Page 1 before the iowa industrial commissioner ____________________________________________________________ : RONALD E. YOUNG, : : Claimant, : : vs. : : File No. 905177 ARMOUR FOOD COMPANY, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : FRED S. JAMES & CO., : : Insurance Carrier, : Defendants. : ____________________________________________________________ statement of the case This is a proceeding in arbitration upon claimant's petition filed March 29, 1989. Claimant alleges that he sustained an injury arising out of and in the course of his employment with Armour Food Company on January 11, 1989. He now seeks benefits under the Iowa Workers' Compensation Act. Hearing on the arbitration petition was held in Mason City, Iowa, on July 9, 1990. The record consists of claimant's exhibits 1 through 17, defendants' exhibits L and M, and the testimony of claimant, Carl Brant and Joyce Kelly. issues Pursuant to the prehearing report submitted at the arbitration hearing, the parties have stipulated: that an employment relationship existed between claimant and defendant at the time of the alleged injury; that if claimant has sustained permanent disability related to the alleged injury, it is an industrial disability to the body as a whole; that the appropriate rate of weekly compensation is $278.15 (based upon stipulated gross weekly earnings of $437.00, a marital status of single and entitlement to two exemptions); that the providers of medical services and supplies would testify that fees were reasonable and incurred for reasonable and necessary medical treatment and defendants offer no contrary evidence; that prior to hearing, defendants paid claimant salary of $2,240.00 (of which $1,600.00 constituted a back pay award in a grievance proceeding) and sick pay/disability income of $768.00, for all of which credit is sought. Issues presented for resolution include: whether claimant sustained an injury arising out of and in the course of his employment on January 11, 1989; whether the Page 2 alleged injury caused temporary or permanent disability, the extent thereof, and the commencement date of the latter; the extent of claimant's entitlement to medical benefits; whether defendants are entitled to credit for the back pay award of $1,600.00. Defendants also asserted the defense of lack of authorization with respect to claimant's entitlement to medical benefits under Iowa Code section 85.27. However, the undersigned ruled at hearing that defendants are not entitled to raise this defense while denying liability on the claim. See, Mason v. Thermo-Gas, file numbers 816116 and 819978 (App. Decn., July 28, 1989) and numerous other agency decisions on that issue. findings of fact The undersigned deputy, having heard the testimony and considered all of the evidence, finds: This case involves two, arguably three claimed injuries. Claimant, just short of his fiftieth birthday at the time of hearing and possessed of a high school diploma, has worked for a total of 31 years in the meat packing industry, essentially his entire career post-high school. He has worked for defendant on two occasions, most recently beginning August 31, 1987. In approximately October, 1988, claimant developed problems with his hands and sought treatment for bilateral carpal tunnel syndrome. A company physicians' assistant, Diane S. Frakes, P.A., noted on January 10, 1989 that claimant was in for recheck of his bilateral early carpal tunnel syndrome, but, due to what Ms. Frakes perceived as claimant's uncooperative attitude, he was released to the care of company physician Kenneth B. Washburn, M.D. Ms. Frakes took him off duty effective the next day and claimant was to see Dr. Washburn on January 11. Dr. Washburn's notes of January 11, 1989 reflect that claimant's hands were unchanged, but that he complained of leg and back problems with a feeling of numbness in the right leg for the last two weeks which allegedly came on when claimant twisted his back while pushing around pork bellies. Dr. Washburn's impression was of low back pain, rule out herniated nucleus polyposus [sic]. X-rays showed considerable sclerosis of the lumbosacral junction on the right and Dr. Washburn resolved to initially treat claimant with bed rest. Claimant was then taken off work. A radiographic report of January 11, 1989 apparently signed by radiologist Martin Schularick, M.D., and Charles B. Wilmarth, M.D., showed vacuum disc phenomenon and narrowing involving the L4-5 and L5-S1 discs with degenerative lipping of the L4 and L5 vertebrae. Sclerosis of the inferior L4 and both L5 end plates were seen as related to the degenerative disc disease. There were no compression fractures, but sclerotic degenerative changes at L4 through S1. On January 20, Dr. Washburn found claimant ready for return to duty with definite improvement in the hands. Page 3 Claimant was given a return to work slip with a 20-pound limitation on lifting for the back problem and with no more than 10 pounds overhead lifting. However, claimant developed an aggravation of his back pain while climbing the steps at work on that date bringing the return to work slip to the nurse or personnel office. Claimant attributes his subsequent lost work to this incident. He called Dr. Washburn that night to complain of this incident, following which Dr. Washburn noted in his chart that defendant was phoned to give claimant a restriction of no stair climbing and that claimant would appear on the following Monday to see if he could return to duty. On the next Monday, claimant saw physicians' assistant Frakes. Ms. Frakes, in accordance with Dr. Washburn's instructions, took claimant off duty and arranged for him to be seen in a week. Claimant was next seen on January 30 by Ms. Frakes, still complaining of numbness in the left leg and inability to climb stairs. He was able to use his hands better. Ms. Frakes, apparently delegated authority by Dr. Washburn, continued claimant off duty. Claimant was next seen by Dr. Washburn on February 7, following which a CT scan was ordered. Dr. Wilmarth reported on February 10 that claimant had degenerative disc with phantom disc signs at L4-5 and L5-S1 with considerable sclerosis in the adjacent end plates at L4-5. His impression was of degenerative discs at L4-5 and L5-S1 with a moderate central herniation at L4-5. Thereafter, Dr. Washburn noted his belief that claimant had "a fairly significant back problem." Surgical repair was considered and claimant was referred to Adrian J. Wolbrink, M.D., for consultation. On February 24, Dr. Washburn reported that Dr. Wolbrink felt there was no acute need for surgery. Claimant was deemed ready for physical capacities evaluation and work hardening. He was at that time released to "continue on present duty restrictions." Since claimant was off work, the meaning of this release is unclear. Dr. Wolbrink also made chart notes on February 24, 1989. Claimant gave history of problems with the back and right leg (Dr. Wolbrink pointed out that other medical records mention the left leg, but that claimant insisted his problem had always been with the right leg) which had begun developing in the previous October and had become progressively worse. Claimant also gave history of having back problems some 15 years ago, as had been the history given Dr. Washburn (claimant also testified that about 15 years before he had been off work for six months due to a back problem). Dr. Wolbrink's impression was of advanced degenerative disease with recent nerve root irritation. However, there was a poor prognosis for surgery due to the marked degenerative changes. Claimant was to follow Dr. Washburn's exercise program. On March 3, 1989, Dr. Washburn noted that claimant was not a candidate for work hardening because he had been unable to come off zero base line in one week of effort; Page 4 every single thing that claimant did was claimed to aggravate leg pain. On March 16, 1989, Dr. Washburn reported that claimant's nerve conduction studies were improved and it was "really just borderline for diagnosis of carpal tunnel, at the present time." Claimant stated his back condition was unchanged. No further reports from Dr. Washburn appear of record, although claimant testified that after discontinuing treatment in March, Dr. Washburn saw him again for evaluation in July, 1989. All treatment ended at that point, and claimant believed that his back had completely recovered and he was able to return to work. However, apparently due to company rules or the requirements of a collective bargaining agreement, claimant was unable to return to work without an additional medical evaluation at the University of Iowa. Dr. Washburn noted a reluctance to opine as to whether any causal nexus existed between claimant's work and his back symptomatology. In particular, he used the follow (ambivalent) language: Of course, Mr. Young did say and I reiterated to him that he felt that this was aggravated by a job that he did at work. Therefore, my history is that the underlying arthritic problem was probably job related. On March 14, 1989, Dr. Wolbrink wrote that claimant had severe degenerative arthritis of the spine, but that "there also has been a significant aggravation of his problem by the lifting which is required of him at his work." Claimant was also seen for evaluation by Robert L. Borgman, M.D. Dr. Borgman wrote on March 16, 1989 that claimant had degenerative disease of the lumbosacral spine and that his problem was "work aggravated." His job of lifting and turning continuously during the day was a type of motion that "would almost certainly aggravate his degenerative problem." Claimant was also seen for evaluation by Peter D. Wirtz, M.D. Dr. Wirtz wrote on August 24, 1989 that claimant's back pain had resolved and his hand had become asymptomatic. Examination of the hand showed full flexion and extension, normal sensation and negative Tinel's sign. X-rays of the lumbar spine showed narrowing, calcification and spurring at L4-5 and narrowing at L5-S1. Dr. Wirtz's diagnosis was of lumbar disc degeneration. Claimant no longer had symptoms or evidence of neurological conditions in the lower back and leg. He had no symptoms in the hand and was capable of functioning within his physiological dexterity and strength. Claimant had no permanent impairment based on his carpal tunnel syndrome symptoms. Dr. Wirtz further wrote: The back condition is a natural degenerate Page 5 condition and was aggravated on a temporary basis in the fall of 1988. This aggravation has resolved. The lumbar disc degeneration would have occurred regardless of work activities. Lumbar disc degeneration as present two levels without neurologic would relate to a 5% impairment of the body as a whole. On December 6, 1989, Dr. Wolbrink wrote that claimant had significant degenerative disease in the back and that there "may have been a temporary aggrevation [sic] from his work situation." It was "possible" that an episode of pushing around pork bellies would aggravate the underlying condition, but the doctor would anticipate that this would improve within a couple of weeks and that the remainder of disability and permanent impairment would be due to the underlying degenerative disc disease. Claimant was finally seen and evaluated at the University of Iowa Hospitals and Clinics, Spine Diagnostic and Treatment Center, on March 8, 1990. Claimant underwent a functional capacity evaluation and underwent AP and lateral x-rays of the lumbosacral spine which showed degenerative changes throughout the lumbosacral spine, particularly at L4-5 and L5-S1. There were no obvious destructive bony or soft tissue lesions present and the examination was essentially unremarkable. Based on the functional capacity evaluation, claimant was seen as capable of lifting on a one-time basis 100 