Opinion
No. 2-817 / 02-0092
Filed July 10, 2003
Appeal from the Iowa District Court for Linn County, David S. Good, Judge.
An employer and its workers' compensation insurer appeal a district court judicial review ruling affirming an award of workers' compensation benefits. AFFIRMED.
Chris J. Scheldrup of Scheldrup Law Firm, P.C., Cedar Rapids, for appellants.
Thomas M. Wertz of Wertz Law Firm, P.C., Cedar Rapids, for appellee.
Heard by Sackett, C.J., and Miller and Eisenhauer, JJ.
Petitioners, West Side Transport, Inc., and its workers' compensation insurer Connecticut Specialty Insurance Co. ("West Side" collectively), appeal a district court judicial review ruling affirming an award of workers' compensation benefits to the respondent Rex Fishel. We affirm.
I. BACKGROUND FACTS.
Rex Fishel began working for West Side Transport as a mechanic in June 1994. He was injured on September 28, 1994 when the axle of the truck he was working under fell on him, injuring his right shoulder, ribs, and chest. Fishel finished his shift and sought medical treatment that evening at St. Luke's Hospital. X-rays were taken of his right shoulder and were determined to be "negative" and "unremarkable." He was released and told to see his family doctor the next day. Fishel was examined by Dr. Koch the next day and was diagnosed as having a "crush injury, upper thorax." A bone scan a few days later confirmed "multiple rib injuries" and "possibly acromial clavicular joint injury." Fishel was off work and continued treatment with Koch until December 12, 1994. Fishel testified before the agency that during this time he was experiencing right shoulder pain and continued to do so after he ended treatment with Dr. Koch and returned to work in December 1994.
When Fishel ended treatment with Dr. Koch, Koch told Fishel he would continue to have some "mild arm impairment" and said he would like to see him again in four to five months. Fishel never returned to Dr. Koch. A few weeks after his return to work Fishel was transferred to the wash bay where he washed the outside of trucks and trailers and cleaned the inside of the trucks.
Fishel continued to work at West Side washing trucks for the next fourteen months. During this time he did not complain to his employer about any shoulder problems. He testified he experienced continual shoulder pain during this time but he did not report it or seek additional treatment because he feared he would lose his job. There is considerable dispute in the record as to how strenuous the job was that Fishel was performing in the wash bay, with his supervisor in the wash bay testifying it was the most strenuous job at West Side with a lot of heavy labor, while one of his co-workers testified the work was not particularly hard to perform.
On January 27, 1996, fourteen months after the work-related injury, Fishel slipped and fell on some ice while helping his girlfriend's mother move. The fall caused a rotator cuff tear to Fishel's left shoulder. There is also evidence that Fishel reported a fall at West Side in 1996, in which he landed "more on the right side," several days after the fall on the ice. Dr. Ahn, West Side's company doctor, treated Fishel after both of these falls and referred him to Dr. Bickel. Fishel had surgery on his left shoulder to repair this tear. At the time of this treatment Dr. Bickel noted an "old probably [sic] cuff injury on the right side which seems to have healed with reasonably good function," however Bickel focused on Fishel's left shoulder because Fishel's problems at the time had to do with his left shoulder.
Fishel subsequently had four surgeries on his right rotator cuff as well, in order to repair a cuff tear and later re-tears. These surgeries occurred in May and October of 1996 and June and December of 1997. The first two of these right shoulder surgeries were performed by Dr. Bickel and the last two were performed by Dr. Nepola, after Bickle's death. Dr. Nepola continues to treat Fishel today and opines he has not yet reached maximum medical benefit from treatment.
Fishel has not returned to work at West Side in any capacity since the January 1996 falls and was terminated from West Side after his last surgery in December 1997. The fighting issue in this case is the cause of Fishel's right rotator cuff problems and four resulting surgeries. Based on the expert medical opinions of Drs. Bickel, Koch and Miller, West Side denies that the right rotator cuff problems are work-related, and claims Fishel should not receive workers' compensation benefits for those problems. Fishel relates the injury to the initial September 1994 injury, relying on Dr. Nepola's opinion that there is a causal connection. Fishel did not again begin to receive treatment on his right shoulder until after he fell on the ice in January of 1996 and began receiving treatment for the resulting tear in his left shoulder.
