuant to Iowa Code section 85.34(2)(s), the loss of two arms is compensated as a proportion of 500 weeks. Simbro v. Delong's Sportswear, 332 N.W.2d 886 (Iowa 1983). According to the American Medical Association Guides to the Evaluation of Permanent Impairment, an eight percent upper extremity impairment is equivalent to a five percent impairment of the whole person, while an eleven percent upper extremity impairment is equivalent to a seven percent body as a whole impairment. The combined values chart indicates that two such whole body impairments are equivalent to a combined 12 percent impairment of the body as a whole. Twelve percent of 500 weeks is 60 weeks. order THEREFORE, IT IS ORDERED: Defendants shall pay unto claimant forty point seven one four (40.714) weeks of healing period benefits as stipulated at the rate of three hundred fifty-four and 05/100 dollars ($354.05) per week and totalling fourteen thousand four hundred fourteen and 79/100 dollars ($14,414.79). Defendants shall pay unto claimant sixty (60) weeks of permanent partial disability benefits at the stipulated rate of three hundred fifty-four and 05/100 dollars ($354.05) per week commencing July 15, 1989 and totalling twenty-one thousand two hundred forty-three and 00/100 dollars ($21,243.00). Defendants shall have credit for all benefits Page 4 voluntarily paid. All accrued weekly benefits shall be paid in a lump sum together with statutory interest thereon pursuant to Iowa Code section 85.30. The costs of this action shall be assessed to defendants pursuant to rule 343 IAC 4.33. Defendants shall file a claim activity report upon compliance with this decision pursuant to rule 343 IAC 3.1. Signed and filed this ______ day of ____________, 1991. ______________________________ DAVID RASEY DEPUTY INDUSTRIAL COMMISSIONER Page 5 Copies To: Mr. I. John Rossi Attorney at Law 203 Skywalk 7th and Walnut Des Moines, Iowa 50309 Mr. Roy M. Irish Attorney at Law 729 Insurance Exchange Building Des Moines, Iowa 50309 5-1803; 2901 Filed April 29, 1991 DAVID RASEY before the iowa industrial commissioner ____________________________________________________________ : LOREN A. BROMMEL, : : Claimant, : : vs. : : File No. 904291 SANCHEZ STRUCTURES, INC., : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : CIGNA, : : Insurance Carrier, : Defendants. : ____________________________________________________________ 2901 Where claimant failed to appear at hearing for reasons unknown, request to dismiss without prejudice was denied under Iowa Rule of Civil Procedure 215. 5-1803 Bilateral arm impairment was compensated under 85.34(2)(s). Page 1 before the iowa industrial commissioner ____________________________________________________________ : SALLY ANN POWELL, Surviving : Spouse of Ernest Thomas : File No. 904855 Powell, and LUCY ANNA POWELL : and ANTHONY EUGENE POWELL : A M E N D E D Minor Children of Ernest : Thomas Powell, : A N D : Claimant, : S U B S T I T U T E D : vs. : D E C I S I O N : K & B TRANSPORTATION, INC., : O N : Employer, : C O M M U T A T I O N : and : A N D : CIGNA INSURANCE COMPANIES, : P A R T I A L : Insurance Carrier, : C O M M U T A T I O N Defendants. : ______________________________: : JOE POWELL, : : Claimant--Intervenor, : ___________________________________________________________ On December 20, 1989, Sally Ann Powell (claimant) filed a petition for commutation of benefits due her as a result of the death of her husband, Earnest T. Powell, on July 28, 1988. K & B Transportation (K & B) was identified as employer and Cigna was identified as the workers' compensation insurer for K & B. (collectively defendants). On May 7, 1991, these matters came on for hearing in Des Moines, Iowa. The parties appeared as follows: the claimant in person and by her counsel Lawrence Bihlmeyer of Rapid City, South Dakota and Lorraine May of Des Moines, Iowa and K & B and Cigna by their counsel Charles Cutler of Des Moines, Iowa. The record in this proceeding consisted of the following: 1. The live testimony of the claimant. 2. Joint exhibits 1-6. Page 2 stipulations The parties stipulated to the following matters at the time of the hearing: a. An employer-employee relationship existed between Ernest T. Powell (Powell) and K & B at the time of Powell's death. b. Powell's death arose out of and in the course of employment. c. The work injury caused Powell's death. d. Death benefits became due on July 29, 1988. e. The rate of compensation, is $309.45 per week. f. Defendants have paid 144 weeks of workers' compensation benefits to claimant at the rate of $309.45 per week prior to hearing. g. That there are no bifurcated claims. Issues 1. Whether Joe Powell, Lucy Powell or Anthony Powell are dependents of Ernest T. Powell. 2. Whether a full commutation is in the best interest of claimant. 3. Whether claimant is entitled to a partial commutation. FINDINGS OF FACT After considering all of the evidence and the arguments of counsel, the undersigned makes the following findings of fact and conclusions of law. 1. On July 28, 1988, Ernest T. Powell was killed in a motor vehicle accident in Scott County, Iowa. Powell's death arose out of and in the course of his employment with K & B Transportation. As a result of his death, claimant, aged 44 at the time, became entitled to workers' compensation benefits at the rate of $309.45 per week. Powell and claimant had two minor children at the time of Powell's death. They were identified as Lucy Anna Powell and Anthony Eugene Powell. Claimant's benefits commenced on July 29, 1988, and have continued on a weekly basis since that time. As of May 1, 1991, total benefits paid equaled $44,251.35. 2. At the time of Powell's death, he had other living children by a first wife. These children were Haley B. Powell and Joe Thomas Powell. At the time of Powell's death, Joe Powell was 28 years old. He was fully employed by the Federal Correction Institution in Lexington, Kentucky. Joe Powell was physically not working when his Page 3 father died. He was on a medical leave of absence from his employment for problems he was experiencing with his kidneys. While on medical leave, Joe Powell did not lose any income and his time off work was sanctioned by his employer. Joe Powell subsequently returned to work on January 1, 1989, and is currently employed as an employee of the Federal Correction Institution in Sandstone, Minnesota. Joe Powell did not receive any financial support from Powell in 1988 and there is no evidence that Joe Powell was in any way financially dependant upon Ernest Powell. Consequently, the undersigned specifically finds and affirms the Motion for Summary Judgment that was granted on April 2, 1991. Joe Powell is not a dependant of Powell. 