BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
         _________________________________________________________________
 
                     
 
         JANINA SKELLEY,       
 
                     
 
              Claimant,   
 
                     
 
         vs.         
 
                                                  File No. 941825
 
         BRAMMER MANUFACTURING,     
 
                                                    A P P E A L
 
              Employer,   
 
                                                  D E C I S I O N
 
         and         
 
                     
 
         WAUSAU INSURANCE,     
 
                     
 
              Insurance Carrier,    
 
              Defendants.      
 
         _________________________________________________________________
 
         The record, including the transcript of the hearing before the 
 
         deputy and all exhibits admitted into the record, has been 
 
         reviewed de novo on appeal.  The decision of the deputy filed 
 
         April 30, 1993 is affirmed and is adopted as the final agency 
 
         action in this case.
 
         Defendants shall pay the costs of the appeal, including the 
 
         preparation of the hearing transcript.
 
         Signed and filed this ____ day of November, 1993.
 
         
 
         
 
         
 
         
 
                                     ________________________________
 
                                             BYRON K. ORTON
 
                                        INDUSTRIAL COMMISSIONER
 
         
 
         Copies To:
 
         
 
         Mr. William B. Bribriesco
 
         Attorney at Law
 
         2407 18th St., Ste 202
 
         Bettendorf, Iowa 52722
 
         
 
         Mr. Craig Levien
 
         Attorney at Law
 
         600 Union Arcade Bldg.
 
         111 E. Third
 
         Davenport, Iowa 52801
 
         
 
 
            
 
 
 
 
 
 
 
                                              1402.3 1806 1803 
 
                                              2206 1403.30 1806
 
                                              Filed November 17, 1993
 
                                              Byron K. Orton
 
            
 
                     BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
          
 
            JANINA SKELLEY,       
 
                        
 
                 Claimant,   
 
                        
 
            vs.         
 
                                                 File No. 941825
 
            BRAMMER MANUFACTURING,     
 
                                                   A P P E A L
 
                 Employer,   
 
                                                 D E C I S I O N
 
            and         
 
                        
 
            WAUSAU INSURANCE,     
 
                        
 
                 Insurance Carrier,    
 
                 Defendants.      
 
            ____________________________________________________________
 
            
 
            1402.30; 1806; 1803; 2206 
 
            Claimant with preexisting degenerative disc disease which 
 
            had not had an impact on her employment awarded 75 percent 
 
            permanent partial disability where her only return to work 
 
            had been through the employer creating a modified job for 
 
            her.  She was only able to work four hours per day.  
 
            Claimant was 53 years of age and did not have a high school 
 
            education.  Other than for the employer, she likely would 
 
            have had no bona fide aspects of gainful employment.  She 
 
            was laid off at the time of hearing despite the fact that a 
 
            number of employees with less seniority had been retained in 
 
            a work status by the employer.  Medically speaking, she was 
 
            limited to sedentary employment which avoided bending, 
 
            stooping and lifting more than ten pounds occasionally.  She 
 
            needed to be able to change positions frequently as she 
 
            needed for her comfort.  
 
            
 
            1403.30; 1806
 
            Employer failed to carry burden of establishing basis for 
 
            apportionment, i.e., (1) preexisting disability (2) that was 
 
            not caused by the employment with the employer.
 
            
 
            
 
 
            
 
            Page   1
 
            
 
            
 
            
 
            
 
            
 
                     BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
                                          :
 
            JANINA SKELLEY,               :
 
                                          :
 
                 Claimant,                :
 
                                          :
 
            vs.                           :
 
                                          :      File No. 941825
 
            BRAMMER MANUFACTURING,        :
 
                                          :  A R B I T R A T I O N
 
                 Employer,                :
 
                                          :      D E C I S I O N
 
            and                           :
 
                                          :
 
            WAUSAU INSURANCE,             :
 
                                          :
 
                 Insurance Carrier,       :
 
                 Defendants.              :
 
            ___________________________________________________________
 
            
 
                              STATEMENT OF THE CASE
 
            
 
                 This is a proceeding in arbitration brought by Janina 
 
            Skelley against Brammer Manufacturing Company and Wausau 
 
            Insurance Company as a result of an injury that occurred on 
 
            February 20, 1990.  It was stipulated that the claimant's 
 
            period for healing or recuperation ended on September 14, 
 
            1990.  The rate of compensation was stipulated to be $214.91 
 
            per week.  The only issue for determination is the extent of 
 
            permanent partial disability affecting Janina Skelley that 
 
            was proximately caused by the February 20, 1990 injury.  
 
            Apportionment of disability is an issue as is aggravation of 
 
            a preexisting condition.  Defendants have paid 89.4 weeks at 
 
            the stipulated rate.  
 
            
 
                 The record in this case consists of testimony from 
 
            Janina Skelley, James Skelley and Carla Lott.  The record 
 
            also contains jointly offered exhibits 1 through 12.  
 
            
 
                                 FINDINGS OF FACT
 
            
 
                 The evidentiary facts in this case are subject to 
 
            little dispute.  Janina Skelley is a 53-year-old married 
 
            woman who dropped out of high school during the twelfth 
 
            grade.  She has not completed high school or obtained a GED.  
 
            She has no specialized formal vocational training or other 
 
            formal education.  
 
            
 
                 Janina has been employed by Brammer for 18 years.  Her 
 
            prior work experience consists of being a nurse's aide, 
 
            department store clerk, waitress, cook, and housekeeper.  
 
            Janina worked as a stacker at Brammer Manufacturing Company 
 
            prior to the injury.  The work required a considerable 
 
            amount of lifting, bending and stooping.  At the time of 
 
            injury she was earning $9.40 per hour.  In 1989 she earned 
 
            $18,500.  This computes to an average of $355.77 per week.  
 
            When divided by $9.40 per hour, the 1989 earnings show that 
 

 
            
 
            Page   2
 
            
 
            
 
            
 
            
 
            she worked an average of 37.85 hours weekly.  If she had 
 
            worked during 1989 with a rate of pay of less than $9.40 per 
 
            hour, the number of hours worked per week would be greater 
 
            than the figure previously noted.
 
            
 
                 On February 20, 1990, Janina was injured when she fell 
 
            backwards off a ladder landing on her back on a cement 
 
            floor.  Initially the x-rays showed no fractures but a 
 
            subsequent closer examination by Dr. Dennis Miller disclosed 
 
            a compression fracture of her L2 vertebra (ex. 12, p. 9).  
 
            Janina experienced a very extended period of recuperation.
 
            
 
                 Janina is afflicted by severe degenerative disc 
 
            disease, particularly at the lower levels of her lumbar 
 
            spine (exhibit 4, pages 58, 60 & 61; ex. 5; ex. 7, p. 2; ex. 
 
            12, pp 9 & 17 lines 22-24).  The degenerative condition is 
 
            probably the cause of Janina's back pain and other symptoms 
 
            as indicated by her primary treating orthopedic surgeon, 
 
            Dennis L. Miller, M.D. (ex. 7, pp. 5-6).
 
            
 
                 With regard to Janina returning to work, Dr. Miller 
 
            stated: 
 
            
 
                 ...I think it's very difficult for men or women 
 
                 with her skills but particularly women and her age 
 
                 group with her back condition to return to gainful 
 
                 employment.  People with this situation tend to do 
 
                 better if they can change positions at their need 
 
                 so if they can have the opportunity to switch from 
 
                 sitting to standing as they need to, they can do 
 
                 fairly well but that's not -- it's hard to find 
 
                 those jobs in competitive gainful employment and I 
 
                 think her chances of -- in the routine job market 
 
                 are dismal.
 
            
 
            (exhibit 12, page 20).
 
            
 
                 Janina has undergone extensive physical therapy, work 
 
            hardening and functional capacity evaluations.  The result 
 
            has been that she is limited to lifting ten pounds on an 
 
            occasional basis and is to avoid bending and stooping (ex. 
 
            1, pp. 1-3, 10-17; ex. 10, p. 1).  Those test results have 
 
            not been considered to be highly accurate and there is some 
 
            possibility of a functional overlay, depression or some 
 
            other psychological component to Janina's symptoms (exs. 5 & 
 
            7, p. 6).
 
            
 
                 Janina has been evaluated as having a significant 
 
            degree of permanent impairment.  Dr. Dennis Miller assigned 
 
            a 17 percent impairment rating of which 7 percent was due to 
 
            degeneration, 5 percent to a compression fracture of her L2 
 
            vertebra and 5 percent due to loss of range of motion (ex. 
 
            12, pp. 17-19).  John S. Koch, M.D., has evaluated Janina as 
 
            having a 5 percent permanent impairment due to the fracture 
 
            and 7 percent due to degeneration but did not give any 
 
            additional rating for loss of range of motion (ex. 3).  Dr. 
 
            Koch stated that the 5 percent due to the fracture has 
 
            resulted from her work place accident.  He declined to 
 
            express an opinion on causation with regard to the balance 
 
            of her impairment.  Except for the 5 percent rating for loss 
 

 
            
 
            Page   3
 
            
 
            
 
            
 
            
 
            of range of motion, the impairment ratings from Drs. Miller 
 
            and Koch are identical.  Their opinions regarding causation 
 
            likewise appear to be identical.
 
            
 
                 Based upon the record in this case there is no showing 
 
            that Janina had ever been disabled from performing her work 
 
            due to her degenerative disc disease prior to February 20, 
 
            1990.  Dr. Dennis Miller agreed that the injury aggravated 
 
            her preexisting degenerative disc disease condition (ex. 12, 
 
            p. 16).
 
            
 
                 Even though her healing was stipulated to have ended 
 
            earlier, she did not return to work until May 23, 1991.  
 
            That return to work was accomplished only through the 
 
            employer creating a job for her out of parts of several 
 
            other jobs and through the cooperation of representatives of 
 
            the insurance carrier and an extensive work hardening 
 
            program.  She initially returned to work at three hours per 
 
            day, increased to four hours per day, increased to six, and 
 
            then on to eight hours per day but was unable to endure 
 
            working eight hours per day.  She eventually developed a 
 
            more or less permanent pattern of working four hours per day 
 
            (ex. 10, pp. 10-11).  Janina has made a very good faith 
 
            effort in her physical therapy and work hardening 
 
            activities.  Working four hours per day causes her 
 
            considerable distress but she prefers to be working (ex. 10, 
 
            pp. 6 & 11).
 
            
 
                 Janina worked from May 1991 through October 1992 when 
 
            she experienced a flare-up of her symptoms from no 
 
            particular identifiable cause.  As she was preparing to 
 
            return to work she was placed into a lay off status.  Janina 
 
            was laid off even though other employees with less seniority 
 
            were still retained.  The lay off was part of a two-phase 
 
            lay off in which approximately 30 percent of the plant work 
 
            force had been laid off.  At the time of hearing, Janina had 
 
            not been recalled to work.  She will retain recall rights 
 
            until May 1994.  There was no assurance or prediction that 
 
            she would in fact be recalled.  Since returning to work in 
 
            May 1991, she has received routine pay increases to the 
 
            point that she was earning $10.74 per hour when she last 
 
            worked on October 22, 1992.  
 
            
 
                 Janina has made some unsuccessful applications for 
 
            employment.  She stated that she would be unable to perform 
 
            the work if hired but has applied in any event.  She has 
 
            received some unemployment compensation and it is likely 
 
            that the job applications were made in order to qualify for 
 
            those unemployment benefits.  Janina's recreational 
 
            activities have been curtailed and her housekeeping 
 
            activities have likewise been curtailed as a result of her 
 
            back problems.  Those activities were not curtailed prior to 
 
            the fall that occurred on February 20, 1990.
 
            
 
                 Since Janina is only capable of working four hours per 
 
            day, she experiences approximately a 50 percent reduction in 
 
            actual earnings when the employer makes work available for 
 
            her.  In a lay off status, she, of course, receives no 
 
            income.  Were it not for the employer accommodating Janina 
 

 
            
 
            Page   4
 
            
 
            
 
            
 
            
 
            and making work available to her, it is unlikely that she 
 
            would be able to obtain any employment anywhere other than 
 
            perhaps some intermittent, unreliable, part-time employment.  
 
            In view of her reduced capacity for work hours and her loss 
 
            of access to jobs, it is found that Janina has experienced a 
 
            75 percent reduction in earning capacity as a result of the 
 
            February 20, 1990 injury.  While it is true that she had 
 
            preexisting degenerative changes in her back those 
 
            degenerative changes had not had any actual impact on her 
 
            ability to work and earn a living in a job which required a 
 
            substantial amount of lifting, bending and stooping until 
 
            this injury occurred.
 
            
 
                                CONCLUSIONS OF LAW
 
            
 
                 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).
 
            
 
                 The question of causal connection is essentially within 
 
            the domain of expert testimony.  The expert medical evidence 
 
            must be considered with all other evidence introduced 
 
            bearing on the causal connection between the injury and the 
 
            disability.  The weight to be given to any expert opinion is 
 
            determined by the finder of fact and may be affected by the 
 
            accuracy of the facts relied upon by the expert as well as 
 
            other surrounding circumstances.  The expert opinion may be 
 
            accepted or rejected, in whole or in part.  Sondag v. Ferris 
 
            Hardware, 220 N.W.2d 903 (Iowa 1974); Anderson v. Oscar 
 
            Mayer & Co., 217 N.W.2d 531 (Iowa 1974); Bodish v. Fischer, 
 
            Inc., 257 Iowa 516, 133 N.W.2d 867 (1965).
 