pounds, bent knee lift 125 pounds, squat lift 110 pounds, and power lift 120 pounds (that is to say, not more than four times per hour). If lifting was to be repetitive more than four times per hour, each of those weights would have to be cut in half. Claimant could reach and lift above his shoulder level up to 50 pounds and could rotate his head, operate foot controls and drive with no restrictions. It was estimated that claimant might be able to sit at any one time up to a period of two continuous hours, stand up to three continuous hours and walk up to three continuous hours. Thereafter, claimant returned to work on the basis of this evaluation. He works at his same job, performs all required duties of the job and has not sought medical care since returning to work. Due to a general increase, he is earning $.25 per hour more than was the case in January, 1989. Unpaid medical bills include the February, 1989 CT scan, totalling $480.00 and a total of $719.52 owed to Drs. Washburn and Wolbrink. Claimant also alleges in excess of 100 miles of unreimbursed mileage for medical treatment and evaluation. Claimant also filed a grievance. He received a total of $1,600.00 as a back pay award which he concedes was intended as reimbursement for earnings (claimant also received job insurance benefits totalling $4,706.00 from Page 6 July 29, 1989 through January 20, 1990). conclusions of law Claimant has the burden of proving by a preponderance of the evidence that he received an injury on January 11, 1989 which arose out of and in the course of his employment. McDowell v. Town of Clarksville, 241 N.W.2d 904 (Iowa 1976); Musselman v. Central Telephone Co., 261 Iowa 352, 154 N.W.2d 128 (1967). The injury must both arise out of and be in the course of the employment. Crowe v. DeSoto Consol. Sch. Dist., 246 Iowa 402, 68 N.W.2d 63 (1955) and cases cited at pp. 405-406 of the Iowa Report. See also Sister Mary Benedict v. St. Mary's Corp., 255 Iowa 847, 124 N.W.2d 548 (l963) and Hansen v. State of Iowa, 249 Iowa 1147, 91 N.W.2d 555 (1958). The words "out of" refer to the cause or source of the injury. Crowe v. DeSoto Consol. Sch. Dist., 246 Iowa 402, 68 N.W.2d 63 (1955). "An injury occurs in the course of the employment when it is within the period of employment at a place the employee may reasonably be, and while he is doing his work or something incidental to it." Cedar Rapids Comm. Sch. Dist. v. Cady, 278 N.W.2d 298 (Iowa 1979), McClure v. Union et al. Counties, 188 N.W.2d 283 (Iowa 1971); Musselman v. Central Telephone Co., 261 Iowa 352, 154 N.W.2d 128 (1967). The supreme court of Iowa in Almquist v. Shenandoah Nurseries, 218 Iowa 724, 731-32, 254 N.W. 35, 38 (1934) discussed the definition of personal injury in workers' compensation cases as follows: While a personal injury does not include an occupational disease under the Workmen's Compensation Act, yet an injury to the health may be a personal injury. [Citations omitted.] Likewise a personal injury includes a disease resulting from an injury....The result of changes in the human body incident to the general processes of nature do not amount to a personal injury. This must follow, even though such natural change may come about because the life has been devoted to labor and hard work. Such result of those natural changes does not constitute a personal injury even though the same brings about impairment of health or the total or partial incapacity of the functions of the human body. .... A personal injury, contemplated by the Workmen's Compensation Law, obviously means an injury to the body, the impairment of health, or a disease, not excluded by the act, which comes about, not through the natural building up and tearing down of the human body, but because of a traumatic or other hurt or damage to the health or body of an employee. [Citations Page 7 omitted.] The injury to the human body here contemplated must be something, whether an accident or not, that acts extraneously to the natural processes of nature, and thereby impairs the health, overcomes, injures, interrupts, or destroys some function of the body, or otherwise damages or injures a part or all of the body. The claimant has the burden of proving by a preponderance of the evidence that the injury of January 11, 1989 is causally related to the disability on which he now bases his claim. Bodish v. Fischer, Inc., 257 Iowa 516, 133 N.W.2d 867 (1965). Lindahl v. L. O. Boggs, 236 Iowa 296, 18 N.W.2d 607 (1945). A possibility is insufficient; a probability is necessary. Burt v. John Deere Waterloo Tractor Works, 247 Iowa 691, 73 N.W.2d 732 (1955). The question of causal connection is essentially within the domain of expert testimony. Bradshaw v. Iowa Methodist Hospital, 251 Iowa 375, 101 N.W.2d 167 (1960). However, expert medical evidence must be considered with all other evidence introduced bearing on the causal connection. Burt, 247 Iowa 691, 73 N.W.2d 732. The opinion of experts need not be couched in definite, positive or unequivocal language. Sondag v. Ferris Hardware, 220 N.W.2d 903 (Iowa 1974). However, the expert opinion may be accepted or rejected, in whole or in part, by the trier of fact. Id. at 907. Further, the weight to be given to such an opinion is for the finder of fact, and that may be affected by the completeness of the premise given the expert and other surrounding circumstances. Bodish, 257 Iowa 516, 133 N.W.2d 867. See also Musselman v. Central Telephone Co., 261 Iowa 352, 154 N.W.2d 128 (1967). While a claimant is not entitled to compensation for the results of a preexisting injury or disease, the mere existence at the time of a subsequent injury is not a defense. Rose v. John Deere Ottumwa Works, 247 Iowa 900, 908, 76 N.W.2d 756, 760-61 (1956). If the claimant had a preexisting condition or disability that is aggravated, accelerated, worsened or lighted up so that it results in disability, claimant is entitled to recover. Nicks v. Davenport Produce Co., 254 Iowa 130, 115 N.W.2d 812, 815 (1962). The medical opinion in this case is unanimously to the effect that claimant had preexisting degenerative disease which was aggravated by the demands of his employment. However, it appears that there actually may have been two injuries, one cumulative in nature and one traumatic while climbing the stairs with a return to work slip. There can be little question but that the cumulative injury arose out of and in the course of employment, since this aggravation of the preexisting condition obviously occurred while claimant was performing his job duties at the place or places authorized by defendant. A closer question is presented with respect to the contribution of the traumatic incident when claimant was climbing stairs on January 20, 1989. However, it is the view of the Page 8 undersigned that this incident arose out of and in the course of employment regardless of whether it be deemed a second and independent traumatic injury, or merely a sequela of the original cumulative injury. An injury to an employee is not normally deemed to have occurred in the course of employment while the employee is traveling to and from the regular work place. Otto v. Indep. School Dist., 237 Iowa 991, 23 N.W.2d 915 (1946). However, the employee is covered while on a special errand on behalf of the employer. Pohler v. T. W. Snow Constr. Co., 239 Iowa 1018, 33 N.W.2d 416 (1948). It has been held that a claimant on vacation when he went to the job site to pick up his check was in the course of employment when injured at that time. Gomez v. E. C. Ernst Midwest, Thirty-fourth Biennial Report of the Industrial Commissioner 118 (1979). Surely an individual at the employment location to furnish the employer with a return to work slip is acting in the course of employment if an individual present only for his own benefit to pick up a check is so engaged. The stair climbing incident might also be considered a sequela of the original injury. Where a work injury has been established, the employer is liable for all consequences that naturally and proximately flow from the original accident. Oldham v. Scofield & Welch, 222 Iowa 764, 266 N.W. 480 (1936). In either case, the result is the same. For convenience, the stair climbing incident will be deemed a sequela of the original injury, and the additional temporary disability resulting therefrom attributable to the original cumulative injury. See, West v. Quaker Oats, 2-1 Iowa Industrial Commissioner Decisions 475 (1984), wherein a bathtub incident failed to break the chain of causation where claimant was in the tub because of the original injury. It is claimant's burden to show that he has sustained permanent disability. Although he clearly has a permanent impairment, he must establish that the impairment was caused by the work injury as opposed to his preexisting condition. As has been seen, Dr. Wirtz opined that claimant's back condition was aggravated "on a temporary basis" and had resolved. Dr. Wolbrink noted that claimant had significant degenerative disease in the back and that there may have been a temporary aggravation, but that this would improve and that the remainder of disability and permanent impairment would be due to the underlying disease. Claimant himself believes that his back has completely recovered. There is no countervailing medical evidence to establish permanent disability causally related to the work injury. It is therefore held that claimant has established a work injury that caused temporary total disability, but that he has failed to establish entitlement to permanent disability benefits. Claimant takes the position that the fact of an injury alone has an impact upon claimant's potential future employability even absent permanent impairment. Even postulating that this result might obtain under some facts, this writer does not find that the period of temporary disability resulting here against the backdrop of a Page 9 degenerative condition is significant enough in the absence of impairment to create industrial disability. Pursuant to Iowa Code sections 85.32 and 85.33, in cases of incapacity extending beyond fourteen days, compensation begins on the date of injury and is payable until the employee has returned to work or is medically capable of returning to substantially similar employment, whichever first occurs. In cases of cumulative injury, the injury date occurs when claimant is no longer able to work due to pain or physical inability. McKeever Custom Cabinets v. Smith, 379 N.W.2d 368 (Iowa 1985). Claimant was taken off work on medical advice effective January 11, 1989. This is the injury date. Although claimant was thereafter released to return to work with limitations in the same month, the subsequent stair climbing incident prevented that return. Although treatment was discontinued in March, 1989, and claimant himself felt completely recovered at least in July, 1989, no medical release for a return to work had been issued. Claimant's view that he was able to return to work is not a professional opinion. This office has commonly disregarded the opinions of various injured workers who felt unable to return to work despite medical release as unreliable; there appears to be no reason to take a different position in the case of a motivated employee who believed himself able to return to work, but had not been formally released by his physician, even where the physician discontinued treatment (it would be speculative to necessarily equate discontinuance of treatment with the end of temporary total disability, since an individual may in a given case be expected to continue recovering in the absence of active treatment). Especially should this be true where claimant was not allowed to return to work without undergoing additional medical evaluation. Claimant was eventually returned to work following an