3, Lucy Anna Powell and Anthony Eugene Powell have both reached the age of majority and are not financially dependant at this time upon their mother, claimant. Lucy Powell is 20 years old. Anthony Powell is nineteen years old. There is no evidence in the record that shows that either of these individuals are full time students. There is no evidence in the record that shows that either of these individuals are physically or mentally incapacitated from earning a living. Consequently, Lucy Anna Powell and Anthony Eugene Powell are not dependants in accordance with Iowa Code section 85.31 (1991). 4. Claimant did not indicate what her educational background was or whether she was a high school graduate. Claimant indicated that she is seeking a commutation because she has a current need for some of the funds that would be available to her from a lump sum payment. Claimant has indicated that she has two medical problems which require attention. She has a small hiatal hernia which requires repair and she is suffering from some intermittent vaginal bleeding which may require dilatation and curettage to solve this problem. Claimant indicated that her financial resources are such that without a lump sum settlement she cannot afford to have these procedures done. 5. Additionally, claimant wants to use $25,000 to purchase a home in Worthville, Kentucky. She wants to relocate to Worthville because she has other children and grandchildren located in the area. Claimant does not have reliable transportation currently and believes that she could purchase a car for approximately $5,000. Finally, claimant explained that if she were able to get her medical problems under control, she would be able to seek employment. Claimant has worked in a limited capacity since the death of her husband. She does woodworking, she has cooked for the Salvation Army and she has worked as a manager for Community Action. She was making $4.25 per hour. Claimant left this work because it was heavy work and was causing her health problems. Claimant supplements her income with her workers compensation benefit checks. Claimant's net check each month is $928.35 per month. 6. With the balance of the commuted funds, a sum that claimant estimates to be approximately $86,000 after the payment of these expenses and attorney fees, claimant intends to invest the remainder in a mutual fund known as Page 4 United High Income II Plan (The Fund) managed and developed by Waddell & Reed, a financial services company with offices in Rapid City, South Dakota. 7. The prospectus for the Fund indicates that the Fund seeks a high level of current income by investing primarily in a diversified portfolio of high yield, high risk, fixed income securities. The assets purchased by the Fund include options or future contracts, puts and calls on options on debts securities, common stocks, broadly based stock indices, futures contracts relating to debt securities (debt futures) or futures contracts on broadly based stock indices. The Fund can purchase repurchase agreements as collateralized loans by the Fund. It can purchase foreign securities, and the Fund may lend securities for the purpose of realizing income. The Fund can also purchase high yield debt securities to fund highly leveraged corporate acquisitions and restructurings. 8. While the Fund may yield high income, this return is accompanied by significant risk to principal. The prospectus indicates that the risk of investing in the Fund may be different or more pronounced than those involved in the purchase of higher quality securities. The high income which the Fund seeks is paid by debt securities in the lower rating categories of the established rating services or in unrated securities which are, in the opinion of Waddell & Reed, of similar quality to the rated debt securities held by the Fund. That is, the unrated securities are of a quality equivalent to the securities held by the Fund; B grade investments or lower. The majority of securities purchased by the Fund are rated as B grade investments or lower by Moody's or Standard and Poor's rating service.(1) (1). Debt that is rated at BB, B, CCC, CC, and C is regarded, on balance, as predominantly speculative with respect with to the capacity to pay interest and repay principal in accordance with the terms of the obligation. A BB rating indicates the lowest degree of speculation and C the highest degree of speculation. This debt may have some quality and protective characteristics but these are outweighed by the larger uncertainties or major risk exposure to adverse conditions. Debt rated at B has a greater vulnerability to default but currently has capacity to meet interest payments and principal payments. A debtor who faces adverse business, financial or economic conditions will likely impair the capacity or willingness to pay interest and repay principal. The B rating category is used for debts subordinated to senior debt that is assigned an actual or implied BB or BB- rating. Debt rated CCC has a currently indefinable vulnerability to default and is dependent upon favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The CCC rating category is also used for debt subordinated to senior dept that is assigned an actual or implied B or B- rating. A CC rating is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC rating. A C rating is applied to debt subordinated to senior debt which is assigned an actual implied CCC- debt rating. The C rating may be used to cover situations where a bankruptcy petition has been filed, but the debt service payments have been continued. A D grade debt is considered payment in default. This is used when interest payments or principals payments are not made on the due date. Page 5 During the Fund's fiscal year which ended on September 30, 1990, the percentage of the Fund's assets invested in debt securities in each of the rating categories of Standard & Poor's and the corporate debt securities not rated by an established rating services, determined on a dollar weighted average were as follows: Rated by Percentage of S&P Fund Assets AAA 9.0% AA 0.0 A 0.0 BBB 1.4 BB 2.0 B 29.6 CCC 9.5 CC 1.3 C 0.0 D 0.3 Unrated 14.1 As of the September 30, 1990, prospectus, approximately three percent of the Fund's assets were involved with bankrupt companies. Moreover, a review of the prospectus and the annual report of the Fund from September of 1989 to September of 1990, showed that the Fund had lost 18 percent of its value. 