            
 
                 Aggravation of a preexisting condition is one manner of 
 
            sustaining a compensable injury.  While a claimant is not 
 
            entitled to compensation for the results of a preexisting 
 
            injury or disease, its mere existence at the time of a 
 
            subsequent injury is not a defense.  Rose v. John Deere 
 
            Ottumwa Works, 247 Iowa 900, 76 N.W.2d 756 (1956).  If the 
 
            claimant had a preexisting condition or disability that is 
 
            materially 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 (1962); Yeager v. Firestone Tire & Rubber Co., 
 
            253 Iowa 369, 112 N.W.2d 299 (1961).
 
            
 
                 Apportionment of disability between a preexisting 
 
            condition and an injury is proper only when some 
 
            ascertainable portion of the ultimate industrial disability 
 
            existed independently before an employment-related 
 
            aggravation of disability occurred.  Bearce v. FMC Corp., 
 
            465 N.W.2d 531 (Iowa 1991); Varied Enterprises, Inc. v. 
 
            Sumner, 353 N.W.2d 407 (Iowa 1984).  Hence, where employment 
 

 
            
 
            Page   5
 
            
 
            
 
            
 
            
 
            is maintained and earnings are not reduced on account of a 
 
            preexisting condition, that condition may not have produced 
 
            any apportionable loss of earning capacity.  Bearce, 465 
 
            N.W.2d at 531.  Likewise, to be apportionable, the 
 
            preexisting disability must not be the result of another 
 
            injury with the same employer for which compensation was not 
 
            paid.  Tussing v. George A. Hormel & Co., 461 N.W.2d 450 
 
            (Iowa 1990).
 
            
 
                 The burden of showing that disability is attributable 
 
            to a preexisting condition is placed upon the defendant who 
 
            seeks to benefit from the asserted apportionment.  Where 
 
            evidence to establish a proper apportionment is absent, the 
 
            defendant is responsible for the entire disability that 
 
            exists.  Bearce, 465 N.W.2d at 536-37; Sumner, 353 N.W.2d at 
 
            410-11.
 
            
 
                 For the disability which results from the preexisting 
 
            degenerative disc disease to be apportionable to the extent 
 
            that it would relieve the employer from paying for the 
 
            results of it, it would be necessary for the employer to 
 
            prove two things.  First, the employer would need to prove 
 
            that actual disability in the nature of reduced earnings or 
 
            earning capacity had preexisted the February 20, 1990 
 
            injury.  There is no such evidence in this case to support 
 
            such a finding.  Second, to be apportionable, the employer 
 
            would have the burden of proving that the degeneration was 
 
            not a result of other injuries with the same employer.  The 
 
            role that claimant's work played in developing the 
 
            degenerative disc disease is not inquired about by counsel 
 
            in this case, however, it is noted that at page nine of 
 
            exhibit 12, Dr. Miller referred to her condition as 
 
            "degenerative disc disease and wear and tear changes 
 
            throughout the lumbar spine."  In view of this, it is not 
 
            possible to make a finding that the employment was not a 
 
            factor in producing those degenerative changes as would be 
 
            necessary in order to meet the second prong of the 
 
            apportionment test.  Since neither prong has been met, it 
 
            clearly is not appropriate to apportion the disability in 
 
            this case based upon the degenerative changes which existed 
 
            before February 20, 1990.
 
            
 
                 Industrial disability or loss of earning capacity is a 
 
            concept that is quite similar to impairment of earning 
 
            capacity, an element of damage in a tort case.  Impairment 
 
            of physical capacity creates an inference of lessened 
 
            earning capacity.  The basic element to be determined, 
 
            however, is the reduction in value of the general earning 
 
            capacity of the person, rather than the loss of wages or 
 
            earnings in a specific occupation.  Post-injury earnings 
 
            create a presumption of earning capacity.  The earnings are 
 
            not synonymous with earning capacity and the presumption may 
 
            be rebutted by evidence showing the earnings to be an 
 
            unreliable indicator.  Bearce v. FMC Corp., 465 N.W.2d 531 
 

 
            
 
            Page   6
 
            
 
            
 
            
 
            
 
         (Iowa 1991); DeWall v. Prentice, 224 N.W.2d 428, 435 (Iowa 1974); 
 
         Carradus v. Lange, 203 N.W.2d 565 (Iowa 1973); Holmquist v. 
 
         Volkswagon of America, Inc., 261 N.W.2d 516 (Iowa App. 1977) 
 
         A.L.R.3d 143; Michael v. Harrison County, Thirty-fourth Biennial 
 
         Report of the Industrial Commissioner 218 (1979); 2 Larson 
 
         Workmen's Compensation Law, sections 57.21 and 57.31.
 
         
 
              It has been found that Janina has experienced a 75 percent 
 
         reduction in her earning capacity based upon her loss of ability 
 
         to work a full work day and her loss of access to jobs and the 
 
         job market.  Were it not for a beneficent employer she would 
 
         likely be without any real prospect for employment.  It is 
 
         determined that Janina has a 75 percent permanent partial 
 
         disability under the provisions of Code section 85.34(2)(u).  
 
         This entitles her to receive 375 weeks of compensation for 
 
         permanent partial disability.  
 
         
 
                                      ORDER
 
         
 
              IT IS THEREFORE ORDERED that defendants pay Janina Skelley 
 
         three hundred seventy-five (375) weeks of compensation for 
 
         permanent partial disability at the stipulated rate of two 
 
         hundred fourteen and 91/100 dollars ($214.91) per week payable 
 
         commencing September 14, 1990.  All accrued amounts shall be paid 
 
         to claimant in a lump sum together with interest pursuant to 
 
         section 85.30 after allowing credit for the eighty-nine point 
 
         four (89.4) weeks of benefits which were voluntarily paid prior 
 
         to hearing.
 
         
 
              It is further ordered that the costs of this proceeding are 
 
         assessed against defendants pursuant to rule 343 IAC 4.33.
 
         
 
              It is further ordered that defendants file claim activity 
 
         reports as requested by this agency pursuant to rule 343 IAC 3.1
 
         
 
              Signed and filed this ____ day of April, 1993.
 
         
 
         
 
         
 
         
 
                                       ______________________________
 
                                       MICHAEL G. TRIER
 
                                       DEPUTY INDUSTRIAL COMMISSIONER    
 
         
 
         Copies to:
 
         
 
         Mr. William B. Bribriesco
 
         Attorney at Law
 
         2407 18th St. STE 202
 
         Bettendorf, Iowa  52722
 
         
 
         Mr. Craig A. Levien
 
         Attorney at Law
 
         600 Union Arcade Bldg
 
         111 E 3rd
 
         Davenport, Iowa  52801
 
         
 
              
 
         
 
 
            
 
            Page   1
 
            
 
            
 
            
 
            
 
                                  1402.3 1806 1803 2206 1403.30 1806
 
                                  Filed April 30, 1993
 
                                  Michael G. Trier
 
            
 
                     BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
                      
 
            JANINA SKELLEY,     
 
                      
 
                 Claimant, 
 
                      
 
            vs.       
 
                                                File No. 941825
 
            BRAMMER MANUFACTURING,   
 
                                            A R B I T R A T I O N
 
                 Employer, 
 
                                                D E C I S I O N
 
            and       
 
                      
 
            WAUSAU INSURANCE,   
 
                      
 
                 Insurance Carrier,  
 
                 Defendants.    
 
            ___________________________________________________________
 
            
 
            1402.30 1806 1803 2206 
 
            
 
            Claimant with preexisting degenerative disc disease which 
 
            had not had an impact on her employment awarded 75 percent 
 
            permanent partial disability where her only return to work 
 
            had been through the employer creating a modified job for 
 
            her.  She was only able to work four hours per day.  
 
            Claimant was 53 years of age and did not have a high school 
 
            education.  Other than for the employer, she likely would 
 
            have had no bona fide aspects of gainful employment.  She 
 
            was laid off at the time of hearing despite the fact that a 
 
            number of employees with less seniority had been retained in 
 
            a work status by the employer.  Medically speaking, she was 
 
            limited to sedentary employment which avoided bending, 
 
            stooping and lifting more than ten pounds occasionally.  She 
 
            needed to be able to change positions frequently as she 
 
            needed for her comfort.  
 
            
 
            1403.30 1806
 
            
 
            Employer failed to carry burden of establishing basis for 
 
            apportionment, i.e., (1) preexisting disability (2) that was 
 
            not caused by the employment with the employer.
 
            
 
 
            
 
            
 
            
 
            
 
                    BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
            THOMAS F. ALLEN, Deceased,      :
 
            SANDRA KAY ALLEN, Surviving     :
 
            Spouse and Executor,            :
 
                                            :       File No. 941868
 
                 Claimant,                  :
 
                                            :          A P P E A L
 
            vs.                             :
 
                                            :        D E C I S I O N
 
            ALLEN WATER AND WASTEWATER      :
 
            ENGINEERING, INC.,              :
 
                                            :
 
                 Employer,                  :
 
                                            :
 
            and                             :
 
                                            :
 
            KEMPER INSURANCE COMPANY,       :
 
                                            :
 
                 Insurance Carrier,         :
 
                 Defendants.                :
 
            ____________________________________________________________
 
            
 
            
 
                 The record, including the transcript of the hearing 
 
            before the deputy and all exhibits admitted into the record, 
 
            has been reviewed de novo on appeal.
 
            
 
                                      ISSUES
 
            
 
                 Defendants state the following issues on appeal:
 
            
 
                  I.  Did the deputy err in awarding penalty 
 
                 benefits to the claimant pursuant to Iowa Code 
 
                 section 86.13?
 
            
 
                 II.  Did the deputy err in failing to award a 
 
                 credit to employer and insurance carrier as a 
 
                 result of the third party settlement?
 
            
 
                                 FINDINGS OF FACT
 
            
 
            The findings of fact contained in the proposed agency 
 
            decision filed March 5, 1993 are adopted as set forth below.  
 
            Segments designated by asterisks (*****) indicate portions 
 
            of the language from the proposed agency decision that have 
 
            been intentionally deleted and do not form a part of this 
 
            final agency decision.
 
            
 
                 Thomas F. Allen was the spouse of Sandra Kay Allen.  
 
            Thomas was a professional engineer whose practice seems to 
 
            have specialized in water and waste water treatment.  Thomas 
 
            had been a part of the French Reneker Engineering firm in 
 
            Fairfield, Iowa, and then subsequently started his own firm, 
 
            Allen Water and Wastewater in the mid-1980's (Claimant's 
 
            Exhibit 71, page 4).  Thomas operated the business as a 
 
            corporation by the name of Allen Water and Wastewater 
 
            Engineering, Inc.  He was the president of the corporation 
 

 
            
 
            Page   2
 
            
 
            
 
            
 
            
 
            and its principal employee.  The business operated in much 
 
            the same manner as if Thomas had functioned as a sole 
 
            proprietor.  The only other employee of the corporation at 
 
            the time of his death was Ethel Marie Barry.  The 
 
            corporation was the alter ego of Thomas F. Allen.  The 
 
            business ended with his death.  Ethel performed bookkeeping 
 
            for the company and assisted Sandra in compiling records and 
 
            otherwise closing out the business.
 
            
 
                 Thomas apparently had a practice of paying himself a 
 
            salary of $2,000 every two weeks (Cl. Ex. 34).  It is noted 
 
            that he paid himself a bonus in the amount of $8,900 in 
 
            early 1989.  When revenues were insufficient during late 
 
            1989, Thomas did not take a salary from the company.  He did 
 
            continue to take a reimbursement for expenses and paid Ethel 
 
            Marie Barry's salary (Cl. Ex. 49, pp. 23-25 and 39; Cl. Ex. 
 
            34; Cl. Ex. 35).  In short, the salary which Thomas actually 
 
            received from his corporation was dependent upon the 
 
            profitability of that corporation.  The profitability varied 
 
            from time to time and the amount which he withdrew from the 
 
            company in the form of salary and bonus likewise varied from 
 
            time to time (Cl. Ex. 31-33).  The record in this case does 
 
            not contain the actual records of Allen Water and Wastewater 
 
            Engineering, Inc., which deal with its income tax status, 
 
            corporate organizational documents or the like.  Since the 
 
            income tax returns filed by Thomas do not show any profit or 
 
            loss or distribution of dividends from the corporation, it 
 
            appears as though the profits from the corporation were paid 
 
            to Thomas in the form of salary.  When profits and revenues 
 
            were low, he received no salary.  When they were high, he 
 
            paid himself a bonus.
 
            
 
                 The salary payment practice used by Thomas is common 
 
            for small corporations, proprietorships and partnerships.  
 
