Opinion
No. 2-257 / 01-1512.
Filed February 28, 2003.
Appeal from the Iowa District Court for Polk County, George W. Bergeson, Judge.
Employer and insurance carrier appeal from a ruling on judicial review affirming the worker' compensation commissioner's decision to grant permanent partial disability benefits to Bret Bahmler. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED TO THE AGENCY.
James M. Ballard and Aaron T. Oliver of Hansen, McClintock Riley, Des Moines, for appellant.
Thomas M. Wertz of the Wertz Law Firm, P.C., Cedar Rapids, for appellee Bahmler.
Harry W. Dahl, Des Moines, for appellee CIGNA Insurance.
Considered by Mahan, P.J., and Miller and Hecht, JJ.
Insurance Company of Pennsylvania appeals from a ruling on judicial review affirming the workers' compensation commissioner's decision to grant permanent partial disability benefits to Bret Bahmler. We affirm in part, reverse in part, and remand to the agency.
I. Background facts and proceedings.
Bret Bahmler has worked for United Technologies Corp. (United Technologies) since July 5, 1984, in various positions and at various rates of pay and physical requirements. On June 1, 1993, Bahmler reportedly strained his shoulder at work, but never received any medical treatment for the problem. Then, in February of 1997, after losing range of motion and experiencing pain in his right shoulder, Bahmler sought medical treatment. United Technologies initially referred him to the "Rossiter" therapy program, but this treatment was unsuccessful. United Technologies then referred him to the plant physician, Dr. Minner who treated Bahmler on February 27, 1997, and diagnosed him as suffering from "internal adhesions with partial frozen shoulder."
Dr. Minner in turn referred Bahmler to an orthopaedic surgeon, Dr. Turner, who performed an MRI, which was completed on March 18, 1997. Dr. Turner again saw Bahmler on March 20, and informed Bahmler he should probably undergo arthroscopic surgery. Bahmler subsequently was referred to Dr. Pilcher, a shoulder specialist, who reviewed the MRI results, and after seeing Bahmler for the first time on April 1, diagnosed a "work-related, chronic rotator cuff tendonitis impingement syndrome which has now developed a component of adhesive capsulitis." Coincidentally, on April 1, 1997, United Technologies changed its insurance coverage from CIGNA Insurance to Insurance Company of Pennsylvania (Pennsylvania).
Dr. Pilcher performed the right shoulder surgery on April 22, 1997, and Bahmler subsequently remained off work until May 27, at which time he was released to do light duty work with only limited lifting and reaching. On August 29, 1997, Dr. Pilcher opined Bahmler was at maximum medical improvement, rated physical impairment at thirteen percent to the upper extremity or eight percent to the whole person, and authorized Bahmler to return to his welding position. Bahmler again experienced shoulder problems at work in October of 1997. At that time, Dr. Pilcher diagnosed a strained shoulder and placed Bahmler on light duty.
On April 6, 1998, Bahmler filed three separate workers' compensation petitions alleging a right shoulder injury, with claimed injury dates of June 1, 1993, April 21, 1997, and October 10, 1997. Following a hearing, Deputy Commissioner Patricia Lantz filed an arbitration decision in which she found the date of injury was April 21, 1997. The deputy commissioner found Bahmler suffered a forty percent industrial disability. She also imposed a fifty percent penalty award, which was calculated on the difference between weekly benefit payments made by CIGNA before the hearing based upon Bahmler's 1993 gross weekly wage and the amount of such weekly benefits found to be owed based upon Bahmler's wage at the time of the April 21, 1997, injury. Finally, the arbitration decision ordered Pennsylvania to reimburse CIGNA "for any benefits CIGNA has paid on the claim." The Chief Deputy Commissioner affirmed the arbitration decision on intra-agency appeal, as did the district court on judicial review. Insurance Company of Pennsylvania appeals.
II. Scope of review.
Our review is governed by Iowa Code chapter 17A (1997), Iowa's Administrative Procedure Act. See Pirelli-Armstrong Tire Co. v. Reynolds, 562 N.W.2d 433, 436 (Iowa 1997). Section 17A.19 permits a reviewing court to reverse an agency decision when it is "[i]n violation of constitutional or statutory provisions," or when it is "unsupported by substantial evidence in the record made before the agency when that record is viewed as a whole." Iowa Code § 17A.19(8). The commissioner's factual findings are binding on us if they are supported by substantial evidence. See IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001).
