IN THE SUPREME COURT OF IOWA

No. 08–0639

Filed July 17, 2009

DRAKE UNIVERSITY and EMPLOYERS

MUTUAL CASUALTY COMPANY,

Appellants,

vs.

ANGELA DAVIS,

Appellee.

Appeal from the Iowa District Court for Polk County, Don C. 

Nickerson, Judge.

An employer and its insurance carrier appeal a decision of the 

district court affirming an award of benefits made by the workers’ 

compensation commissioner. AFFIRMED IN PART, REVERSED IN 

PART, AND REMANDED WITH INSTRUCTIONS.

David L. Jenkins of Bradshaw, Fowler, Proctor & Fairgrave, P.C., 

Des Moines, for appellants.

Thomas J. Reilly and Kyle T. Reilly of Thomas J. Reilly Law Firm, 

P.C., Des Moines, for appellee.
2

WIGGINS, Justice.

The workers’ compensation commissioner awarded an employee 

benefits for three separate injury dates. The employer and its insurance 

carrier sought judicial review of the agency action. The district court not 

only affirmed the decision of the agency, but also found the employer and 

its insurance carrier were not entitled to a credit for benefits paid by a 

group plan under Iowa Code section 85.38(2) (2005).1

I. Background Facts and Proceedings.

 In this appeal, we 

find the employer and its insurance carrier were not deprived of 

procedural due process, substantial evidence supports the agency’s 

decision, the permanent total disability benefits are not subject to 

apportionment under the workers’ compensation statutes, the agency 

misapportioned the benefits due for the March 16, 2001, and July 31, 

2002, injuries, and the district court should not have considered the 

credit for benefits issue. Therefore, we affirm in part the decision of the 

district court affirming the decision of the workers’ compensation 

commissioner. However, we reverse that part of the district court 

judgment dealing with the apportionment of benefits for the March 16, 

2001, and the July 31, 2002, injuries. Additionally, we vacate that part 

of the district court judgment dealing with the credit for benefits issue 

because the commissioner did not consider the issue at the agency level. 

A. Employment History. Angela Davis began working at Drake 

University2

 1All references in this opinion will be to the 2005 edition of the Iowa Code unless 

otherwise noted.

in the facility management area in May 1982. She worked at 

Drake moving up in pay scale and job title for twenty-two and one-half 

2Drake University’s insurance carrier, Employers Mutual Casualty Company, is 

also a party to this action. For the sake of brevity, we will refer to both parties as 

“Drake.”
3

years until her termination on November 3, 2004. Davis started out as 

Facility Maintainer IV, the lowest position on the scale, doing custodial 

work in residence halls. Drake promoted her to Facility Maintainer III

sometime in 1983. Drake promoted her again in 1985 to Facility 

Maintainer II in which position she trained new employees. Finally, 

Davis was promoted in 1990 to Facility Maintainer I, the top 

classification in the custodial field at Drake. Her responsibilities 

included answering the phone, arranging work schedules, training new 

employees, supervising student employees, and performing manual 

custodial work. 

Although the university continued to promote her, it did have 

problems with her performance. Her employment records contained five 

disciplinary reports. Davis also had many run-ins with her boss, John 

Selin, the director of residential services throughout her time at Drake. 

Another supervisor claimed Davis did not respect her supervisors. Some 

of the complaints in Davis’s employee file dealt with her job performance, 

but many more dealt with her interpersonal skills. At one point, Drake 

demoted her from Facility Maintainer I to Facility Maintainer II for 

creating a hostile work environment. Drake later bumped her back up to 

Facility Maintainer I status. 

In September 2004, Drake claimed Davis left work early without 

finishing her work. Drake informed Davis that any further incident 

would result in disciplinary action against her. Drake terminated Davis 

on November 3 citing inflammatory and racist comments to coworkers as 

well as an ongoing pattern of inappropriate behavior toward supervisors 

and coworkers as the justification for the termination. 