            Widely fluctuating earnings are quite typical for sole 
 
            proprietors. Individuals like Thomas are, from a practical 
 
            standpoint, self-employed sole proprietors even though they 
 
            have adopted the corporate form of business.  Persons such 
 
            as Thomas are technically classified as employees of the 
 
            corporation under which they do business but they are not 
 
            normal employees, despite the fact that all or part of what 
 
            is paid to them is termed a salary or wages.  They continue 
 
            to work even when no money is available to actually pay 
 
            their salary or wages.  They are not placed into a layoff 
 
            status.  They have the ability, if they choose to use it, to 
 
            borrow and pay a salary or wages to themselves.  They have 
 
            the ability to cause the corporation to appear profitable or 
 
            unprofitable based upon matters such as rent which they pay 
 
            to themselves for the business premises.  It is noted that 
 
            Thomas paid himself rent for the offices used by the 
 
            employer corporation.  Items such as depreciation, interest 
 
            expense and many other variables are subject to the control 
 
            of a person such as Thomas.  Corporate meetings can set a 
 
            salary or salary level which may or may not actually be 
 
            paid.  If funds are not available to pay the established 
 
            salary to the owner at the time when it is due, it may be 
 

 
            
 
            Page   3
 
            
 
            
 
            
 
            
 
            paid at a later time when and if funds become available.  In 
 
            short, the owner of a business is not a normal employee from 
 
            the standpoint of wages or salary.  Thomas had full ability 
 
            to perform many functions which easily could overstate or 
 
            understate the profitability of the business and the owner's 
 
            salary.  The facts in evidence in this case clearly show 
 
            that the practices followed by Thomas F. Allen in operating 
 
            the business of Allen Water and Wastewater Engineering, 
 
            Inc., were within the range of practices commonly and 
 
            customarily used by individuals who function as a 
 
            self-employed proprietor yet have chosen the corporate form 
 
            for conducting the business.  It would be extremely 
 
            speculative to venture to guess at what amount of actual 
 
            salary Thomas Allen would have paid to himself during 
 
            calendar year 1990 or during the period running from May 1, 
 
            1989 through May 1, 1990, if he had not died on January 13, 
 
            1990.
 
            
 
                 Allen Water and Wastewater Engineering was charged  a 
 
            premium for covering Thomas F. Allen with workers' 
 
            compensation insurance.  The premium was based upon Thomas 
 
            having yearly earnings of $57,200.  The period during which 
 
            earnings were considered for determining the premium was 
 
            from May 1 of one year until May 1, of the following year, a 
 
            date different than the calendar year period used for 
 
            determining income taxes.  The 1988-1989 premium year 
 
            provided a final premium based upon Thomas having a yearly 
 
            salary of $57,200.  The 1989-1989 premium audit charged a 
 
            premium based upon Thomas having a yearly salary of $57,200.  
 
            The sum of $57,200 was used by the insurance carrier when 
 
            computing the premium to be charged for workers' 
 
            compensation coverage for Thomas F. Allen.  When premium 
 
            audits were conducted, the insurance carrier continued to 
 
            charge a premium based upon Thomas F. Allen having a yearly 
 
            salary of $57,200 (Cl. Ex. 21, 22 and 23; Cl. Ex. 71, pp. 9-
 
            15).  The premiums for insurance year 1989-1990 have been 
 
            fully paid (Cl. Exs. 24 and 26).  It is clear that the 
 
            premium charged to Allen Water and Wastewater, Inc. was 
 
            based upon Thomas F. Allen having wages or earnings in the 
 
            amount of $57,200.
 
            
 
                 Claimant's exhibit 6 is a weekly planner-type of book.  
 
            It is the book used by Thomas F. Allen for planning his 
 
            daily activities and appointments.  Ethel Marie Barry also 
 
            confirmed that claimant's exhibits 5 through 15 were all 
 
            made in the handwriting of Thomas F. Allen and that exhibit 
 
            7 is the file used by Thomas F. Allen for keeping those 
 
            exhibits in his office records.  Ethel Marie Barry is fully 
 
            familiar with the handwriting of Thomas F. Allen.  No 
 
            contrary evidence is in the record of this case (Cl. Ex. 49, 
 
            pp. 8-20).  It is found that all the writing on exhibits 5 
 
            through 15 was performed by Thomas F. Allen.
 
            
 
                 It is readily apparent from reviewing exhibits 5 
 
            through 15 that Thomas F. Allen, doing business as Allen 
 
            Water and Wastewater Engineering, Inc., was engaged in 
 
            performing some type of a project for a business known as 
 

 
            
 
            Page   4
 
            
 
            
 
            
 
            
 
            Iowa Bottlers.  At this point it should be noted that Iowa 
 
            Beverage Manufacturers, Inc., is sometimes referred to as 
 
            Iowa Beverage or Iowa Bottlers (Cl. Ex. 52, pp. 5 and 6).  
 
            Throughout the record of this case those different names are 
 
            used interchangeably.
 
            
 
                 The records maintained by Thomas F. Allen clearly show 
 
            that he had dealings with Iowa Beverage Manufacturers, Inc., 
 
            on  January 2, 1990, January 4, 1990, January 5, 1990, 
 
            January 9, 1990, and possibly at other times as well.  The 
 
            first page of exhibit 15 shows that Tom had a plan to stop 
 
            at Ottumwa at Iowa Bottlers for something to do with tests.  
 
            On the third page of claimant's 10 appears what is 
 
            apparently a list of things which Tom wished to accomplish.  
 
            Number 2 appears to indicate that he intended to check the 
 
            depth of flow at a manhole at 6:00 a.m.  Number 13 indicates 
 
            that no flow periods are from 4:00 to 5:00 a.m. or on 
 
            Saturday or Sunday.  It is noted that from 7:00 a.m. to 3:00 
 
            p.m., the first shift is operating and that from 3:00 p.m. 
 
            to 11:00 p.m., the second shift is operating, and that from 
 
            8:30 p.m. to 5:00 p.m., cleaning is ongoing.  Most of the 
 
            entries on the page are in pencil, however, there is an 
 
            entry in blue ink which appears to say Saturday or Sunday in 
 
            parentheses.  That entry was apparently entered at some 
 
            point after the original writing was made since a different 
 
            writing instrument was used.  When taken as a whole, the 
 
            sheet appears to indicate that 6:00 a.m. or anytime on a 
 
            Saturday or Sunday would be a reasonable time for performing 
 
            the check of flow at the manhole.  The entries in exhibit 6 
 
            for Saturday, January 13, by what apparently is the 5:00 
 
            p.m. line, indicates that Tom planned to be at the Iowa 
 
            Bottlers plant in Ottumwa on that Saturday.
 
            
 
                 Standing alone, claimant's exhibits 6 through 15 
 
            readily establish that Thomas Allen was performing services 
 
            for Iowa Bottlers and intended to perform some of those 
 
            services on Saturday, January 13, 1990. 
 
            
 
                 *****Further evidence that Thomas F. Allen was 
 
            performing services for Iowa Beverage Manufacturers, Inc., 
 
            is provided by claimant's exhibit 16 and the testimony from 
 
            Charles E. Sizemore, personnel manager of Iowa Beverage (Cl. 
 
            Ex. 50), Keith Kropf, superintendent of the City of Ottumwa 
 
            Water Pollution Control Facility (Cl. Ex. 51), Stephen Allen 
 
            Cullinan, industrial pre-treatment coordinator for the City 
 
            of Ottumwa (Cl. Ex. 52), Theodore J. McNulty, executive vice 
 
            president of Iowa Beverage Manufacturing, Inc., in Ottumwa 
 
            (Cl. Ex. 53), and, Manish Kohli, chemist analyst for Iowa 
 
            Beverage in January 1990 (Cl. Ex. 70). 
 
            
 
                 Charles E. Sizemore, at page 19 of his deposition, 
 
            testified that he knew that Tom was coming over to the plant 
 
            on the weekend of his death in order to check the flow in a 
 
            manhole and that Saturday, January 13, would have been a 
 
            suitable time for him to do so (Cl. Ex. 50, pp. 13-19).  
 
            Additionally, according to Sizemore, the company had a 
 
            special tool made for removing the manhole in question 
 
            because it was quite heavy.  The tool was available at its 
 

 
            
 
            Page   5
 
            
 
            
 
            
 
            
 
            plant for whoever would have needed to use it (Cl. Ex. 50, 
 
            pp. 12 and 13).  The fact that Tom did not have such a tool 
 
            in his car at the time of the fatal accident has no bearing 
 
            whatsoever upon whether or not a business purpose existed 
 
            for Tom's travel to Ottumwa on January 13, 1990.
 
            
 
                 Stephen Cullinan confirmed that it would be appropriate 
 
            for Tom to check the flow at the manhole on a Saturday or 
 
            Sunday, a time which he felt would be a low flow period (Cl. 
 
            Ex. 52, pp. 21 and 22).  Other corroboration of the business 
 
            purpose comes from Theodore J. McNulty (Cl. Ex. 53, pp. 5-
 
            7), Elvin Frank Beach (Cl. Ex. 54, pp. 15 and 16), Thomas L. 
 
            Dugan (Cl. Ex. 55, pp. 7-9), and Manish Kohli (Cl. Ex. 70, 
 
            pp. 9 and 10).  There is absolutely no evidence in existence 
 
            which refutes the fact that Thomas F. Allen had a distinct 
 
            business purpose when traveling to Ottumwa, Iowa on January 
 
            13, 1990.
 
            
 
                 It is well documented in the record of this case that 
 
            Thomas Allen would commonly work on weekends, particularly 
 
            on Saturdays.  It was not uncommon for him to simply appear, 
 
            unannounced at places where he had business to perform (Cl. 
 
            Ex. 54, pp. 25 and 26; Cl. Ex. 51, pp. 16 and 17).  The fact 
 
            that he did not have an appointment to meet with anyone at 
 
            the Iowa Beverage Manufacturers plant is of no significance.  
 
            There is no evidence in the record to indicate that he would 
 
            have needed an appointment in order to gain access or to 
 
            know where to go at the plant.  He had been there 
 
            previously.  It was not uncommon for him to merely show up, 
 
            unannounced, at places where he had business interests.
 
            
 
                 It is well documented by the evidence in this case that 
 
            Thomas F. Allen had a business need for checking the flow in 
 
            manholes at the Iowa Beverage Manufacturers plant in 
 
            Ottumwa, Iowa, at a time when flow in the manhole would be 
 
            low.  The record indicates that Saturday or Sunday was an 
 
            appropriate time to conduct that testing.  From the record, 
 
            it is possible that approximately 6:00 a.m. on a weekday 
 
            might have been an equally appropriate time to conduct the 
 
            testing.  From the record, it cannot be determined if any 
 
            one time would have been preferable to another though it 
 
            appears that any of the options would have been adequate and 
 
            appropriate.  If Thomas Allen had not chosen to go to 
 
            Ottumwa on Saturday, January 13, 1990, it would have been 
 
            necessary for him to go there at some other time when the 
 
            flow was at a low level.
 
            
 
                 From the third page of claimant's exhibit 10, it is 
 
            apparent that on January 5, 1990, Thomas Allen knew that it 
 
            would be necessary for him to check the flow in the manholes 
 
            at the Iowa Bottlers plant on a Saturday, Sunday or, 
 
            possibly, at 6:00 a.m. on a weekday.  There is nothing in 
 
            the record to indicate that the tests which Thomas needed to 
 
            perform could not have been done on Sunday the 14th, 
 
            Saturday the 6th, Sunday the 7th, or at some other time on 
 
            Saturday the 13th.
 
            
 
                 The record shows that Thomas F. Allen needed to make a 
 
            trip to Ottumwa to the Iowa Bottlers plant at some point in 
 

 
            
 
            Page   6
 
            
 
            
 
            
 
            
 
            order to check the flow during the low flow periods of time.  
 
            If he had not gone on Saturday, January 13, when he did, it 
 
            would have been necessary for him to go at some other time.  
 
            It can be reasonably argued that the possibility or 
 
            opportunity to meet with Tom and Peg Lazio on the evening of 
 
            January 13, 1990, might have played some part in his 
 
            decision to go to Ottumwa and check the manhole during the 
 
            afternoon of January 13 rather than at some other 
 
            appropriate time.  Thomas Allen had worked the morning of 
 
            Saturday, January 13.  According to Sandra, he stopped at 
 
            home shortly before lunch and informed her that he needed to 
 
            check the flow in some manholes at Iowa Bottlers in Ottumwa.  
 
            He asked her to go along with him so they could go dancing 
 
            and also to see if their friends, Tom and Peg Lazio, would 
 
            be able to meet with them.  Tom then had lunch with Tom 
 
            Dugan.  Dugan was informed that the Allens intended to 
 
            engage in some type of social activity that evening.  It was 
 
            a reason given by Tom Allen for finishing the lunch meeting 
 
            when he did.  Tom then apparently stopped at the business 
 
            place of Elvin Beach and informed Beach that he was going to 
 
            Ottumwa to look at manholes.  Apparently, nothing about 
 
            social activities was mentioned (Cl. Ex. 54, pp. 15 and 15).  
 
            Dugan was under the impression that the Allens were staying 
 
            overnight wherever it was they were going but he could not 
 
            identify why he had that impression (Cl. Ex. 55, pp. 9-11 
 
            and 14).  He knew no particulars about the plans the Allens 
 
            had made.  It is apparent that Dugan's impression about 
 
            staying overnight was incorrect since no overnight clothes 
 
            or personnel hygiene items were in the car at the time the 
 
            fatal accident occurred.
 
