IN THE COURT OF APPEALS OF IOWA

No. 20-0769

Filed July 21, 2021

AMERICAN HOME ASSURANCE,

Plaintiff-Appellee,

vs.

LIBERTY MUTUAL FIRE INSURANCE COMPANY,

Defendant-Appellant.

________________________________________________________________

Appeal from the Iowa District Court for Polk County, William P. Kelly, Judge.

Liberty Mutual Fire Insurance Company appeals from a ruling on judicial 

review reversing the workers’ compensation commissioner’s decision and 

concluding American Home Assurance was entitled to reimbursement from Liberty 

Mutual for benefits paid when it was not the employer’s insurance carrier. 

REVERSED AND REMANDED.

Benjamin T. Erickson and Andrew D. Hall of Grefe & Sidney, P.L.C, Des 

Moines, for appellant.

Aaron T. Oliver of Hansen, McClintock & Riley, Des Moines, for appellee.

Heard by Vaitheswaran, P.J., and Greer and Schumacher. JJ.
2

VAITHESWARAN, Presiding Judge.

This appeal raises a question about the procedure an insurance company 

must follow to obtain reimbursement from another insurer for workers’

compensation benefits inadvertently paid a claimant.

I. Background Facts and Proceedings

An employee filed a petition for workers’ compensation benefits against his 

employer and its insurer, American Home Assurance (American Home), for onthe-job injuries sustained on November 15, 2007. He later amended the petition 

to allege an injury date of June 30, 2008. Following an arbitration hearing, a deputy 

workers’ compensation commissioner found the injury date to be June 16, 2008. 

The deputy ordered the employer and American Home to pay the claimant 125 

weeks of permanent partial disability benefits. The commissioner summarily 

affirmed the award. American Home paid the benefits, with its final payment 

disbursed in 2013. 

In 2016, the claimant filed a review-reopening petition. At that time, 

American Home discovered it was not the insurer on the claimant’s date of injury

as found by the deputy or on the amended date pled by the claimant. American 

Home filed an “Application and Consent Order for Payment Benefits Under Iowa 

Code Section 85.21” (2016). A deputy commissioner granted the application on 

January 3, 2017. The order authorized American Home to “petition, cross-petition, 

or intervene in proceedings before this agency . . . to seek determination of liability 

and reimbursement from another carrier.”

American Home filed a petition for contribution pursuant to Iowa Code 

section 85.21, seeking reimbursement from Liberty Mutual Insurance Company
3

(Liberty Mutual) “for the benefits paid to date” as well as any future benefits “found 

to be due as a result of [the claimant’s] currently pending” review-reopening 

petition. Liberty Mutual filed a motion for partial summary judgment, asserting “a 

petitioner can only obtain contribution or reimbursement from a third party for 

benefit payments made after an 85.21 order has been issued,” and because “an 

85.21 order was not issued until January 3, 2017” in this case, “[b]enefits issued 

prior to January 3, 2017 are not reimbursable as a matter of law.” American Home 

filed a cross-motion for summary judgment, requesting a determination that Liberty

Mutual owed contribution for benefits paid and any future benefits. 

A deputy workers’ compensation commissioner concluded American Home 

was entitled to “contribution for benefits paid, at any time, in connection with [the

claimant’s] June 16, 2008 work injury.” On intra-agency appeal, the commissioner 

sitting by delegation disagreed. The commissioner reversed that portion of the 

decision requiring reimbursement for payments made before the January 3, 2017 

order authorizing a reimbursement claim. The commissioner stated, “Because 

American Home failed to seek an Iowa Code section 85.21 consent order prior to 

the arbitration hearing, Liberty Mutual is not liable for contribution to American 

Home for benefits ordered to be paid and paid pursuant to the arbitration decision.”

American Home petitioned for judicial review. The district court reversed

the agency’s final decision. The court found no “time limitation on reimbursement 

actions or a carrier’s right to recovery.” The court concluded, “[W]hen an employer 

or insurance carrier mistakenly paid benefits prior to the determination of the 

proper date of injury, but discovered its mistake after it had made or completed 
4

payments, they are entitled to reimbursement under section 85.21.” Liberty Mutual 

appealed. 