II. PRIOR PROCEEDINGS.
Fishel filed a claim seeking workers' compensation benefits relating to his right shoulder on June 7, 1996. A hearing took place on July 27, 1998 before Deputy Commissioner Walshire. In his arbitration decision filed August 29, 1998, Deputy Walshire found that the work injury in September of 1994 was a cause of Fishel's right rotator cuff problems. The deputy found Dr. Nepola's opinion, that Fishel's 1994 work injury was the cause of the right shoulder cuff tear condition he had treated, to be more convincing and credible than those of Drs. Bickel, Koch and Miller, who opined the right shoulder problems were not causally connected to the 1994 injury. The deputy based this finding on Nepola's professional status as a full professor of orthopedic surgery, his special expertise in should problems, his opinion being more consistent with Fishel's credible testimony as to continuous symptoms since the 1994 work injury, and the fact he was one of only two physicians who had actually viewed the right shoulder tear damage, the other, Dr. Bickel, being deceased. The deputy's decision was summarily affirmed by the Commissioner in October 1999. West Side filed a petition for judicial review on November 5, 1999 claiming the agency's decision was not supported by substantial evidence, was affected by errors of law, and was arbitrary and capricious.
At that time West Side also sought a remand to the agency to present additional evidence, alleging Deputy Walshire misconstrued a document on which he based his finding that its witness, Glen Rathje, was not credible. Rathje is the vice-president of maintenance at West Side and was Fishel's supervisor at the time of his first work injury. Rathje testified before the deputy that Fishel was transferred to the wash bay because of poor performance as a mechanic and not due to his previous work injury and workers' compensation claim. The deputy found this testimony was inconsistent with Rathje's good performance evaluation of Fishel dated January 21, 1995 and thus found Rathje was not credible. West Side claimed the actual date on the evaluation was June 21, 1995 and that Rathje would so testify.
The district court remanded the case to the agency for the purpose of taking additional testimony from Rathje and reconsideration of the appropriate date on the performance evaluation. West Side filed a motion with the agency for enlargement of the remand order seeking to have the remand hearing before a different deputy or the commissioner to ensure the findings were not tainted by Deputy Walshire's alleged bias against Rathje based on his earlier misreading of the evaluation date and resultant credibility determination. The agency ruled that West Side gave no persuasive reason why Walshire could not preside. However, in the meantime Deputy Walshire had recused himself from the case "for reasons other than those asserted by" West Side. Accordingly, the remand hearing was held before a different deputy.
West Side contends that on the way to the remand hearing Rathje told counsel for West Side he had known Deputy Walshire for at least three years prior to the initial hearing. Rathje stated his wife was best friends with Walshire's sister, that he and his wife had been at various social events together at Walshire's sister's house, and they had once stayed with Walshire and his girlfriend in his motor home while attending Oktoberfest in Wisconsin. Rathje stated he did not know what Walshire thought of him, but felt uncomfortable in his presence. The only matter on which evidence was presented at the remand hearing, and the only issued raised at that hearing, was the correct date of Fishel's performance evaluation.
The agency's "Remand Decision" specifically stated that the sole issue presented concerned taking testimony for reconsideration of the "appropriate date of the records." The agency determined that the correct date of Fishel's evaluation was June 21, 1995. The district court remanded the case to the agency a second time, finding the commissioner had misunderstood the full extent of the first remand order. The court stated its intent was not only to have the agency consider the date issue but also to modify its findings and decision in the case, if necessary, based on the new testimony from Rathje. The commissioner ruled after the second remand that the agency had complied with the previous remand order and no additional modifications to its decision were necessary. The final decision of the agency was filed on May 21, 2001 and stated that the additional evidence taken on remand did not change the outcome of the agency's original decision in the case.
