EVERADO LOPEZ, Plaintiff-Appellant/Cross-Appellee, vs. MIDSTATES HORSE SHOWS, INC., Defendant-Appellee/Cross-Appellant.
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IN THE COURT OF APPEALS OF IOWA
No. 9-452 / 08-1714
Filed October 7, 2009
EVERADO LOPEZ,
Plaintiff-Appellant/Cross-Appellee,
vs.
MIDSTATES HORSE SHOWS, INC.,
Defendant-Appellee/Cross-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Artis I. Reis, Judge.
The plaintiff appeals and the defendant cross-appeals from the district
court‟s ruling on judicial review affirming the workers‟ compensation decision.
AFFIRMED.
Gary G. Mattson of LaMarca & Landry, P.C., Des Moines, for appellant.
Rustin T. Davenport of De Vries, Price & Davenport, Mason City, for
appellee.
Heard by Vogel, P.J., Potterfield, J. and Mahan, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2009).
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VOGEL, P.J.
Everado Lopez appeals and Midstates Horse Shows, Inc. cross-appeals
from the district court‟s ruling on judicial review affirming the workers‟
compensation commissioner‟s decision. We affirm.
I. Background Facts and Proceedings.
Kristin Rame is the president and sole shareholder of Midstates Horse
Shows, Inc. (Midstates).
incorporated
Midstates
Rame, a professional horse rider and trainer,
in
1985.
Midstates
organizes
and
produces
approximately five horse shows a year in Iowa and Minnesota, as well as renting
equipment and contracting services to other events. When producing a horse
show, Midstates utilizes several different types of workers, including announcers,
blacksmiths, course designers, judges, people to set up and tear down
equipment, secretaries, security, and veterinarians.
In 2001, Lopez turned sixty-five and began receiving Social Security
retirement benefits. He also learned of Midstates through a long-time friend,
Peter Booth, who worked at horse shows produced by Midstates and other
companies.
When working for Midstates, Booth performed various tasks,
including carpentry, the set up and tear down of the horse stalls and show
equipment, and running gates and rings for the shows. On the recommendation
of Booth, Lopez began working at horse shows doing security work and assisting
with the set up and tear down of equipment.
Lopez described himself as semi-retired. He worked several horse shows
a year, each with one to three weeks duration.
He did not work for all of
Midstates‟s horse shows and in 2003 he also worked for Alpine Farms, Inc. at
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two of its horse shows. Lopez was paid $800 by Midstates in 2002; $7642.50 by
Midstates and $1687.50 by Alpine Farms, Inc. in 2003; and $2000 by Midstates
in 2004.
On June 5, 2004, Lopez was setting up portable metal stalls for Midstates
when he was injured. Twenty-four metal panels, weighing approximately 600700 pounds, fell on top of him.
Lopez was taken to the local hospital by
emergency medical services and was then transported to Hennepin County
Medical Center by air ambulance.
Lopez sustained multiple trauma injuries,
including injuries to his head, left and right clavicle, rib fractures, and a pelvic
fracture. He required surgery on his right clavicle and pelvic fractures.
After an August 2006 hearing on Lopez‟s petition, the deputy
commissioner filed an arbitration decision finding that (1) Lopez was an
employee of Midstates at the time of his injury; (2) Lopez‟s injury arose out of and
in the course of his employment with Midstates; (3) Lopez was permanently and
totally disabled; and (4) Lopez was entitled to a compensation rate of $459.58
per week.
In calculating Lopez‟s weekly rate of compensation, the deputy
discussed that Lopez was a full-time intermittent employee but did not work
thirteen consecutive calendar weeks prior to June 5, 2004. Therefore, the deputy
found that “Iowa Code section [85.36(9)] would be a logical and appropriate way
to determine claimant‟s actual earnings,” but was difficult to apply and instead
determined Lopez‟s gross earnings by applying an averaging test. See Hanigan
v. Hedstrom Concrete Prods., Inc., 524 N.W.2d 158 (Iowa 1994) (discussing the
averaging test).
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On intra-agency appeal, the commissioner adopted the deputy‟s proposed
arbitration decision except modified and reduced the rate of weekly
compensation. The commissioner found that “awarding a compensation rate that
is over twice claimant‟s annual earnings from employment since his retirement
prior to this work injury is excessive. . . . [T]he best approximation of the
claimant‟s customary earning from employment is . . . pursuant to Iowa Code
section 85.36(9).” The commissioner awarded Lopez a compensation rate of
$164.41 per week.