evaluation at the University of Iowa Hospitals and Clinics on March 8, 1990. It is held that this evaluation established claimant's ability to return to substantially similar employment and ended his period of disability. Therefore, temporary total disability benefits shall be awarded from January 11, 1989 through March 8, 1990, a total of 60 weeks, 2 days. The parties stipulated to a rate of weekly compensation of $278.15, based upon gross weekly earnings of $457.00, a marital status of single and entitlement to two exemptions. A review of Guide to Iowa Workers' Compensation Claim Handling published by this office and effective July 1, 1988 shows that this rate is correct. Based upon the stipulation of the parties that the provider of medical services and supplies would testify that fees and treatment were reasonable and incurred for reasonable and necessary treatment of the work injury without the introduction of contrary evidence, it is held that those expenses were causally connected to the work injury and compensable under Iowa Code section 85.27. Lack of authorization is not a valid defense since defendants denied liability. Barnhart v. MAQ, Inc., I Iowa Industrial Page 10 Commissioner Report 16 (1981). Therefore, defendants shall pay the medical expenses totalling $719.52 and $480.00 set forth in exhibits 15 and 16. Claimant's testimony as to mileage is of insufficient specificity to support an award. The remaining issue is whether claimant's back pay award of $1,600.00 should be a credit to defendants as it has undisputably been paid. Defendants specified that they do not claim credit under Iowa Code section 85.38 (by its provisions, that section would not be applicable anyway), but because disallowance would create a double recovery. Claimant cites the case of Hiserote Homes, Inc. v. Riedemann, 277 N.W.2d 911 (Iowa 1979) as supportive of the view that a back pay award should not be offset against temporary total disability benefits. However, that case is of no avail, being even contrary to that position. Hiserote Homes was a case in which payment of back pay pursuant to a National Labor Relations Board order was not set off by the Iowa Department of Job Service in an unemployment insurance case because it did not constitute "wages" within the meaning of a statute specific to Job Service. The court reversed, finding that back pay awards by the NLRB were intended to be compensatory and that it was essentially redundant to unemployment compensation because each took the place of wages not earned due to that claimant's termination. A contrary rule was held not rational. However, it was further held that recoupment was not available to the unemployment trust fund through creation of an overpayment solely due to a statute specific to the issue of job payment benefits and as earlier interpreted in Galvin v. Iowa Beef Processors, Inc., 261 N.W.2d 701 (Iowa 1978). Hiserote Homes further ruled that the account of the employer in that case would not be charged with benefits erroneously paid to claimant, thus leaving the unemployment trust fund without a remedy. While this result may have been mandated by specific s disability benefits at the stipulated rate of two hundred seventy-eight and 15/100 dollars ($278.15) per week from January 11, 1989 through March 8, 1990, a total of sixty point two eight six (60.286) weeks. Defendants shall be entitled to credit for sick pay/ disability income totalling seven hundred sixty-eight and 00/100 dollars ($768.00) and salary, including a back pay award, totalling two thousand two hundred forty and 00/100 dollars ($2,240.00). Defendants shall pay medical benefits totalling seven hundred nineteen and 52/100 dollars ($719.52) to North Iowa Medical Center and four hundred eighty and 00/100 dollars ($480.00) to St. Joseph Mercy Hospital. As all weekly benefits have accrued, they shall be paid in a lump sum with interest pursuant to Iowa Code section 85.30. Interest does not accrue on medical benefits. Costs of this action shall be assessed to defendants pursuant to Division of Industrial Services Rule 343-4.33. Defendants shall file claim activity reports as requested by this agency pursuant to Division of Industrial Services Rule 343-3.1. Signed and filed this ______ day of ____________, 1990. ______________________________ DAVID RASEY DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr. Robert W. Pratt Attorney at Law 1913 Ingersoll Avenue Des Moines, Iowa 50309 Mr. Marvin E. Duckworth Attorney at Law Suite 111, Terrace Center Page 12 2700 Grand Avenue Des Moines, Iowa 50312 Page 1 1101, 1104, 1106, 1402.30 1703, 1801 Filed August 15, 1990 DAVID RASEY before the iowa industrial commissioner ____________________________________________________________ : RONALD E. YOUNG, : : Claimant, : : vs. : : File No. 905177 ARMOUR FOOD COMPANY, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : FRED S. JAMES & CO., : : Insurance Carrier, : Defendants. : ____________________________________________________________ 1101, 1104, 1106, 1402.30 Claimant sustained a cumulative injury establishing a temporary aggravation of a preexisting back condition. Upon being returned to work with restrictions, claimant suffered a further incident while climbing steps at the place of employment to furnish defendant with the return to work slip, causing further temporary disability. The second incident was held to be a sequela of the original injury, but it was further noted that it would be held to have arisen out of and in the course of employment even if considered a second, traumatic injury. 1801 When claimant's physician discontinued active treatment, he did not formally release claimant to return to work, even though claimant personally believed he had completely recovered. He was not allowed to return to work by the employer for many months, until he had undergone further evaluation at a back clinic. When that evaluation resulted in a release, it was held that this ended claimant's period of temporary total disability. It was noted that many decisions have disregarded the nonprofessional opinion of various claimant who believed themselves unable to return to work in the face of medical release, and that no different result should obtain where a nonprofessional claimant believed himself recovered prior to actually being released. Page 2 1703 Defendants were allowed credit for a back pay award resulting from a grievance procedure which related to the same time period in which claimant was temporarily disabled due to the work injury because disallowance of the credit would result in an inequitable double recovery. BEFORE THE IOWA INDUSTRIAL COMMISSIONER ____________________________________________________________ : MICHAEL DORR, : : File No. 905182 Claimant, : : vs. : D E C I S I O N : DIAMOND TRANSPORTATION, INC., : F I X I N G : Employer, : A T T O R N E Y : and : F E E S : INTERNATIONAL INSURANCE, : : Insurance Carrier, : Defendants. : ___________________________________________________________ STATEMENT OF THE CASE This is a proceeding to fix attorney fees for Peter M. Soble, the former attorney for Michael Dorr. The case was heard at Davenport, Iowa, on March 25, 1992. The evidence consists of exhibits 1, 2, 3, 4, B and C. The record also consists of testimony from Peter Soble and Michael Dorr. 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. On or about March 28, 1989, Michael Dorr contacted Peter Soble in order to obtain legal guidance in connection with the claim against Dorr's employer under the Iowa workers' compensation laws. At that time, Dorr was off work and receiving weekly benefits and payment of his medical expenses. Dorr entered into a contingent fee agreement with Soble (Ex. 2) which provided for attorney fees in an amount equal to 33 1/3 percent of the net amount recovered and all costs and expenses. The fee agreement also provides that the attorney shall communicate all offers to the client and that if the attorney recommends an offer be accepted, and the client fails to accept the offer, the attorney shall be entitled to a fee based upon the offer. The contingent fee also provides that if the client should terminate the agreement prior to trial, an offer or settlement the fee shall be calculated at the rate of $150 per hour. The fee agreement is a contingent fee agreement which provides that if the case is lost the client has no obligation to pay fees to the attorney. On April 11, 1989, former Deputy Industrial Commissioner Deborah A. Dubik entered an order approving a lien for Attorney Soble in an amount not to exceed 33 1/3 percent of all benefits which become payable Page 2 to the claimant as a result of Soble's efforts. Over the months following establishment of the attorney-client relationship, Soble opened a file and through the efforts of himself and his office staff filed a petition for benefits with this agency, collected and assembled medical records and reports and otherwise gathered information and processed the case in preparation for an eventual hearing or settlement. On at least one occasion, Dorr contacted Soble's office regarding benefits which had not been received in a timely manner. Soble's office contacted the parties responsible for paying the benefits and Dorr received those benefits. It cannot be determined whether or not those benefits would have been paid if Soble had taken no action. When Dorr initially contacted Soble, the adjusters handling the case apparently considered Dorr to be in a healing period status. Thereafter, weekly benefits continued to be paid and eventually the authorized physician provided a rating of permanent impairment. Soble arranged an independent medical evaluation which provided a rating of 25 percent in comparison to the 15 percent rating provided by the employer's physician. The adjusters handling the case for the employer then paid the claimant permanent partial disability benefits representing a 20 percent permanent partial disability without entering into any type of formal settlement documents or settlement agreement. Based upon agency expertise and experience, it is found that in those cases where liability has been at least tacitly acknowledged and weekly benefits paid it is quite common for permanent partial disability compensation to be paid voluntarily in an amount equal to the impairment rating provided by the authorized physician without any action being taken by counsel for the claimant. It is quite commonly done even if the claimant is unrepresented. It is found that in this case it is probable that the claimant would have been paid benefits for a 15 percent permanent partial disability even if he were unrepresented. It is further found that the additional 5 percent or 25 weeks of benefits which was voluntarily paid was attributable to the efforts arranged by Soble in obtaining the independent medical examination. In this case, the amount of communication between Soble and Dorr was quite limited, so limited in fact that the attorney-client relationship deteriorated resulting in Dorr obtaining other counsel. Soble had been in contact with the adjusters for the case and had obtained a settlement offer which would have provided Dorr, under a special case type of settlement, with a total amount which would have been equivalent to a 30 percent permanent partial disability and $2,500 for future medical expenses. The settlement would have provided what is commonly referred to as a closed file and Dorr would not have had any entitlement to future medical or review-reopening. It cannot be absolutely determined from the record but it appears as though the Page 3 settlement offer was obtained shortly prior to the time Dorr terminated Soble's services and that the offer was not communicated by Soble to Dorr prior to the time that Soble received notice that