West Side filed a second petition for judicial review on June 7, 2001 based on this ruling. In its second petition West Side asserted all of the errors by the agency that it had asserted in its initial petition, but added a claim that Deputy Walshire had a conflict of interest which prevented him from properly presiding over the hearing. It requested reversal of the agency decision and that the case be remanded for a new hearing before a deputy other than Deputy Walshire. Fishel sought to have this second petition dismissed, contending it was moot and unnecessary because the district court retained jurisdiction on the limited remands.
The district court granted Fishel's motion to dismiss the second petition, finding it had retained jurisdiction during the limited remands. However, it went on to find that West Side had "offered no evidence of Walshire's alleged bias or shown how his impartiality was affected by not recusing himself." The court also found there was substantial evidence in the record as a whole to support the commissioner's finding that Fishel's right rotator cuff problems were causally related to the September 1994 work injury. West Side appeals from the district court's affirmance of the agency action.
III. SCOPE AND STANDARDS OF REVIEW.
Our review of a final decision of the workers' compensation commissioner, like that of the district court, is for correction of errors of law. Second Injury Fund v. Shank, 516 N.W.2d 808, 812 (Iowa 1994). In determining whether the district court erred in exercising its power of judicial review, we apply the standards of Iowa Code section 17A.19(8) (1995) to the agency action to determine whether our conclusions are the same as those of the district court. Williamson v. Wellman Fansteel, 595 N.W.2d 803, 806 (Iowa 1999); E.N.T. Assocs. v. Collentine, 525 N.W.2d 827, 829 (Iowa 1994). The agency's findings are akin to a jury verdict, and we broadly apply them to uphold the agency decision. Shank, 516 N.W.2d at 812.
We will uphold the agency's action against a claim it is unsupported by substantial evidence in the record made before the agency when the record is viewed as a whole if a reasonable person could accept the evidence as adequate to reach the findings made by the agency. Pointer v. Iowa Dep't of Transp., 546 N.W.2d 623, 625 (Iowa 1996).
[E]vidence is not insubstantial merely because it would have supported contrary inferences. Nor is evidence insubstantial because of the possibility of drawing two inconsistent conclusions from it. The ultimate question is not whether the evidence supports a different finding but whether the evidence supports the findings actually made.
City of Hampton v. Iowa Civil Rights Comm'n, 554 N.W.2d 532, 536 (Iowa 1996). Therefore, if the agency's findings of fact are supported by substantial evidence, those findings are binding on us. Id. IV. MERITS.
West Side contends on appeal that the district court should have vacated the commissioner's decision and ordered a new hearing based on the failure of Deputy Walshire to recuse himself due to an alleged bias or prejudice toward its witness (Rathje) based on their prior social relationship. West Side argues the administrative rules required Walshire to disclose the relationship with Rathje and his failure to do so is sufficient in itself to warrant a new hearing before a different deputy. West Side also asserts there is not substantial evidence in the record to support the finding that Fishel's shoulder injury was causally connected to his work-related injury of September 1994.
Fishel argues the alleged error asserted by West Side based on Walshire's failure to recuse himself has not been preserved, and even if it has been, Walshire's limited past contact with Rathje did not require his recusal under Iowa law. Fishel also argues there is substantial evidence in the record, independent of Rathje's testimony, to support the commissioner's conclusion that Fishel's right shoulder problems were causally connected to his work-related injury. We will address these issues separately.
A. Recusal of the Deputy and New Hearing.
As set forth above, Rathje and Deputy Walshire had some limited social contact prior to the hearing on Fishel's claim. West Side claims, based on this contact, that Walshire was biased or prejudiced against Rathje, and the fact he did not disclose this possible "conflict of interest" prior to hearing, as required by the administrative rules, warrants a new hearing before a different deputy commissioner. For several reasons we disagree.