On March 5, 2008, Lopez petitioned for judicial review asserting that the
commissioner erred in calculating Lopez‟s weekly rate of compensation pursuant
to Iowa Code section 85.36(9). Midstates cross-petitioned for judicial review
asserting that (1) the commissioner‟s finding that Lopez was an employee of
Midstates was not supported by substantial evidence; (2) the commissioner‟s
finding that Lopez was permanently totally disabled was not supported by
substantial evidence; and (3) the commissioner‟s calculation of the weekly rate of
compensation was incorrect. The district court found that (1) the commissioner‟s
finding that Lopez was an employee of Midstates was supported by substantial
evidence and the application of law to those fact findings was not irrational,
illogical, or wholly unjustifiable; (2) the commissioner‟s finding that Lopez was
permanently totally disabled was supported by substantial evidence; (3) there
was no error in the commissioner‟s use of Iowa Code section 85.36(9) to
calculate Lopez‟s weekly rate of compensation; and (4) Midstates‟s argument
that the commissioner‟s math appears to be incorrect was not preserved. Lopez
appeals and Midstates cross appeals.
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II. Standard of Review.
The Iowa Administrative Procedure Act governs judicial review of the
commissioner‟s decisions.
Iowa Code § 86.26 (2007).
Iowa Code section
17A.19 lists the instances when a court may, on judicial review, reverse, modify,
or grant other appropriate relief from agency action.
“scrutinizing analysis” to the commissioner‟s findings.
We do not apply a
Terwilliger v. Snap-On
Tools Corp., 529 N.W.2d 267, 272 (Iowa 1995). Rather, we are bound by the
agency‟s findings of fact if supported in the record as a whole and will reverse
only if we determine substantial evidence does not support the agency‟s findings.
Meyer v. IBP, Inc., 710 N.W.2d 213, 218 (Iowa 2006).
The question is not
whether the evidence supports a different finding, but whether the evidence
supports the findings actually made. Id.
Unlike the commissioner‟s findings of fact, “we give the commissioner‟s
interpretation of the law no deference and are free to substitute our own
judgment.” Lakeside Casino v. Blue, 743 N.W.2d 169, 173 (Iowa 2007). “On the
other hand, application of the workers‟ compensation law to the facts as found by
the commissioner is clearly vested in the commissioner” and may be reversed
“only if it is irrational, illogical, or wholly unjustifiable.” Id.
When we review the district court‟s decision, “we apply the standards of
chapter 17A to determine whether the conclusions we reach are the same as
those of the district court.
If they are the same, we affirm; otherwise, we
reverse.” Mycogen Seeds v. Sands, 686 N.W.2d 457, 464 (Iowa 2004).
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III. Analysis.
A. Employee-Employer Relationship.
Midstates first argues that Lopez was not an employee, but rather an
independent contractor.
In order for our workers‟ compensation statues to
provide coverage, the claimant and the respondent must have an employeremployee relationship at the time of the injury. Meyer, 710 N.W.2d at 220, 221.
An independent contractor is not an employee and thus, is not covered by the
workers‟ compensation statutes. See Iowa Code § 85.61 (2005); Mermigis v.
Servicemaster Indus., 437 N.W.2d 242, 245 (Iowa 1989).
“When the issue is whether an individual is an employee or an
independent contractor, many factors are relevant.”
Iowa Mut. Ins. Co. v.
McCarthy, 572 N.W.2d 537, 542 (Iowa 1997). In determining whether there is an
employer-employee relationship, we consider the following five factors:
(1) the right of selection, or to employ at will, (2) responsibility for
payment of wages by the employer, (3) the right to discharge or
terminate the relationship, (4) the right to control the work, and (5)
the identity of the employer as the authority in charge of the work or
for whose benefit it is performed.
Id. Further, in determining whether a worker is an employee or independent
contractor, we consider the following eight factors:
(1) the existence of a contract for the performance by a person of a
certain piece or kind of work at a fixed price; (2) independent nature
of his business or of his distinct calling; (3) his employment of
assistants, with the right to supervise their activities; (4) his
obligation to furnish necessary tools, supplies, and materials; (5)
his right to control the progress of the work, except as to final
results; (6) the time for which the workman is employed; (7) the
method of payment, whether by time or by job; (8) whether the work
is part of the regular business of the employer.
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Id. at 543. “And, in every case where the issue was whether the person was an
employee or an independent contractor, the court weighs the parties‟ intention as
it reflected upon the employment relationship.” Id. at 543. Although “the primary
focus is on the extent of control by the employer over the details of the alleged
employee‟s work,” no one factor is controlling. Id. at 542; D & C Express, Inc., v.
Sperry, 450 N.W.2d 842, 844 (Iowa 1990).
In the present case, Lopez worked at some of Midstates‟s horse shows,
but not all of them. Midstates provided Lopez with a list of the horse shows and
he would indicate at which ones he planned on working. Lopez did not work
exclusively for Midstates; he could work for other horse shows and worked at two
horse shows produced by Alpine Farms, Inc. in 2003. Additionally, Midstates
was hired by the Minnesota Hunter Jumper Association to be the manager of its
horse shows in 2003 and 2004. Lopez worked at these two shows and was
considered to be an independent contractor and paid directly by the Minnesota
Hunter Jumper Association.