            
 
                 Sandra Allen talked with Peg Lazio in the early 
 
            afternoon of January 13.  At that point in time, both Sandra 
 
            and Peg have testified that the time at which they would 
 
            meet was uncertain.  The Lazios testified that they had 
 
            planned a family dinner prior to the time that they were 
 
            contacted by Sandra.  ***** Sandra, Peg and Tom Lazio all 
 
            agree that the first time any mention had been made of the 
 
            Lazios and Allens getting together on Saturday, January 13, 
 
            was in the early afternoon of that day.  They all agree that 
 
            the plans for getting together were not finalized until 
 
            Allens phoned from the car telephone after they were already 
 
            en route traveling from Mount Pleasant to Ottumwa.  The 
 
            Lazios had previously made other plans for that evening in 
 
            the nature of a family gathering and they did not cancel 
 
            those plans in order to meet with the Allens.  As it turned 
 
            out, the work which Tom had to do was expected to occupy his 
 
            time until approximately 8:00 p.m.  This would have amounted 
 
            to approximately three hours of work.
 
            
 
                 It is found that Thomas Allen planned to go to Ottumwa 
 
            on the afternoon of Saturday, January 13, 1990, prior to the 
 
            time that he knew whether or not the Lazios would be able to 
 
            meet with him and Sandra.  One can speculate about what 
 
            might have happened if the Lazios had been unavailable.  
 
            Perhaps, Tom and Sandra would have eaten dinner at a 
 

 
            
 
            Page   7
 
            
 
            
 
            
 
            
 
            restaurant in Ottumwa or someplace en route to or from 
 
            Ottumwa.  Perhaps, they would have gone dancing in Ottumwa.  
 
            Perhaps, Sandra would not have gone along for the ride.  
 
            Perhaps, Tom would have rescheduled the trip for some other 
 
            time or date.  It is, however, unlikely that the trip would 
 
            have been rescheduled because Tom had appointments to meet 
 
            at Iowa Bottlers on the following Monday and Tuesday.  
 
            Sandra did not like for him to work on Sundays and he 
 
            usually avoided work on Sundays.  It is possible that the 
 
            Monday or Tuesday meetings at Iowa Bottlers would have 
 
            required input which would result from his testing at the 
 
            manhole cover and that it would be necessary to complete 
 
            that testing prior to the meetings.  Tom Allen was 
 
            performing a project which was time sensitive.  It was 
 
            necessary that the steps needed to move the project to a 
 
            prompt completion, be taken in a prompt manner.  It cannot 
 
            be determined whether or not Tom would have actually needed 
 
            the test results for the Monday or Tuesday meetings but it 
 
            is apparent that they were needed for the project to keep 
 
            progressing toward completion.
 
            
 
                 It is found that Tom Allen would have gone to Ottumwa 
 
            to test at the manhole at Iowa Bottlers on the afternoon of 
 
            January 13, 1990, even if the Lazios had not been available 
 
            to meet with him and Sandra.  The evidence showing that the 
 
            principal purpose of the travel was to conduct the testing 
 
            is clear and convincing.  There is no reliable evidence to 
 
            the contrary, only surmise and conjecture.  The importance 
 
            of moving promptly with the project in which Tom Allen was 
 
            engaged is well corroborated by the testimony of Charles 
 
            Sizemore (Cl. Ex. 50, p. 7; Cl. Ex. 16), Keith Kropf (Cl. 
 
            Ex. 51, p. 15), Stephen Cullinan (Ex. 52, pp. 25 and 26), 
 
            Theodore J. McNulty (Cl. Ex. 53, p. 8), and Manish Kohli 
 
            (Cl. Ex. 70, p. 7).  When Thomas Allen made his plan of 
 
            things to do on January 5, 1990, checking flow in manholes 
 
            were the first two activities on the list (Cl. Ex. 10, p. 
 
            3).  There is every reason to believe that the activities 
 
            that Tom planned to perform at the manhole on January 13, 
 
            1990, were an integral part of keeping the project going in 
 
            order to achieve a timely completion.  It is very unlikely 
 
            that his plan to do so would have changed regardless of the 
 
            availability of the Lazios.  Tom Allen needed to perform the 
 
            testing.  His plan to perform the testing on that Saturday 
 
            was made several days prior to the time that he knew whether 
 
            or not the Lazios would be available to meet with him and 
 
            Sandra.  That fact, when coupled with the time sensitive 
 
            nature of the project makes it extremely unlikely that his 
 
            plans would have been altered if the Lazios had been 
 
            unavailable.  There is no credible evidence in the record of 
 
            this case to support the contention that meeting with the 
 
            Lazios was a principal, primary or even significant 
 
            consideration in selecting the time at which Tom Allen went 
 
            to Ottumwa in order to perform testing at the Iowa Beverage 
 
            Manufacturers plant on January 13, 1990.
 
            
 
                 In short, the evidence in this case overwhelmingly and 
 

 
            
 
            Page   8
 
            
 
            
 
            
 
            
 
            without any substantial evidence to the contrary proves 
 
            beyond all doubt whatsoever that Thomas Allen was performing 
 
            engineering services for Iowa Beverage Manufacturers, Inc., 
 
            at its Ottumwa, Iowa plant, that on January 13, 1990, he was 
 
            traveling to that plant in order to perform testing at a 
 
            manhole cover as part of those services and that he was 
 
            fatally injured in a motor vehicle accident while he was 
 
            traveling on a customarily used direct route for travel 
 
            between Mount Pleasant and Ottumwa, Iowa.  That same 
 
            evidence overwhelmingly shows that the business function 
 
            which was planned would have needed to be performed at some 
 
            other time if it were not to be performed on January 13 and, 
 
            accordingly, the related travel from Mount Pleasant to 
 
            Ottumwa and back would have been necessary at some other 
 
            time if it were not performed on January 13.  One can engage 
 
            in surmise and conjecture in order to allege that if the 
 
            Lazios had not been available on January 13 that the travel 
 
            and business function might not have been performed on that 
 
            date.  The evidence in the record is, however, to the 
 
            contrary.  It is found that Thomas Allen would have gone to 
 
            the Iowa Beverage Manufacturers plant on January 13, 1990, 
 
            and would have performed the travel that he was engaged in 
 
            at the time of his death even if the Lazios had been 
 
            unavailable to meet with him and Sandy on that evening.  The 
 
            record of this case contains no substantial evidence to the 
 
            contrary.
 
            
 
                 There are other pertinent facts which should be 
 
            considered.  The car in which Thomas was traveling was owned 
 
            and provided by the corporate employer (Cl. Exs. 19, 20).  
 
            Decedent was customarily compensated for his travel expenses 
 
            (Cl. Ex. 49, pp. 24, 25, 30).
 
            
 
                 No written contract was found between Allen Water and 
 
            Wastewater Engineering, Inc., and Iowa Beverage 
 
            Manufacturers, Inc., because none had been entered into.  
 
            
 
                                CONCLUSIONS OF LAW
 
            
 
            The conclusions of law contained in the proposed agency 
 
            decision filed March 5, 1993 are adopted as set forth below.  
 
            Segments designated by asterisks (*****) indicate portions 
 
            of the language from the proposed agency decision that have 
 
            been intentionally deleted and do not form a part of this 
 
            final agency decision.  Segments designated by brackets ([ 
 
            ]) indicate language that is in addition to the language of 
 
            the proposed agency decision.
 
            
 
                 [It is noted that the conclusion of law that the 
 
            decedent was in the course of his employment at the time of 
 
            his death has not been raised as an issue on appeal.  
 
            However, the findings of fact and the conclusions of law on 
 
            that issue and the issue of decedent's rate are incorporated 
 
            herein.]
 
            
 
                 The claimant has the burden of proving by a 
 
            preponderance of the evidence that the alleged injury 
 
            actually occurred and that it arose out of and in the course 
 
            of employment.  McDowell v. Town of Clarksville, 241 N.W.2d 
 
            904 (Iowa 1976); Musselman v. Cent. Tel. Co., 261 f there 
 
            was evidence which showed that the trip would have been 
 
            rescheduled if the Lazios had been unavailable, it would 
 
            still have been necessary for the trip and work which was 
 
            planned to be performed at some other time if it had not 
 
            been performed on January 13, 1990.  The death of Thomas F. 
 
            Allen is clearly compensable and his surviving spouse, 
 
            Sandra K. Allen, is entitled to receive benefits under the 
 
            provisions of section 85.31.
 
            
 
                 ***** Claimant asserts that the rate of compensation 
 
            should be based upon section 85.36(11) with the wage being 
 
            based upon a salary of $57,200, the salary level for which a 
 
            premium was charged.
 
            
 
                 The premium charged by Kemper Insurance Company to 
 
            Allen Water and Wastewater Engineering, Inc., was based upon 
 
            Thomas Allen having a yearly salary of $57,200 per year.  In 
 
            fact, Kemper had exercised its prerogative to limit the 
 
            maximum salary for which they would issue workers' 
 
            compensation coverage for a corporate executive and $57,200 
 
            was that maximum amount for which they would issue coverage.  
 
            Kemper would not cover a larger salary even if actual 
 
            earnings were more than $57,200.  Kemper collected a premium 
 
            during policy year 1988-1989 based upon Thomas F. Allen 
 
            having earnings of $57,200.  They collected a premium for 
 
            policy year 1989-1990 based upon Thomas F. Allen having a 
 
            yearly salary of $57,200 per year.
 
            
 
                 *****
 
            
 
                 It is therefore concluded that subsection 11 of section 
 

 
            
 
            Page  10
 
            
 
            
 
            
 
            
 
            85.36 of the Code controls in this case.  It is a specific 
 
            express exception to the normal practice of basing the rate 
 
            of compensation upon actual earnings.  The actual earnings 
 
            are immaterial.  In this case, the level of coverage which 
 
            was purchased and the premium paid was based upon Thomas F. 
 
            Allen having a yearly wage of $57,200.  The weekly rate of 
 
            compensation should therefore be computed under section 
 
            85.36(5) with the yearly earnings being determined under 
 
            section 85.36(11) as $57,200 per year.  The gross weekly 
 
            earnings of Thomas F. Allen for purposes of computing the 
 
            rate of workers' compensation weekly benefits is therefore 
 
            $1,100.  Since Thomas was married and entitled to himself 
 
            and his spouse as an exemption, the rate of compensation is 
 
            $609.60 per week.
 
            
 
                 An issue exists with regard to a claimed credit under 
 
            section 85.22.  The case Fisher v. Keller Industries, 485 
 
            N.W.2d 626 (Iowa 1992) controls the claimed credit in this 
 
            case.  Since Kemper Insurance Company denied liability for 
 
            the claim and made no payment of weekly compensation 
 
            benefits, they have no basis for indemnification.  They had 
 
            no right to object to the third party settlement.  The 
 
            statute provides no provisions for future credit for amounts 
 
            which have not been paid.  The supreme court case was 
 
            decided prior to the date of hearing in this case.  It is 
 
            therefore controlling.  Defendants are not entitled to any 
 
            credit whatsoever based upon the third party recovery.  
 
            Since they paid nothing, they have no right to be 
 
            indemnified and no basis for indemnification which, by its 
 
            very definition, requires that something has been paid in 
 
            order for there to be a reimbursement.
 
            
 
                 The final issue in this case is the claimant's claim 
 
            for a penalty under the provisions of the fourth unnumbered 
 
            paragraph of Iowa Code section 86.13.  It is recognized that 
 
            since Sandra Allen was not a participant in her husband's 
 
            business that it was difficult for her to provide the 
 
            adjusters of the insurance carrier with information which 
 
            they could use to corroborate or deny her claim.  That fact 
 
            would be apparent to a reasonable adjuster.  It could 
 
            initially cause some suspicion about the validity of the 
 
            claim.
 
            
 
                 [The standard is whether defendants' claim is fairly 
 
            debatable.  Where defendants assert a claim that is fairly 
 
            debatable, they do not act unreasonably in the denial of 
 
            payment.  Seydel v. U of I Physical Plant, Appeal Decision, 
 
            November 1, 1989.
 
            
 
                 In this case, the circumstances of claimant's death 
 
            raised significant questions of application of the dual 
 
            purpose doctrine and other aspects of the issue of whether 
 
            claimant's death was in the course of his employment.  
 
            Claimant's spouse was in the vehicle with claimant, and the 
 
            record shows clearly that part of the trip was for a 
 
            personal, rather than a business purpose.  Although the 
 
            evidence as it developed through the course of the case 
 
            ultimately established that the death of claimant was in the 
 

 
            
 
            Page  11
 
            
 
            
 
            
 
            
 
            course of his employment, it cannot be said that the 
 
            question of compensability was not fairly debatable.  
 
            Although the evidence of compensability ultimately proved to 
 
            be compelling, defendants' argument that the death was not 
 
            in the course of employment was not unreasonable.  A party 
 
            is entitled to raise a viable argument in its favor without 
 
            suffering a penalty under Iowa Code section 86.13.  Covia v. 
 
            Robinson, 507 N.W.2d 411 (Iowa 1993).  The question of 
 
            whether claimant's death was in the course of his employment 
 
            was fairly debatable and penalty benefits are not 
 
            appropriate.]
 
            
 
                 Defendants shall also pay the sum of $4000 to the 
 
            Second Injury Fund of Iowa pursuant to section 85.65.  The 
 
            burial expense provided by section 85.28 at the time of 
 
            decedent's death was an amount up to $1000.  In this case it 
 
            is found that the actual burial expenses exceed $1000 (pl. 
 
            ex. 42).  Defendants shall also pay Sandra K. Allen the sum 
 
            of $1000 pursuant to section 85.28.
 