B. March 16, 2001, Injury. Davis’s first injury occurred on 

March 16, 2001. She was shoveling snow outside a residential hall and
4

felt a sharp pain down her back and leg. The doctors diagnosed a left 

L5-S1 herniated nucleus pulposus and performed a left L5-S1 

diskectomy. After her recovery, the doctors gave Davis a ten percent

permanent partial impairment rating and a permanent lift restriction of 

thirty-five pounds. Drake voluntarily paid her seventy-five weeks of 

permanent disability for this injury.

C. July 31, 2002, Injury. On July 31, 2002, while performing 

her duties vacuuming in the law school, Davis felt queasiness in her 

stomach and weakness in her leg. An MRI scan revealed left L5-S1 

epidural fibrosis plus a small recurrent herniated nucleus pulposus. She 

received three epidural steroid injections for her injury. The doctor 

assented to Davis’s return to work with a twenty-pound lift restriction 

and allowed her to do only lightweight vacuuming on an occasional 

basis. He also gave her a two percent permanent partial impairment 

rating. Drake voluntarily paid her ten weeks of permanent disability for 

this injury. 

D. September 14, 2004, Injury. Davis alleges her third injury 

occurred on September 14, 2004. Davis was working in the field house 

that day and was pulling trash across the floor when she felt queasy. 

She filled out an incident report of the injury. The incident report 

contained no statement as to the specifics of her injury, but she thought

she told her supervisor how the injury occurred. The incident report 

stated Davis was going to Concentra Medical Center, but also said her 

disability was ongoing and began on March 16, 2001. Davis’s supervisor

filled out the incident report and Davis signed it. 

At Concentra, Davis reported that her injury occurred around 

8 a.m. and was from repetitive use of the vacuum and lifting more than 

twenty pounds of trash. Concentra referred her to her previous doctor. 
5

She reported to this doctor that the onset of pain had increased on 

September 14, 2004. She denied a specific injury. The doctor diagnosed 

her with having a herniated nucleus pulposus and spondylolisthesis. 

The doctor opined the spondylolisthesis was not work-related, but the 

herniated nucleus was related to her work activities. He recommended

surgical intervention.

Davis decided on November 2 to proceed with surgery. Drake fired 

her the next day. Drake sought a second opinion before authorizing any 

surgery. Davis told the doctor retained by Drake about the specific 

incident of dragging trash in the field house and the pain she felt after 

that point. On November 17 the second doctor opined Davis’s current 

complaints related back to the original injury in March 2001. The 

second doctor acknowledged his opinion was based on his review of a 

July 2002 MRI and he did not have her recent MRI to study.

Based on this report, Drake would not authorize her surgery. 

Additionally, Drake informed Davis that Drake had no notice of increased 

back pain or the specific September 14 incident; therefore, it would be 

denying her claim for the surgery and any other subsequent treatment. 

Without Drake’s authorization, Davis had the surgery on November 22. 

Davis also had a permanent implantation of a dorsal column stimulator 

on August 15, 2005. A third physician rated Davis’s injury. He gave 

Davis an impairment rating of twenty-six percent for the September 14, 

2004, injury, which includes a three percent impairment based on the 

pain from the dorsal stimulator. 

Davis also saw a psychologist. The psychologist diagnosed Davis 

with major depression disorder and opined her depression was related to 

her work injury. He further opined Davis’s depression limited her ability 
6

to function in a normal society, and that she would likely require 

indefinite psychological care in the future. 

Again, Drake referred Davis to a psychiatrist for a second opinion. 

He found Davis had a twenty-plus year history of interpersonal 

relationship problems. Further, he opined the idea that her depression 

stemmed from injuries lacked credence because she did not seek 

treatment and no psychiatric diagnosis indicated Davis was unable to 

work. 

