Opinion
No. 5-226 / 04-0997
Filed August 31, 2005
Appeal from the Iowa District Court for Winnebago County, Stephen P. Carroll, Judge.
Jeffrey Steele appeals from an adverse judgment in this action for judicial review of decision of the Industrial Commissioner. AFFIRMED.
Mark S. Soldat, Des Moines, for appellant.
Joseph A. Happe and William H. Grell of Huber, Book, Cortese, Happe Lanz, P.L.C., Des Moines, for appellees.
Heard by Sackett, C.J., and Huitink and Vaitheswaran, JJ.
Jeffrey Alan Steele worked for Larson Manufacturing Company, assembling doors. Steele sustained two on-the-job injuries: a hernia and a knee injury. He sought workers' compensation and penalty benefits for both. A deputy commissioner denied Steele's request for permanent partial disability benefits. The deputy awarded penalty benefits in the amount of $400.68 and assessed costs to Larson. That decision was affirmed in an intra-agency appeal to the Workers' Compensation Commissioner.
Steele sought judicial review. The district court affirmed the agency in all respects. On further judicial review, Steele asserts the Workers' Compensation Commissioner erred (1) in not awarding permanent partial disability benefits for the hernia, (2) in not awarding permanent partial disability benefits for the knee injury, (3) in his award of penalty benefits, and (4) in his taxation of intra-agency costs. We affirm.
I. The Hernia
Steele had an operation for his hernia and was released to full duty in May 1996. He returned to his same job with mandatory overtime.
Steele contends the deputy commissioner "misapplied the law and erroneously disregarded the uncontroverted facts of permanent disability" in denying permanent partial disability benefits for this injury. Specifically, he argues the deputy ignored the precept that lay evidence may be considered in establishing the extent of his "functional disability." See Miller v. Lauridsen Foods, Inc., 525 N.W.2d 417, 421 (Iowa 1994).
Steele is essentially asking us to apply the judicial review standard set forth in Iowa Code section 17A.19(10)(m) (2001). That provision authorizes us to grant relief if the agency decision is "based upon an irrational, illogical, or wholly unjustifiable application of law to fact that has clearly been vested by a provision of law in the discretion of the agency." See also Iowa Code § 86.8(1); Mycogen Seeds v. Sands, 686 N.W.2d 457, 465 (Iowa 2004).
"Functional disability" is the impairment of body function. Mortimer v. Fruehauf Corp., 502 N.W.2d 12, 14 (Iowa 1993). "Industrial disability" is "the loss to the employee's earning capacity of the body or body part." Id. "[A] specific scheduled disability is determined by the functional method; an unscheduled disability is determined by the industrial method." Id. at 15; see also Iowa Code § 85.34(2). The parties agree that the hernia injury required a determination of industrial disability. Functional disability is a component of industrial disability, but other factors such as the claimant's age, education and work history are also considered to determine "the extent to which the injury impairs the worker's ability to earn wages." Id.
Focusing primarily on "functional disability," Steele and his lay witnesses testified to his inability to engage in strenuous activity and weightlifting after the hernia. They quantified his level of impairment from the hernia injury at between ten and forty percent.
The deputy commissioner did not ignore this evidence of functional disability. He cited Steele's testimony concerning his loss of function as a result of the hernia and cited to the testimony of his mother, brother, sister and wife on the same subject. The deputy elected to place greater weight on the records of a treating physician and an independent medical evaluator who both gave a zero-percent rating for this impairment. The deputy commissioner acted well within his authority in finding the physicians' measures of functional disability more persuasive than those of the lay witnesses. See Terwilliger v. Snap-On Tools Corp., 529 N.W.2d 267, 273 (Iowa 1995) ("We have held that lay witness testimony is relevant and material on the issue of cause and extent of an injury. [citation omitted]. However, it is a basic tenet of law that it remains within the province of the industrial commissioner to weigh the facts presented to him and it is entirely within his right to reject any evidence he considers less reliable than other contradictory testimony.").
The deputy commissioner also considered other measures of industrial disability, including Steele's age and past work history. The deputy noted that, after the hernia surgery, Steele continued "to perform the same duties with defendant employer without accommodation up to the present time."
On judicial review, the district court thoroughly and cogently analyzed this issue. Like that court, we conclude the agency's application of law to fact on the disabling nature of the hernia was not "irrational, illogical, or wholly unjustifiable."
II. The Knee Injury
Turning to the knee injury, the deputy commissioner wrote:
As it relates to claimant's right lower extremity injury there was no permanent impairment offered by Dr. Ciota, the authorized treating physician and surgeon on the basis of the AMA Guides, as Dr. Ciota determined the Guides did not consider claimant's cartilage loss as ratable. Dr. Ciota also offered no permanent restrictions.