When he worked at a Midstates‟s horse show, Lopez would assist in
setting up the equipment for approximately three days before the show began.
During the show, he worked security as a night watchman from 7:00 p.m. to 7:00
a.m.
After the show ended, he assisted in tearing down the equipment for
approximately one and one-half days. Lopez testified that he was also asked to
perform other duties, such as water the plants and drive Rame and other judges
to the airport. He was paid a daily rate and Midstates gave him a check at the
end of the show for each day he worked.
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Lopez testified that Midstates did not provide him with any tools for either
the security work or the set up and tear down of equipment. He provided his own
screwdriver and pair of pliers for doing the set up and tear down, and his uniform
and flashlight for performing the security work. However, he testified that he
used his own tools because “half the time you went to the office, where the tools
were, and you couldn‟t find them there.” Rame testified that Midstates does not
have any tools. She also testified that she did not supervise Lopez while he was
providing security work for the horse shows and did not give him specific hours.
However, she stated that she needed security to patrol the area and gave a
detailed description of her expectations for the job.
Lopez testified that he considered himself as an employee of Midstates.
However, Rame testified that she considered Lopez as an independent
contractor. She characterized all of the workers at horse shows as independent
contractors. However, some workers were paid daily and some were paid a flat
amount for working a show.
For the compensation he received in 2002 and 2003 from Midstates,
Lopez was given a 1099 income tax form that reported the payments as
“nonemployee compensation.” However, for the compensation he received in
2003 from Alpine Farms, Inc., Lopez was given a W-2 income tax form that
reported the payments as wages, with corresponding withholdings.
“It was [Lopez‟s] burden to establish the existence of an employeremployee relationship at the time he was injured.” D & C Express, 450 N.W.2d
at 844. On this record, there were indicia of both an employee and independent
contractor relationship. The finding of fact is the commissioner‟s duty and “[o]ur
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inquiry is strictly limited to determining whether a contrary factual finding is
demanded as a matter of law.” Id. We agree with the district court that there
was substantial evidence to support the commissioner‟s factual findings and his
conclusion that Lopez was an employee of Midstates was not irrational, illogical,
or wholly unjustifiable.
See Lakeside Casino, 743 N.W.2d at 173 (stating
application of law to the facts as found by the commissioner may be reversed
“only if it is irrational, illogical, or wholly unjustifiable”).
B. Permanent Total Disability.
Midstates next argues that the commissioner‟s finding that Lopez suffered
permanent total disability is not supported by substantial evidence.
disability does not require a state of absolute helplessness.
Total
IBP, Inc. v. Al-
Gharib, 604 N.W.2d 621, 633 (Iowa 2000). “Such disability occurs when the
injury wholly disables the employee from performing work that the employee‟s
experience, training, intelligence, and physical capacities would otherwise permit
the employee to perform.” Id.
In the present case, the agency finding was that at the time of the hearing,
Lopez was seventy-years old. He had obtained a GED and was certified in
heating and air conditioning as well as private investigation. His work experience
was varied as both a skilled and unskilled manual laborer.
The arbitration
decision adopted by the commissioner stated,
On June 5, 2004, Lopez was involved in a serious accident that
resulted in a permanent disability to his pelvis, right clavicle, and
left leg. Dr. Stoken rated Lopez‟s combined whole body impairment
(the only rating in the record) as thirty-eight percent. Dr. Stoken‟s
opinion that claimant was unable to work because of his chronic
pain is uncontradicted in the record. Claimant had surgery on both
his pelvis and his right clavicle. He walks only with the use of a
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cane or a walker . . . . Given the severity of claimant‟s disabilities,
his current physical condition, and Dr. Stoken‟s opinion that
claimant was unable to work, it is hard to imagine any job that
claimant could do given his experience, training, and education.
Claimant is permanently and totally disabled.
Dr. Jacqueline M. Stoken performed an independent medical examination and
issued a report dated June 15, 2006. The report stated that as a result of the
injuries, Lopez suffered from impaired mobility and gait and chronic pain
syndrome. Lopez had reached maximum medical improvement and had a whole
person impairment of thirty-eight percent. Additionally, due to his chronic pain,
Lopez was unable to work at that time. Lopez testified that he still requires daily
pain medication and had pain in his right shoulder, pelvis, and leg. He uses a
prescribed left knee brace and a TENS unit to manage pain and walks with either
a cane or walker.