II. Standard of Review

Both sides agree the appeal turns on the commissioner’s interpretation of 

Iowa Code section 85.21. Our review of an agency interpretation of law depends 

on the level of deference we are obligated to afford the interpretation. See Iowa 

Code § 17A.19(11). Specifically, “[t]he deference owed to an agency’s 

interpretation of a statute depends on whether ‘interpretation of a provision of law’

has, or has not, ‘clearly been vested by a provision of law in the discretion of the 

agency.’” Christensen v. Iowa Dep’t of Revenue, 944 N.W.2d 895, 899–900 (Iowa 

2020) (quoting Iowa Code § 17A.19(10)(c), (l)).

Section 17A.19(10)(c) authorizes reversal where the agency action is 

“[b]ased upon an erroneous interpretation of a provision of law whose 

interpretation has not clearly been vested by a provision of law in the discretion of 

the agency.” Section 17A.19(10)(l) authorizes reversal where the agency action is 

“[b]ased upon an irrational, illogical, or wholly unjustifiable interpretation of a 

provision of law whose interpretation has clearly been vested by a provision of law 

in the discretion of the agency.” “Indications that an agency has interpretive 

authority include rule-making authority, decision-making or enforcement authority 

that requires the agency to interpret the statutory language, and the agency’s 

expertise on the subject or on the term to be interpreted.” Christensen, 944 N.W.2d 

at 900 (citation omitted).

The commissioner has exercised authority to interpret section 85.21 by 

promulgating a rule fixing procedures an insurer must follow to obtain 
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reimbursement from another carrier. See Iowa Admin. Code r. 876-3.1(11) 

(prescribing the form an insurer must use “to pay weekly and medical benefits 

without admitting liability and to be able to seek reimbursement from another 

carrier or employer” pursuant to section 85.21). The commissioner also has filed 

a host of adjudicative decisions over more than two decades construing and 

applying section 85.21. See, e.g., Arreola v. Bodeans Baking Group Holding,

L.L.C., File Nos. 5040956, 5040974, 2018 WL 1042709, at *2–4 (Iowa Workers’ 

Comp. Comm’n Feb. 16, 2018); Dakota Truck Underwriters v. Cont’l W., Ins., File 

Nos. 5028722, 5028738, 2011 WL 13186195, at *1–2 (Iowa Workers’ Comp. 

Comm’n Sept. 28, 2011); Gardner v. Great River Med. Ctr., File Nos. 5018081, 

5018082, 5018083, 2007 WL 1438516, at *11 (Iowa Workers’ Comp. Comm’n Apr. 

26, 2007); Allied Ins. v. Fareway, Inc., File No. 1292163, 2003 WL 22283449, at 

*2–3 (Iowa Workers’ Comp. Comm’n Aug. 15, 2003); Akers v. Woodmarc, File 

Nos. 1124900, 5003252, 2002 WL 32125459, at *5 (Iowa Workers’ Comp. Comm’n 

Feb. 6, 2002); Cambridge Integrated v. Farewav Stores, Inc., File No. 1292163, 

2001 WL 34111282, at *3 (Iowa Workers’ Comp. Comm’n Dec. 21, 2001); Mehmen 

v. Archer Daniels Midland, File No. 1059955, 1999 WL 33619593, at *4–6 (Iowa 

Workers’ Comp. Comm’n Dec. 30, 1999); Hysell v. Golden Age Care Ctr., File Nos. 

1075022, 1042236, 987874, 1999 WL 33619268, at *1 (Iowa Workers’ Comp. 

Comm’n Oct. 19, 1999); Va. Surety Co. v. Kiowa Corp., File No. 1195075, 1999 

WL 33619662, at *3–4 (Iowa Workers’ Comp. Comm’n Apr. 22, 1999); Hammers 

v. Sentry Ins., File No. 1133618, 1999 WL 33619900, at *1–2 (Iowa Workers’ 

Comp. Comm’n Feb. 2, 1999); Emps. Mut. Cas. Cos. v. Van Wyngarden & 

Abrahamson, File Nos.1059572, 1059573, 1059574, 1011165 (Iowa Workers’ 
6

Comp. Comm’n June 30, 1998); Van Dyk v. Hope Haven, File Nos. 1021846, 

1030780 (Iowa Workers’ Comp. Comm’n Feb 27, 1995); see also Zomer v. W.