9. Regarding the value of the Fund, the Fund's managers advised in the prospectus that past experience in the Fund would probably not provide an accurate indicator of future performance in this market particularly during periods of economic recession. An economic downturn or increase in interest rates is likely to have a greater negative affect on the Fund's ability to market its holdings, the value of high yield debt securities in the Fund's portfolio, the Fund's net asset value, the ability of the bond's issuers to repay principal and interest, the bond issuer's ability to meet projected business goals and obtain additional financing when necessary. The Fund's investments might also result in a higher incidence of defaults than with respect to higher rated securities. The prospectus further indicated that the prices of high yield securities had declined substantially reflecting the expectation that many of the issuers of the high yield securities may or will experience financial difficulties. The Fund is also subject to market price volatility and limited liquidity in the resale of some these assets. Moreover, since the Fund has invested in foreign securities, these securities may not be redially liquidated because foreign securities are not traded in the volume that U.S. securities are traded and the audit and accounting practices in various countries are not as rigid as those in the U.S. All of these factors contribute to a speculative investment that could lose significant principal value. 10. The proceeds from the Fund are taxable. Moreover, the Fund is not guaranteed by the Federal Deposit Insurance Page 6 Corporation. Contrary to testimony at hearing, the prospectus indicated that a management fee was charged to shareholders on a a two tier basis. The fee consists of a specific fee which is computed on the Fund's net asset value as of the close of each day at the annual rate of 0.15 of 1 percent of net assets and a group fee computed each day on the combined net asset values of all of the funds in the United Group. The fee is accrued and paid on a daily basis. 11. Claimant's understanding of this Fund is minimal. Claimant believes that her investment is spread over a large number of corporate bonds so that her investment is more secure than investing in one stock such as IBM. Claimant was also advised by Waddell & Reed that the past performance of the Fund suggested that claimant would meet her monthly income goal. Claimant indicated that while she did not understand how the Fund worked, she did understand that she would receive a monthly income of approximately $800 per month from the Fund. Claimant did not know: a. Whether the $800 that she was to receive from the Fund would be taxable; b. What Waddell & Reed were going to charge when she invested this money; c. What it would cost to switch between various Funds managed by Waddell & Reed. 12. Claimant had not looked at any other funds in order to make a comparative judgment between the Fund and other funds. Additionally, it was apparent that the claimant did not understand or recall much regarding the prospectus that had been prepared for the Fund. Claimant did explain that she understands how the Fund is supposed to work based upon explanations of Waddell & Reed representatives. 13. When claimant moves to Kentucky, it is her intent after her medical problems are resolved to seek employment in the Worthville area. She intends to make applications in the restaurant business when she is living fulltime in Kentucky. 14. Claimant is relatively debt free. She currently does not own her own home. She is renting a house in Rapid City, South Dakota. Claimant's rent is approximately $450 per month. The balance of her monthly workers' compensation check covers her other living expenses. Claimant has noted that her utility bills are higher in the wintertime due to cold weather. 15. Claimant is also seeking this commutation so that she will have an estate at the time of her death. She understands that without the commutation the workers' compensation benefits would terminate at the time of her death and she would be able to leave nothing to her heirs. 16. Claimant understands that an investment in a mutual fund like the Fund does not guarantee a monthly income payment. She also understands that the Fund is subject to value fluctuation. She believes that she would be able to Page 7 remove money from the Fund before serious harm occurred to the principal balance of her investment. She also understands that the Fund is not tax free and that she will have to pay taxes on the dividends. Claimant believes that a full commutation is more valuable than a partial commutation because the full commutation will allow her to pay for the things that she needs currently and provide a steady stream of income for the remainder of her life. Claimant understands that there are certain risks attached to this type of investment however, she is willing to undertake those risks. CONCLUSIONS OF LAW 1. Whether Joe Powell, Lucy Powell or Anthony Powell are dependants of Ernest T. Powell. The question of whether the children of Ernest T. Powell are dependents is a fairly straight forward question to determine. The analysis is guided by the dependency provisions of Iowa Code section 85.31, 85.42, 85.43 and 85.44 (1991). These provisions provide the frame work for determining whether a person is a dependent for the purposes of worker's compensation benefits. Dependency, according to the Iowa Supreme Court has a broader meaning than just the dictionary meaning of dependency. Murphy v. Franklin County, 145 N.W.2d 465, 468 (Iowa 1966). In Murphy, the Court found that a showing of actual dependency does not require proof that, without decedent's contributions, claimant would have lacked the necessaries of life. The test is whether the decedent's contributions were relied on by claimant to maintain claimant's accustomed standard of living. Even if the dependent has income from other sources, the individual may be a dependent if the decedent's contributions were made for the ordinary comforts and conveniences which are reasonably appropriate to the parties in their station in life. These contributions should be considered as support and the recipient regarded as a dependent. Lighthill v. McCurry, 122 N.W.2d 468, 471 (Neb. 1963); 2A Larson, Workmen's Compensation Law, section 63.11(b) (1990). A declaratory ruling by Industrial Commissioner Robert E. Landess in Stromley v. Iowa Packaging Corp., File No. 652607, Slip op. (Iowa Ind. Comm'r Dec. Rul. May 2, 1985) is also helpful in determining dependency. The Commissioner noted: . . . a child under the age of eighteen is no longer entitled to benefits upon reaching age eighteen unless he or she was mentally or physically incapacitated from earning at the time of the death or