CLIFFORD AYERS , Petitioner - Appell ee , vs. D&N FENCE COMPANY, INC. and EMC INSURANCE COMPANIES , Respondents - Appell ees , UNITED FIRE & CASUALTY COMPANY, Intervenor - Appellant .
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IN THE COURT OF APPEALS OF IOWA
No. 8-470 / 07-1795
Filed August 13, 2008
CLIFFORD AYERS,
Petitioner-Appellee,
vs.
D&N FENCE COMPANY, INC. and
EMC INSURANCE COMPANIES,
Respondents-Appellees,
UNITED FIRE & CASUALTY COMPANY,
Intervenor-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, Thomas L. Koehler,
Judge.
An insurer appeals a judgment entered on a workers’ compensation
award. REVERSED AND REMANDED.
Charles A. Blades of Scheldrup Blades Schrock Sand Aranza, P.C., Cedar
Rapids, for appellant.
David O’Brien of Willey, O’Brien, Cedar Rapids, for appellee.
Considered by Miller, P.J., and Vaitheswaran and Eisenhauer, JJ.
2
VAITHESWARAN, J.
An insurer appeals a judgment entered on a workers’ compensation
award. As the judgment is inconsistent with recent precedent on the issue, we
reverse and remand.
I. Background Facts and Proceedings
Clifford Ayers injured his knee while working for D & N Fence Co., Inc. He
petitioned for workers’ compensation benefits. In pertinent part, the workers’
compensation commissioner ordered “that defendants pay all of claimant’s
expenses under section 85.27 associated with a knee injury and knee
replacement surgery.”1
On judicial review, the district court and the Iowa Supreme Court affirmed
the agency decision. See Ayers v. D & N Fence Co., Inc., 731 N.W.2d 11 (Iowa
2007). The Iowa Supreme Court concluded “Ayers is entitled to reimbursement
for his medical expenses.” Id. at 19.
Ayers subsequently filed a district court motion to have the workers’
compensation award reduced to judgment.
The parties to the agency
proceedings stipulated that, of the $50,667.04 in medical costs billed to Ayers’s
health insurance company, the company paid $27,129.74. Ayers’s out-of-pocket
expenses were $507.58.2
1
The named defendants were D & N Fence Co. Inc. and EMC Insurance Company. It
later became apparent that United Fire and Casualty Company rather than EMC was the
correct workers’ compensation carrier. On rehearing, EMC was relieved of liability and
D & N was substituted for “defendants” throughout the agency decision. United Fire and
Casualty was allowed to intervene in the judicial review proceedings.
2
In a resistance to Ayers’s motion, United Fire & Casualty alleged on information and
belief that EMC paid Ayers’s out-of-pocket expenses. The agency record does not
reflect such a payment.
3
The district court granted the motion, ordering judgment “on behalf of the
petitioner, Clifford Ayers, and against Defendant, D & N Fence Company, Inc. for
$27,129.74 in actual medical expenses and $100 in costs.” The court denied a
request to reconsider its ruling.
II. Analysis
On appeal, United Fire and Casualty argues that the district court
exceeded the scope of its authority under Iowa Code section 86.42 when it
entered judgment in favor of Ayers personally for medical expenses paid by a
personal health insurer.
“The standard of appellate review regarding the
permissible scope of a district court judgment is for errors of law.” Rethamel v.
Havey, 715 N.W.2d 263, 266 (Iowa 2006) (Rethamel II).
Iowa Code section 86.42 allows a party to present an order or decision of
the workers’ compensation commissioner to the district court which “shall render
a decree or judgment.” The court’s role is ministerial and is limited to entering a
judgment conforming with the award. Rethamel v. Havey, 679 N.W.2d 626, 629
(Iowa 2004). The court may, however, construe the commissioner’s award. Id.
at 628.
Here, the commissioner ordered D & N to pay Ayers’s medical expenses,
but did not specify who was to be paid. In Rethamel II, the Iowa Supreme Court
addressed this scenario. The court held that “a workers’ compensation claimant
is not entitled to be paid sums for medical and hospital expenses unless there is
a specific showing that the claimant himself paid for medical expenses.” 715
N.W.2d at 66-67 (emphasis in original).
4
As noted, the agency record reveals that Ayers did not directly pay
$27,129.74. Therefore he was not entitled to judgment in that amount.
In reaching this conclusion, we have considered Ayers’s contention that
the commissioner’s decision is no less enforceable simply because he “has to
turn around and pay back his health insurance carrier for any amount he is able
to recover.” The Iowa Supreme Court rejected this argument in Krohn v. State,
420 N.W.2d 463, 464-65 (Iowa 1988). Construing virtually identical language in
a workers’ compensation order, the Court stated, “our review of the language of
the deputy’s order convinces us that it was not intended to require the State to
pay the enumerated medical and hospital expenses directly to the claimant.
Rather, it orders the State to satisfy these obligations which arose from a workrelated injury.” Id. at 464.
Ayers maintains this language is not controlling because “the same entity,
the State of Iowa, paid the medical expenses through its health insurance benefit
program that was responsible for the payment of workers’ compensation
benefits.” Krohn did not turn on this factual distinction. As the Court noted, the
obligation to pay the claimant’s medical expenses was the employer’s. Id. The
employer could satisfy this obligation by paying the suppliers directly or by
making other arrangements.
Id. at 464-65.
insurer initially paid the expenses.
As in this case, Krohn’s health
Id. at 465.
This fact did not relieve the
employer of liability for the expenses. Id. There, as here, the remedy was not to
enter judgment in favor of the claimant but to allow the insurer to recover from
the employer. Id.
5
In Rethamel II, the Court provided guidance on the language to be used in
this type of judgment, including language on enforcement of the judgment. The
court stated:
An appropriate way to “construe” the award would be to enter
judgment stating “Rethamel is liable for Havey’s medical
expenses.” Such a judgment could be enforced “at the time of
execution or by a separate action” by whoever provided the medical
care, or whoever already paid for the medical expenses.
We reverse and remand for entry of judgment in conformity with the
commissioner’s award.
We find it unnecessary to address United Fire and
Casualty’s remaining argument concerning a release executed by Ayers.
REVERSED AND REMANDED.
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