River Farms, Inc., 666 N.W.2d 130, 132–33 (Iowa 2003) (noting that section 85.21 

“give[s] the commissioner authority to resolve claims for workers’ compensation 

benefits,” and “[t]he scope of this authority is comprehensive”); Second Inj. Fund 

of Iowa v. Bergeson, 526 N.W.2d 543, 549 (Iowa 1995) (“Section 85.21 gives the 

commissioner authority to order reimbursement where one party makes voluntary 

payment that ultimately the commissioner determines should have been paid by 

another party.”). Finally, the commissioner has used its expertise to establish 

dates of claimants’ injuries, which control which insurer should be liable to pay 

benefits. See Mike Brooks, Inc. v. House, 843 N.W.2d 885, 889 (Iowa 2014) 

(stating “[t]he legislature has by a provision of law vested the commissioner with 

the discretion to make factual determinations,” and concluding “the district court 

correctly affirmed the agency’s factual finding that [the claimant] sustained a workrelated injury and resulting disability on” a specified date); Ruiz v. Revstone 

Casting Indus., L.L.C., No. 16-1728, 2017 WL 6034128, at *4 (Iowa Ct. App. Dec. 

6, 2017) (“The establishment of a date of injury is a fact-finding decision made by 

the commissioner.”). The commissioner’s actions relative to section 85.21 lead us 

to conclude that the commissioner is clearly vested with authority to interpret 

section 85.21. Accordingly, our review is under the “irrational, illogical, or wholly 

unjustifiable” standard set forth in Iowa Code section 17A.19(10)(l). But, assuming 

we are wrong about the clear vesting of authority to interpret section 85.21, we will 

also review the agency action under the “erroneous” standard. See Iowa Code 

§ 17A.19(10)(c). 
7

III. Iowa Code section 85.21

Iowa Code section 85.21 states in part:

1. The workers’ compensation commissioner may order any 

number or combination of alleged workers’ compensation insurance 

carriers and alleged employers, which are parties to a contested 

case or to a dispute which could culminate in a contested case, to 

pay all or part of the benefits due to an employee or an employee’s 

dependent or legal representative if any of the carriers or employers 

agree, or the commissioner determines after an evidentiary hearing, 

that one or more of the carriers or employers is liable to the employee 

or to the employee’s dependent or legal representative for benefits 

under this chapter or under chapter 85A or 85B, but the carriers or 

employers cannot agree, or the commissioner has not determined 

which carriers or employers are liable.

. . . .

3. When liability is finally determined by the workers’

compensation commissioner, the commissioner shall order the 

carriers or employers liable to the employee or to the employee’s 

dependent or legal representative to reimburse the carriers or 

employers which are not liable but were required to pay benefits. 

Benefits paid or reimbursed pursuant to an order authorized by this 

section do not require the filing of a memorandum of agreement. 

However, a contested case for benefits under this chapter or under 

chapter 85A or 85B shall not be maintained against a party to a case 

or dispute resulting in an order authorized by this section unless the 

contested case is commenced within three years from the date of the 

last benefit payment under the order. The commissioner may 

determine liability for the payment of workers’ compensation benefits 

under this section.

In interpreting section 85.21, the commissioner began by noting “the 

scenario created by American Home [was] not the circumstance for which Iowa 

Code section 85.21 was intended.” In the commissioner’s view, the purpose of the 

provision was “to encourage the voluntary payment of benefits to a claimant when 

insurers dispute who is responsible.” The commissioner stated that “[i]n this case, 

American Home initially accepted responsibility despite being put on alert via 

claimant’s amended petition in the spring of 2011 that [the claimant’s] actual injury 

date may be June 30, 2008, which was outside of [American Home’s] coverage 
8

period,” and it “continued to admit it was the correct insurer for the next five and a 

half years, including at the arbitration hearing.” The commissioner explained that 

“20 years of agency precedent” required insurers to follow a procedure under 

section 85.21 of seeking orders before the arbitration hearing in order to pursue 

reimbursement claims from another insurer. After canvassing that precedent,

including a decision that came to be known as the Van Wyngarden rule, the 

commissioner concluded:

While not explicitly stated, it appears the Van Wyngarden rule 

draws a line in the sand at evidentiary hearing in an attempt to 

establish the fairest result for insurers. By the time the evidentiary 

hearing is held, the insurer pled by the claimant will have had a full 

opportunity to conduct discovery, depose the necessary individuals, 

and investigate. By that point, the pled insurer in most cases should 

reasonably know whether there is a possibility that the correct injury 

date may fall outside its coverage period. Thus, allowing retroactive 

reimbursement only if an 85.21 consent order is sought prior to the

evidentiary hearing protects the public policy of encouraging insurers 

to render payment even if it is subsequently determined that the injury 

is outside their coverage period while discouraging drawn out or 

piecemeal litigation. In other words, it balances the public policy 

interests and judicial efficiency.

As noted, the district court reached a contrary conclusion. The court stated, 

“Section 85.21 is not constricted to only allow reimbursement proactively after 

arbitration, and only for those parties who were a part of the underlying arbitration.” 

The court “recognize[d]” its “interpretation [was] contrary to the cases that have 

followed the Commission’s restricted interpretation of [s]ection 85.21” but stated 

the “plain language” of the statute together with its purpose permitted American 

Home’s reimbursement claim.

Liberty Mutual contends “the district court err[ed] in reversing over 20 years 

of agency rulings by finding Iowa Code section 85.21 allows American Home to 
9

retroactively seek and receive contribution from [it] for workers’ compensation 

mistakenly paid several years after the applicable evidentiary hearing.” American 

Home counters that “Iowa Code section 85.21 grants broad powers to the 

workers’ compensation agency to resolve payment disputes between insurance 

carriers.” It further contends “the statute is not ambiguous, and it does not contain 

the limiting language suggested by Liberty Mutual.”

Section 85.21(1) indisputably affords the workers’ compensation 

commissioner authority to order “any number or combination of alleged workers’

compensation carriers” to pay benefits. These carriers must be “parties to a 

contested case or to a dispute which could culminate in a contested case.” Iowa 

Code § 85.21(1).1If the carriers do not agree on liability or the commissioner “has 

not determined which carriers . . . are liable,” the commissioner may “determine[] 

after an evidentiary hearing, that one or more of the carriers . . . is liable to the 

employee.” Id.

The commissioner’s authority under this provision is broad. Opinions cited 

by American Home confirm as much. See Zomer, 666 N.W.2d at 133; United 

Techs. Corp. v. Bahmler, No. 01-1512, 2003 WL 553855, at *5 (Iowa Ct. App. Feb. 

28, 2003). However, the opinions do not stand for the proposition that the 

commissioner is authorized to approve an insurer’s reimbursement claim without 

considering when it was filed.

 

1

“Contested case proceedings before the workers’ compensation commissioner” 

include “[d]etermination of liability, reimbursement for benefits paid and recovery 

of interest.” Iowa Admin. Code r. 876–4.1(16) (citing Iowa Code section 85.21); 

see also Iowa Admin. Code r. 876–4.1(1)–(2) (defining “Arbitration” and “Reviewreopening” separately under “contested case proceedings”).
10

In Zomer, the issue before the court was whether the commissioner had 

authority to reform a workers’ compensation policy to provide for coverage where 

“a determination of insurance coverage was an essential prerequisite to a 

determination of the compensability of the claimant’s injury.” 666 N.W.2d at 131. 

The court concluded, “[T]he commissioner has the power to decide any issue 

necessary to a determination of whether a claimant is entitled to workers’

compensation benefits.” Id. at 133. The court did not speak to the timing of 

reimbursement claims.

In Bahmler, the court made the undisputed statement that section 85.21 

“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.” 2003 WL 553855, at *5. Unlike this case, both potentially 

liable carriers participated in the arbitration hearing. See id. The opinion is 

inapposite. Other opinions cited by American Home also are inapposite. 