Dr. Ban determined, based on claimant's continued pain symptoms and loss of tissue, that this equated to arthritis and offered a permanent impairment rating of approximately 14 percent of the right lower extremity. However, Dr. Ban's physical examination of claimant was essentially normal with the exception of claimant having mild difficulty noted when he was squatting and having mild tenderness over the right knee. Claimant's lay witnesses testified as to the impact of the right knee injury on claimant's activity level and also offered their estimates of the loss of function of his right knee as a result of this injury. However, claimant continues to work for defendant employer without accommodation and is also working overtime that is mandated by the employer. Claimant also engages in the shingling of houses, which obviously involves heavy physical labor and also involves getting one's legs in awkward positions even if claimant does not carry the bundles of shingles all the time.
It is concluded the opinion of Dr. Ciota will be given more weight based on claimant's continuing to work for the employer in his regular job and claimant's outside work activities and also based on the essentially normal physical examination by Dr. Ban. Therefore, it is concluded claimant has sustained no permanent disability as a result of the right leg injury.
"The court must not reassess the weight of the evidence because the weight of the evidence remains within the agency's exclusive domain." Robbennolt v. Snap-on Tools Corp., 555 N.W.2d 229, 234 (Iowa 1996). The deputy commissioner concluded Steele did not suffer a permanent impairment to his knee based on the following: Dr. Ban's "essentially normal physical examination"; Steele's ability to continue work with the same employer in the same position without accommodations; Steele's ability to continue to complete off-the-job shingling work; and Dr. Ciota's letter where he explained that not only "because the AMA Guides do not provide for permanent impairment secondary to pure cartilage loss," but also because Steele "has no decrease in range of motion," he did not believe Steele would have any permanent impairment rating.
Dr. Ban explained how he used the Guides to estimate Steele's permanent impairment rating. The deputy commissioner cited this in his findings of fact:
Dr. Ban determined claimant's condition was equivalent to mild arthritis and pursuit to the AMA Guides to the Evaluation of Permanent Impairment Dr. Ban believes claimant has a 3 percent whole person impairment and a 7 percent right lower extremity impairment. Dr. Ban further determined claimant to have an additional 3 percent whole person impairment for pain pursuant to the Fifth Edition of the Guides. (Cl. Ex. 1, p. 75) Table 17-3 of the Guides would yield another 7 percent lower extremity impairment for the additional impairment due to pain.
Steele further cited Dr. Ban's opinion and the aforementioned Guides "suggestion" in his application for rehearing to the commissioner. The commissioner affirmed and adopted the deputy's decision as final agency action.
The agency's decision was not "unjustifiable" when it declined to follow Dr. Ban's permanent impairment opinion because the commissioner is not bound to follow the Guides. According to Iowa Admininistrative Code rule 873-2.4(85):
The Guides to the Evaluation of Permanent Impairment published by the American Medical Association are adopted as a guide for determining permanent partial disabilities under Iowa Code section 85.34(2) "a"-"s." The extent of loss or percentage of permanent impairment may be determined by use of this guide and payment of weekly compensation for permanent partial scheduled injuries made accordingly. Payment so made shall be recognized by the industrial commissioner as a prima facie showing of compliance by the employer or insurance carrier with the foregoing sections of the Iowa Workers' Compensation Act. Nothing in this rule shall be construed to prevent the presentations of other medical opinion or guides for the purpose of establishing that the degree of permanent impairment to which the claimant would be entitled would be more or less than the entitlement indicated in the AMA guide.
(Emphasis added). "Under this rule, the Guides are just that — guides, and the commissioner is not bound to follow them." Sherman v. Pella Corp., 576 N.W.2d 312, 319 (Iowa 1998).
"Because factual determinations are within the discretion of the agency, so is its application of law to the facts." Clark v. Vicorp Restaurants, Inc., 696 N.W.2d 596, 604 (Iowa 2005). The agency's decision to deny Steele's request of permanent disability benefits for his knee injury is rational, supported by the evidence, and a proper application of the law to the facts. Accordingly, we affirm this aspect of the agency's decision.
III. Penalty Benefits
The deputy commissioner awarded a fifty-percent penalty for underpaid benefits and a thirty-percent penalty for late benefits. Steele contends this discrepancy in penalty awards is "arbitrary." He also challenges the agency's failure to award interest on the penalties from the date of the arbitration decision and a penalty for the underpayment of principal and interest.
With respect to the agency's decision to award a thirty-percent rather than a fifty-percent penalty, we fully concur with the district court's conclusion that the amount of a penalty award rests within the agency's discretion. See Robbennolt v. Snap-On Tools Corp., 565 N.W.2d 229, 236-38 (Iowa 1996). Accordingly, we do not find the agency action arbitrary. See Iowa Code § 17A.19(10)(n) (reviewing agency action to determine whether it is "[o]therwise unreasonable, arbitrary, capricious, or an abuse of discretion").
The remaining two issues concerning penalty benefits were not addressed by the agency or by the district court. Neither the district court nor our court has authority to decide an issue not decided by the Commissioner. See Meads v. Iowa Dep't of Soc. Servs., 366 N.W.2d 555, 559 (Iowa 1985).
IV. Intra-Agency Costs
The Workers' Compensation Commissioner taxed all intra-agency costs to Steele, a decision that Steele challenges. We review for an abuse of discretion. See Robbenolt, 565 N.W.2d at 238. We find no abuse.