can show in fact dependency. Dependency is established as of the time and under the conditions present at the time of the triggering event-the injury producing death. In order for a person to receive benefits for being dependent they must be able to show that condition of dependency present at the time of the injury Page 8 and continuing in an unbroken chain. A full time student under age twenty-five is aided by a rebuttable presumption of actual dependency. One cannot flitter in and out of the condition of dependency. Just as a spouse cannot reestablish dependency after remarriage by a subsequent dissolution, a dependent child once no longer actually dependent cannot reestablish dependency by deciding to go to school, for example, at age 24 after having been independent and self-supporting for several years. In order to continue to be entitled to benefits either child must show a continuation of actual dependency from the date of the injury. One cannot flow in and out of dependency as the duration of benefits terminates when actual dependency terminates. Once concluded for the purpose of these statutes it cannot be reinstated. In the case at hand, Joe Powell was not a dependent at the time of his father's death. First, he was age 28 at the time of his father's death. Therefore, Joe Powell is not entitled to any presumption that he was a dependent of Powell at the time of Powell's death. Second, there is no evidence in the record to support Joe Powell's claim of dependency. He was fully employed at the time his father died, though he was on long-term medical leave from the Federal Corrections Institution (FCI) in Lexington, Kentucky. During his leave, Joe Powell received his full wages. Joe Powell returned to full-time employment with FCI and remains employed with that employer. Finally, the motion for partial summary judgment resolved the issue of Joe Powell's dependency and is not subject to reversal by another deputy. Lucy Powell and Anthony Powell were dependents of Powell at the time of his death. However, their dependency status has not continued because they have both reached the age of majority. There is no evidence in the record that shows that these individuals are full time students or are incapacitated. Consequently, Lucy Powell and Anthony Powell are no longer dependents of Powell. 2. Whether a full commutation is in the best interest of the claimant. The primary focus of this dispute is whether the commutation proposed by the claimant is in her best interest. Claimant contends that the expenditure of funds for medical services, the purchase of a new car, the purchase of a new home, the expense of moving, the payment of attorney fees, the creation of an estate and investment in a managed fund are all good reasons to commute her death benefits to a present value. Defendants urge that claimant does not have the ability to manage a large lump sum payment of cash that is intended to supply her with benefits for the rest of her life. Page 9 Iowa Code section 85.45 (1991) provides that a commutation may be ordered when the commutation is shown to be in the best interests of the person or persons entitled to the compensation. Diamond v. The Parsons Co., 129 N.W.2d 608, 616 (1964). The factors relied on in determining if a commutation is in the claimant's best interests include: 1. The claimant's age, education, mental and physical condition, and actual life expectancy; 2. The claimant's family circumstances, living arrangements, and responsibilities to dependents; 3. The claimant's financial condition, including all sources of income, debts, living expenses; 4. The reasonableness of claimant's plans for the commuted funds; 5. Claimant's ability to manage the funds or arrange for someone else to manage them. Dameron v. Neumann Bros., Inc., 339 N.W.2d 160, 164 (Iowa 1983). Ultimately, the analysis that is employed in the decision whether to allow a commutation uses as its fundamental touchstone the best interests of the claimant. Within that context, a benefit-detriment analysis is employed, balancing the above recited factors with the claimant's preference and the benefits to the claimant of receiving a lump sum payment against the potential detriments that would result if the claimant invested unwisely, spent foolishly, or otherwise wasted the fund, to the point where the fund no longer provided the wage substitute intended by the workers' compensation law. Dameron, 339 N.W.2d at 164-65. The Division does not act an unyielding conservator of claimant's property and disregards the claimant's desires and reasonable plans for the use of the commuted funds just because success in the future is not assured. Diamond, 129 N.W.2d at 617; Dameron, 339 N.W.2d at 163-64. The Division has consistently followed the rationale in these cases and has used a reasonableness test to approve or disapprove commutations. Paulsen v. Central States Power, LTD, II Iowa Industrial Commissioner Report 304 (App. 1982); Finn v. Gee Grading and Excavating, Inc., II Iowa Industrial Commissioner Report 152, 153 (App. 1981); Smith v. Fegles Power Systems, Inc., IV Iowa Industrial Commissioner Report 338, 339 (App. 1984); In this instance, claimant proposes to use the commuted funds to purchase medical services, a house, a car, and shares in a mutual fund. Additionally, claimant seeks to pay her attorney and establish an estate for her heirs. The vast portion of this award will be invested in a mutual fund that is by it terms highly speculative and contemplates a loss of not only income but principal as well. Claimant does not understand how the Fund works or the fact that it is highly speculative. Claimant did not know, for example, that the Fund lost value between 1989 and 1990. Claimant explained that reading the material in the prospectus was difficult for her, but if someone explained how the Fund worked, she could understand it. Claimant had not looked at any other mutual funds before she decided to Page 10 invest in the Fund. Claimant has been advised by a financial advisor who is selling its own product. The financial advisor told claimant that investing in this Fund would be a better investment than purchasing IBM because the investment would be more diverse and thereby subject the investment to less market risk and price fluctuation. This explanation presumes that the quality of the investments are equivalent. However, comparing the purchase of this Fund to a purchase of IBM stock is an invalid comparison. While a single investment in IBM is subject to market risk and price fluctuation because the investment lacks diversity, the investment is not considered a high risk investment because IBM has not