The evidence, including the medical evidence, is uncontested. Rather,
Midstates argues the commissioner did not give enough weight to Lopez‟s
“demonstrated skills” and “semi-retired status.”
However, the commissioner
clearly considered the appropriate factors, including Lopez‟s age, education, prior
work experience, and his ability to engage in this type of employment. The fact
that Lopez was semi-retired is considered in calculating the amount of his
benefits, not whether he had an ability to work at all.
Compare Iowa Code
§ 85.36 (basing the computation of benefits on the amount an employee
historically earned), with IBP, Inc., 604 N.W.2d at 633 (discussing that permanent
total disability is based upon what type of work the employee would have been
able to perform absent the injury). We agree with the district court and find
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substantial evidence supports the commissioner‟s finding of permanent total
disability.
C. Calculation of Benefits.
Lopez argues that the commissioner erred by applying Iowa Code section
85.36(9) to calculate his weekly rate of compensation. Section 85.36 sets forth
the basis of computation for a claimant‟s weekly rate of compensation.
Subsection (9) provides:
If an employee earns either no wages or less than the usual weekly
earnings of the regular full-time adult laborer in the line of industry
in which the employee is injured in that locality, the weekly earnings
shall be one-fiftieth of the total earnings which the employee has
earned from all employment during the twelve calendar months
immediately preceding the injury.
Iowa Code § 85.36(9); see also King v. City of Mt. Pleasant, 474 N.W.2d 564,
566 (Iowa 1991) (stating that prior to applying subsection (9), “there must be a
preliminary finding that the employee „either earns no wages or less than the
usual weekly earnings of the regular full-time adult laborer in the line of industry
in which the employee is injured in that locality‟”). The commissioner concluded
that this subsection was the best method to approximate and calculate the
claimant‟s customary earnings from employment.
Lopez argues that the commissioner did not make a preliminary factual
finding that he earned less wages than the “usual weekly earnings of a regular
full-time laborer” and therefore, the commissioner cannot apply subsection (9) to
determine his weekly rate of compensation. He further argues that the district
court erred in “cit[ing] the Commissioner‟s „factual finding‟ that Lopez‟s salary
was less than a full time worker . . . this factual finding did not take place.”
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The commissioner stated, “Claimant demonstrated that he had no desire
to return to work after his retirement at age sixty-five and described himself as
semi-retired. . . . [A] semi-retired worker would earn less than a person who is
available full-time.” We find this is a sufficient factual finding that Lopez would
earn less than the usual weekly earnings of a regular full-time laborer and there
was no error in applying subsection (9) to determine Lopez‟s weekly rate of
compensation; there was no error by the district court in citing the
commissioner‟s findings.
Additionally, Lopez argues that rather than applying section 85.36(9), the
commissioner should have applied an averaging test. See Iowa Code § 85.36(7)
(2007); Hanigan v. Hedstrom Concrete Prod., Inc., 524 N.W.2d 158 (Iowa 1994).
The commissioner found that the averaging test would result in
awarding a compensation rate that is over twice claimant‟s annual
earnings from employment since his retirement prior to his work
injury is excessive. . . . Claimant demonstrated that he had no
desire to return to full-time work after his retirement at age sixty-five
and described himself as semi-retired.
Workers‟ compensation statutes are “meant to be applied, not mechanically nor
technically, but flexibly, with a view always to achieving the ultimate objective of
reflecting fairly the claimant‟s probable future earning loss.” Lopez does not fit
perfectly into a category, but the application of section 85.36(9) was the closest
reflection of Lopez‟s income for the prior year and future earning loss. We find
the commissioner did not err in applying section 85.36(9) (2005), rather than an
averaging test.
Finally, Midstates argues that in calculating Lopez‟s weekly rate of
compensation under section 85.36(9), the commissioner incorrectly included
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$2000 of wages.
However, Midstates failed to raise this issue before the
commissioner. “In workers‟ compensation cases appellate review is limited to
those matters raised and litigated before the commissioner.” McSpadden v. Big
Ben Coal Co., 288 N.W.2d 181, 184 (Iowa 1980). We agree with the district
court that because the issue was not raised and litigated before the
commissioner, we lack authority to review the issue.
IV. Conclusion.
Upon our review, we find there was substantial evidence to support the
commissioner‟s factual findings regarding the employer-employee relationship
and the commissioner‟s conclusion that Lopez was an employee of Midstates
was not irrational, illogical, or wholly unjustifiable.
Additionally, we find
substantial evidence supported the commissioner‟s finding that Lopez suffered
permanent total disability. In calculating Lopez‟s weekly rate of compensation,
we find the commissioner correctly applied Iowa Code section 85.36(9). Finally,
Midstates‟s argument regarding a mathematical calculation was not preserved.
We have considered all of the arguments on appeal and affirm the district court.
AFFIRMED.
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