his services were terminated. The 30 percent previously referred to is actually an additional 10 percent over and above the 20 percent which was being voluntarily paid. At the hearing it was acknowledged that there was no dispute with regard to the entitlement of Soble to recover expenses in the amount of $753.33. Soble was holding weekly benefits payable to the claimant as security for payment of his fees. At the undersigned's direction, those three checks in the amount of $434.76 each, representing six weeks of benefits, were negotiated by claimant and Soble and delivered to claimant's new counsel for holding in trust. The undisputed out-of-pocket expenses were directed to be paid immediately by claimant's new counsel to Soble from those funds being held in trust with the remainder to be held pending this decision. CONCLUSIONS OF LAW Section 86.39 of the Code of Iowa makes all fees for services rendered in a workers' compensation proceeding subject to approval of this agency. Factors to be considered have been defined in Kirkpatrick v. Patterson, 172 N.W.2d 259, 261 (Iowa 1969) and disciplinary rule 2-106, Iowa Code of Professional Responsibility For Lawyers. It is generally considered that where a claimant who is being voluntarily paid benefits consult an attorney that the attorney is entitled to charge a fee based upon the time spent advising the client regarding the propriety of what is being paid but may not charge a contingent fee based upon amounts which were voluntarily being paid. When an attorney seeks fees the burden of proof rests on the attorney to show, by a preponderance of the evidence, what amounts were paid as a result of the attorney's action and would not have otherwise been paid voluntarily except for the services provided by the attorney. It is recognized that contingent fee contracts make legal services available to persons who would otherwise be unable to pay an attorney by the hour and such contracts are enforceable. Wunschel Law Firm, P.C. v. Clabaugh, 291 N.W.2d 331, 333 (Iowa 1980). Any such contract must be clear, concise and understood by both parties. Carmichael v. The Iowa State Highway Commission, 219 N.W.2d 658, 665 (Iowa 1974). The contract which is contrary to public policy will not be enforced. Rowen v. LeMars Mutual Insurance Company, 282 N.W.2d 639, 650 (Iowa 1979). In the final analysis, Soble is entitled to recover a reasonable fee for the services which he performed with such fee to be determined, as closely as may be accomplished, in accordance with the written fee agreement. There was no dispute with regard to the reimbursement of $753.33 for expenses. It has further been found by the undersigned that Soble is entitled to a fee equal to one-third of 25 weeks of Page 4 benefits representing the additional 5 percent permanent partial disability which was paid voluntarily as a result of the rating obtained through the independent medical examination. Twenty-five weeks at the rate of $17.38 per week computes to $5,434.50. One-third of that amount is $1,811.50. Soble is clearly entitled to recover that additional one-third based upon the additional 25 weeks of benefits which were paid through his services. The more difficult question is the one dealing with the offer of a special case settlement which Soble had obtained. As shown by exhibit 1, Soble has expended approximately 80 hours of time dealing with this case. It is certainly not reasonable for him to not be compensated in some manner for his time and efforts, as well as the efforts of his office staff, simply because the offer which was obtained was for a special case settlement. Such a settlement is generally subject to approval only when the employer's liability is subject to a bonafide dispute. It is noted that in the answer in the agency file the employer admitted that the claimant was injured in the manner alleged in the petition. It appears as though the only real dispute was the extent of permanent disability. If that be the fact, as it appears from the file, a special case settlement under Iowa Code section 85.35 could not be properly approved by this agency. Settlements are valid only if approved by the industrial commissioner under the provisions of section 86.13 and 85.35 of the Iowa Code. From the agency file and other information presented in this case, there appears to be a very real possibility that the settlement negotiated by Soble might not have been approved. A special case settlement requires the claimant to waive valuable future rights. It is quite difficult to place a value on the right to review-reopen and the right to future medical care which are waived by a special case settlement. Nevertheless, it certainly remains possible that in the future this file may perhaps be settled by a special case settlement which provides no more than the amount negotiated by Soble. The case could also possibly go to hearing and receive a recovery which is no more than the 20 percent permanent partial disability which has voluntarily been paid in this case. The value of such an outcome may, however, not necessarily be any less than the value of the special case settlement negotiate by Soble depending upon the value placed upon the future benefits which would have been waived under the special case settlement. In the event that Dorr should require back surgery, the additional 50 weeks of benefits and $2,500 negotiated by Soble would probably amount to less than the actual medical expenses and additional weekly benefits Dorr would be entitled to receive even if current counsel were to obtain nothing further in the way of a settlement. It cannot, of course, be determined at this time whether or not Dorr will require surgery in the future. A client in a workers' compensation case is not liable Page 5 for a contingency attorney fee on an offer for a settlement under section 85.35 which the client rejects contrary to the attorney's recommendation if there is a reasonable question regarding whether the settlement could properly be approved by the industrial commissioner. The fee should be based on the value of the settlement not necessarily its dollar amount if future rights are waived. It is therefore concluded that since the offer arranged by Soble was contingent upon approval by the industrial commissioner and, also, that the value of the offer was not necessarily any greater than the value of future benefit rights which the claimant currently has but would have waived through accepting the offer, that Soble is not entitled to recover any additional fee based upon that offer. Soble's fee in this matter is therefore fixed at the sum of $1,811.50 in addition to the expenses in the amount of $753.33 which have been previously reimbursed. According to the undersigned computations, Dorr's current counsel received the sum of $1,304.28 to be held in trust. Of that amount, $753.33 has been previously expended to reimburse Soble for expenses. The remaining balance of $550.95 should now be dispersed to Soble in payment of fees. Once that amount has been expended, Soble will still be owed the sum of $1,260.55 in fees. Soble should be granted a lien against any further amounts paid to or on behalf of the claimant in this case to secure payment of those fees. Since those fees are due based upon amounts previously paid, any additional amounts payable to the claimant shall first be paid to Soble prior to actually distributing those amounts to Dorr or Dorr's current counsel. It is noted that in the agency file Dorr apparently sent a letter seeking to terminate the lien which had previously been approved by this agency. The purpose of a lien is to provide security for payment of fees. Once a lien has been approved it cannot be revoked at the mere request of the claimant. If such were the case, the lien would be meaningless as any claimant could simply revoke the lien, immediately prior to payment of an award or settlement and thereby cause the attorney to no longer be able to look to the proceeds of the recovery as a source of payment of fees. Once a lien is approved by this agency, that lien remains in full force and effect until it is in some way vacated or modified by an order from this agency. ORDER IT IS THEREFORE ORDERED that the entire amount of fees and expenses entitled to be recovered by Peter M. Soble in association with the services provided by him in this case are seven hundred fifty-three and 33/100 dollars ($753.33) in expenses and one thousand eight hundred eleven and 50/100 dollars ($1,811.50) in fees. The total amount is therefore two thousand five hundred sixty-four and 83/100 dollars ($2,564.83). Soble has previously been reimbursed for the expenses and the remaining amount due and payable to Soble for fees is the sum of one thousand eight hundred eleven and Page 6 50/100 dollars ($1,811.50). IT IS FURTHER ORDERED that the entire remaining sum held in trust of claimant's current attorney, Harry W. Dahl, be paid by Attorney Dahl to Attorney Soble forthwith in the amount of five hundred fifty and 95/100 dollars ($550.95), more or less. IT IS FURTHER ORDERED that the lien previously approved in this case is modified and that Soble shall have a first lien upon all amounts to be paid or payable to the claimant in this case in the sum of one thousand two hundred sixty and 55/100 dollars ($1,260.55) as security for payment of the unpaid balance of the attorney fees awarded in this decision. IT IS FURTHER ORDERED that the costs of this action are assessed against the claimant, Michael Dorr, pursuant to rule 343 IAC 4.33. Signed and filed this ____ day of September, 1992. ________________________________ MICHAEL G. TRIER DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr Peter M Soble Attorney at Law 505 Plaza Office Bldg Rock Island IL 61201 Mr Harry W Dahl Attorney at Law 974 73rd St Ste 16 Des Moines IA 50312 1001.10 Filed September 3, 1992 Michael G. Trier BEFORE THE IOWA INDUSTRIAL COMMISSIONER ____________________________________________________________ : MICHAEL DORR, : : File No. 905182 Claimant, : : vs. : D E C I S I O N : DIAMOND TRANSPORTATION, INC., : F I X I N G : Employer, : A T T O R N E Y : and : F E E S : INTERNATIONAL INSURANCE, : : Insurance Carrier, : Defendants. : ___________________________________________________________ 1001.10 Attorney awarded fees based upon one-third of the additional amount of permanent partial disability which was paid voluntarily as a result of the higher impairment rating obtained through an independent medical evaluation arranged by claimant's counsel. No fees were awarded based upon an offered special case settlement because the file reflected a serious question regarding whether such a settlement could be properly be approved and there was no showing that the value of the amounts to be paid under the special case settlement which had been offered was any greater than the value of the claimant's already existing right to review-reopening and future medical expenses. The case was one which involved a concern that future back surgery might be required. The offer was never communicated to the client as the client terminated the attorney's services at the same time the offer was received by the attorney. A client in a workers' compensation case is not liable for a contingency attorney fee on an offer for a settlement under section 85.35 which the client rejects, contrary to the attorney's recommendation, if there is a reasonable question regarding whether the settlement could properly be approved by the industrial commissioner. Further, the fee should be based on the value of the settlement, rather than its full dollar amount if future rights currently held are to be waived. 