E. Proceedings before the Iowa Workers’ Compensation 

Commissioner. Davis filed her petitions in September 2004 as files 

5012800, 5012801, and 5012802. File number 5012800 alleges an 

injury date of March 16, 2001, with shoveling snow as the cause of the 

injury. File number 5012801 lists the injury date as July 31, 2002, and 

alleges vacuuming as the cause of the injury. File number 5012802 

alleges repetitive use of back at work as the cause with an injury date of

September 14, 2004. 

Davis amended her petition in file number 5012802 on 

November 22. In that amended petition Davis stated that on 

September 14, 2004, as she “carried out her work duties ‘dragging a bag 

of trash,’ her back and leg pain was intensified and thus she reported her 

injury.” Davis asked to amend the “petition to reflect the cumulative 

process by which her injury occurred culminating with the intensified 

pain she felt on 9/14/04 when she was dragging a bag of trash.” She 

also amended her petition to include a claim for penalty benefits under 

Iowa Code section 86.13 stating Drake failed to provide reasonable 

justification for refusing to commence weekly and medical benefits. 

Prior to the hearing, the parties filed hearing reports in each of the 

files. The deputy commissioner approved each hearing report by signing 
7

an order. The orders confirmed the parties’ stipulation that the injuries 

of March 16, 2001, and July 31, 2002, arose out of and were in the 

course of employment. The orders also confirmed the March 16, 2001, 

injury caused a permanent disability and the commencement date for the 

permanent partial disability benefits for this injury would be July 21, 

2001. The orders further confirmed the parties did not dispute that 

Drake paid Davis seventy-five weeks of compensation for this injury. 

Finally, the orders confirmed the parties’ stipulation that the 

commencement date for the permanent partial disability benefits for the 

July 31, 2002, injury would be August 21, 2002, and that Drake had 

paid Davis ten weeks of compensation. 

The orders indicated the following issues relevant to this appeal 

were in dispute: (1) whether the July 31, 2002, injury caused a 

temporary or permanent disability; (2) whether Davis suffered an injury 

on September 14, 2004, arising out of and in the course of her 

employment; (3) the amount of benefits, if any, due from the three 

injuries; (4) the apportionment of benefits among the three injuries; and 

(5) the payment of medical expenses for the September 14 injury. The 

parties reserved the issue of credit for benefits paid for by a group plan 

for another day.

The deputy workers’ compensation commissioner issued the

arbitration decision. The deputy found Davis to be credible. He 

determined Davis suffered a low back injury on September 14, 2004, 

when dragging trash bags and performing other duties at work. The 

deputy also found Davis did have mental health problems causally 

related to her work injuries. The deputy further determined the medical 

expenses submitted for this injury were fair and reasonable. 
8

Additionally, the deputy determined the work injury on March 16, 

2001, caused a fifteen percent permanent partial disability entitling

Davis to seventy-five weeks of benefits. He found the July 31, 2002, 

injuries caused a thirty percent permanent partial disability entitling

Davis to 150 weeks of benefits. Finally, he found the September 14, 

2004, injury caused a one hundred percent loss of earning capacity

entitling Davis to permanent total disability benefits during her period of 

disability and continuing throughout her lifetime, absent improvement. 

He also determined the benefits for this injury would begin on 

November 3, 2004. 

The deputy recognized the overlap in benefits regarding the first 

two injuries. He stated the overlap was from August 21, 2002, through 

December 3, 2002, based on the stipulated commencement dates of each 

benefit. Under Iowa Code section 85.36(9)(c) (2003), the deputy 

apportioned the benefits between the first and second injury. 

The deputy also recognized an overlap in benefits regarding the 

second and third injuries. He did not apportion these benefits because 

the legislature repealed section 85.36(9)(c), effective September 7, 2004. 

2004 First Extraordinary Session Iowa Acts ch. 1001, §§ 12, 18. In its 

place, the legislature enacted section 85.34(7). Id. § 11. This section 

was effective September 7, 2004, and applied to all injuries occurring 

after its effective date. Id. § 18. The deputy held section 85.34(7)(b) does 

not apply to a permanent total disability when the same employer is 

involved. 