been rated as a B grade investment. The Fund the claimant proposes to use has 80 percent of the principal of the Fund invested in B grade investments, unrated investments or lower grade investments. According to both Standard & Poor's rating service and Moody's rating service, this results in a high risk investment that can net high returns with a substantial risk to income and principal. Claimant's testimony shows that she does not understand the nature of this risk. Claimant does not regularly follow the market the Fund invests in. She would have to rely on Waddell & Reed for guidance in making the decision to move her money fast enough to avoid a precipitous fall in value. There is insufficient evidence in the record to show that Waddell & Reed have undertaken this responsibility. If claimant invests in this Fund, she will be at the mercy of the market. The information in the prospectus supports this conclusion. Based on the September 1990 prospectus, if claimant invests in this Fund, she would purchase shares in a Fund which has three percent of its assets invested in bankrupt companies. Twenty-nine per cent of the Fund is invested in B grade investment vehicles. Fourteen percent of the Fund is invested in unrated investments. The Fund managers indicate that the Fund will not do well during periods of recession. The Fund has lost significant value between 1989 and 1990. Claimant also understands that she will be receiving a net monthly payment that is less than she is currently receiving now. Claimant's net payment will be reduced further because the monthly income from this Fund is taxable to her. While claimant is a good money manager in that she has few debts, in making decisions regarding this Fund, claimant has demonstrated that she has no understanding of the risk she will be taking on by investing in this Fund. Claimant currently has no source of income other than wages from occasional labor and the weekly workers compensation check. Over the course of a year, claimant will receive approximately 7.25 percent less income as a result of the investment in the Fund. There is no evidence in the record that Claimant's investment will approximate her current monthly payment. Based on all the evidence adduced at the time of Page 11 hearing, the undersigned cannot conclude that this investment is in the best interest of the claimant. As a result, the full commutation must be denied. Additionally, the claimant sought a commutation for the purpose of establishing an estate. While the Supreme Court has not addressed this issue directly, it has observed that a ground for denying a commutation exists where the request for a commutation is for the purpose of leaving an estate. Dameron, 339 N.W.2d at 166. The primary reason for denying the commutation is grounded in the risky investment the claimant has proposed. However, this additional ground exists for denying the commutation as well. 3. Whether claimant is entitled to a partial commutation. In the alternative, claimant contends that she is entitled to a partial commutation totalling $61,740.81. Claimant proposes to use these funds to purchase the following items: ITEM COST Car $5,000.00 Home in Kentucky 25,000.00 Medical Services 2,000.00 Attorney Fees 29,740.81 TOTAL: $61,740.81 Defendants contend that claimant has not demonstrated that she will be able to maintain her proposed asset purchases and that she will have an income shortfall since, the weekly payments will end before claimant is entitled to Social Security benefits. The law applicable to full commutations is equally applicable to partial commutations and will be incorporated here as if fully set out. Partial or full commutations have been granted in the past for a variety of things. Snow v. Earl May Seed and Nursery Co., 1 Iowa Industrial Commissioner Decisions 1078, 1081 (Arb. 1985)(Living expenses and medical services, full commutation granted); Baldwin v. Carter-Waters Corporation, II Iowa Industrial Commissioner Report 16 18 (Arb. 1981)(Commutation for payment of attorney fees is proper); Larson v. Haag Drug, 1 Iowa Industrial Commissioner Report 201, 202 (Arb. 1980)(Window repair and medical bills, partial commutation granted); Davis v. McAtee Tire Co., 34 Iowa Industrial Commissioner Biennial Report 83, 84 (Arb. 1979)(Begin a pest control business, partial commutation granted). The evidence is clear that claimant has sufficient ability to manage money so that she can wisely purchase a car, a home, medical services and pay her attorney. Claimant has demonstrated that she has sufficient skills in managing money so as not to dissipate the lump sum payment before the proposed purchases are accomplished. Claimant has no Page 12 dependents at this point and is only responsible for providing for her welfare. Claimant has been employed in the past and intends to return to the competitive labor market once her medical problems are resolved. Defendants contention that the commutation is unreasonable because it will create a shortfall between the time that claimant's last payment is made and the time that Social Security benefits will begin is without merit. Claimant is aware that she will have a gap in her income and she is willing to undertake that risk in order to maximize her ability to live where she wants to live and resolve current medical problems to enable her to return to the competitive labor market. Moreover , if the defendants' argument were taken to the extreme no partial commutation would ever be granted because there is a potential that there would always be a gap in income coverage between the time the weekly benefits end and the time Social Security benefits begin, particularly for younger workers. Defendants second argument relates to claimant's current lack of employment and the accompanying lack of income from any other source other than worker's compensation. This argument will also not carry the day. Claimant has worked in the past when her health allowed her to do so. She has indicated she will work again once her medical problems have resolved. It would be unreasonable to deny claimant the opportunity to purchase medical services that would enable her to return to gainful employment simply because she is unemployed now. Since the Division is not to act as an "unyielding conservator" in overseeing claimant's expenditures, and these purchases would enable the claimant to return to full time employment in a region of the country where most of her family is located, with reliable transportation, the proposed expenditures are not unreasonable and the partial commutation will be granted. order THEREFORE, it is ordered: 1. That claimant's request for a full commutation is denied. 