1402.20; 1402.30; 2203 2206 Filed September 13, 1991 MICHAEL G. TRIER before the iowa industrial commissioner ____________________________________________________________ : WINFRED E. COOP, : : Claimant, : File No. 905191 : vs. : A R B I T R A T I O N : JOHN DEERE DES MOINES WORKS, : D E C I S I O N : Employer, : Self-Insured, : Defendant. : ____________________________________________________________ 1402.20; 1402.30; 2203; 2206 The claimant alleged that he had developed occupational asthma, but asserted the claim as one of injury due to exposure during a specified period of time. The record inarguably showed that he had been previously diagnosed with asthma and that it had previously been considered to be occupational asthma. The claimant went off work, but was disabled by the condition of hypertension, rather than asthma. The claim was therefore denied. It was discussed that, if the claimant did in fact have occupational asthma as a result of prolonged exposures, his condition was most likely an occupational disease compensable under chapter 85A of The Code. Since occupational disease was not on the hearing assignment order and was not urged or argued by either party, no ruling was made regarding whether or not the claimant's asthma was an occupational disease since he was still employed by the employer and the record failed to show any concise or clear significant reduction in his earnings. Since he was not disabled by the condition, any claim under chapter 85A would have been premature. BEFORE THE IOWA INDUSTRIAL COMMISSIONER ____________________________________________________________ WINFRED E. COOP, Claimant, File No. 905191 vs. R E M A N D JOHN DEERE DES MOINES WORKS, D E C I S I O N Employer, Self-Insured, Defendant. ____________________________________________________________ This matter is on remand from the district court. The district court remanded this case "to address whether the oil mist and other workplace inhalants were a cause of Coop's disability;" "to determine whether the oil mist aggravated Coop's health problems during the period in question;" and "to state the reasons" for the conclusion. ISSUE The issue to be resolved is whether claimant has proved that workplace exposure to oil mist or other inhalants from February 1987 to May 1987 was a proximate cause, a substantial or aggravating factor of his underlying asthma. findings of fact Winfred E. Coop is a 50-year-old employee of the John Deere Des Moines Works. The medical records in evidence show that there is no question regarding his diagnosis of having asthma. Coop himself listed asthma on health questionnaires as far back as 1982 (exhibit 81, pages 19 and 20). At that time, he was performing the job of a paint stripper (exhibit 88). The plant medical records contain notes which indicate that on December 5, 1982, the results of pulmonary function tests were discussed with Coop, but the records do not reveal what those test results showed (exhibit 81, page 9). The fact that they were discussed indicates that they showed some abnormality. Pulmonary function tests were repeated in December 1984 and showed moderate to severe progression of his chronic obstructive pulmonary disease to have occurred since the previous tests were conducted two years earlier. It was recommended that he be placed in a different job (exhibit 81, pages 12, 25 and 26). Coop was taken off work until he could be retested or seen by the company physician (exhibit 81, page 26). The physician, Santiago Garcia, M.D., characterized the condition as being non-occupational. It is noted that claimant had been prescribed Theodur, Page 2 a common asthma medication, by Manmohanlal Kwatra, M.D., in February of 1984 and on April 27, 1984. The doctor's notes of November 30, 1984 indicate that claimant was given an alupent inhaler, another common asthma medication (exhibit 81, page 40). The following note, the date of which cannot be determined other than for it being in 1984, indicates that the assessment was made that Coop had bronchial asthma, which was allergic in nature, and that he was taken off work one week (exhibit 81, page 41). Dr. Kwatra referred Coop to allergist A. Y. Al-Shash, M.D. Dr. Al-Shash confirmed the diagnosis of asthma and in a report stated, "He is working at John Deere in an area where he is exposed to quite a few chemicals and he said that he will feel worse in the work environment. Recently, he was moved to another area where he is feeling better." Allergy testing for the most common inhalants and foods showed Coop to be reactive to house dust, dogs, cats, feathers, ragweed and grasses. Coop was advised to attempt to avoid fumes and obtain a cleaner area at his workplace (exhibit 81, pages 100-103). When released to return to work effective January 4, 1985, it was recommended that Coop wear a cotton face mask (exhibit 81, page 12). On February 28, 1985, it was noted that he should not be placed in jobs which required him to wear a respirator in view of his chronic obstructive pulmonary disease (exhibit 81, page 13). Pulmonary function tests performed December 5, 1985 showed Coop's asthma to be under good control with medications. Claimant was laid off from July 13, 1986 through February 9, 1987. Claimant testified that he was feeling very good, having no shortness of breath and had occasional respiratory problems when exposed to heat or extreme cold in the time period from August 18, 1986 until the return to work on February 9, 1987. (Transcript, page 36) He stated he had no work restrictions when he returned to work. Claimant testified that he was exposed to oil mist while operating gear cutting machines in Department 32. He stated that his breathing problems were worse in November 1987 than before he started the gear cutting job. (Tr., p. 62) Gary Higbee, safety director for the employer, testified that tests were performed to determine the level of oil mist in Department 32. He admitted that the tests showed that workers are exposed to oil mist but described the exposure level as "miniscule." (Tr., p. 247) Coop visited the employer's nurse four times between February 25, 1987 and May 22, 1987. Three of the visits related to blood pressure and the fourth was for a laceration of a finger. The notes of May 22, 1987 indicates that he "Denies pain, SOB" (shortness of breath). (Ex. 81, p. 14) Coop worked without any particular incidents until May 22, 1987 when he gave complaints of weakness in his arms and legs and was sent to see his own physician. Dr. Kwatra noted that his symptoms were probably secondary to Page 3 hypertension (exhibit 81, page 43). Coop had medical problems relating to hypertension beginning as early as 1980. The May 26, 1987 notes made by Dr. Kwatra do not indicate any particular asthma symptoms. The notes specifically note that Coop denied having any chest discomfort (exhibit 81, page 43). The subsequent treatment notes initially deal with hypertension symptoms. Claimant left work on May 22, 1987 and was released to return to work on November 30, 1987. (Tr., p. 61) It is not until June of 1987 that the notes indicate any asthma symptoms. By July or August, while he was still off work, his asthma symptoms increased and it was recommended that he not go out in heat and humidity (exhibit 81, page 45). Coop remained off work until December 2, 1987 because of hypertension (exhibit 86). The diagnosis on July 22, 1987 (Ex. 81, p. 138) was virtually identical to diagnosis on August 20, 1986 (Ex. 81, p. 129) except the characterization of obesity had changed from "mild to moderate" to "mild." Coop was seen at the University of Iowa Hospitals and Clinics on August 18, 1986 at which time it was suggested by James A. Merchant, M.D., that his asthma was quite possibly occupational asthma (exhibit 81, pages 129 and 130). The notes from a subsequent visit held July 20, 1987 indicate that Coop had been off work since May 22, 1987 for hypertension (exhibit 81, pages 138 and 139). In a report dated August 26, 1988, University of Iowa Hospitals physician Laurence Fuortes, M.D., reported that Coop has adult onset asthma with a strong work-related component. He at that time declined to express an opinion regarding the cause of the asthma (exhibit 81, page 158). On April 13, 1990, Dr. Fuortes wrote: Mr. Coop's clinical history and presentation is most consistent with a recent onset of occupational asthma syndrome. It is my assessment that Mr. Coop's respiratory health problems had been quite specific to the work place and work place irritant exposures. Mr. Coop's asthma symptoms date back to 1984, manifest by nonproductive cough, occasional wheezing, and chest tightness associated with exercise, cold air, and work place exposures. His respiratory symptoms appear reliably to decrease with absence from the work place and decreased exposure to respiratory irritants. Mr. Coop has had fewer complaints either when out of the work place or when working without exposure to respiratory irritants. It also appears that work place exposures to a variety of respiratory irritants have at the very least, continued to irritate an underlying condition and may well, in fact, been etiological in the development of adult onset asthma. The cutting oils with which Mr. Coop has worked have very probably been a significant factor in his respiratory symptomatology, both because of his history of temporal association and because of our knowledge of epidemiologic association of cutting environmental exposure and respiratory disease. Page 4 (Ex. 81, p. 170) Coop was evaluated by Mark Thoman, M.D. On June 9, 1990 Dr. Thoman wrote: From 1972 to 1987, he worked in several job categories in the plant and was exposed to various chemicals, solvents, petroleum products, and dust. From February 2, 1987 to May 27, 1987 he ran gear cutting machines which involved the use of an oil mist sprayed on the gears being cut. This process resulted in Mr. Coop exposure to smoke and oil fumes in his work environment. .... While working on the gear cutting machines from February 2, 1987 to May 25, 1987 his condition became aggravated due to inhalation of oil mist and smoke from the gear cutting oil.... Winfred Coop was examined on August 18, 1986, at the University of Iowa Hospitals and Clinics. ... No other restrictions or recommendations were made at that time. However, by July 1987, (post exposure to the gear cutting oil) Mr. Coop was advised to restrict his work environment to a "non-irritant exposure area of ..