Drake filed for reconsideration before the deputy. The deputy 

corrected a typographical error and reaffirmed his decision. Drake 

appealed the decision to the commissioner. The commissioner affirmed 

and adopted the deputy’s decision as the final agency action. Drake then 
9

requested judicial review by the district court. The district court affirmed 

the decision of the workers’ compensation commissioner. The district 

court also ruled Drake was not entitled to a credit for benefits under a 

group plan. Drake appealed the decision of the district court to this 

court.

II. Issues.

Drake appeals claiming: (1) the agency violated its due process 

rights when the commissioner found an injury date of September 14, 

2004; (2) substantial evidence did not support the commissioner’s 

findings; (3) the commissioner miscalculated the apportionment between 

the March 16, 2001, injury and the July 31, 2002, injury; (4) the 

commissioner misapplied the apportionment of benefit statute to the 

September 14, 2004, injury; and (5) the agency failed to provide a credit 

for benefits under a group plan. 

III. Analysis.

A. Due Process. Drake claims the agency violated its due process 

rights when the agency found Davis suffered a low back injury on 

September 14, 2004, when dragging trash bags and performing other 

duties at work. Drake bases this claim on the belief that Davis did not 

allege a specific injury occurring on September 14. Therefore, Drake 

claims its procedural due process rights were violated because Drake did 

not have notice and an opportunity to defend the claim. 

We can reverse, modify, or grant other relief if the agency action is 

unconstitutional as applied to a party. Iowa Code § 17A.19(10)(a). We 

review constitutional issues raised in an agency proceeding de novo. 

Insituform Techs., Inc. v. Employment Appeal Bd., 728 N.W.2d 781, 788 

(Iowa 2007). The Fourteenth Amendment requires that a party to an 

agency proceeding have notice and an opportunity to defend. Carr v. 
10

Iowa Employment Sec. Comm’n, 256 N.W.2d 211, 214 (Iowa 1977). Our 

review of the record reveals Drake had notice and an opportunity to 

defend Davis’s claim that she suffered a low back injury on September 

14, 2004, when dragging trash bags and performing other duties at 

work.

Davis filed her petition on September 16, 2004. The petition stated 

the cause of injury was the “[r]epetitive use of back at work.” Although 

Drake may not have recognized it as a specific injury, Davis had filed an 

incident report with the school on that date. In that incident report, her 

supervisor acknowledged she was going to seek medical care at 

Concentra Medical Center. Davis told the physicians at Concentra her 

injury occurred around 8 a.m. and was from repetitive use of the vacuum 

and lifting more than twenty pounds of trash.

After Drake received a medical report from the physician it retained

to give an opinion as to whether Davis’s surgery was work-related, 

Drake’s attorney sent a letter to Davis’s attorney stating that Drake did 

not know of any incident that increased the lower back pain. The history 

Davis gave to the physician retained by Drake states, “she was dragging 

trash in the field house and apparently was hung up in a doorway. She 

felt sharp pain in her back . . . .” The physician sent his report to Drake 

on November 17. On November 22 Davis amended her petition and 

stated that on September 14, 2004, as she “carried out her work duties 

‘dragging a bag of trash,’ ” she suffered intensified pain in her left leg and 

back. Additionally, Drake signed a hearing report indicating it disputed 

whether Davis suffered an injury on September 14. 

As early as November 2004, Drake knew the cause of Davis’s 

September 14 injury was an issue in this case. It was at this time Davis 

claimed the injury occurred when the trash she was dragging hung up in 
11

a doorway. The hearing took place in April 2006. This information and 

its timing gave Drake ample notice and opportunity to defend the claim. 

Drake’s claim of a due process violation is meritless.

B. Substantial Evidence. Drake makes multiple claims alleging 

substantial evidence did not support the commissioner’s findings. 