In Wilson Food Corp. v. Cherry, 315 N.W.2d 756, 757 (Iowa 1982), the court 

stated, “Employers may generally recover payments made by mistake in workers’

compensation matters.” And the court stated, “[T]he public interest will be better 

served by encouraging employers to freely pay injured employees without 

adversary strictness. It is not so unfair to compel the claimant to face at an earlier 

date the termination he would face later in any event so as not to penalize the 

employer.” Cherry, 315 N.W.2d at 758. Both propositions were made in the 

context of an employer’s attempt to obtain a credit for extra weekly benefits paid

to the claimant. Id. at 757. The opinion had nothing to do with section 85.21, which 

had yet to take effect. See 1982 Iowa Acts ch. 1161, § 22 (enacting Iowa Code 
11

section 85.21). More to the point, neither proposition cited by the court answers 

the question here—whether mistaken payments may be recouped whenever the 

insurer discovers the mistake, no matter how long after the arbitration award or the 

expiration of benefit payments. 

In Bergeson, 526 N.W.2d at 549, the court broadly stated, “Section 85.21 

gives the commissioner authority to order reimbursement where one party makes 

voluntary payment that ultimately the commissioner determines should have been 

paid by another party.” True. But, again, that proposition does not answer the 

question facing us. There, two entities were ordered to compensate the claimant 

for a second injury. Id. Both participated in the contested case proceeding. Id. at 

546. The court specifically noted, “The proportion between the obligation of the 

employer and the [Second Injury] Fund could not be determined until a hearing 

was held and a decision rendered.” Id. at 549. That language undermines 

American Home’s assertion that the commissioner “is not time bound nor limited 

only to arbitration.” 

There is no question that statute and case law afford the commissioner 

comprehensive authority to decide reimbursement claims. The real question is 

whether statute or case law affords an insurer an indefinite period of time within 

which to seek reimbursement.

Section 85.21(3) states that an order “to reimburse the carriers . . . which 

are not liable but were required to pay benefits” will be entered only “[w]hen liability 

is finally determined.” The provision also states:

[A] contested case for benefits under this chapter or under chapter 

85A or 85B shall not be maintained against a party to a case or 

dispute resulting in an order authorized by this section unless the 
12

contested case is commenced within three years from the date of the 

last benefit payment under the order.

 

Iowa Code § 85.21(3). The provision expressly limits the time for seeking

reimbursement. 

The commissioner found that American Home made its last payment to the 

claimant in May 2013. American Home did not seek a section 85.21 order until 

December 2016. If we were to apply the three-year limitation period, American 

Home’s application for such an order would have been untimely, but for the 

claimant’s filing of a review-reopening petition within three years of the last benefit 

payment. Liberty Mutual conceded the claimant’s petition opened the door for 

American Home’s late filing. In short, American Home’s belated reimbursement 

claim was saved by the claimant. The interpretation advanced by American 

Home—an ability to seek reimbursement from another carrier five years and nine 

months after receiving notice of an injury date outside its coverage period or, as 

suggested at oral argument, at any time—runs afoul of the express language of 

section 85.21(3). 

The commissioner’s procedure for addressing reimbursement claims is 

essentially a method of enforcing the statutory time limit. Per agency rule, the 

employer’s insurance carrier is generally a party to the arbitration proceeding 

against the claimant. See Iowa Admin. Code r. 876–4.10 (titled, “Insurance carrier 

as a party,” and stating, “Whenever any insurance carrier shall issue a policy with 

a clause in substance providing that jurisdiction of the employer is jurisdiction of 

the insurance carrier, the insurance carrier shall be deemed a party in any action 

against the insured”). The commissioner’s order implementing section 85.21 
13

authorizes the insurance carrier to bring in another party “to seek determination of 

liability and reimbursement from another carrier or employer for benefits paid 

pursuant to this order.” (Emphasis added.) The prescribed form states2:

An agency decision filed more than two decades ago confirms that the 

procedure set forth in rule 3.1(11) implements the time limit set forth in section 

85.21(3). In Van Wyngarden, the commissioner stated, “Subsection 85.21(3) 

allows the named insurance carrier to bring a contested case against another 

insurance carrier or employer but only if the case is commenced within three years 

 

2 Form 14–0037 was updated in November 2020, but the relevant content remains 

the same. 
14

from the date of the last benefit payment under this order.” The commissioner 

summarized the statute as follows:

Section 85.21 contemplates that sometime prior to an 

evidentiary hearing the industrial commissioner may order an 

insurance carrier to pay benefits due to an employee until liability is 

finally determined. In the event of a later determination that the 

named insurance carrier is not liable to a claimant the named 

insurance carrier is entitled to an order for reimbursement from the 

insurance carrier that is liable.