[the] plant.... It is my opinion to a reasonable degree of medical certainty that the oil used in the gear cutting process was a significant factor contributing to the adult onset asthma now suffered by Winfred Coop. (Ex. 81, pp. 220-221) Ronald E. Gots, M.D., reviewed Coop's medical records. He testified that the records reflect that Coop had asthma in 1981. (Defendant's Ex. C, p. 29) He testified that the actual medical records did not corroborate that Coop was having respiratory difficulties between February and May of 1987. (Def. Ex. C, pp. 39-40) He recited that the records indicate that Coop had complaints of respiratory problems during 1987 for the six month period he was out of work. (Def. Ex. C, p. 45) Dr. Gots testified: Q. I think you should continue the analysis with regard to the oil mist exposure in February and May of the '87 period. A. Well, not only is oil mist not a likely cause of asthma based upon what we know about the toxicology of oil mist, but as we look at the next level of questions, that is, the probability that it could have caused this man's asthma, the evidence simply is not there. During the time that he worked in that environment, he didn't have respiratory problems, and the evaluations that he had during that period of time made it quite clear that he was not wheezing and his problems were not asthmatic in nature. His health problems during that period were other kinds of health problems. And I think he was feeling bad during that time, but I don't think he was feeling bad because of the asthma. CONCLUSIONS OF LAW Claimant has the burden of proving by a preponderance of the evidence that he received an injury between February 9, 1987 and May 22, 1987 which arose out of and in the Page 5 course of his employment. McDowell v. Town of Clarksville, 241 N.W.2d 904 (Iowa 1976); Musselman v. Central Telephone Co., 261 Iowa 352, 154 N.W.2d 128 (1967). The injury must both arise out of and be in the course of the employment. Crowe v. DeSoto Consol. Sch. Dist., 246 Iowa 402, 68 N.W.2d 63 (1955) and cases cited at pp. 405-406 of the Iowa Report. See also Sister Mary Benedict v. St. Mary's Corp., 255 Iowa 847, 124 N.W.2d 548 (l963) and Hansen v. State of Iowa, 249 Iowa 1147, 91 N.W.2d 555 (1958). The words "out of" refer to the cause or source of the injury. Crowe, 246 Iowa 402, 68 N.W.2d 63. A determination that an injury "arises out of" the employment contemplates a causal connection between the conditions under which the work was performed and the resulting injury; i.e., the injury followed as a natural incident of the work. Musselman, 261 Iowa 352, 154 N.W.2d 128; Reddick v. Grand Union Tea Co., 230 Iowa 108, 296 N.W. 800 (1941). While a claimant is not entitled to compensation for the results of a preexisting injury or disease, the mere existence at the time of a subsequent injury is not a defense. Rose v. John Deere Ottumwa Works, 247 Iowa 900, 908, 76 N.W.2d 756, 760-61 (1956). If the claimant had a preexisting condition or disability that is aggravated, accelerated, worsened or lighted up so that it results in disability, claimant is entitled to recover. Nicks v. Davenport Produce Co., 254 Iowa 130, 115 N.W.2d 812, 815 (1962). An employee is not entitled to recover for the results of a preexisting injury or disease but can recover for an aggravation thereof which resulted in the disability found to exist. Olson v. Goodyear Service Stores, 255 Iowa 1112, 125 N.W.2d 251 (1963); Yeager v. Firestone Tire & Rubber Co., 253 Iowa 369, 112 N.W.2d 299 (1961); Ziegler v. United States Gypsum Co., 252 Iowa 613, 106 N.W.2d 591 (1960). See also Barz v. Oler, 257 Iowa 508, 133 N.W.2d 704 (1965); Almquist v. Shenandoah Nurseries, 218 Iowa 724, 254 N.W. 35 (1934). The claimant has the burden of proving by a preponderance of the evidence that the injury is a proximate cause of the disability on which the claim is based. A cause is proximate if it is a substantial factor in bringing about the result; it need not be the only cause. A preponderance of the evidence exists when the causal connection is probable rather than merely possible. Blacksmith v. All-American, Inc., 290 N.W.2d 348 (Iowa 1980); Holmes v. Bruce Motor Freight, Inc., 215 N.W.2d 296 (Iowa 1974). A claimant need not prove that a work place incident is the sole proximate cause of his disability. Langford v. Kellar Excavating & Grading, Inc., 191 N.W.2d 667, 670 (Iowa 1971). The party who would suffer loss if an issue were not established has the burden of proving that issue by a Page 6 preponderance of the evidence. Iowa R. App. P. 14(f). Claimant must prove that workplace exposure to oil mist or other irritants from February 9, 1987 to May 27, 1987 was a proximate cause, a substantial factor or aggravating factor of his underlying asthma. The opinion of Dr. Thoman is confusing and can be given little weight. Dr. Thoman expresses an opinion that exposure to the oil used in the gear cutting process (February 2, 1987 to May 25, 1987) was a significant factor to the adult onset asthma of claimant. However, Dr. Thoman acknowledges that claimant reacts to irritants outside the work environment. It also appears that claimant was diagnosed as having bronchial asthma as early as December 1984 when claimant was 44 years of age. (Ex. 81, p. 100) It is unclear how Dr. Thoman reached his opinion in light of apparent prior diagnosis and nonwork irritants. Furthermore, Dr. Thoman's opinion is inconsistent with the fact that claimant never complained of respiratory problems from February 2, 1987 to May 22, 1987 and did not complain of respiratory problems until a month and a half after claimant left work in May 1987. Dr. Fuortes' opinion offers little to resolve the issue. While he gives the opinion that the cutting oil exposure is a probable significant factor in claimant's respiratory symptomatology, he clearly did not relate the exposure to the time period in question. It is difficult to tell whether the workplace exposure Dr. Fuortes relies on for his opinion occurred in the time period in question or was a result of exposure before, after and during the period in question. Like Dr. Thoman, Dr. Fuortes' opinion is inconsistent with the fact that claimant had no complaints of respiratory problems during the time period in question. The opinions of Drs. Thoman and Fuortes are directly contradicted by the opinion of Dr. Gots. Dr. Gots' opinion is consistent with other facts of this case. He takes into account claimant's failure to make complaints of respiratory problems. It was his opinion that exposure to oil mist did not cause claimant's asthma. Claimant had no work restrictions and had no symptoms of shortness of breath, dizziness or chest tightening when he returned to work on February 9, 1987. When he left work and sought medical care on May 27, 1987 he was treated for high blood pressure. The recurrence of asthma was noted somewhat later and appears to be attributed to heat and humidity. Claimant's reason for seeking medical treatment in May 1987 was for high blood pressure. The level of exposure to oil mists as indicated by Mr. Higbee's testimony appears to be low. Claimant has not proved that workplace exposure to oil mists or other inhalants from February 9, 1987 to May 22, 1987 was a proximate cause of his underlying asthma. Claimant has not proved that the exposure in this time period was a substantial factor in causing his underlying asthma. Claimant has not proved that the exposure in this time period was an aggravation of his underlying asthma. Page 7 Claimant has not proved entitlement to benefits under Iowa Code chapter 85. Page 8 ORDER THEREFORE, it is ordered: That claimant shall take nothing from these proceedings. That claimant shall pay the costs of this matter including the transcription of the hearing. Signed and filed this ____ day of August, 1993. ________________________________ BYRON K. ORTON INDUSTRIAL COMMISSIONER Copies To: Mr. Gregory T. Racette Attorney at Law 2700 Grand Ave., Ste 111 Des Moines, Iowa 50312 Mr. Roger L. Ferris Attorney at Law 1900 Hub Tower 699 Walnut Des Moines, Iowa 50309 1402.30 Filed August 20, 1993 Byron K. Orton BEFORE THE IOWA INDUSTRIAL COMMISSIONER ____________________________________________________________ WINFRED E. COOP, Claimant, File No. 905191 vs. R E M A N D JOHN DEERE DES MOINES WORKS, D E C I S I O N Employer, Self-Insured, Defendant. ____________________________________________________________ 1402.30 The claimant alleged that he had developed asthma, but asserted the claim as one of injury due to exposure during a specified period of time. The record showed that he had been previously diagnosed with asthma. The claimant went off work, but was disabled by the condition of hypertension, rather than asthma. Claimant failed to prove that workplace exposure to oil mist in the time period alleged was a proximate cause of his underlying asthma. Claimant failed to prove the exposure was a substantial or aggravating factor of his underlying asthma. The claim was therefore denied. Page 1 before the iowa industrial commissioner ____________________________________________________________ : JAMES YOUNG, : : Claimant, : : vs. : : File No. 905194 HAGER CITY EXPRESS, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : THRESHERMEN'S MUTUAL : INSURANCE CO., : : Insurance Carrier, : Defendants. : ____________________________________________________________ introduction This is a proceeding in arbitration brought by the claimant, James Young, against his employer, Hager City Express, and its alleged insurance carrier, Threshermen's Mutual Insurance Company, to recover benefits under the Iowa Workers' Compensation Act as the result of an injury of July 27, 1988. This matter came on for hearing before the undersigned deputy industrial commissioner at Council Bluffs, Iowa on September 21, 1990. A copy of a first report of injury for the state of Wisconsin was received on January 11, 1990. The record consists of the testimony of Jeff Osky, Marlys Witte, Barbara Bauer, William Schroeder and Mel Wefler as well as of Threshermen's exhibits B, C, and D and Hager City's exhibits 1 through 11. All objections to exhibits are overruled. Both parties filed briefs in this matter. Hager City Express filed its brief October 23, 1990. Threshermen's brief was filed on October 22, 1990. Under the post-hearing order, briefs were to be filed by October 19, 1990. Hence, briefs of both parties were untimely filed. For that reason, Threshermen's objection to Hager City's post-hearing brief and argument is overruled as failure to consider Hager City's brief for lack of timely filing would in equity require that Threshermen's brief also not be considered. Threshermen's also objected to consideration of a supplemental brief and argument filed by Hager City Express. Threshermen's correctly points out that such supplemental brief if considered would permit Hager City to respond to Threshermen's brief while Threshermen's has not been permitted that opportunity relative to Hager City's brief. Page 2 For that reason, the supplemental brief and argument of Hager City will not be considered in this matter. Hager City's proposed remedy that Threshermen's also be permitted to file a supplemental brief and argument is not acceptable as it would result in further delay in the issuance of this decision. issues Pursuant to the prehearing order and the oral stipulations of the parties at hearing, the parties have agreed that claimant did receive an injury which arose out of and in the course of claimant's employment on July 27, 1988 and that such injury has resulted in a period of entitlement to temporary total disability or healing period benefits. The sole issue to be decided at this time is the issue of insurance coverage, specifically, the extent of insurance coverage provided under the insurance policy Threshermen's Mutual Insurance Company issued to the employer Hager City Express; that is, whether the policy provides coverage and benefit payments under the law of all states in which Hager City Express trucks operate or whether benefits under the policy are limited to those benefits payable under Wisconsin workers' compensation law. All other issues have been bifurcated for subsequent hearing. findings of facts The deputy, having heard the testimony and considered the evidence, finds: In 1983, Hager City Leasing Company approached the Hiawatha Insurance Agency through its agent, Jeff Osky, to purchase a policy of workers' compensation insurance coverage. Hiawatha National Bank of Hager City, Wisconsin owns the Hiawatha Insurance Agency. Osky submitted Hager City Leasing Company's application to the Wisconsin insurance risk pool. Osky was familiar with the business of Hager City Leasing Company, which business consisted of leasing Hager City Leasing drivers to other companies for over-the-road hauling, both in and out of Wisconsin. The Hager City Leasing application was Osky's first experience with attempting to secure workers' compensation coverage for an employer needing coverage for out-of-state drivers. It is unclear to the undersigned whether Osky had had prior experience working with the Wisconsin insurance risk pool. The application stated under Certification of Operations, Classification Phraseology, "Truckers