Specifically, Drake claims substantial evidence does not support the 

agency decision: (1) finding Davis sustained a work-related injury on 

September 14, 2004; (2) awarding Davis permanent partial disability 

benefits for the July 31, 2002, injury; (3) declaring Davis permanently 

and totally disabled; and (4) awarding medical expenses.

The legislature vested the determination of facts with the Iowa 

Workers’ Compensation Commissioner. Iowa Code §§ 86.14–.24. 

Therefore, we review the record as a whole for substantial evidence. Id. 

§ 17A.19(10)(f) (stating we review an agency’s “determination of fact 

clearly vested by a provision of law in the discretion of the agency” for 

substantial evidence). Substantial evidence is:

[T]he quantity and quality of evidence that would be 

deemed sufficient by a neutral, detached, and reasonable 

person, to establish the fact at issue when the consequences 

resulting from the establishment of that fact are understood 

to be serious and of great importance.

Id. § 17A.19(10)(f)(1). Viewing the record as a whole means:

that the adequacy of the evidence in the record before the 

court to support a particular finding of fact must be judged 

in light of all the relevant evidence in the record cited by any 

party that detracts from that finding as well as all of the 

relevant evidence in the record cited by any party that 

supports it, including any determinations of veracity by the 

presiding officer who personally observed the demeanor of 

the witnesses and the agency’s explanation of why the 

relevant evidence in the record supports its material findings 

of fact.
12

Id. § 17A.19(10)(f)(3). 

A decision of an agency does not lack substantial evidence merely 

because the interpretation of the evidence is open to a fair difference of 

opinion. Myers v. F.C.A. Servs., Inc., 592 N.W.2d 354, 356 (Iowa 1999). 

Even if we can draw different conclusions from the evidence, we must 

decide whether the evidence supports the actual finding made by the 

agency, not whether the evidence would support a different finding. 

Raper v. State, 688 N.W.2d 29, 36 (Iowa 2004). It is not the job of the 

district court or the appellate court to determine what “evidence ‘trumps’

other evidence or whether one piece of evidence is ‘qualitatively weaker’

than another piece of evidence” when it conducts a substantial evidence 

review of an agency decision. Arndt v. City of Le Claire, 728 N.W.2d 389, 

394 (Iowa 2007). The legislature left those determinations to the agency. 

The agency found Davis to be a credible witness. It also weighed 

the testimony of the various physicians who testified as to Davis’s 

physical and mental conditions. Although the record contains conflicting 

evidence as to (1) whether Davis sustained a work-related injury on 

September 14, 2004; (2) whether she suffered a permanent partial 

disability from the July 31, 2002, injury; (3) whether Davis suffered a 

permanent total disability due to the September 14, 2004, injury; and 

(4) whether Davis was entitled to the medical benefits awarded by the 

agency, our review of the record reveals substantial evidence supports

the agency’s findings as to these issues. Consequently, Drake’s claims 

regarding the lack of substantial evidence are also without merit.

C. Apportionment of Benefits. Drake makes two separate 

arguments concerning the apportionment of benefits. First, it claims the 

commissioner wrongly apportioned the benefits paid due to the 

March 16, 2001, injury and the July 31, 2002, injury. Second, it argues 
13

the commissioner should have apportioned the benefits paid due to the 

July 31, 2002, injury and the September 14, 2004, injury. 

1. Apportionment between March 16, 2001, and July 31, 2002, 

injuries. Drake argues the overlap in permanent partial disability 

benefits for the March 16, 2001, injury and the benefits from the 

July 31, 2002, injury should have been apportioned under Iowa Code 

section 85.36(9)(c) (2003). Although, the agency apportioned the benefits 

between the March 16, 2001, and July 31, 2002, injuries under section 

85.36(9)(c), Drake argues the agency did not compute the correct overlap 

time. 

The resolution of this issue involves the agency’s application of law 

to the facts. The legislature clearly vested the agency with the 

application of the law to the facts. Iowa Code §§ 86.14–.24. We are 

required to give the agency appropriate deference because the legislature 

vested the application of the law to the facts with the agency. Id. § 

17A.19(11)(c). We give the agency the appropriate deference by only 

reversing or modifying the agency action “upon an irrational, illogical, or 

wholly unjustifiable application of law to fact.” Id. § 17A.19(10)(m). 