            
 
                 Since claimant has prevailed in this proceeding she is 
 
            entitled to recover the costs of this action.  The affidavit 
 
            of costs together with the attachments, has been reviewed 
 
            (cl. ex. 72).  All items requested are properly assessed 
 
            under the provisions of rule 343 IAC 4.33.  The deposition 
 
            transcripts were all received into evidence at the hearing.  
 
            Woody v Machin, 380 N.W.2d 727 (Iowa 1986).  Claimant is 
 
            therefore entitled to recover the entire amount claimed, 
 
            namely $1,087.11.
 
            
 
                 WHEREFORE, the decision of the deputy is affirmed and 
 
            modified.
 
            
 
                                      ORDER
 
            
 
                 THEREFORE, it is ordered:
 
            
 
                 That it is ordered that defendants pay Sandra K. Allen 
 
            the sum of six hundred nine and 60/100 dollars ($609.60) per 
 
            week  for the period of time running from January 13, 1990.
 
            
 
                 That it is further ordered that defendants pay the 
 
            Second Injury Fund of Iowa the sum of four thousand dollars 
 
            ($4000).
 
            
 
                 That defendants shall pay the costs of this matter 
 
            including transcription of the hearing and shall reimburse 
 
            claimant for the filing fee if previously paid by claimant.
 
            
 
                 That it is further ordered that defendants pay to 
 
            Sandra K. Allen one thousand dollars ($1,000) in burial 
 
            expenses.
 
            
 
                 That it is further ordered that defendants shall pay 
 
            interest pursuant to Iowa Code section 85.30.
 
            
 
                 Signed and filed this ____ day of January, 1994.
 
            
 
            
 
            
 

 
            
 
            Page  12
 
            
 
            
 
            
 
            
 
            
 
                                          
 
                                       ________________________________
 
                                                   BYRON K. ORTON
 
                                              INDUSTRIAL COMMISSIONER
 
            
 
            Copies To:
 
            
 
            Mr. Roger Stone
 
            Attorney at Law
 
            1200 MNB Building
 
            Cedar Rapids, Iowa  52401
 
            
 
            Mr. Craig Levien
 
            Attorney at Law
 
            600 Union Arcade Building
 
            111 East Third
 
            Davenport, Iowa  52801
 
            
 
 
            
 
 
 
 
 
 
 
                                           1102; 1104; 1110; 1402.30
 
                                           1506; 2003; 3001; 3002;
 
                                           3400; 1704; 4000.2
 
                                           Filed January 31, 1994
 
                                           BYRON K. ORTON
 
                      
 
            
 
                     BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
            
 
            THOMAS F. ALLEN, Deceased,      :
 
            SANDRA KAY ALLEN, Surviving     :
 
            Spouse and Executor,            :
 
                                            :       File No. 941868
 
                 Claimant,                  :
 
                                            :          A P P E A L
 
            vs.                             :
 
                                            :        D E C I S I O N
 
            ALLEN WATER AND WASTEWATER      :
 
            ENGINEERING, INC.,              :
 
                                            :
 
                 Employer,                  :
 
                                            :
 
            and                             :
 
                                            :
 
            KEMPER INSURANCE COMPANY,       :
 
                                            :
 
                 Insurance Carrier,         :
 
                 Defendants.                :
 
            ____________________________________________________________
 
            
 
            1102; 1104; 1110; 1402.30
 
            Decedent was an engineer.  He lived and had his office at 
 
            Mt. Pleasant, Iowa, but was involved in a project at 
 
            Ottumwa, Iowa, (as well as other projects throughout SE 
 
            Iowa).  He commonly worked on Saturdays.  He was killed in 
 
            an automobile accident while traveling from Mt. Pleasant to 
 
            Ottumwa in order to perform approximately three hours of 
 
            work associated with a project.  Decedent and his spouse had 
 
            planned to meet with friends after the work was completed.  
 
            The plan to meet with friends was made on the day of death 
 
            but the plan to travel to Ottumwa to perform the work which 
 
            was intended had been performed several days earlier.  If 
 
            decedent had not gone to Ottumwa on the date of death, he 
 
            would have needed to make the trip at some other time in 
 
            order to perform the intended work.  The fact of the 
 
            employment, the plan to travel and the subsequently formed 
 
            plan to meet with friends was shown conclusively by the 
 
            evidence in the case and without any evidence or reasonably 
 
            conjecture to the contrary.  The death was held compensable.  
 
            1506; 2003; 3001; 3002
 
            The defendant employer in this case was a corporation which 
 

 
            
 
 
 
 
 
            consisted principally of the decedent.  He functioned as a 
 
            sole proprietor but had elected to do business as a 
 
            corporation.  The insurance had charged a premium based upon 
 
            an earning level of $57,200 per year.  It would not make 
 
            coverage available at a higher level of earnings.  It used 
 
            that same level for the policy year in which the death 
 
            occurred and had used it for the preceding policy year.  The 
 
            policy year which the insurance carrier used for determining 
 
            wages upon which to base their premium was not the same as 
 
            the calendar year used by the decedent for his individual 
 
            income taxes.  The rate of compensation was held to be 
 
            controlled by section 85.36(11) and that the actual earnings 
 
            of the decedent were immaterial.  The deputy hearing this 
 
            case was one of the drafters of the legislation which became 
 
            section 85.36(11).  The intent was to make the weekly 
 
            benefit to be determined precisely by the wage level which 
 
            was represented when the policy was issued and the premiums 
 
            for the policy were determined.  It was intended to be an 
 
            exception to the normal rule of basing the rate on actual 
 
            earnings.  It was intended to avoid the often cumbersome 
 
            litigation that frequently occurs, such as that in this 
 
            case, when people who for all practical purposes are 
 
            self-employed, are technically treated as an employee under 
 
            the workers' compensation laws.  It was intended to provide 
 
            that the benefit paid would be commensurate with the premium 
 
            actually charged.
 
            
 
            3400; 1704
 
            Defendants had consistently denied liability and continued 
 
            to do so at the time of hearing.  They paid nothing in the 
 
            way of weekly benefits to the surviving spouse.  The Keller 
 
            case was decided prior to the date of hearing of this case.  
 
            Any alleged agreement by claimant to grant a credit was void 
 
            as lacking consideration and mutuality.  No credit was 
 
            allowed for the third party recovery.
 
            
 
            4000.2
 
            The evidence establishing liability in this case was strong.  
 
            The defense in this case denied undisputable facts which 
 
            were requested to be admitted in request for admissions, 
 
            even things as basic as the ownership of the automobile, a 
 
            matter of public record and which was shown on the DOT 
 
            accident report of which defendants had possession.  
 
            However, it was held that the presence of decedent's spouse 
 
            in the automobile and the evidence in the record that at 
 
            least part of the purpose of the trip was personal (to go 
 
            for dinner and dancing with friends) made the case fairly 
 
            debatable.  No penalty was imposed.
 
            
 
 
            
 
            Page   1
 
            
 
            
 
            
 
            
 
            
 
                     BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
                                          :
 
            THOMAS F. ALLEN, Deceased,    :
 
            SANDRA KAY ALLEN, Surviving   :
 
            Spouse and Executor,          :
 
                                          :
 
                 Claimant,                :
 
                                          :
 
            vs.                           :
 
                                          :       File No. 941868
 
            ALLEN WATER AND WASTEWATER    :
 
            ENGINEERING, INC.,            :
 
                                          :     A R B I T R A T I O N
 
                 Employer,                :
 
                                          :       D E C I S I O N
 
            and                           :
 
                                          :
 
            KEMPER INSURANCE COMPANY,     :
 
                                          :
 
                 Insurance Carrier,       :
 
                 Defendants.              :
 
            ___________________________________________________________
 
            
 
                              STATEMENT OF THE CASE
 
            
 
                 This is a proceeding in arbitration brought by Sandra 
 
            K. Allen, in her capacity as surviving spouse and also as 
 
            executor of the estate of Thomas F. Allen, based upon the 
 
            death of Thomas F. Allen which occurred on January 13, 1990.  
 
            Sandra seeks death benefits pursuant to section 85.31.  The 
 
            principal issue in the case is whether the death arose out 
 
            of and in the course of employment.  It involves application 
 
            for the dual purpose doctrine.  Sandra also seeks a penalty 
 
            under the fourth unnumbered paragraph of section 86.13.  
 
            There is an issue regarding the rate at which weekly 
 
            benefits are payable and an issue with regard to the amount 
 
            of credit defendants are entitled to receive as a result of 
 
            the recovery obtained in a wrongful death action against 
 
            third parties.
 
            
 
                 The case was heard and fully submitted at Ottumwa, 
 
            Iowa, on July 14, 1992.  The evidence in the case consists 
 
            of testimony from Sandra Kay Allen, Mary Margaret (Peg) 
 
            Lazio, Robert Flagherty, and Randy Hilbrant.  The record 
 
            also contains claimant's exhibits 1 through 72 and 
 
            defendants' exhibits 1 through 5.
 
            
 
                                 FINDINGS OF FACT
 
            
 
                 The appearance and demeanor of those who testified at 
 
            hearing was observed by the undersigned.  Their testimony 
 
            has been considered in light of the other evidence in the 
 
            record.  They are found to be credible witnesses to the 
 
            extent that their testimony is based upon their personal 
 
            knowledge and observations.  The finding of credibility does 
 
            not extend to the accuracy of their opinions or conclusions.
 

 
            
 
            Page   2
 
            
 
            
 
            
 
            
 
            
 
                 Thomas F. Allen was the spouse of Sandra Kay Allen.  
 
            Thomas was a professional engineer whose practice seems to 
 
            have specialized in water and waste water treatment.  Thomas 
 
            had been a part of the French Reneker Engineering firm in 
 
            Fairfield, Iowa, and then subsequently started his own firm, 
 
            Allen Water and Wastewater in the mid-1980's (Claimant's 
 
            Exhibit 71, page 4).  Thomas operated the business as a 
 
            corporation by the name of Allen Water and Wastewater 
 
            Engineering, Inc.  He was the president of the corporation 
 
            and its principal employee.  The business operated in much 
 
            the same manner as if Thomas had functioned as a sole 
 
            proprietor.  The only other employee of the corporation at 
 
            the time of his death was Ethel Marie Barry.  The 
 
            corporation was the alter ego of Thomas F. Allen.  The 
 
            business ended with his death.   Ethel performed bookkeeping 
 
            for the company and assisted Sandra in compiling records and 
 
            otherwise closing out the business.
 
            
 
                 Thomas apparently had a practice of paying himself a 
 
            salary of $2,000 every two weeks (Cl. Ex. 34).  It is noted 
 
            that he paid himself a bonus in the amount of $8,900 in 
 
            early 1989.  When revenues were insufficient during late 
 
            1989, Thomas did not take a salary from the company.  He did 
 
            continue to take a reimbursement for expenses and paid Ethel 
 
            Marie Barry's salary (Cl. Ex. 49, pp. 23-25 and 39; Cl. Ex. 
 
            34; Cl. Ex. 35).  In short, the salary which Thomas actually 
 
            received from his corporation was dependent upon the 
 
            profitability of that corporation.  The profitability varied 
 
            from time to time and the amount which he withdrew from the 
 
            company in the form of salary and bonus likewise varied from 
 
            time to time (Cl. Ex. 31-33).  The record in this case does 
 
            not contain the actual records of Allen Water and Wastewater 
 
            Engineering, Inc., which deal with its income tax status, 
 
            corporate organizational documents or the like.  Since the 
 
            income tax returns filed by Thomas do not show any profit or 
 
            loss or distribution of dividends from the corporation, it 
 
            appears as though the profits from the corporation were paid 
 
            to Thomas in the form of salary.  When profits and revenues 
 
            were low, he received no salary.  When they were high, he 
 
            paid himself a bonus.
 
            
 
                 The salary payment practice used by Thomas is common 
 
            for small corporations, proprietorships and partnerships.  
 
            Widely fluctuating earnings are quite typical for sole 
 
            proprietors. Individuals like Thomas are, from a practical 
 
            standpoint, self-employed sole proprietors even though they 
 
            have adopted the corporate form of business.  Persons such 
 
            as Thomas are technically classified as employees of the 
 
            corporation under which they do business but they are not 
 
            normal employees, despite the fact that all or part of what 
 
            is paid to them is termed a salary or wages.  They continue 
 
            to work even when no money is available to actually pay 
 
            their salary or wages.  They are not placed into a layoff 
 
            status.  They have the ability, if they choose to use it, to 
 
            borrow and pay a salary or wages to themselves.  They have 
 
            the ability to cause the corporation to appear profitable or 
 

 
            
 
            Page   3
 
            
 
            
 
            
 
            
 
            unprofitable based upon matters such as rent which they pay 
 
            to themselves for the business premises.  It is noted that 
 
            Thomas paid himself rent for the offices used by the 
 
            employer corporation.  Items such as depreciation, interest 
 
            expense and many other variables are subject to the control 
 
            of a person such as Thomas.   Corporate meetings can set a 
 
            salary or salary level which may or may not actually be 
 
            paid.  If funds are not available to pay the established 
 
            salary to the owner at the time when it is due, it may be 
 
            paid at a later time when and if funds become available.  In 
 
            short, the owner of a business is not a normal employee from 
 
            the standpoint of wages or salary.  Thomas had full ability 
 
            to perform many functions which easily could overstate or 
 
            understate the profitability of the business and the owner's 
 
            salary.  The facts in evidence in this case clearly show 
 
            that the practices followed by Thomas F. Allen in operating 
 
            the business of Allen Water and Wastewater Engineering, 
 
            Inc., were within the range of practices commonly and 
 
            customarily used by individuals who function as a 
 
            self-employed proprietor yet have chosen the corporate form 
 
            for conducting the business.  It would be extremely 
 
            speculative to venture to guess at what amount of actual 
 
            salary Thomas Allen would have paid to himself during 
 
            calendar year 1990 or during the period running from May 1, 
 
            1989 through May 1, 1990, if he had not died on January 13, 
 
            1990.
 