III. Date of cumulative injury.
Pennsylvania first asserts the agency erred in finding April 21, 1997, was Bahmler's date of injury. Our supreme court adopted the "cumulative injury rule" in McKeever Custom Cabinets v. Smith, 379 N.W.2d 368 (Iowa 1985). The court held that when a disability develops over a period of time, the compensable injury is held to occur when the employee, "because of pain or physical inability," can no longer work. McKeever, 379 N.W.2d at 374. The date such an injury occurs is important because it impacts the determination of which employer and carrier is at risk, whether notice of injury and claim are within the statutory period, whether statutory amendments were in effect, the weekly benefit rate, and other important considerations. Herrera v. IBP, Inc., 633 N.W.2d 284, 287 (Iowa 2001).
In Oscar Mayer Foods v. Tasler, 483 N.W.2d 824, 829 (Iowa 1997), the supreme court adopted the "manifestation test," fixing the date of injury "as of the time at which the disability manifests itself." It held that an injury manifests itself when both (1) the fact of the injury and (2) the causal relationship of the injury to the claimant's employment would have become plainly apparent to a reasonable person. Tasler, 483 N.W.2d at 829.
In this case, the commissioner found the date of injury to be April 21, 1997, the day Bahmler quit working in order to have surgery. Pennsylvania contends the date of injury must have been at least some time prior to April 1, 1997, and more specifically that it occurred on March 20, 1997. It was on March 20 that Dr. Turner, having reviewed the MRI, informed Bahmler that his shoulder was "highly suspicious for a partial tear" and the injury was "probably most amenable for consideration for arthroscopy." In other words, Pennsylvania contends it was on this date Bahmler became aware of the nature of the injury and that it was caused by his employment.
We first note Bahmler did not miss any work on account of his injury until the day he underwent surgery. Furthermore, prior to Bahmler's surgery, no medical expert opined whether or to what extent Bahmler's ability to function in the job market would be impacted by the injury. Moreover, Dr. Turner's notes from his March 20 appointment with Bahmler only noted a high suspicion of a tear and a probable need for surgery. Prior to April 21, Bahmler was merely receiving medical care for shoulder pain. After the April 22 surgery, Bahmler missed work and work restrictions imposed by the treating physician impacted his employment. As this court recognized in Venenga v. John Deere Component Works, 498 N.W.2d 422 (Iowa Ct.App. 1993), "more is required [to identify the date of cumulative injury] than knowledge of an injury or receipt of medical services. The employee must realize his or her injury will have an impact on employment." Venenga, 498 N.W.2d at 424-25. After a careful review of the record, we find substantial evidence supporting the agency's finding of April 21, 1997 as the date of injury. Accordingly, we affirm on this issue.
IV. Forty percent industrial disability award.
As noted, the agency found Bahmler sustained a forty percent industrial disability. Pennsylvania argues this award is excessive. Industrial disability is a concept used to measure an unscheduled disability under Iowa Code section 85.34(2)(u) (1997). A claimant's industrial disability is measured by the claimant's lost earning capacity. Mortimer v. Fruehauf Corp., 502 N.W.2d 12, 14 (Iowa 1993). Factors that should be considered include the claimant's functional disability, age, education, qualifications, experience, and ability to engage in employment for which the claimant is fitted. Second Injury Fund v. Shank, 516 N.W.2d 808, 813 (Iowa 1994). "Thus, the focus is not solely on what the worker can and cannot do; the focus is on the ability of the worker to be gainfully employed." Second Injury Fund v. Nelson, 544 N.W.2d 258, 266 (Iowa 1995).
Here, the agency pointed to a variety of factors that informed its judgment on the industrial disability award. Those factors include Bahlmer's age of thirty-eight, the fact he has worked for only one employer most of his adult life, his motivation, his work restrictions, the decrease in pay he experienced as a consequence of the injury, his ability to perform future work, his eight percent whole body functional impairment, and his high school education. The commissioner considered appropriate factors and came to a reasoned conclusion supported by substantial evidence. We therefore affirm the award of industrial disability benefits.