short and long haul In and out of state." Under the Statement of the Producer of Record, Osky executed his signature certifying that he had read the Wisconsin rejected risk plan, had explained the provisions of the plan to the applicant and had included in the application all required information the applicant had given him. The risk pool assigned the application to Lumbermen's Insurance Company and Lumbermen's issued Hager City Leasing a policy of workers' compensation insurance effective March Page 3 20, 1984. The declarations page of the Lumbermen's policy issued for the period of March 20, 1984 to March 20, 1985 states, at item 3, that coverage A of this policy applies to the workers' compensation law and occupational disease law of each of the following states--Wisconsin. Osky understood that that declaration statement indicated that Wisconsin workers' compensation law applied to the coverage provided. Osky stated he understood that the item 4 statement of "Truckers short and long haul In and out of state" created additional coverage outside of Wisconsin. In 1987, Lumbermen's withdrew from the assigned risk insurance carriers group. All risks that had been assigned to Lumbermen's were then assigned to Threshermen's Mutual Insurance Company. In 1988, Hager City Leasing Company underwent a material change of ownership and operation such that a new workers' compensation insurance policy needed to be secured. Marlys Witte, with the Hiawatha Insurance Agency, completed the application form necessary to switch coverage from Hager City Leasing to Hager City Express. Witte had written other Wisconsin risk insurance pool applications, but the Hager City Express application was her first experience with a workers' compensation insurance application involving the Wisconsin risk insurance pool. The application with Hager City Express was also her first experience with Wisconsin's limited states endorsement. Witte presently does not understand the Wisconsin limited other states endorsement. She testified that she had gotten different answers from both the risk pool and from Threshermen's when she inquired regarding such, apparently after this controversy arose. In the 1988 application, Witte also used the phraseology "Truckers short and long haul In and out of state" to indicate the coverage classification intended. Witte checked "No" relative to the phrase "Wisconsin limited other states" because Witte believed that, by doing so, no limitations would be placed on where travel could be conducted in Hager City Express's business. Item 3A of the declaration page for the policy of insurance in effect from March 20, 1987 to March 20, 1988 states that part I of the policy applies to the workers' compensation law of the state of Wisconsin. Item 3C states as follows: "Other states insurance: part three of the policy applies to the states, if any, listed here:" No other states are listed. Items 3A and 3C of the workers' compensation policy issued from March 20, 1988 to March 20, 1989 are identical to those in the policy from March 20, 1987 to March 20, 1988. Witte testified regarding her understanding of the declaration page that she felt Wisconsin workers' compensation law applied and that she had no questions as to whether she had secured out-of-state coverage for Hager City Express. Witte had a specific discussion with Threshermen's regarding the code number and the rate for the language "Truckers short and long haul In and out of state" which was utilized by Witte to secure the correct coverage. Barbara Bauer, former co-owner of Hager City Leasing, Page 4 discussed the need for all states coverage with Jeff Osky when applying for coverage for Hager City Leasing. Ms. Bauer understood that she had secured all states workers' compensation coverage for Hager City Leasing. William Schroeder, general manager and sole owner of Hager City Express Company, advised Ms. Witte that he had wanted to continue the Hager City Leasing policy for Hager City Express and to make sure that he had all states coverage for Hager City Express. Schroeder did not personally inspect the declaration page with either the Threshermen's or the Lumbermen's policies. He stated that he had read the top part and the phraseology "Truckers short and long haul In and out of state" and had assumed that his company's needs were met without reading the entire declarations page. Pursuant to the testimony of Mel Wefler, vice-president of workers' compensation underwriting with Threshermen's Mutual Insurance Company and a member of the workers' compensation pool committee for the Wisconsin risk insurance pool, it is not possible to get out of state coverage under the Wisconsin insurance risk pool since the pool applies only to Wisconsin law. The pool is set up for Wisconsin employers and employees and is not designed for non-Wisconsin jurisdiction. At the time of the application, apparently with Threshermen's, Threshermen's only authority was to write benefits for Wisconsin workers' compensation insurance. Threshermen's did not write limited other states coverage for Hager City Express because the application did not seek such. An application for insurance under Wisconsin risk insurance pool is taken at face value as the insurer has no ability to decide whether to take the insured as a risk. conclusions of law As stated above, the sole issue before us is that of whether the policy of insurance in effect between the employer, Hager City Express, and the insurer, Threshermen's Mutual Insurance Company, on July 27, 1988 provided coverage for claims for Iowa benefits and, if the policy does not provide such coverage, whether the policy should be reformed to provide coverage for Iowa and all states benefits. Additionally, the sub-issue has been raised of whether, under conflicts of laws principles, Wisconsin or Iowa law applies in determining the issue of insurance coverage. We shall first consider that issue. We note that Hager City Express did not address this issue in their brief as instructed and therefore gave us no guidance as to its appropriate resolution. Threshermen's has set out the appropriate law in its brief, namely: The law to be applied is the law of the state of the "most significant relationship with respect to the issue in question." Restatement (Second) Conflict of Laws, section 188(3) (1980). Couch, Insurance, section 16.2 (Rev.Ed. 1984) states that the following factors are to be used to determine the state with the "most significant relationship" Page 5 in cases involving contracts of insurance: 1. The place the contract was entered into. 2. The place where the contract was to be performed. 3. The place where the contract was issued and delivered. 4. The place where the insured has its operations. Clearly, when those factors are considered, the state with the most significant relationship to this matter is Wisconsin. The contract was entered into in Wisconsin; the contract was to be performed in Wisconsin; the contract was issued and delivered in Wisconsin; and, the insured's home location for its business operations was Wisconsin. We note, on the other hand, that while the law of Wisconsin is clearly applicable, application of the Wisconsin law does not impact on the outcome in this matter as the applicable law is essentially identical whether it be cited as Wisconsin law or Iowa law. The factual issue of whether the policy provided for payment of workers' compensation benefits under Wisconsin law only or under other states' law has been previously set forth in the findings of fact. Plainly, the policy as issued applied only to the workers' compensation law of the state of Wisconsin. Application of the workers' compensation law of a state would necessarily include application of the benefit table for such a state. We note, however, that this relates only to the obligation of the insurer to the insured. Iowa clearly has jurisdiction of this matter as the injury occurred within its borders. Schmidt v. Pittsburgh Plate Glass Co., 243 Iowa 1307, 55 N.W.2d 227 (1952). Iowa law then is applicable to the case in chief. The employer's liability is as established under the Iowa workers' compensation law. Section 85.18 prohibits contractual agreements that relieve an employer in whole or in part from liability created under our law. In this matter, where the employee is not even a party to the contract, any other result would be especially egregious. We are left then only with the question of whether the contract of insurance coverage should be reformed to permit payment of benefits under the Iowa rate schedule. Reformation is allowed where the party seeking reformation establishes a mutual mistake by the parties with regard to the items sought to be reformed, or a mistake on the part of one party and a fraud or an inequitable conduct on the part of the other. State Bank of LaCrosse v. Elsen, 128 Wis. 2d 508, 383 N.W.2d 916 (Wis. App. 1986); Schuknecht v. Wisconsin Mutual Ins. Co., 203 N.W.2d 605, 608 (Iowa 1973). The purpose of reformation is to make the policy express the true contract which the parties intended and desired to put in writing. Reformation is a proper remedy where the parties have reached a definite and explicit agreement, understood in the same sense by both, but where by Page 6 their mutual or common mistake, the written contract fails to express their agreement. 17 Couch on Insurance 2d Section 66.2 at 249-50 (1967), accord, Jeske v. General Accident, Fire & Life Assurance Corp., 1 Wis. 2d 70, 83 N.W.2d 167 (1957); Kufer v. Carson, 230 N.W.2d 500, 503 (Iowa 1975). Clear and convincing evidence must demonstrate that both parties intended to make a different instrument and that both had agreed upon facts which were different from those set forth in the instrument. Jeske, supra; Kufer, supra. The record clearly does not establish a unilateral mistake of one party induced by inequitable conduct of the other party. Therefore, reformation is possible only if a mistake was shared by both parties. The record clearly fails to establish such. Mr. Schroeder, as agent for Hager City Express, clearly understood the type of workers' compensation insurance coverage which he sought for his company. Likewise, Threshermen's Mutual Insurance Company was well aware that it could issue coverage only under the Wisconsin workers' compensation law when it was assigned a risk under the Wisconsin risk insurance pool. Schroeder's desire for a policy of workers' compensation coverage including coverage for all states in which his business operated was not communicated to the insurer. Likewise, the insurer's inability to provide coverage, other than coverage under the Wisconsin workers' compensation law, unless limited other states coverage was expressly asked for was not communicated to Mr. Schroeder on behalf of his company. Hence, while each party had a unilateral mistake as to the intent of the other party, there was no mutual mistake as to the insurance contract desired. The intent of each party was not properly communicated to the other party such that the parties never reached a definite and explicit agreement, understood in the same sense by both, which the written contract failed to express. It is therefore concluded that reformation on the basis of mutual mistake is inappropriate. Hager City Express further argues that the contract of insurance should be reformed on an implied warranty theory. For relief to be granted under an implied warranty theory, three conditions must exist: 1. The insurer must have had reason to know the particular purpose for which the policy was purchased. 2. The insured must have relied upon the company's skill or judgment in furnishing the coverage. 