2. Claimant's request for a partial commutation in the amount of $61,760.00 is granted. 2. The costs of this action shall be assessed to defendants pursuant to rule 343 IAC 4.33. Signed and filed this ____ day of March, 1992. ________________________________ ELIZABETH A. NELSON DEPUTY INDUSTRIAL COMMISSIONER Copies To: Page 13 Ms Lorraine J May Attorney at Law 4th Floor Equitable Building Des Moines Iowa 50309 Mr Lawrence Bihlmeyer Attorney at Law 429 Quincy Street PO Box 8274 Rapid City South Dakota 57709 Mr Charles E Cutler Attorney at Law 729 Insurance Exchange Building Des Moines Iowa 50309 5-3303 Filed March 20, 1992 ELIZABETH A. NELSON before the iowa industrial commissioner ____________________________________________________________ : SALLY ANN POWELL, Surviving : Spouse of Ernest Thomas : File No. 904855 Powell, and LUCY ANNA POWELL : and ANTHONY EUGENE POWELL : A M E N D E D Minor Children of Ernest : Thomas Powell, : A N D : Claimant, : S U B S T I T U T E D : vs. : D E C I S I O N : K & B TRANSPORTATION, INC., : O N : Employer, : C O M M U T A T I O N : and : A N D : CIGNA INSURANCE COMPANIES, : P A R T I A L : Insurance Carrier, : C O M M U T A T I O N Defendants. : ______________________________: : JOE POWELL, : : Claimant--Intervenor, : ___________________________________________________________ 5-3303 Claimant, seeking a full commutation, did not show that the proposed use of the funds was in her best interest. Claimant proposed to invest the majority of the funds from the commutation in a mutual fund that invested in high risk, high yield securities. Three percent of the fund's holdings were in bankruptcy. The claimant did not understand how the fund worked or that the fund anticipated that any investor could withstand the significant risk of loss of principal and income associated with the fund. Consequently, the commutation was not approved. 5-3303 Claimant seeking a partial commutation for payment of medical services, attorney fees, purchase of home and purchase of a car was reasonable. Claimant planned to move to Kentucky and had investigated the housing market and job market. Claimant testified that she would return to the labor market as soon as her medical problems were resolved. before the iowa industrial commissioner ____________________________________________________________ : OTTO SCHNEIDER, : : Claimant, : : vs. : File Nos. 904873, : 923601 & 923602 PIEPER, INC., : : A P P E A L Employer, : : D E C I S I O N and : : CIGNA INSURANCE 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 February 21, 1991 is affirmed and is adopted as the final agency action in this case. Defendants shall pay the costs of the appeal, including the preparation of the hearing transcript. Signed and filed this ____ day of November, 1991. ________________________________ BYRON K. ORTON INDUSTRIAL COMMISSIONER Copies To: Mr. James P. Hoffman Attorney at Law Middle Road Box 1087 Keokuk, Iowa 52632-1087 Mr. Craig A. Levien Ms. Vicki L. Seeck Attorneys at Law 600 Union Arcade Bldg. 111 East Third St. Davenport, Iowa 52801 9998 Filed November 20, 1991 BYRON K. ORTON LPW before the iowa industrial commissioner ____________________________________________________________ : OTTO SCHNEIDER, : : Claimant, : : vs. : File Nos. 904873, : 923601 & 923602 PIEPER, INC., : : A P P E A L Employer, : : D E C I S I O N and : : CIGNA INSURANCE COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ 9998 Summary affirmance of deputy's decision filed February 21, 1991. Page 1 before the iowa industrial commissioner ____________________________________________________________ : OTTO SCHNEIDER, : : Claimant, : : vs. : File Nos. 904873, : 923601 & 923602 PIEPER, INC., : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : CIGNA INSURANCE COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ statement of the case This is a proceeding in arbitration brought by Otto Schneider, claimant, against Pieper, Inc., employer (hereinafter referred to as Pieper), and Cigna Insurance Company, insurance carrier, defendants, for workers' compen sation benefits as a result of alleged injuries on December 1, 1988, December 14, 1988 and August 14, 1989. On October 10, 1990, a hearing was held on claimant's petition and the matter was considered fully submitted at the close of this hearing. The parties have submitted a prehearing report of con tested issues and stipulations which was approved and accepted as a part of the record of this case at the time of hearing. Oral testimony and written exhibits were received during the hearing from the parties. The exhibits offered into the evidence are listed in the prehearing report. According to the prehearing report, the parties have stipulated to the following matters: 1. An employee-employer relationship existed between claimant and Pieper at the time of the alleged injuries. 2. If defendants are liable for the alleged injury of December 14, 1988, claimant is entitled to temporary total disability or healing period benefits from December 14, 1988 through January 17, 1989. 3. If any of the injuries are found to have caused permanent disability, the type of disability is an indus trial disability to the body as a whole. 4. Claimant's rate of weekly compensation in the event of an award of weekly benefits from this proceeding shall be $100.85 for the alleged December 1988 injuries and $112.14 Page 2 for the August 1989 alleged injury (using the commissioner's rate booklet and the stipulations in the prehearing report). issues The parties submitted the following issues for determi nation in this proceeding: I. Whether claimant received an injury arising out of and in the course of employment; and, II. The extent of claimant's entitlement to disabil ity benefits. findings of fact Having heard the testimony and considered all the evi dence, the deputy industrial commissioner finds as follows: A credibility finding is necessary to this decision as defendants place claimant's credibility at issue during cross-examination as to the nature and extent of the injury and disability. From his demeanor while testifying, claimant is found credible. Claimant worked for Pieper as a welder/fabricator from July 1983 until his termination in September 1989 after reporting back to work following the work injury to restricted duty. Pieper is a farming corporation. Claimant's employment at Pieper was rather informal. Claimant admitted that he regularly worked less than 40 hours a week. Claimant's supervisors at Pieper testified that they wanted him to work more hours but claimant only worked on average 26 hours a week in the six months prior to the work injury. Pieper's