The agency determined the March 16, 2001, injury caused a fifteen

percent permanent partial disability and the July 31, 2002, injury 

caused a thirty percent permanent partial disability. The March 16 

injury entitled Davis to seventy-five weeks of permanent partial disability 

benefits. Drake paid seventy-five weeks of disability compensation for 

this injury at the rate of $287.18 per week. The starting date for these 

payments was July 21, 2001. 

For the July 31 injury, Drake was required to pay 150 weeks of 

disability compensation at the rate of $305.52 per week beginning on 

August 21, 2002. The agency calculated that the overlap time extended 
14

from August 21, 2002, through December 3, 2002. During the overlap 

period, the agency ordered Drake to pay $18.34 per week on the second 

injury, the difference between the rates for these two injuries. Starting 

on December 4, 2002, the agency ordered Drake to start paying $305.52 

per week, the rate due on the July 31 injury. 

The agency miscalculated the period of overlap. The agency 

ordered Drake to pay benefits for seventy-five weeks due to the March 16

injury. If the payments started on July 21, 2001, they would end on 

December 27, 2002, not December 3, as calculated by the agency. This 

miscalculation by the agency is an illogical application of law to fact. 

Therefore, Drake should have paid $18.34 per week through 

December 27, 2002, for the July 31 injury and started paying the 

$305.52 per week for this injury on December 28, 2002. 

2. Apportionment between July 31, 2002, and September 14, 2004, 

injuries. Drake claims the commissioner erred by not apportioning 

Davis’s permanent total disability benefits. We generally do not 

apportion the benefits from two successive work-related injuries without 

a statute allowing us to do so. Mycogen Seeds v. Sands, 686 N.W.2d 

457, 465 (Iowa 2004). Therefore, the workers’ compensation statutes 

control the apportionment of benefits. 

Presently, Iowa Code section 85.34(7) governs the apportionment of 

benefits. Section 85.34(7) became effective September 7, 2004, and 

applied to all injuries occurring on or after its effective date. 2004 First 

Extraordinary Session Iowa Acts ch. 1001, § 18. The injury that caused 

Davis’s permanent total disability occurred on September 14, 2004. 

Thus, the resolution of the apportionment issue requires an 

interpretation of section 85.34(7). 
15

It is well settled in Iowa that “ ‘ “[t]he interpretation of workers’ 

compensation statutes and related case law has not been clearly vested 

by a provision of law in the discretion of the agency.” ’ ” Schadendorf v.

Snap-On Tools Corp., 757 N.W.2d 330, 334 (Iowa 2008) (quoting Lakeside 

Casino v. Blue, 743 N.W.2d 169, 173 (Iowa 2007)). Because the 

legislature has not clearly vested the agency with the interpretation of 

the law, we do not give the agency’s view of the law any deference and 

can substitute our own judgment. Iowa Code § 17A.19(11)(b); 

Schadendorf, 757 N.W.2d at 334. Accordingly, our review is for errors at 

law. Iowa Code § 17A.19(10)(c).

Section 85.34(7)(b) applies to successive injuries at the same place 

of employment with the same employer. It provides in relevant part:

If an injured employee has a preexisting disability that 

was caused by a prior injury arising out of and in the course 

of employment with the same employer, and the preexisting 

disability was compensable under the same paragraph of 

section 85.34, subsection 2, as the employee’s present injury, 

the employer is liable for the combined disability that is 

caused by the injuries, measured in relation to the 

employee’s condition immediately prior to the first injury. In 

this instance, the employer’s liability for the combined 

disability shall be considered to be already partially satisfied 

to the extent of the percentage of disability for which the 

employee was previously compensated by the employer.