            
 
                 Allen Water and Wastewater Engineering was charged  a 
 
            premium for covering Thomas F. Allen with workers' 
 
            compensation insurance.  The premium was based upon Thomas 
 
            having yearly earnings of $57,200.  The period during which 
 
            earnings were considered for determining the premium was 
 
            from May 1 of one year until May 1, of the following year, a 
 
            date different than the calendar year period used for 
 
            determining income taxes.  The 1988-1989 premium year 
 
            provided a final premium based upon Thomas having a yearly 
 
            salary of $57,200.  The 1989-1989 premium audit charged a 
 
            premium based upon Thomas having a yearly salary of $57,200.  
 
            The sum of $57,200 was used by the insurance carrier when 
 
            computing the premium to be charged for workers' 
 
            compensation coverage for Thomas F. Allen.  When premium 
 
            audits were conducted, the insurance carrier continued to 
 
            charge a premium based upon Thomas F. Allen having a yearly 
 
            salary of $57,200 (Cl. Ex. 21, 22 and 23; Cl. Ex. 71, pp. 9-
 
            15).  The premiums for insurance year 1989-1990 have been 
 
            fully paid (Cl. Exs. 24 and 26).  It is clear that the 
 
            premium charged to Allen Water and Wastewater, Inc. was 
 
            based upon Thomas F. Allen having wages or earnings in the 
 
            amount of $57,200.
 
            
 
                 Claimant's exhibit 6 is a weekly planner-type of book.  
 
            It is the book used by Thomas F. Allen for planning his 
 
            daily activities and appointments.  Ethel Marie Barry also 
 
            confirmed that claimant's exhibits 5 through 15 were all 
 
            made in the handwriting of Thomas F. Allen and that exhibit 
 
            7 is the file used by Thomas F. Allen for keeping those 
 

 
            
 
            Page   4
 
            
 
            
 
            
 
            
 
            exhibits in his office records.  Ethel Marie Barry is fully 
 
            familiar with the handwriting of Thomas F. Allen.  No 
 
            contrary evidence is in the record of this case (Cl. Ex. 49, 
 
            pp. 8-20). It is found that all the writing on exhibits 5 
 
            through 15 was performed by Thomas F. Allen.
 
            
 
                 It is readily apparent from reviewing exhibits 5 
 
            through 15 that Thomas F. Allen, doing business as Allen 
 
            Water and Wastewater Engineering, Inc., was engaged in 
 
            performing some type of a project for a business known as 
 
            Iowa Bottlers.  At this point it should be noted that Iowa 
 
            Beverage Manufacturers, Inc., is sometimes referred to as 
 
            Iowa Beverage or Iowa Bottlers (Cl. Ex. 52, pp. 5 and 6).  
 
            Throughout the record of this case those different names are 
 
            used interchangeably.
 
            
 
                 The records maintained by Thomas F. Allen clearly show 
 
            that he had dealings with Iowa Beverage Manufacturers, Inc., 
 
            on  January 2, 1990, January 4, 1990, January 5, 1990, 
 
            January 9, 1990, and possibly at other times as well.  The 
 
            first page of exhibit 15 shows that Tom had a plan to stop 
 
            at Ottumwa at Iowa Bottlers for something to do with tests.  
 
            On the third page of claimant's 10 appears what is 
 
            apparently a list of things which Tom wished to accomplish.  
 
            Number 2 appears to indicate that he intended to check the 
 
            depth of flow at a manhole at 6:00 a.m.  Number 13 indicates 
 
            that no flow periods are from 4:00 to 5:00 a.m. or on 
 
            Saturday or Sunday.  It is noted that from 7:00 a.m. to 3:00 
 
            p.m., the first shift is operating and that from 3:00 p.m. 
 
            to 11:00 p.m., the second shift is operating, and that from 
 
            8:30 p.m. to 5:00 p.m., cleaning is ongoing.  Most of the 
 
            entries on the page are in pencil, however, there is an 
 
            entry in blue ink which appears to say Saturday or Sunday in 
 
            parentheses.  That entry was apparently entered at some 
 
            point after the original writing was made since a different 
 
            writing instrument was used.  When taken as a whole, the 
 
            sheet appears to indicate that 6:00 a.m. or anytime on a 
 
            Saturday or Sunday would be a reasonable time for performing 
 
            the check of flow at the manhole.  The entries in exhibit 6 
 
            for Saturday, January 13, by what apparently is the 5:00 
 
            p.m. line, indicates that Tom planned to be at the Iowa 
 
            Bottlers plant in Ottumwa on that Saturday.
 
            
 
                 Standing alone, claimant's exhibits 6 through 15 
 
            readily establish that Thomas Allen was performing services 
 
            for Iowa Bottlers and intended to perform some of those 
 
            services on Saturday, January 13, 1990. 
 
            
 
                 Any scintilla of a doubt which might have existed as to 
 
            whether or not Thomas F. Allen was performing services for 
 
            Iowa Beverage Manufacturers, Inc., is overwhelmingly 
 
            extinguished by claimant's exhibit 16 and the testimony from 
 
            Charles E. Sizemore, personnel manager of Iowa Beverage (Cl. 
 
            Ex. 50), Keith Kropf, superintendent of the City of Ottumwa 
 
            Water Pollution Control Facility (Cl. Ex. 51), Stephen Allen 
 
            Cullinan, industrial pre-treatment coordinator for the City 
 
            of Ottumwa (Cl. Ex. 52), Theodore J. McNulty, executive vice 
 
            president of Iowa Beverage Manufacturing, Inc., in Ottumwa 
 

 
            
 
            Page   5
 
            
 
            
 
            
 
            
 
            (Cl. Ex. 53), and, Manish Kohli, chemist analyst for Iowa 
 
            Beverage in January 1990 (Cl. Ex. 70). 
 
            
 
                  If exhibits 6 through 15 were not sufficient to 
 
            convince a person that Thomas F. Allen had a business 
 
            purpose for going to Ottumwa, Iowa, on January 13, 1990, any 
 
            such doubt is overwhelming erased by the testimony of 
 
            Charles E. Sizemore, who, at page 19 of his deposition, 
 
            testified that he knew that Tom was coming over to the plant 
 
            on the weekend of his death in order to check the flow in a 
 
            manhole and that Saturday, January 13, would have been a 
 
            suitable time for him to do so (Cl. Ex. 50, pp. 13-19).  
 
            Additionally, according to Sizemore, the company had a 
 
            special tool made for removing the manhole in question 
 
            because it was quite heavy.  The tool was available at its 
 
            plant for whoever would have needed to use it (Cl. Ex. 50, 
 
            pp. 12 and 13).  The fact that Tom did not have such a tool 
 
            in his car at the time of the fatal accident has no bearing 
 
            whatsoever upon whether or not a business purpose existed 
 
            for Tom's travel to Ottumwa on January 13, 1990.
 
            
 
                 Stephen Cullinan confirmed that it would be appropriate 
 
            for Tom to check the flow at the manhole on a Saturday or 
 
            Sunday, a time which he felt would be a low flow period (Cl. 
 
            Ex. 52, pp. 21 and 22).  Other corroboration of the business 
 
            purpose comes from Theodore J. McNulty (Cl. Ex. 53, pp. 5-
 
            7), Elvin Frank Beach (Cl. Ex. 54, pp. 15 and 16), Thomas L. 
 
            Dugan (Cl. Ex. 55, pp. 7-9), and Manish Kohli (Cl. Ex. 70, 
 
            pp. 9 and 10).  There is absolutely no evidence in existence 
 
            which refutes the fact that Thomas F. Allen had a distinct 
 
            business purpose when traveling to Ottumwa, Iowa on January 
 
            13, 1990.
 
            
 
                 It is well documented in the record of this case that 
 
            Thomas Allen would commonly work on weekends, particularly 
 
            on Saturdays.  It was not uncommon for him to simply appear, 
 
            unannounced at places where he had business to perform (Cl. 
 
            Ex. 54, pp. 25 and 26; Cl. Ex. 51, pp. 16 and 17).  The fact 
 
            that he did not have an appointment to meet with anyone at 
 
            the Iowa Beverage Manufacturers plant is of no significance.  
 
            There is no evidence in the record to indicate that he would 
 
            have needed an appointment in order to gain access or to 
 
            know where to go at the plant.  He had been there 
 
            previously.  It was not uncommon for him to merely show up, 
 
            unannounced, at places where he had business interests.
 
            
 
                 It is well documented by the evidence in this case that 
 
            Thomas F. Allen had a business need for checking the flow in 
 
            manholes at the Iowa Beverage Manufacturers plant in 
 
            Ottumwa, Iowa, at a time when flow in the manhole would be 
 
            low.  The record indicates that Saturday or Sunday was an 
 
            appropriate time to conduct that testing.  From the record, 
 
            it is possible that approximately 6:00 a.m. on a weekday 
 
            might have been an equally appropriate time to conduct the 
 
            testing.  From the record, it cannot be determined if any 
 
            one time would have been preferable to another though it 
 
            appears that any of the options would have been adequate and 
 
            appropriate.  If Thomas Allen had not chosen to go to 
 

 
            
 
            Page   6
 
            
 
            
 
            
 
            
 
            Ottumwa on Saturday, January 13, 1990, it would have been 
 
            necessary for him to go there at some other time when the 
 
            flow was at a low level.
 
            
 
                 From the third page of claimant's exhibit 10, it is 
 
            apparent that on January 5, 1990, Thomas Allen knew that it 
 
            would be necessary for him to check the flow in the manholes 
 
            at the Iowa Bottlers plant on a Saturday, Sunday or, 
 
            possibly, at 6:00 a.m. on a weekday.  There is nothing in 
 
            the record to indicate that the tests which Thomas needed to 
 
            perform could not have been done on Sunday the 14th, 
 
            Saturday the 6th, Sunday the 7th, or at some other time on 
 
            Saturday the 13th.
 
            
 
                 It is overwhelming, abundantly clear that Thomas F. 
 
            Allen needed to make a trip to Ottumwa to the Iowa Bottlers 
 
            plant at some point in order to check the flow during the 
 
            low flow periods of time.  If he had not gone on Saturday, 
 
            January 13, when he did, it would have been necessary for 
 
            him to go at some other time.  It can be reasonably argued 
 
            that the possibility or opportunity to meet with Tom and Peg 
 
            Lazio on the evening of January 13, 1990, might have played 
 
            some part in his decision to go to Ottumwa and check the 
 
            manhole during the afternoon of January 13 rather than at 
 
            some other appropriate time.  Thomas Allen had worked the 
 
            morning of Saturday, January 13.  According to Sandra, he 
 
            stopped at home shortly before lunch and informed her that 
 
            he needed to check the flow in some manholes at Iowa 
 
            Bottlers in Ottumwa.  He asked her to go along with him so 
 
            they could go dancing and also to see if their friends, Tom 
 
            and Peg Lazio, would be able to meet with them.  Tom then 
 
            had lunch with Tom Dugan.  Dugan was informed that the 
 
            Allens intended to engage in some type of social activity 
 
            that evening.  It was a reason given by Tom Allen for 
 
            finishing the lunch meeting when he did.  Tom then 
 
            apparently stopped at the business place of Elvin Beach and 
 
            informed Beach that he was going to Ottumwa to look at 
 
            manholes.  Apparently, nothing about social activities was 
 
            mentioned (Cl. Ex. 54, pp. 15 and 15).  Dugan was under the 
 
            impression that the Allens were staying overnight wherever 
 
            it was they were going but he could not identify why he had 
 
            that impression (Cl. Ex. 55, pp. 9-11 and 14).  He knew no 
 
            particulars about the plans the Allens had made.  It is 
 
            apparent that Dugan's impression about staying overnight was 
 
            incorrect since no overnight clothes or personnel hygiene 
 
            items were in the car at the time the fatal accident 
 
            occurred.
 
            
 
                 Sandra Allen talked with Peg Lazio in the early 
 
            afternoon of January 13.  At that point in time, both Sandra 
 
            and Peg have testified that the time at which they would 
 
            meet was uncertain.  The Lazios testified that they had 
 
            planned a family dinner prior to the time that they were 
 
            contacted by Sandra.  Tom and Peg Lazio have been shown by 
 
            the evidence of this case to be responsible members of their 
 
            community.  Tom is president of the school board.  Tom and 
 
            Sandra Allen, likewise, appear as solid, reputable citizens.  
 

 
            
 
            Page   7
 
            
 
            
 
            
 
            
 
            They are not the type of people who would normally be 
 
            expected to fabricate stories or give perjured testimony.  
 