V. Penalty benefits.
Under Iowa Code section 86.13:
If a delay in commencement or termination of benefits occurs without reasonable or probable cause or excuse, the industrial commissioner shall award benefits in addition to those benefits payable under this chapter, or chapter 85, 85A, or 85B, up to fifty percent of the amount of benefits that were unreasonably delayed or denied.
In Christensen v. Snap-On Tools Corp., 554 N.W.2d 254 (Iowa 1996), our supreme court discussed the standards for imposition of section 86.13 penalties. It held an employee is entitled to penalty benefits if there has been a delay in payment unless the employer proves a reasonable cause or excuse. Id. at 260. A reasonable cause or excuse exists if either (1) the delay was necessary for the insurer to investigate the claim or (2) the employer had a reasonable basis to contest the employee's entitlement to benefits. Id. A "reasonable basis" for denial of the claim exists if the claim is "fairly debatable." See Meyers v. Holiday Express Corp., 557 N.W.2d 502, 504 (Iowa 1996). Cigna paid benefits to Bahmler based upon his 1993 gross weekly wage. Bahlmer sought and the agency ordered Pennsylvania to pay a penalty in the amount of fifty percent of the difference between the benefits paid by CIGNA and the benefits owed based upon a higher gross weekly wage earned by Bahmler as of April 21, 1997.
The medical records show and the agency concluded the injury alleged by Bahmler was a cumulative injury to the right shoulder. After reviewing the law and the evidence in the record, the agency found no evidence to support a conclusion that Bahmler's cumulative injury was manifest on June 1, 1993, and determined that Pennsylvania's claim to the contrary was not fairly debatable. The considerable body of case law controlling the determination of the date of injury in cumulative injury cases leads us to the same conclusion. See Herrera v. IBP. Inc., 633 N.W.2d 284, 288 (Iowa 2001) (noting the date of injury is the date "the employee learned that he would not recover from the cumulative injury to his shoulder, and that permanent restrictions on his work activities would be required"); Ellingson v. Fleetguard Inc., 599 N.W.2d 440, 444 (Iowa 1999) ("the date of a cumulative injury is deemed to be the time at which both the fact of disability and the causal relationship of the disability to the employment would be apparent to a reasonable person"); George A. Hormel Co. v. Jordan, 569 N.W.2d 148, 152 (Iowa 1997) (affirming the agency's determination that claimant's injury manifested itself when claimant learned he would not recover from the cumulative injury to his shoulder, and that permanent restrictions on his work activities would be required); Tasler, 483 N.W.2d at 829 (noting it is appropriate to fix the date of injury on the date when the disability manifests itself; and defining manifestation as "the date on which both the fact of the injury and the causal relationship of the injury to the claimant's employment would have become plainly apparent to a reasonable person"); Venenga, 498 N.W.2d at 425 (concluding manifestation requires more than mere knowledge of an injury or receipt of medical care; the employee must realize his or her injury will have an impact on employment); McKeever, 379 N.W.2d at 374 ("clearly the employee is disabled and injured when, because of pain or physical inability, he can no longer work"). There is no evidence that Bahmler missed work or sought medical treatment until 1997. No medical care provider expressed the opinion that Bahmler's shoulder condition was work-related or permanent until 1997. No permanent physical restrictions were imposed upon Bahmler until after the shoulder surgery in April of 1997. Although Bahmler's medical records suggest Bahmler reported having shoulder symptoms for approximately four years before he sought treatment, the date of cumulative injury is clearly not controlled by the date of onset of symptoms. By definition, cumulative injuries develop over a period of time and are not deemed to occur until manifested by disability. There is no substantial evidence in this record tending to prove Bahmler had a disability before April of 1997.
See Tasler, 483 N.W.2d at 829-30.