If, however, an employer is liable to an employee for a 

combined disability that is payable under section 85.34, 

subsection 2, paragraph “u”, and the employee has a 

preexisting disability that causes the employee’s earnings to 

be less at the time of the present injury than if the prior 

injury had not occurred, the employer’s liability for the 

combined disability shall be considered to be already 

partially satisfied to the extent of the percentage of disability 

for which the employee was previously compensated by the 

employer minus the percentage that the employee’s earnings 

are less at the time of the present injury than if the prior 

injury had not occurred. 
16

Iowa Code § 85.34(7)(b) (emphasis added).

In interpreting section 85.34(7)(b), we must determine legislative 

intent. Auen v. Alcoholic Beverages Div., 679 N.W.2d 586, 590 (Iowa 

2004). We look to the words the legislature chose to determine legislative 

intent rather than what the legislature should or might have said. State 

v. Dohlman, 725 N.W.2d 428, 431 (Iowa 2006). We “may not extend, 

enlarge or otherwise change the meaning of a statute” under the guise of 

construction. Auen, 679 N.W.2d at 590.

The plain and unambiguous language of section 85.34(7)(b) 

indicates the only benefits subject to apportionment are those awarded 

under section 85.34(2). Section 85.34(2) benefits include scheduled 

benefits and permanent partial disability of the body as a whole. The 

agency awarded Davis permanent total disability benefits under section 

85.34(3). Permanent total disability benefits are not subject to 

apportionment under section 85.34(7). 

This interpretation is consistent with section 85.34(7)’s legislative 

history. The legislature stated when it enacted the new apportionment 

statute that it was intended to avoid “all double recoveries and all double 

reductions in workers’ compensation benefits for permanent partial 

disability.” 2004 First Extraordinary Session Iowa Acts, ch. 1001, § 20 

(emphasis added). Without an apportionment statute that applies to an 

award of permanent total disability benefits, there is no basis for the 

agency to apportion the award. See Celotex Corp. v. Auten, 541 N.W.2d 

252, 256 (Iowa 1995) (holding the industrial commissioner could not 

apportion benefits without a statute authorizing him to do so; therefore, 

the full responsibility rule was applicable). Therefore, the agency was 

correct when it refused to apportion Davis’s permanent total disability 

benefits.
17

D. Credit for Benefits Under a Group Plan. An employer may be 

entitled to a credit against an award of workers’ compensation benefits 

for the benefits an employee received under a group plan. Iowa Code § 

85.38(2). The district court addressed the credit for benefits issue and 

found Drake was not entitled to a credit. 

The agency did not address the credit for benefits issue in its final 

decision. We believe the agency did not address this issue because the 

parties stipulated in the hearing report that any credit to which the 

employer may be entitled under section 85.38(2) was “to be determined.” 

When the deputy signed the order approving the hearing report, he 

entered a hand-written note next to the section dealing with section

85.38(2). The notation stated the “parties [are] not asking for this [to be]

determined now.” 

Iowa Code section 17A.19 governs judicial review of agency action. 

“A person or party who has exhausted all adequate administrative 

remedies and who is aggrieved or adversely affected by any final agency 

action is entitled to judicial review . . . .” Iowa Code § 17A.19(1). Drake 

is not aggrieved or adversely affected by a decision of the agency 

regarding the credit for benefits issue because the agency never ruled on 

the issue. Thus, the district court should not have considered the issue.

IV. Disposition.

We affirm in part the decision of the district court affirming the 

judgment of the workers’ compensation commissioner. However, we 

must reverse that part of the district court judgment dealing with the 

apportionment of benefits for the March 16, 2001, and the July 31, 

2002, injuries. Additionally, we must vacate that part of the district 

court judgment dealing with the credit for benefits issue because the 

commissioner did not consider the issue at the agency level. 
18

Accordingly, we remand the case to the district court to enter judgment 

consistent with this opinion and then the district court should remand 

the matter to the agency for entry of a decision consistent with this 

opinion.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

WITH INSTRUCTIONS.