            Sandra, Peg and Tom Lazio all agree that the first time any 
 
            mention had been made of the Lazios and Allens getting 
 
            together on Saturday, January 13, was in the early afternoon 
 
            of that day.  They all agree that the plans for getting 
 
            together were not finalized until Allens phoned from the car 
 
            telephone after they were already en route traveling from 
 
            Mount Pleasant to Ottumwa.  The Lazios had previously made 
 
            other plans for that evening in the nature of a family 
 
            gathering and they did not cancel those plans in order to 
 
            meet with the Allens.  As it turned out, the work which Tom 
 
            had to do was expected to occupy his time until 
 
            approximately 8:00 p.m.  This would have amounted to 
 
            approximately three hours of work.
 
            
 
                 It is found that Thomas Allen planned to go to Ottumwa 
 
            on the afternoon of Saturday, January 13, 1990, prior to the 
 
            time that he knew whether or not the Lazios would be able to 
 
            meet with him and Sandra.  One can speculate about what 
 
            might have happened if the Lazios had been unavailable.  
 
            Perhaps, Tom and Sandra would have eaten dinner at a 
 
            restaurant in Ottumwa or someplace en route to or from 
 
            Ottumwa.  Perhaps, they would have gone dancing in Ottumwa.  
 
            Perhaps, Sandra would not have gone along for the ride.  
 
            Perhaps, Tom would have rescheduled the trip for some other 
 
            time or date.  It is, however, unlikely that the trip would 
 
            have been rescheduled because Tom had appointments to meet 
 
            at Iowa Bottlers on the following Monday and Tuesday.  
 
            Sandra did not like for him to work on Sundays and he 
 
            usually avoided work on Sundays.  It is possible that the 
 
            Monday or Tuesday meetings at Iowa Bottlers would have 
 
            required input which would result from his testing at the 
 
            manhole cover and that it would be necessary to complete 
 
            that testing prior to the meetings.  Tom Allen was 
 
            performing a project which was time sensitive.  It was 
 
            necessary that the steps needed to move the project to a 
 
            prompt completion, be taken in a prompt manner.  It cannot 
 
            be determined whether or not Tom would have actually needed 
 
            the test results for the Monday or Tuesday meetings but it 
 
            is apparent that they were needed for the project to keep 
 
            progressing toward completion.
 
            
 
                 It is found that Tom Allen would have gone to Ottumwa 
 
            to test at the manhole at Iowa Bottlers on the afternoon of 
 
            January 13, 1990, even if the Lazios had not been available 
 
            to meet with him and Sandra.  The evidence showing that the 
 
            principal purpose of the travel was to conduct the testing 
 
            is clear and convincing.  There is no reliable evidence to 
 
            the contrary, only surmise and conjecture.  The importance 
 
            of moving promptly with the project in which Tom Allen was 
 
            engaged is well corroborated by the testimony of Charles 
 
            Sizemore (Cl. Ex. 50, p. 7; Cl. Ex. 16), Keith Kropf (Cl. 
 
            Ex. 51, p. 15), Stephen Cullinan (Ex. 52, pp. 25 and 26), 
 
            Theodore J. McNulty (Cl. Ex. 53, p. 8), and Manish Kohli 
 
            (Cl. Ex. 70, p. 7).  When Thomas Allen made his plan of 
 

 
            
 
            Page   8
 
            
 
            
 
            
 
            
 
            things to do on January 5, 1990, checking flow in manholes 
 
            were the first two activities on the list (Cl. Ex. 10, p. 
 
            3).  There is every reason to believe that the activities 
 
            that Tom planned to perform at the manhole on January 13, 
 
            1990, were an integral part of keeping the project going in 
 
            order to achieve a timely completion.  It is very unlikely 
 
            that his plan to do so would have changed regardless of the 
 
            availability of the Lazios.  Tom Allen needed to perform the 
 
            testing.  His plan to perform the testing on that Saturday 
 
            was made several days prior to the time that he knew whether 
 
            or not the Lazios would be available to meet with him and 
 
            Sandra.  That fact, when coupled with the time sensitive 
 
            nature of the project makes it extremely unlikely that his 
 
            plans would have been altered if the Lazios had been 
 
            unavailable.  There is no credible evidence in the record of 
 
            this case to support the contention that meeting with the 
 
            Lazios was a principal, primary or even significant 
 
            consideration in selecting the time at which Tom Allen went 
 
            to Ottumwa in order to perform testing at the Iowa Beverage 
 
            Manufacturers plant on January 13, 1990.
 
            
 
                 In short, the evidence in this case overwhelmingly and 
 
            without any substantial evidence to the contrary proves 
 
            beyond all doubt whatsoever that Thomas Allen was performing 
 
            engineering services for Iowa Beverage Manufacturers, Inc., 
 
            at its Ottumwa, Iowa plant, that on January 13, 1990, he was 
 
            traveling to that plant in order to perform testing at a 
 
            manhole cover as part of those services and that he was 
 
            fatally injured in a motor vehicle accident while he was 
 
            traveling on a customarily used direct route for travel 
 
            between Mount Pleasant and Ottumwa, Iowa.  That same 
 
            evidence overwhelmingly shows that the business function 
 
            which was planned would have needed to be performed at some 
 
            other time if it were not to be performed on January 13 and, 
 
            accordingly, the related travel from Mount Pleasant to 
 
            Ottumwa and back would have been necessary at some other 
 
            time if it were not performed on January 13.  One can engage 
 
            in surmise and conjecture in order to allege that if the 
 
            Lazios had not been available on January 13 that the travel 
 
            and business function might not have been performed on that 
 
            date.  The evidence in the record is, however, 
 
            overwhelmingly to the contrary.  It is found that Thomas 
 
            Allen would have gone to the Iowa Beverage Manufacturers 
 
            plant on January 13, 1990, and would have performed the 
 
            travel that he was engaged in at the time of his death even 
 
            if the Lazios had been unavailable to meet with him and 
 
            Sandy on that evening.  The record of this case contains no 
 
            substantial evidence to the contrary.
 
            
 
                 There are other pertinent facts which should be 
 
            considered.  The car in which Thomas was traveling was owned 
 
            and provided by the corporate employer (Cl. Exs. 19, 20).  
 
            Decedent was customarily compensated for his travel expenses 
 
            (Cl. Ex. 49, pp. 24, 25, 30).
 
            
 
                 No written contract was found between Allen Water and 
 
            Wastewater Engineering, Inc., and Iowa Beverage 
 

 
            
 
            Page   9
 
            
 
            
 
            
 
            
 
            Manufacturers, Inc., because none had been entered into.  
 
            
 
                    
 
            
 
            
 
            Page  10
 
            
 
            
 
            
 
            
 
                             CONCLUSIONS OF LAW
 
            
 
                 The claimant has the burden of proving by a 
 
            preponderance of the evidence that the alleged injury 
 
            actually occurred and that it arose out of and in the course 
 
            of employment.  McDowell v. Town of Clarksville, 241 N.W.2d 
 
            904 (Iowa 1976); Musselman v. Cent. Tel. Co., 261 Iowa 352, 
 
            154 N.W.2d 128 (1967).  The words "arising out of" refer to 
 
            the cause or source of the injury.  The words "in the course 
 
            of" refer to the time, place and circumstances of the 
 
            injury.  Sheerin v. Holin Co., 380 N.W.2d 415 (Iowa 1986); 
 
            McClure v. Union County, 188 N.W.2d 283 (Iowa 1971).
 
            
 
                 An injury occurs in the course of employment when it is 
 
            within the period of employment at a place where the 
 
            employee reasonably may be performing his duties and while 
 
            he is fulfilling those duties or engaged in doing something 
 
            incidental thereto.  McMullin v. Department of Revenue, 437 
 
            N.W.2d 596 (Appellate 1989).
 
            
 
                 Thomas Allen had no fixed place of work.  He had no 
 
            fixed hours of work.  He was traveling in an employer-owned 
 
            and provided conveyance at the time of his death en route to 
 
            perform functions which were part of the duties ot the 
 
            maximum salary for which they would issue workers' 
 
            compensation coverage for a corporate executive and $57,200 
 
            was that maximum amount for which they would issue coverage.  
 
            Kemper would not cover a larger salary even if actual 
 

 
            
 
            Page  11
 
            
 
            
 
            
 
            
 
            earnings were more than $57,200.  Kemper collected a premium 
 
            during policy year 1988-1989 based upon Thomas F. Allen 
 
            having earnings of $57,200.  They collected a premium for 
 
            policy year 1989-1990 based upon Thomas F. Allen having a 
 
            yearly salary of $57,200 per year.
 
            
 
                 Subsection 11 of section 85.36 of the Code was added in 
 
            1986.  There was a corresponding amendment to section 85.1A.  
 
            The undersigned was involved in drafting and preparing that 
 
            legislation.  The purpose intended by the drafters was to 
 
            resolve problems and reduce litigation regarding the rate of 
 
            compensation in those cases such as this where the person 
 
            had an option regarding whether to be covered and the 
 
            business was, for all practical purposes, a sole 
 
            proprietorship but was doing business in the corporate form.  
 
            Much litigation had been ongoing regarding the rate of 
 
            compensation.  Salaries were being stated for purposes of 
 
            paying a premium yet when an injury occurred the actual 
 
            earnings were often much in excess of the salary which had 
 
            been reported for purposes of paying workers' compensation 
 
            insurance premiums.  In other cases, there was litigation 
 
            over the rate where a premium had been collected based upon 
 
            a record of earnings from a prior year which turned out to 
 
            be much greater than the actual earnings during the period 
 
            of time prior to the injury.  The very nature of these 
 
            businesses, as noted in the findings of fact in this case, 
 
            is that the earnings of the owner fluctuate wildly from time 
 
            to time.  The owners are not typical employees with a stable 
 
            level of income.  The normal rules which base the rate of 
 
            compensation upon actual earnings simply do not work well 
 
            with sole proprietors regardless of whether or not they have 
 
            chosen to do business as a corporation.  It was intended by 
 
            the drafters that these individuals, whose earnings often 
 
            fluctuate widely and who have the ability to make business 
 
            records overstate or understate their actual earnings should 
 
            simply be allowed to purchase a fixed amount of workers' 
 
            compensation insurance coverage, pay a premium for the 
 
            coverage which they select and that, if injured, they will 
 
            draw benefits based upon the amount of coverage which they 
 
            have purchased and for which they have paid the appropriate 
 
            premium.  Simply stated, it was intended that corporate 
 
            officers, proprietors and partners simply be allowed to 
 
            purchase a given level of coverage and that whatever level 
 
            of coverage they purchase is determinative of the rate of 
 
            compensation that will be paid if an injury or death occurs.  
 
            It was felt by the drafters that such a system would reduce 
 
            litigation and would be inherently fair.  Insurance 
 
            companies were free to limit the amount of coverage which 
 
            they would sell to any particular individual, a prerogative 
 
            which Kemper has exercised as shown by the evidence in this 
 
            case.  It was intended that the risk assumed by the 
 
            insurance carrier would be exactly commensurate with the 
 
            premium which it collected.  That is precisely what has 
 
            happened in this case.
 
            
 
                 It is therefore concluded that subsection 11 of section 
 

 
            
 
            Page  12
 
            
 
            
 
            
 
            
 
            85.36 of the Code controls in this case.  It is a specific 
 
            express exception to the normal practice of basing the rate 
 
            of compensation upon actual earnings.  The actual earnings 
 
            are immaterial.  In this case, the level of coverage which 
 
            was purchased and the premium paid was based upon Thomas F. 
 
            Allen having a yearly wage of $57,200.  The weekly rate of 
 
            compensation should therefore be computed under section 
 
            85.36(5) with the yearly earnings being determined under 
 
            section 85.36(11) as $57,200 per year.  The gross weekly 
 
            earnings of Thomas F. Allen for purposes of computing the 
 
            rate of workers' compensation weekly benefits is therefore 
 
            $1,100.  Since Thomas was married and entitled to himself 
 
            and his spouse as an exemption, the rate of compensation is 
 
            $609.60 per week.
 
            
 
                 An issue exists with regard to a claimed credit under 
 
            section 85.22.  The case Fisher v. Keller Industries, 485 
 
            N.W.2d 626 (Iowa 1992) controls the claimed credit in this 
 
            case.  Since Kemper Insurance Company denied liability for 
 
            the claim and made no payment of weekly compensation 
 
            benefits, they have no basis for indemnification.  They had 
 
            no right to object to the third party settlement.  The 
 
            statute provides no provisions for future credit for amounts 
 
            which have not been paid.  The supreme court case was 
 
            decided prior to the date of hearing in this case.  It is 
 
            therefore controlling.  Defendants are not entitled to any 
 
            credit whatsoever based upon the third party recovery.  
 
            Since they paid nothing, they have no right to be 
 
            indemnified and no basis for indemnification which, by its 
 
            very definition, requires that something has been paid in 
 
            order for there to be a reimbursement.
 
            
 
                 The final issue in this case is the claimant's claim 
 
            for a penalty under the provisions of the fourth unnumbered 
 
            paragraph of Iowa Code section 86.13.  It is recognized that 
 
            since Sandra Allen was not a participant in her husband's 
 
            business that it was difficult for her to provide the 
 
            adjusters of the insurance carrier with information which 
 
            they could use to corroborate or deny her claim.  That fact 
 
            would be apparent to a reasonable adjuster.  It could 
 
            initially cause some suspicion about the validity of the 
 
            claim.
 