Pennsylvania contends Bahmler's allegation of a June 1, 1993 injury date excused CIGNA's payment of weekly benefits based upon the 1993 rate. We reject this contention because it overlooks the nature of a workers' compensation insurance company's duty to act reasonably even in the absence of express orders of the workers' compensation commissioner. The insurer's duty to investigate, evaluate, and respond in good faith to workers' compensation claims does not end with an examination of the claimant's pleading or the filing of an answer. See Meyers v. Holiday Express Corp., 557 N.W.2d 502, 505 (Iowa 1996) ("An employer's bare assertion that a claim is `fairly debatable' does not make is so."); Pickering v. Squealer Feeds, 530 N.W.2d 678, 683 (Iowa 1995) (noting that while a denial of benefits may be supportable at the time it is made, it may later lack a reasonable basis in light of subsequent information). The insurer's duty is, instead, a continuing duty that requires ongoing evaluation and reassessment of a workers' compensation claim as additional information is learned. In this case, Bahmler's employment and medical records, which were available to CIGNA and Pennsylvania after the petitions were filed, and which the insurers had a good faith duty to evaluate and respond to, clearly demonstrated under prevailing legal principles that Bahmler's cumulative injury was not manifest until 1997. Thus, notwithstanding the fact that claimant's pleading alleged June 1, 1993 as one of several potential cumulative injury dates, the evidence generated after the pleading stage conclusively established the injury was not manifest until 1997. Accordingly, the agency's determination that Pennsylvania's assertion of a June 1, 1993 injury date was not fairly debatable is overwhelmingly supported by the evidence in the record and the applicable law, and must be affirmed.
Pennsylvania next urges that the agency erred by imposing a penalty against Pennsylvania for CIGNA's failure to pay benefits at the correct rate. We reject this argument for two reasons. First, the agency imposed a penalty against Pennsylvania for failure without reasonable cause or excuse to pay Bahmler benefits at the proper rate. See Robbenolt v. Snap-On Tools Corp., 555 N.W.2d 229, 237 (Iowa 1996) (holding that a penalty may be imposed pursuant to Iowa Code section 86.13 when the full amount of benefits are not timely paid). The penalty was not imposed, as suggested by Pennsylvania, for CIGNA's failure to pay at the appropriate rate. It was instead imposed against Pennsylvania for its failure to pay benefits at the appropriate rate. Second, we conclude Pennsylvania benefited from CIGNA's voluntary payments because, had they not been made, the amount of Pennsylvania's penalty would likely have been much greater. Accordingly, we find no reversible error on this issue because Pennsylvania suffered no prejudice as a consequence of CIGNA's payments.
Accordingly, we affirm the agency's imposition of a penalty.
VI. Order requiring Pennsylvania to reimburse CIGNA.
CIGNA paid medical expenses for treatment, some of which was received by Bahmler before Pennsylvania became United Technology's workers' compensation insurance carrier on April 1, 1997. CIGNA sought and the agency ordered reimbursement from Pennsylvania pursuant to Iowa Code section 85.21 for all payments made on Bahmler's claim. Pennsylvania now asserts this court must reverse the order requiring it to reimburse CIGNA for the cost of medical treatment provided to Bahmler before Pennsylvania's coverage began on April 1, 1997.
Iowa Code section 85.1 empowers the workers' compensation commissioner to apportion liability between insurance carriers and to order reimbursement to any carrier that was not liable but was required to pay. Iowa Code § 85.21(1)(3). The parties have offered no authority which would authorize the agency to require Pennsylvania to reimburse CIGNA medical treatment provided to Bahmler before Pennsylvania's coverage commenced. Finding no authority for the reimbursement order, we reverse the portion of the order requiring reimbursement to CIGNA for medical expenses incurred prior to the commencement of Pennsylvania's coverage on April 1, 1997.
VII. Conclusion.
We affirm in all respects, except that we reverse the portion of the order requiring reimbursement to CIGNA for medical treatment incurred by Bahmler prior to the commencement of Pennsylvania's coverage on April 1, 1997. We remand this case to the agency for a determination of the amount of reimbursement owed by Pennsylvania to CIGNA. Three-fourths of the costs of this appeal shall be assessed to Pennsylvania; the remaining one-fourth of the costs are assessed to Bahmler.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED TO THE AGENCY.
Mahan, P.J., and Hecht, J., concurs: Miller, J., concurs in part and dissents in part.
Bahmler filed and pursued to conclusion before the agency an arbitration petition in which he asserted his date of injury was June 1, 1993, and another arbitration petition in which he asserted his date of injury was October 10, 1997. He therefore cannot logically claim, and the agency and courts should not find, that it is not "fairly debatable" there was an injury date other than April 21, 1997. I would reverse the award of penalty benefits. In all other respects I concur in the majority opinion.