Initially we note, as a general proposition, the knowledge of an officer-director of a corporation is imputed to the corporate entity even if it is never actually disclosed to the corporation. Regal Ins. Co. v. Summit Guar. Corp., 324 N.W.2d 697, 703-04 (Iowa 1982). Rathje, as a vice-president of West Side, is an officer of the company. Accordingly, Rathje's own knowledge of his prior contacts with Deputy Walshire is imputed to West Side. Thus, in effect what West Side is arguing is that Walshire had a duty to disclose to West Side information which West Side already possessed. There can be no duty to disclose to a party information it already possesses, and a party cannot be prejudiced by not being informed of that which it already knows. However, we need not rest our decision of this issue on this principle alone.
Presuming Rathje's knowledge of his relationship with Walshire is not imputed to West Side, West Side was still required to notify the parties and agency of the possible conflict or bias as soon as practicable after becoming aware of it, which would have been on January 16, 2001 at the remand hearing. See Iowa Admin. Code r. 876-4.38(4) (requiring that the party asserting disqualification of a deputy shall file a motion, supported by affidavit, as soon as practicable after the reason alleged becomes known to the party). However, West Side made no effort at the remand hearing to inform the agency or Fishel of the alleged conflict or to file a motion, as required by the rule.
As both parties seem to agree, and the district court correctly found in its judicial review ruling, under Iowa Code section 17A.19(7) the district court did in fact retain jurisdiction of the case during the limited remand. Reiter v. Iowa Dep't of Job Serv., 327 N.W.2d 763, 766-67 (Iowa Ct.App. 1982). Thus, because of the limited and confined nature of the remand the agency did not have jurisdiction to rule on the matter of Deputy Walshire's alleged bias or conflict of interest and West Side's assertion that a new hearing was necessary.
However, the district court could not rule on this issue either, because the issue was not presented to or passed upon by the agency. See Strand v. Rasmussen, 648 N.W.2d 95, 100 (Iowa 2002) (holding that an issue must generally be presented to agency to satisfy preservation requirements); Campbell v. Iowa Beer Liquor Control Dept., 366 N.W.2d 574, 576 (Iowa 1985) (stating district court exercises only appellate jurisdiction in reviewing agency action and its authority in judicial review proceeding is limited to review of challenged agency action). Accordingly, West Side's proper recourse was to seek further remand under section 17A.19(7) from the district court to raise the issue before the agency and allow the agency to address it. West Side did not do so. Instead, it filed a second petition for judicial review. In that second petition, for the first and only time in either the agency or the district court, it raised the issue. The district court however dismissed this second petition because it had retained jurisdiction on the limited remand.
Despite the court's dismissal of West Side's second petition, and thus the issue of Walshire's alleged bias or conflict of interest and need for a new hearing, the district court did address the merits of the claim, finding West Side had not proven Walshire's alleged bias or shown his impartiality was affected by not recusing himself. We agree with the district court's decision on this issue. However, we also believe Rathje's testimony had little or no bearing on the facts which support the agency's determination regarding causation of Fishel's injury and the resulting award of workers' compensation benefits. Thus, even though Rathje's testimony does not lack credibility, it does little or nothing to detract from the evidence supporting the agency's findings and decision.
Having determined the district court did not err by not ordering a new hearing based on Deputy Walshire's alleged bias, we must now determine whether we agree with the district court that there was substantial evidence to support the agency's determination regarding causation.
B. Causal Connection.
West Side contends Fishel failed to meet his burden of proving his right rotator cuff injury resulted from his September 24, 1994 work-related injury. A claimant seeking workers' compensation benefits has the burden of proving by a preponderance of the evidence that the injury on which he or she bases a claim arose out of and in the course the claimant's employment. St. Luke's Hosp. v. Gray, 604 N.W.2d 646, 652 (Iowa 2000); Quaker Oats Co. v. Ciha, 552 N.W.2d 143, 150 (Iowa 1996). The question of causal connection is essentially within the domain of expert testimony. Dunlavey v. Economy Fire and Cas. Co., 526 N.W.2d 845, 853 (Iowa 1995); Collentine, 525 N.W.2d at 830. The commissioner is free to accept or reject, in whole or in part, expert testimony even if uncontroverted. Sondag v. Ferris Hardware, 220 N.W.2d 903, 907 (Iowa 1974) ; Prewitt v. Firestone Tire Rubber Co., 564 N.W.2d 852, 855 (Iowa Ct.App. 1997). In the context of expert opinion concerning causal connection of an injury with employment, our supreme court has stated:
The weight to be given such an opinion is for the finder of fact, in this case the commissioner, and that may be affected by the completeness of the premise given the expert and other surrounding circumstances.