management stated at hearing that claimant's failure to appear for less than 40 hours was tolerated because claimant was a very good welder. The evidence fails to show anything in particular hap pened on or about December 1, 1988 and no findings with reference to this date will be made. On or about December 14, 1988, claimant injured his low back while hitching up a power generator to a pickup truck. This injury arose out of and in the course of his employment at Pieper. Claimant said that his back felt like it exploded. Claimant was treated by Keith W. Riggins, M.D., an orthopedic surgeon, who authorized 10 days off work and prescribed rest and medication. Dr. Riggins had previously diagnosed a prior existing condition of claimant's low back termed "transitional verte bra following a back strain incident in December 1986." Claimant was off work at that time for approximately 10 days. Following recovery from this incident, Dr. Riggins stated that, although claimant had not suffered any perma nent partial impairment from the injury, claimant would experience episodes of back strain in the future with bend ing and lifting. He suggested that claimant refrain from lifting over 20 pounds at the time. Page 3 Claimant testified that following his recovery from the December 14, 1988 injury, claimant returned to work and, after two weeks, he resumed full duty as a welder. Claimant stated that he had no problems until his next injury in August of 1989. Claimant injured his low back again on August 14, 1989, while fabricating metal doors to be used on a small dam on a Pieper farm. This injury also arose out of and in the course of his employment at Pieper. There is some confusion as to when this injury actually occurred but August appears to be the time when it most likely occurred. Claimant was again treated by Dr. Riggins who took claimant off work and diagnosed a bulging disc at the L4-5 level of claimant's lower spine. Dr. Riggins has opined that claimant reached maximum healing from this injury on September 18, 1989, at which time he released claimant to return to work. Dr. Riggins also stated at that time that claimant was very sus ceptible to recurrences of episodes of low back sprain. Claimant was then only released to work with restrictions against repeated bending and lifting by Dr. Riggins. Claimant reported back to work to Pieper who subsequently terminated claimant. Claimant has not worked since and stated that he has made an unsuccessful attempt to look for replacement employment in the area of his residence since that time. After this matter was set for hearing, defendants made an attempt to return claimant to work at Pieper. Claimant was sent for a capabilities evaluation to the University of Iowa Hospitals and Clinics, Spinal Diagnostic Center. According to this Center, claimant should not lift over 50 pounds and no more than 25 pounds on a repeated basis. They also stated that claimant needs to lose weight and would benefit from a physical conditioning program. The Center stated that claimant appeared motivated during the evalua tion and a clinical psychologist stated that claimant's future horizons appear pretty limited. On August 8, 1990, claimant was offered a job at Pieper within the restrictions imposed by the Center. Claimant responded by personally appearing at Pieper's farm stating that he would be willing to return to work but would prefer higher wages and a job other than a welder. A second letter was sent to claimant on August 14, 1990, offering the same pay of $5.00 an hour and the same job as a welder. This employment was to begin on September 1, 1990, but claimant was to respond by August 20, 1990, if the offer is being accepted. Claimant failed to respond within the time frame set by Pieper. On August 30, 1990, in a letter dated August 13, 1990, claimant mailed a letter accepting the job in writing. When claimant called after mailing this letter, he was informed by Pieper that the job had already been filled by another person. Claimant disputes the fact that this job was given to someone else and points to recent advertising by Pieper with Job Services for a welder. In cross-examina tion, Pieper manager, Michael Pieper, testified that this advertising was old. However, he appeared to recant this testimony during cross-examination when he was informed that Page 4 Job Service's representatives would be testifying at hear ing. It appears to the undersigned that, unfortunately, neither Pieper nor claimant were committed to a return to work. Claimant certainly missed the stated deadlines but Pieper was all-too-quick to retract the employment offer. Claimant's lack of timely response was not that unusual or unexpected given claimant's lackadaisical attitude over the years toward his Pieper employment which, prior to the last work injury, had been tolerated by Pieper. Obviously, Pieper was reluctant to return a disabled claimant to work despite his welding skills. The timing of the offer immedi ately prior to the hearing also is a factor in the decision that this offer may have been only posturing for the hear ing. Claimant, in turn, was also reluctant to return to a job that would risk future injury such as in welding. He also did not appear highly motivated to return to work at Pieper. It could not be found that the work injury of December 14, 1988, resulted in permanent partial impairment or loss of earning capacity. Claimant had returned to work to full duty without loss of earnings prior to the injury of August 14, 1989. As a result of the work injury of August 14, 1989, claimant has suffered a significant permanent partial impairment to the body as a whole. Claimant is permanently restricted from activity consisting of no lifting over 50 pounds and no repetitive lifting over 25 pounds with limited forward bending and stooping. Claimant's primary treating physician, Dr. Riggins, in his deposition opined that claimant has some extent of permanent partial impairment as a result of this injury but that he could not give the exact percentage without another examination. Whether or not this subsequent examination was actually performed is not avail able in the record of this case. However, this is an indus trial disability case and the exact impairment rating is not critical to an award of benefits for a loss of earning capacity. As a result of the work injury of August 14, 1989, claimant has suffered a 40 percent loss of earning capacity. Although claimant's medical condition before the work injury was not excellent, he had no ascertainable functional impairments or loss of earning capacity. Claimant was able to fully perform physical tasks involving his welding and