3. The resulting implied warranty has been breached. Farm Bureau Mutual Ins. Co. v. Sandbulte, 302 N.W.2d 104, 110 (Iowa 1981). Page 7 Under the facts presented, Threshermen's had no reason to know the particular purpose for which Hager City Express purchased workers' compensation coverage. The application as written did not seek limited other states coverage. Similarly, Hager City Express did not rely on Threshermen's skill or judgment in furnishing the coverage requested. Hager City Express relied on its insurance agents to acquire appropriate coverage. Hence, Threshermen's cannot be held to have breached an implied warranty to provide a particular type of workers' compensation coverage. For the above stated reasons, no basis exists for reformation of the contract for workers' compensation insurance between Hager City Express and Threshermen's Mutual Insurance Company. As relates to the contractual liability between the insurance carrier and the insured employer, the policy of insurance as written is applicable in this matter including the application of the Wisconsin workers' compensation law and the Wisconsin benefit table. As Iowa has jurisdiction of this matter, this contractual result does not relieve the employer of any obligation it has to the claimant under Iowa law as a result of its liability for the injury which arose out of and in the course of claimant's employment on July 27, 1988 and which is the subject matter of this claim. order THEREFORE, IT IS ORDERED: This matter is returned for docket for appropriate scheduling of prehearing conference and hearing relative to the remaining bifurcated issues which issues shall be decided under the appropriate Iowa law. Signed and filed this ______ day of ____________, 1990. ______________________________ HELENJEAN WALLESER DEPUTY INDUSTRIAL COMMISSIONER Copies To: Mr. Sheldon M. Gallner Attorney at Law 803 Third Avenue P.O. Box 1588 Council Bluffs, Iowa 51502 Page 8 Mr. John M. McHale Attorney at Law 233 Pearl Street P.O. Box 1078 Council Bluffs, Iowa 51502 Mr. Michael M. Sellers Mr. Steven C. Kaiser Attorneys at Law 1200 Hub Tower 699 Walnut Street Des Moines, Iowa 50309 Mr. Bradley C. Lundeen Attorney at Law 110 Second Street P.O. Box 802 Hudson, Wisconsin 54016 2100 Filed November 29, 1990 HELENJEAN WALLESER before the iowa industrial commissioner ____________________________________________________________ : JAMES YOUNG, : : Claimant, : : vs. : : File No. 905194 HAGER CITY EXPRESS, : : A R B I T R A T I O N Employer, : : D E C I S I O N and : : THRESHERMEN'S MUTUAL : INSURANCE CO., : : Insurance Carrier, : Defendants. : ____________________________________________________________ 2100 Reformation of contract of workers' compensation insurance not permitted where record did not show mutual mistake of fact as to type of insurance desired and secured. Reformation on implied warranty grounds also rejected. Insurance secured through statutory risk pool. Agent should have known liability limits under the pool. Page 1 before the iowa industrial commissioner ____________________________________________________________ : DICKIE R. GORDY, : : Claimant, : File No. 905342 : vs. : A R B I T R A T I O N : ALUMINUM COMPANY OF AMERICA, : D E C I S I O N : Employer, : Self-Insured, : Defendant. : ____________________________________________________________ statement of the case Claimant Dickie R. Gordy filed a petition in arbitration seeking benefits under the Iowa Workers' Compensation Act as the result of a work injury arising out of and in the course of his employment with self-insured defendant employer Aluminum Company of America (Alcoa) on September 14, 1988. This cause was scheduled to come on for hearing on June 13, 1991. Respective counsel agreed that the cause should be submitted on a stipulated record which was filed on September 3, 1991. That stipulation constitutes the record. issue The only issue presented for resolution is claimant's proper rate of compensation under Iowa Code section 85.36. findings of fact The undersigned deputy industrial commissioner finds: The proposed stipulation of fact submitted by the parties is adopted and accepted verbatim except for paragraph 11, wherein it is stipulated that rate should be calculated pursuant to Iowa Code section 85.36(6). That is an issue of law, not fact. The parties are not competent to determine what law the agency should apply to stipulated facts, even though they have done so correctly in this instance. Page 2 conclusions of law The crucial sub-issues to be determined are: (1) what are claimant's gross earnings; and, (2) under which of the ten subsections of Iowa Code section 85.36 should rate be calculated? As stipulated, Dickie R. Gordy is a full-time employee paid on an hourly basis. During some of the weeks preceding the work injury, he engaged during work hours in business relating to his position as a vice-president of his union local. He is permitted by Alcoa to devote time to union business, but is paid by the union for time lost from the normal eight-hour shift at his regular wage. Although the normal work week is 40 hours, claimant frequently exercised his option to voluntarily work overtime up to 56 hours. Iowa Code section 85.36(6) provides: In the case of an employee who is paid on a daily, or hourly basis, or by the output of the employee, the weekly earnings shall be computed by dividing by thirteen the earnings, not including overtime or premium pay, of said employee earned in the employ of the employer in the last completed period of thirteen consecutive calendar weeks immediately preceding the injury. As claimant is paid on an hourly basis, he should be compensated under section 85.36(6). King v. City of Mt. Pleasant, file number 840912 (App. Decn., August 31, 1989). Non-representative weeks should be excluded. Hardy v. Abell-Howe Co., file number 814126 (App. Decn., December 21, 1990). Claimant's spendable weekly earnings are the amount remaining after payroll taxes are deducted from gross weekly earnings. See Iowa Code section 85.61(11). Gross earnings are defined in 85.61(12) as follows: "Gross earnings" means recurring payments by employer to the employee for employment, before any authorized or lawfully required deduction or withholding of funds by the employer, excluding irregular bonuses, retroactive pay, overtime, penalty pay, reimbursement of expenses, expense allowances, and the employer's contribution for welfare benefits. Page 3 Payment of wages by claimant's union, a separate entity, are not "by employer to the employee for employment" within the meaning of Iowa Code section 85.61(12) or "earned in the employ of the employer" within the meaning of section 85.36(6). Where rate is not calculated under section 85.36(10), which deals with part-time employees, Titus v. Super Valu Stores, Inc., file numbers 825816 and 828115 (Arb. Decn., April 21, 1989), income earned from other employers is not to be considered in calculating rate. King v. City of Mt. Pleasant, supra. Therefore, only wages paid by Alcoa as shown on exhibit A attached to the proposed stipulation of fact should be utilized in calculating rate. Claimant was paid $14.496 per hour plus $.11 per hour as cost of living. In addition, Alcoa contributed $0.536 per hour to a retirement plan. Although $.11 of claimant's hourly wage may have been designated "cost of living," this is a distinction without a difference. That $.11 is clearly a recurring payment by employer to the employee for employment. However, the contribution to claimant's retirement plan is a "contribution for welfare benefits," and therefore not subject to inclusion in gross earnings under section 85.61(12). Exhibit A attached to the parties' proposed stipulation of fact sets forth the hours claimant worked for Alcoa and his union in the 27 weeks prior to the work injury. Actual earnings are not set forth, except as may be calculated by multiplying the hours worked at Alcoa by $14.606 (hourly wage plus "cost of living"). Weeks designated 3, 4, 5 and 13 are not representative because claimant worked zero hours for Alcoa, although working at least 40 hours for the union in each of those weeks. Weeks 7 and 8 should be excluded because claimant was on vacation, clearly non-representative weeks. The parties have written in 44.2 hours for each such week, but this appears to be based on claimant's vacation entitlement, rather than a wage for services rendered during those weeks. As such, they are not "recurring" payments for employment within the meaning of 85.61(12). During week 9, claimant worked only 28 hours, also taking some vacation that week. In Hardy v. Abell-Howe Co., supra, weeks where claimant earned no wages due to being laid off were not counted, but a week where claimant earned some wages before being laid off was counted. Under this rationale, the week ending July 17, 1988 is not unrepresentative and should be included. Page 4 Therefore, the following weeks should be used in calculating claimant's rate: Week Week Number Ending Hours 1 09/11/88 55.2 2 09/04/88 48.0 6 08/07/88 54.0 9 07/17/88 28.0 10 07/10/88 56.0 11 07/03/88 38.0 12 06/26/88 54.4 14 06/12/88 48.0 15 06/05/88 48.0 16 05/29/88 40.0 17 05/22/88 32.0 18 05/15/88 35.5 19 05/08/88 52.0 Accordingly, claimant worked 589.1 hours during the 13 representative weeks immediately preceding the injury. At an hourly rate of $14.606, this constitutes total earnings of $8,604.39, or an average weekly wage of $661.87. A review of the tables set forth in the Guide to Iowa Workers' Compensation Claim Handling published by this office and effective July 1, 1988, reveals that a married individual entitled to three exemptions and so situated with respect to earnings is entitled to a weekly rate of $403.19. Benefits have voluntarily been paid at the rate of $410.37. Accordingly, claimant has been overpaid on this claim. Defendant seeks restitution, but the agency lacks jurisdiction to so order. Comingore v. Shenandoah Artificial Ice, Power, Heat & Light Co., 208 Iowa 430, 226 N.W. 124 (1929). order THEREFORE, IT IS ORDERED: Claimant's proper rate of compensation in this case is four hundred three and 19/100 dollars ($403.19) per week. Each party shall be responsible for its own costs. Page 5 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. Michael W. Liebbe Attorney at Law 116 East 6th Street P.O. Box 339 Davenport, Iowa 52805-0339 Mr. Thomas N. Kamp Attorney at Law 600 Davenport Bank Building Davenport, Iowa 52801 1703; 1704; 2302; 2901 3001; 3003 Filed September 13, 1991 DAVID RASEY before the iowa industrial commissioner ____________________________________________________________ : DICKIE R. GORDY, : : Claimant, : File No. 905342 : vs. : A R B I T R A T I O N : ALUMINUM COMPANY OF AMERICA, : D E C I S I O N : Employer, : Self-Insured, : Defendant. : ____________________________________________________________ 2901 In rate case submitted on stipulated record, stipulation as to proper law section to be applied was rejected. Parties are not competent to stipulate what law the agency should apply to facts. 3001; 3003 Hours devoted to union business during regular work hours were not included in gross earnings where union paid claimant for those hours at his regular salary under 85.36(6) and 85.61(12). Portion of wage designated "cost of living" was included in gross earnings as a recurrent payment for employment. Contribution by employer to 401K plan was a "welfare benefit" and not included in gross earnings. Weeks in which claimant worked no hours while on vacation were excluded as unrepresentative, but week in which claimant both worked and vacationed was included, citing Hardy v. Abell-Howe Co., file number 814126 (App. Decn., December 21, 1990). 1703; 1704; 2302 Although rate decision created overpayment, the agency lacks power to order restitution. Comingore v. Shenandoah Artificial Ice, Power, Heat & Light Co., 208 Iowa 430, 226 N.W. 124 (1929).