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March 11, 2020: Iowa Legal Update

• Mar 16, 2020

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Legal Update by Attorney Alison Stewart

Iowa Workers’ Compensation Commissioner Responds to Coronavirus

On Friday, March 13, 2020, Iowa Workers’ Compensation Commissioner Cortese filed an Order responding to Coronavirus concerns. In-person hearings will be suspended beginning March 18, 2020 and continuing through June 16, 2020. During this time period scheduled hearings will be held using CourtCall, the agency’s video hearing technology. Fees for the service will be covered by this agency.

For any compensability questions relating to contraction of Coronavirus by Iowa employees, please contact any of the Peddicord Workers’ Compensation Attorneys to discuss further. Analyzing these situations on a case-by-case basis is appropriate.

Shoulder Definition Clarified

The agency filed two arbitration decisions clarifying how the agency defines the shoulder. Recall that the shoulder was added to the schedule in July 2017 and has been compensated based upon 400 weeks since that time. A scheduled member injury has been limited to the impairment rating of an expert.

The decisions are Chavez v. MS Technology, LLC, File No. 5066270 (Feb. 5, 2020) and Deng v. Farmland Foods, Inc., File No. 5061883 (Feb. 28, 2020). We expect the decisions to be appealed. In light of these decisions, however, the current agency law is that where the injury to the shoulder extends into the proximal portion of the shoulder joint (the portion nearer to the center of the body), it is a body as a whole injury and an industrial disability analysis may be appropriate. The agency cited pre-legislative change cases where the shoulder was defined as the ball and socket between the arm (humerus) and the trunk (scapula), which is medically called the glenohumeral joint. The agency then reasoned that the legislature was aware of this definition when they drafted the 2017 amendment and found that injuries extending into the body side of the glenohumeral joint are body as a whole injuries. Consider the below diagram for additional context relating to the anatomy of the shoulder:

 

 

 

 

 

Importantly, any time the injury extends into the proximal portion of the shoulder joint, including where the surgery performed involves a distal clavicle resection (which is where the surgeon shaves the tip of the clavicle), we can expect the agency to find a body as a whole injury since the clavicle is proximal to the glenohumeral joint. The cases cited in the Chavez decision in arriving at the shoulder definition now being applied by the agency specifically identify the distal clavicle as part of the body as a whole. The agency will likely then apply an industrial disability analysis where the Claimant has not returned to work, with the same hours and earnings. If there is a return to work, we would expect the agency to apply a body as a whole rating to 500 weeks like they would for a typical body as a whole injury with a return to work.

Additionally, in the Deng case, penalty benefits were awarded where Defendants did not pay permanency following an IME report from Claimant’s expert containing a permanency rating, despite the authorized treating physician not yet placing the claimant at MMI or assigning impairment. The deputy found that since the authorized treater provided permanent restrictions after a valid FCE, this was the equivalent to MMI, even though the treating doctor didn’t come out and say that in his report. Penalty was awarded from the date that permanent restrictions were provided, not the MMI date in Claimant’s IME report.

These decisions may be appealed, but we will not know the outcome of any appeal(s) for more than a year.

Iowa Supreme Court Reduces Punitive Damages Award in Bad Faith Case

Thornton v. American Interstate Insurance Company, arising out of a compensable work injury where the carrier delayed benefits owed, the Iowa Supreme Court of Iowa recently took up the issue of the level of conduct necessary to justify an award of punitive damages in a bad faith case. Ultimately the punitive damages were reduced, however, the decision did not provide a definitive ratio between punitive and compensatory damages. However, it is instructive as to the level of conduct that will justify certain awards for punitive damages.

 

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