V. Disposition
We affirm the district court on all issues. Costs on appeal are assessed to Steele.
AFFIRMED.
Sackett, C.J., and Huitink, J. concur; Vaitheswaran, J. partially dissents.
I respectfully dissent from that portion of the opinion affirming the denial of permanent partial disability benefits for the knee injury.
Steele's knee injury required arthroscopic surgery. After surgery, Steele completed a course of physical therapy and was released to work with no restrictions. Nearly a year later, he was still in pain.
The dispute concerning this knee injury centers on the opinions of two physicians, Dr. Ciota and Dr. Ban. Both cited the American Medical Association's Guides to the Evaluation of Permanent Impairment. See Iowa Admin. Code r. 876-2.4 (providing Guides "are adopted as a guide for determining permanent partial disabilities under Iowa Code section 85.34(2) `a' to `s'"). Steele contends Dr. Ciota misapplied the Guides, and the deputy commissioner therefore misapplied the law in adopting this opinion over the opinion of Dr. Ban.
Dr. Ciota was Steele's treating physician. He described Steele's injury as "unusual" and said he was a possible candidate for a cartilage transplant. He nevertheless assigned Steele no permanent impairment rating because (1) Steele had no decrease in range-of-motion, and (2) the Guides did not provide for "permanent impairment secondary to pure cartilage loss."
Steele then submitted to an independent medical evaluation by Dr. Ban. Dr. Ban agreed with Dr. Ciota that the Guides do not have a listing for Steele's precise impairment. He disagreed that this required the assignment of no permanent impairment rating. Instead, he concluded that, in such a situation, the Guides allow the evaluator to "use clinical judgment, comparing measurable impairment resulting from the unlisted condition to measurable impairment resulting from similar conditions with similar impairment of function in performing activities of daily living." Based on this authority and records showing that Steele lost tissue in his knee as well as the use of his right leg for strenuous physical activity, Dr. Ban selected mild arthritis as a similar impairment. The Guides provide a seven percent impairment rating of the right lower extremity for this impairment. The Guides further note that range of motion is "of limited value for estimating impairment secondary to arthritis in many individuals." Using his clinical judgment as authorized by the Guides, Dr. Ban assigned Steele a seven percent impairment of his right leg, with an additional seven percent for pain.
I would conclude Dr. Ciota did not follow Guides protocol. He assumed that the absence of a rating for the particular injury Steele sustained and the fact that his range of motion stayed the same precluded a finding of a permanent impairment rating. As Dr. Ban pointed out, these assumptions are incorrect. The Guides authorize a rating based on a similar impairment and, assuming arthritis is the similar impairment, state that range-of-motion is "of limited value" in assessing this impairment. A professional might question Dr. Ban's selection of arthritis as the similar impairment and might quarrel with the impairment ratings he assigned. However, in my view, there is nothing in the record to refute these judgment calls or his application of the alternate methodology authorized by the Guides. It might be a different situation if Dr. Ciota had recognized this alternate method and concluded no equivalent impairment existed. He did not.
Notably, the Guides' discussion of the "similar impairment" Dr. Ban selected includes an example that mirrors Steele's situation. Specifically, the example rates a 48-year-old man who "[f]ell from a loading dock twenty-three years ago, sustaining a right tibia fracture," resumed work, and "[o]ver the last several years, had right knee pain toward the end of the day" and "occasional mild swelling of the knee joint." A physical examination revealed a healed fracture with ten degree deformity, "almost full range of motion of the injured knee," and "mild crepitation." The Guides assign a fifteen percent impairment rating to this hypothetical male, despite his ability to work and his fairly normal exam.
The deputy commissioner gave more weight to the opinion of Dr. Ciota than to the opinion of Dr. Ban based on Steele's "essentially normal" physical exam and his ability to work. I disagree with the majority's acceptance of these reasons as grounds for rejecting Dr. Ban's opinion.
The deputy'scharacterization of Dr. Ban's physical examination as "essentially normal" undervalues Dr. Ban's findings supporting his disability rating. Dr. Ban specifically noted Steele had cartilage loss. He further noted mild tenderness over the right knee. That an impairment is manifested by mild symptoms does not mean the impairment is not "permanent" or a "disability." These mild symptoms are consistent with the Guides. Cf. Caylor v. Employers Mut. Cas. Co., 337 N.W.2d 890 (Iowa Ct.App. 1983) (affirming an award of ten percent functional impairment where the treating physician rated claimant's right leg impairment due to degenerative arthritis, using the Guides, at seven percent). Notably, even Dr. Ciota described Steele's injury as unusual and stated he was a potential candidate for a cartilage transplant.
As for Steele's ability to continue working, that fact is not inconsistent with an award of permanent partial disability benefits. The Guides example cited above confirms this fact.
As the agency accorded more weight to the opinion of a physician who did not follow Guides protocol, I would conclude the agency's application of law to fact was unjustifiable with respect to the knee injury. Based on the record made, I would reverse and remand for calculation of benefits and reassessment of intra-agency costs. See Armstrong v. State of Iowa Bldgs. Grounds, 382 N.W.2d 161, 165 (Iowa 1986).