fabricating duties. The fact that claimant was initially terminated by Pieper is evidence that claimant has a signif icant disability in his ability to perform the job as a welder at Pieper. Regardless of the job offer by Pieper shortly before the hearing, claimant remains unemployed with significant restrictions against lifting as a result of the work injury. Claimant is a high school graduate with sig nificant welding skills that can only be used in light duty work. However, claimant is not highly motivated to return to full time employment. This lack of motivation is consis tent with his past employment history at Pieper. Pieper, on the other hand, has not made a strong effort to return claimant to work in some sort of meaningful capacity. Page 5 conclusions of law I. Claimant has the burden of proving by a prepon derance of the evidence that claimant received an injury which arose out of and in the course of employment. The words "out of" refer to the cause or source of the injury. The words "in the course of" refer to the time and place and circumstances of the injury. See Cedar Rapids Community Sch. v. Cady, 278 N.W.2d 298 (Iowa 1979); Crowe v. DeSoto Consol. Sch. Dist., 246 Iowa 402, 68 N.W.2d 63 (1955). An employer takes an employee subject to any active or dormant health impairments, and a work connected injury which more than slightly aggravates the condition is considered to be a personal injury. Ziegler v. United States Gypsum Co., 252 Iowa 613, 620, 106 N.W.2d 591 (1960) and cases cited therein. In the case sub judice, despite the indication that the work injuries were disputed in the prehearing report, defen dants offered little evidence to suggest there is a factual basis for their position. II. Claimant must establish by a preponderance of the evidence the extent of weekly benefits for permanent dis ability to which claimant is entitled. As the claimant has shown that the work injury was a cause of a permanent physi cal impairment or limitation upon activity involving the body as a whole, the degree of permanent disability must be measured pursuant to Iowa Code section 85.34(2)(u). However, unlike scheduled member disabilities, the degree of disability under this provision is not measured solely by the extent of a functional impairment or loss of use of a body member. A disability to the body as a whole or an "industrial disability" is a loss of earning capacity resulting from the work injury. Diederich v. Tri-City Railway Co., 219 Iowa 587, 593, 258 N.W. 899 (1935). A physical impairment or restriction on work activity may or may not result in such a loss of earning capacity. The extent to which a work injury and a resulting medical condi tion has resulted in an industrial disability is determined from examination of several factors. These factors include the employee's medical condition prior to the injury, imme diately after the injury and presently; the situs of the injury, its severity and the length of healing period; the work experience of the employee prior to the injury, after the injury and potential for rehabilitation; the employee's qualifications intellectually, emotionally and physically; earnings prior and subsequent to the injury; age; education; motivation; functional impairment as a result of the injury; and inability because of the injury to engage in employment for which the employee is fitted. Loss of earnings caused by a job transfer for reasons related to the injury is also relevant. Olson v. Goodyear Service Stores, 255 Iowa 1112, 1121, 125 N.W.2d 251, 257 (1963). See Peterson v. Truck Haven Cafe, Inc., (Appeal Decision, February 28, l985). In the case sub judice, it was found that claimant had suffered a 40 percent loss of earning capacity as a result of the work injury. Based upon such a finding, claimant is entitled as a matter of law to 200 weeks of permanent par Page 6 tial disability benefits under Iowa Code section 85.34(2)(u) which is 40 percent of 500 weeks, the maximum allowable for an injury to the body as a whole in that subsection. As claimant has established entitlement to permanent partial disability, claimant is entitled to weekly benefits for healing period under Iowa Code section 85.34 from the date of injury until claimant returns to work; until claimant is medically capable of returning to substantially similar work to the work he was performing at the time of injury; or until it is indicated that significant improve ment from the injury is not anticipated, whichever occurs first. With reference to the December 14, 1988 injury, the parties stipulated as to the extent of temporary total dis ability benefits and this will be awarded. With reference to the August 14, 1989 injury, it was found that claimant was off work until he reached maximum healing on September 19, 1989. Healing benefits will be awarded accordingly. Page 7 order 1. Defendants shall pay to claimant two hundred (200) weeks of permanent partial disability benefits at the rate of one hundred twelve and 14/l00 dollars ($112.14) per week from September 19, 1989. 2. Defendants shall pay to claimant temporary total disability benefits from December 14, 1988 through January 17, 1989, at the rate of one hundred and 85/l00 dollars ($100.85) per week and healing period benefits from August 14, 1989 through September 18, 1989, at the rate of one hun dred twelve and 14/l00 dollars ($112.14) per week. 3. Defendants shall pay accrued weekly benefits in a lump sum and shall receive credit against this award for all benefits previously paid. 4. Defendants shall pay interest on weekly benefits awarded herein as set forth in Iowa Code section 85.30. 5. Defendants shall pay the cost of this action pur suant to rule 343 IAC 4.33, including reimbursement to claimant for any filing fees paid in this matter. 6. Defendants shall file activity reports on the pay ment of this award as requested by this agency pursuant to rule 343 IAC 3.1. Signed and filed this ____ day of February, 1991. ______________________________ LARRY P. WALSHIRE DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr. James P. Hoffman Attorney at Law Middle Rd Box 1087 Keokuk IA 52632 Mr. Craig A. Levien Attorney at Law 600 Union Arcade Bldg Davenport IA 52801 5-1803 Filed February 21, 1991 LARRY P. WALSHIRE before the iowa industrial commissioner ____________________________________________________________ : OTTO SCHNEIDER, : : Claimant, : : vs. : File Nos. 904873, : 923601 & 923602 PIEPER, INC., : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : CIGNA INSURANCE COMPANY, : : Insurance Carrier, : Defendants. : ___________________________________________________________ 5-1803 Extent of disability benefits.