            
 
                 As time passed, however, the validity of the claim 
 
            became increasingly clear.  Nevertheless, defendants would 
 
            not budge from their position of denial.  They refused to 
 
            commence weekly payments.  By the time all depositions had 
 
            been taken and the case proceeded to hearing it should have 
 
            been abundantly clear to any reasonable person that the 
 
            claim was compensable.  Nevertheless, defendants have 
 
            continued to deny the claim despite the absence of even a 
 
            scintilla of evidence which provides any rational basis for 
 
            denying the claim.  This is a case in which the maximum 
 
            penalty allowed by law is appropriate.  Even as recently as 
 
            March 1992 defendants denied requests for admissions of 
 
            facts which were easily verifiable and absolutely, 
 
            indisputably true.  Examples are request number 71 wherein 
 

 
            
 
            Page  13
 
            
 
            
 
            
 
            
 
            they denied that the car in which the decedent was traveling 
 
            at the time of his death was owned by and registered to 
 
            Allen Water and Wastewater Engineering, Inc.  Defendants 
 
            denied request number 67 which asserted that the letter 
 
            which is in evidence in this case as claimant's exhibit 16 
 
            was a true and correct copy of the original.  They denied 
 
            request number 68 which asserted that Thomas F. Allen was a 
 
            consulting engineer for Iowa Beverage Manufacturers, Inc.  
 
            They denied request numbers 69 and 70, all of which were 
 
            facts which clearly and indisputably existed. The response 
 
            to request number 25 denied that Thomas F. Allen was 
 
            president of the employer corporation.   The authenticity of 
 
            his appointment calendar, that records were made in 
 
            decedent's handwriting, that decedent had lunch with Tom 
 
            Dugan on January 13, 1990, and dozens of other clearly true 
 
            indisputable facts were all denied.  The unwarranted denial 
 
            of facts in the request for admissions, plaintiff's exhibits 
 
            45-48, are merely illustrative of the manner in which the 
 
            true facts of this case were absolutely ignored by the 
 
            defendant insurance carrier and its adjusters.  They decided 
 
            to deny the claim and then refused to reconsider their 
 
            decision regardless of the evidence and information that was 
 
            presented to them.  The evidentiary facts relied upon by 
 
            Flagherty when denying the claim were either immaterial to 
 
            the ultimate issues in the case or were incorrect.  The 
 
            investigation which was conducted in this case was lacking.  
 
            It is recognized that the trail initially was difficult in 
 
            view of Sandra's lack of knowledge of all the facts but 
 
            certainly by the time the case had arrived at hearing it was 
 
            abundantly clear that the claim was compensable.  A full 50 
 
            percent penalty is therefore warranted.  
 
            
 
                 Defendants have an arguable defense to the amount of 
 
            the weekly benefit upon which the penalty claim should be 
 
            computed.  It is recognized that section 85.36(11) has 
 
            little in the way of precedent.  There is some precedent at 
 
            the agency level but none at the level of the Iowa Supreme 
 
            Court.  Nevertheless, the language is clear and 
 
            understandable.  More importantly, Kemper charged, collected 
 
            and retained a premium based upon Thomas F. Allen having 
 
            annual earnings of $57,200.  It is not reasonable for them 
 
            to assert their obligation should somehow be reduced to a 
 
            level which is not commensurate with the premium which they 
 
            charged and collected.  It is therefore determined that the 
 
            penalty should be based upon the full amount of the weekly 
 
            benefits, namely $609.60 per week.  The standard set by the 
 
            Iowa Supreme Court in the case of Boylan v. American 
 
            Motorists Ins. Co., 489 N.W.2d 742 (Iowa 1992) has clearly 
 
            been met in this case.  It is not within the role of this 
 
            agency to decide whether or not outrageous conduct, bad 
 
            faith or similar conditions existed in the denial of this 
 
            claim.  The standard which falls within the jurisdiction of 
 
            this agency has clearly been met. The delay in commencement 
 
            of benefits was without reasonable cause or excuse.  Any 
 
            argument that it was reasonable to not pay based upon the 
 

 
            
 
            Page  14
 
            
 
            
 
            
 
            
 
            dispute regarding the rate of compensation is rejected, in 
 
            large part because Kemper did not even pay at the rate which 
 
            it asserted to be the correct rate.  Even if Kemper's 
 
            position on the credit for the third party recovery were to 
 
            be accepted, they would still have owed additional amounts.  
 
            Kemper has not paid in accordance with what it contends the 
 
            correct payments should be in this case.  Failure to pay in 
 
            accordance with their own position in the case, as far as 
 
            the issues of rate and credit are concerned, is strong proof 
 
            that the failure to pay was unreasonable.
 
            
 
                 Upon performing all the computations, with all amounts 
 
            being computed as of March 5, 1993, the date of this 
 
            decision, defendants owe Sandra 164 weeks of benefits 
 
            payable at the rate of $609.60 per week for a total of 
 
            $99,974.40.  Those weekly benefits were not paid when due 
 
            and under the provisions of section 85.30, Sandra is also 
 
            entitled to recover interest in the amount of $15,669.04.  
 
            As a result of the unreasonable denial of this claim, the 50 
 
            percent penalty is based only upon the weekly benefits, 
 
            without interest.  The amount of the penalty assessed 
 
            pursuant to the fourth unnumbered paragraph of section 86.13 
 
            is $49,987.20.  Defendants shall also pay the sum of $4000 
 
            to the Second Injury Fund of Iowa pursuant to section 85.65.  
 
            The burial expense provided by section 85.28 is an amount up 
 
            to $1000.  In this case it is found that the actual burial 
 
            expenses exceed $1000 (pl.ex. 42).  Defendants shall also 
 
            pay Sandra K. Allen the sum of $1000 pursuant to section 
 
            85.28.
 
            
 
                 Since claimant has prevailed in this proceeding she is 
 
            entitled to recover the costs of this action.  The affidavit 
 
            of costs together with the attachments, has been reviewed 
 
            (cl.ex. 72).  All items requested are properly assessed 
 
            under the provisions of rule 343 IAC 4.33.  The deposition 
 
            transcripts were all received into evidence at the hearing.  
 
            Woody v Machin, 380 N.W.2d 727 (Iowa 1986).  Claimant is 
 
            therefore entitled to recover the entire amount claimed, 
 
            namely $1,087.11.
 
            
 
                                      ORDER
 
            
 
                 IT IS THEREFORE ORDERED that defendants Allen Water and 
 
            Wastewater Engineering, Inc. and Kemper Insurance Company 
 
            pay Sandra K. Allen the sum of one hundred sixty-six 
 
            thousand six hundred thirty and 64/100 dollars ($166,630.64) 
 
            for accrued weekly benefits, interest, penalty, and burial 
 
            expense.
 
            
 
                 It is further ordered that defendants pay Sandra K. 
 
            Allen the sum of six hundred nine and 60/100 dollars 
 
            ($609.60) per week  for the period of time running from 
 
            March 6, 1993.
 
            
 
                 It is further ordered that defendants pay the Second 
 
            Injury Fund of Iowa the sum of four thousand dollars 
 
            ($4000).
 
            
 
                 It is further ordered that the costs of this action are 
 
            assessed against defendants pursuant to rule 343 IAC 4.33 in 
 

 
            
 
            Page  15
 
            
 
            
 
            
 
            
 
            the sum of one thousand eighty-seven and 11/100 dollars 
 
            ($1,087.11) and shall pay that amount to claimant.
 
            
 
     
 
            
 
            
 
            Page  16
 
            
 
            
 
            
 
            
 
            Signed and filed this ____ day of March, 1993.
 
            
 
            
 
            
 
            
 
                                          ______________________________
 
                                          MICHAEL G. TRIER
 
                                          DEPUTY INDUSTRIAL COMMISSIONER    
 
            
 
            Copies to:
 
            
 
            Mr. Roger Stone
 
            Attorney at Law
 
            1200 MNB Bldg
 
            Cedar Rapids, Iowa  52401
 
            
 
            Mr. Craig Levien
 
            Attorney at Law
 
            600 Union Arcade Bldg
 
            111 E 3rd 
 
            Davenport, Iowa  52801
 
            
 
                 
 
            
 
                 
 
            
 
 
            
 
 
 
             
 
 
 
                                          1102; 1104; 1110; 1402.30
 
                                          1506; 2003; 3001; 3002;
 
                                          3400; 1704; 4000.2
 
                                          Filed March 5, 1993
 
                                          Michael G. Trier
 
            
 
                     BEFORE THE IOWA INDUSTRIAL COMMISSIONER
 
            ____________________________________________________________
 
                                          :
 
            THOMAS F. ALLEN, Deceased,    :
 
            SANDRA KAY ALLEN, Surviving   :
 
            Spouse and Executor,          :
 
                                          :
 
                 Claimant,                :
 
                                          :
 
            vs.                           :
 
                                          :       File No. 941868
 
            ALLEN WATER AND WASTEWATER    :
 
            ENGINEERING, INC.,            :
 
                                          :     A R B I T R A T I O N
 
                 Employer,                :
 
                                          :       D E C I S I O N
 
            and                           :
 
                                          :
 
            KEMPER INSURANCE COMPANY,     :
 
                                          :
 
                 Insurance Carrier,       :
 
                 Defendants.              :
 
            ___________________________________________________________
 
            
 
            1102 1104 1110 1402.30
 
            Decedent was an engineer.  He lived and had his office at 
 
            Mt. Pleasant, Iowa, but was involved in a project at 
 
            Ottumwa, Iowa, (as well as other projects throughout SE 
 
            Iowa).  He commonly worked on Saturdays.  He was killed in 
 
            an automobile accident while traveling from Mt. Pleasant to 
 
            Ottumwa in order to perform approximately three hours of 
 
            work associated with a project.  Decedent and his spouse had 
 
            planned to meet with friends after the work was completed.  
 
            The plan to meet with friends was made on the day of death 
 
            but the plan to travel to Ottumwa to perform the work which 
 
            was intended had been performed several days earlier.  If 
 
            decedent had not gone to Ottumwa on the date of death, he 
 
            would have needed to make the trip at some other time in 
 
            order to perform the intended work.  The fact of the 
 
            employment, the plan to travel and the subsequently formed 
 
            plan to meet with friends was shown conclusively by the 
 
            evidence in the case and without any evidence or reasonably 
 
            conjecture to the contrary.  The death was held compensable.  
 
            
 
            1506 2003 3001 3002
 
            The defendant employer in this case was a corporation which 
 
            consisted principally of the decedent.  He functioned as a 
 
            sole proprietor but had elected to do business as a 
 
            corporation.  The insurance had charged a premium based upon 
 

 
            
 
 
 
 
 
 
 
 
 
 
 
            an earning level of $57,200 per year.  It would not make 
 
            coverage available at a higher level of earnings.  It used 
 
            that same level for the policy year in which the death 
 
            occurred and had used it for the preceding policy year.  The 
 
            policy year which the insurance carrier used for determining 
 
            wages upon which to base their premium was not the same as 
 
            the calendar year used by the decedent for his individual 
 
            income taxes.  The rate of compensation was held to be 
 
            controlled by section 85.36(11) and that the actual earnings 
 
            of the decedent were immaterial.  The deputy hearing this 
 
            case was one of the drafters of the legislation which became 
 
            section 85.36(11).  The intent was to make the weekly 
 
            benefit to be determined precisely by the wage level which 
 
            was represented when the policy was issued and the premiums 
 
            for the policy were determined.  It was intended to be an 
 
            exception to the normal rule of basing the rate on actual 
 
            earnings.  It was intended to avoid the often cumbersome 
 
            litigation that frequently occurs, such as that in this 
 
            case, when people who for all practical purposes are 
 
            self-employed, are technically treated as an employee under 
 
            the workers' compensation laws.  It was intended to provide 
 
            that the benefit paid would be commensurate with the premium 
 
            actually charged.
 
            
 
            3400 1704
 
            Defendants had consistently denied liability and continued 
 
            to do so at the time of hearing.  They paid nothing in the 
 
            way of weekly benefits to the surviving spouse.  The Keller 
 
            case was decided prior to the date of hearing of this case.  
 
            Any alleged agreement by claimant to grant a credit was void 
 
            as lacking consideration and mutuality.  No credit was 
 
            allowed for the third party recovery.
 
            
 
            4000.2
 
            The evidence establishing liability in this case was 
 
            overwhelming and uncontroverted.  The adjusters and 
 
            investigators for the defendants relied entirely  upon 
 
            suspicion and ignored all the other evidence which included 
 
            the decedent's business records made in his own handwriting 
 
            and the testimony of community leaders in the city of 
 
            Ottumwa, Iowa.  The unreasonable position of the defense in 
 
            this case is illustrated by their action in denying 
 
            undisputable facts which were requested to be admitted in 
 
            request for admissions, even things as basic as the 
 
            ownership of the automobile, a matter of public record and 
 
            which was shown on the DOT accident report of which 
 
            defendants had possession.  Simply stated, they decided to 
 
            deny the claim and continued to deny the claim without 
 
            regard to what the investigation showed.  They referred to 
 
            evidentiary facts which were immaterial to the ultimate 
 
            issue as reasons for denying the claim.  A full 50 percent 
 
            penalty was awarded.