When the expert's opinion is based upon an incomplete history, the opinion is not necessarily binding upon the commissioner. The commissioner as trier of fact has the duty to determine the credibility of the witnesses and to weigh the evidence, together with the other disclosed facts and circumstances, and then to accept or reject the opinion.
Dunlavey, 526 N.W.2d at 853 (citations omitted).
As set forth in detail above, despite the opinions of Drs. Bickel, Koch and Miller that Fishel's right shoulder problems were not causally connected to the 1994 work injury, the agency found Dr. Nepola's opinion that the 1994 work injury was the cause of the right shoulder rotator cuff tear condition he had treated to be more credible. The agency based its finding that Dr. Nepola was more credible than the other medical experts, in part, on the following:
First, by far, Dr. Nepola's credentials, especially his professional status at a major teaching medical center, far exceed any of those presented in the record. He also has special expertise in shoulder problems. Secondly, Dr. Nepola's views are more consistent with Rex's credible testimony as to continuous symptoms since the 1984 [sic] work injury which was verified by a disinterested witness. Dr. Nepola's views as to the progressive nature of such an injury makes sense and appear to be the most logical explanation of the events in this case. Third, only he and Dr. Bickel, now deceased, were treating physicians who have actually viewed the tear damage.
We presume the deputy's reference to the "1984 work injury" was meant to refer to Fishel's 1994 work injury and is merely a typographical error.
The agency then went on to specifically state a number of specific problems it found with the views of Drs. Bickel, Koch, and Miller.
West Side claims in part that Dr. Nepola's opinion regarding causation lacks foundation because while he opined that "in the absence of any other injury" Fishel's right shoulder rotator cuff injury did stem from the September 1994 accident when the truck axle fell on him, the evidence shows Fishel fell twice in January 1996 injuring both his left and right sides. However, there was evidence that the first fall, not at work, resulted in left-side injury only and the second fall, at work, injured only Fishel's right ribs rather than affecting his shoulder in any manner. All of this evidence was before the agency and presumably considered by it.
It is clear from the record that the expert testimony regarding causation was controverted. However, it is equally clear the medical opinions, and the evidence upon which they were based, of all four doctors were before the agency and fully considered by it. Based on the agency's review of the expert witness testimony it found Dr. Nepola's opinion regarding causation to be the most credible. We find, when the record is viewed as a whole, there is substantial evidence to support the agency's discounting Drs. Bickel, Koch, and Miller's opinions and its reliance on Dr. Nepola's opinion in making its determination regarding causation. A reasonable mind could find the evidence adequate to reach the same conclusion as the agency. The decision does not lack substantial evidential support merely because inconsistent conclusions could be drawn from the evidence. Murillo v. Blackhawk Foundry, 571 N.W.2d 16, 17 (Iowa 1997). The ultimate question is not whether the evidence would support a different finding, but whether it supports the finding the commissioner actually made. Id.
We agree with the conclusions of the district court that Fishel met his burden of proof and find the agency's decision should be affirmed. We find there is substantial evidence in the record to support the agency's determination that Dr. Nepola provided the most credible and accurate opinion regarding causal connection between Fishel's right rotator cuff tear and his September 1994 work-related injury.
V. CONCLUSION.
Based on our review of the evidence as a whole, we conclude the district court did not err in not granting West Side a new hearing based on the alleged conflict of interest or bias of Deputy Walshire. Although we do not believe this issue was properly before the district court, we can find no harm or prejudice to West Side in the court's determination of the issue because Rathje's testimony had little or no bearing on the agency's causation determination. We also agree with the district court's determination there is substantial evidence in the record to support the agency's finding that Dr. Nepola's expert opinion was the most credible regarding the causal connection between Fishel's right rotator cuff problems and his work injury.