Id. The commissioner highlighted the purpose of requiring advance notice of 

reimbursement claims as follows:

The statutory scheme of section 85.21 is set up to allow an 

employer or insurance carrier to seek an order prior to payment of 

benefits, and only when liability is finally determined, to seek 

reimbursement for benefits the employer or insurance carrier was 

“required to pay” under the order. . . . Litigation can be expected to 

proceed much more expeditiously where, as the statute 

contemplates, relief under section 85.21 is sought in advance, and 

all parties are subsequently well aware that potential contribution is 

an issue. 

Id. 

The commissioner articulated other purposes for early notice of 

reimbursement claims in Arreola. There, an insurer sought reimbursement from 

another insurer three-and-one-half years after a claimant filed arbitration petitions 

and two years and nine months after the evidentiary hearing. See Arreola, 2018 

WL 1042709, at *1–2. The commissioner stated:

By raising the issue of reimbursement at the time of evidentiary 

hearing, the deputy is able to avoid the potential for double-recovery 

by a claimant or double-payment by a party. . . . 

In this case, Farmington [(the insurer seeking 

reimbursement)] failed to raise the issue of reimbursement at any 

time prior to evidentiary hearing. . . . A procedure was available to 

Farmington whereby Farmington could maintain a right to seek 

reimbursement; Farmington did not utilize the procedure. 
15

Id. at *4.

These purposes were elucidated in Gardner. There, one insurer sought 

reimbursement from another for benefits paid. See Gardner, 2007 WL 1438516, 

at *11. The issue was litigated at the arbitration hearing, along with the claimant’s 

assertion that he sustained two separate injuries for which different insurers were 

responsible. Id. at *8–9. The deputy commissioner found a cumulative injury date 

that fell within the coverage of a single insurer and ordered that insurer to 

reimburse the other. Id. The entire matter was resolved with all players having 

notice and a chance to weigh in. See id. The manner of resolution had the added 

benefit of affording the claimant prompt payment of benefits without double 

recovery or double-payments. 

The agency rule implementing section 85.21 together with agency 

adjudicative decisions make sense. An insurer should have to afford the 

commissioner early notice of the disputed nature of its claim so that the 

commissioner can address the issue at the arbitration hearing. Cf. Iowa Code 

§ 86.13(1) (requiring an employer or insurance carrier that pays an employee 

weekly compensation benefits to file with the commissioner “a notice of the 

commencement of the payments”). Once the commissioner authorizes impleader 

of another insurer, the first insurer can seek to absolve itself of liability while at the 

same time allowing the second insurer to present its own defense to the claimant’s 

case before liability is established. The interpretation adopted by the 

commissioner gives everyone with a stake in the case a chance to participate at 

the earliest opportunity. The supreme court endorsed these purposes in 
16

Bergeson, where the reimbursement issue was litigated and resolved at the 

arbitration hearing:

By recognizing the commissioner’s authority to order 

reimbursement we further the beneficial purpose of encouraging the 

voluntary payment of benefits to the employee while the case is 

pending. Such an interpretation also supports the intent to reimburse 

employers and insurers and to avoid double recovery expressed in 

section 85.22 [(providing for “liability of others–subrogation”)]. 

526 N.W.2d at 549. 

We conclude the commissioner’s decision limiting American Home’s 

reimbursement claim to benefits paid after it sought and obtained a section 85.21 

order was consistent with its precedents. See Iowa Code § 17A.19(10)(h) 

(reviewing agency action to determine whether it “is inconsistent with the agency’s 

prior practice or precedents, unless the agency has justified that inconsistency by 

stating credible reasons sufficient to indicate a fair and rational basis for the 

inconsistency”). We further conclude the commissioner’s interpretation of Iowa 

Code section 85.21 was neither “irrational, illogical, or wholly unjustifiable” nor 

“erroneous.” See id. § 17A.19(10)(c), (l). The district court judgment reversing the

portion of the commissioner’s decision that declined to order reimbursement for 

benefits American Home paid prior to January 3, 2017, is reversed. The case is 

remanded for entry of a judgment consistent with this opinion.

REVERSED AND REMANDED.