IN THE COURT OF APPEALS OF IOWA

No. 14-0292

Filed March 25, 2015

NID, INC., and GREAT WEST

CASUALTY COMPANY,

Petitioners-Appellees/Cross-Appellants,

vs.

TROY MONAHAN,

Respondent-Appellant/Cross-Appellee.

________________________________________________________________

Appeal from the Iowa District Court for Polk County, Robert J. Blink, 

Judge. 

Appeal and cross-appeal from ruling on judicial review. AFFIRMED IN 

PART, REVERSED IN PART, AND REMANDED.

Max Schott and Jean Mauss of Schott Mauss & Associates, P.L.L.C., Des 

Moines, for appellant.

Stephen W. Spencer and Christopher S. Spencer of Peddicord, Wharton, 

Spencer, Hook, Barron & Wegman, L.L.P., West Des Moines, for appellee. 

Heard by Vogel, P.J., and Doyle and McDonald, JJ.
2

MCDONALD, J.

Claimant Troy Monahan appeals and the employer NID, Inc., and its 

insurer Great West Casualty Company (collectively, hereinafter “NID”) crossappeal from the district court’s ruling that affirmed in part and reversed in part the 

agency’s decision in this alternate medical care proceeding arising under the 

workers’ compensation law. See Iowa Code § 85.27(4) (2009). Monahan 

concedes the agency committed legal error in concluding the employer was 

barred from denying causation but asks this court to apply the doctrine of judicial 

estoppel to affirm the agency’s action. NID claims the agency erred in imposing 

sanctions, and the court erred in remanding this alternate medical care 

proceeding to the agency for a hearing on causation.

I.

This workers’ compensation proceeding is unnecessarily Dickensian in 

duration and procedural complexity. On March 15, 2007, Monahan fell at work, 

landing on his left side. He treated at a local hospital and was prescribed 

medication. On September 28 of that year, NID assigned Monahan to a project. 

Monahan did not think he was physically able to do the project, and he left 

without ever returning to work. Over the next two years Monahan treated on 

multiple occasions for pain on his left side. 

Almost two years after the injury, on February 26, 2009, Monahan filed his 

petition in arbitration, alleging a March 15, 2007 work-related injury to his upper 

left extremity, including shoulder, elbow, and hand. The matter came on for 

hearing in March 2010. The joint hearing report shows the parties stipulated that 
3

Monahan sustained an injury on March 15, 2007, that arose out of and in the 

course of his employment with NID. The parties disputed whether the injury 

caused disability, Monahan’s entitlement to healing period benefits, and 

Monahan’s entitlement to permanent partial disability benefits. The joint report 

also showed the parties disputed whether Monahan’s medical expenses were 

causally connected to the injury. On April 5 and May 19, 2010—after the 

arbitration hearing but prior to the filing of the arbitration decision—Monahan, on 

his own volition, treated with Dr. Neff, an orthopedic surgeon, who recommended

arthroscopy of Monahan’s left shoulder with impingement decompression. 

On June 1, 2010—after the arbitration hearing but prior to the filing of the 

arbitration decision—Monahan filed a petition for alternate medical care pursuant 

to Iowa Code section 85.27(4), seeking the recommended arthroscopy. NID filed 

its answer, disputing liability for Monahan’s “current left shoulder complaints for 

which he seeks care.” The agency dismissed the petition for alternate care, 

explaining the “summary provisions of Iowa Code section 85.27 as more 

particularly described in rule 876 IAC 4.48 are not designed to adjudicate 

disputed compensability of claim.”

On October 27, 2010, the agency filed its arbitration decision. The deputy 

found “claimant sustained a stipulated injury to the neck, left upper extremity/left 

shoulder” and “at the time of the evidentiary hearing claimant was working fulltime with IMT with lots of overtime without restrictions or accommodations.” The 

deputy found that Monahan “still gets sharp pains in his hand and from his elbow 

to his shoulder and has reduced grip strength in the left hand. No doctor took 
4

claimant off work from the time he left employment at NID until he began work at 

another employer, L&M, except for October 25, 2007 to November 8, 2007.” The 

deputy found Monahan’s work injury was causally related only to the left hand 

carpal tunnel syndrome and awarded benefits for the period Monahan was off 

work following carpal tunnel surgery. The deputy concluded Monahan failed to 

prove the March 15, 2007 work injury “caused a permanent disability.” The 

deputy ordered that Monahan was entitled to alternate medical care, specifically 

that “defendants shall provide claimant a second opinion by an orthopedic doctor 

of their choosing for his shoulder.” The parties appealed and cross-appealed the 

arbitration decision. In April 2012, the agency issued its appeal decision, 

affirming and adopting “those portions of the proposed arbitration decision . . . 

that relate to issues properly raised . . . without additional comment.”

On April 15, 2013, now more than six years after his injury, Monahan filed

a second application for alternate medical care, requesting that the agency order 

NID to authorize a return consultation with Dr. Neff to determine if the May 2010 

recommendation was still appropriate. NID answered and denied “causation of 

claimant’s current complaints.” The agency dismissed the alternate medical care 

application, explaining “before any benefits can be ordered, including medical 

benefits, compensability of the claim must be established, either by admission of 

liability or by adjudication.” 

Monahan sought rehearing of his second application for alternate medical 

care. He asserted causation and liability were established in the arbitration and 

appeal decisions “as a matter of law and [are] preclusive on this issue.” He 
5

noted NID had failed to comply with the appeal decision’s order to provide a 

second opinion by an orthopedic doctor. For relief, he requested that he be 

allowed to return to Dr. Neff and that sanctions be imposed against NID. The 

agency granted Monahan’s request for rehearing. It held the defendants were 

“barred by the doctrine of res judicata from contending they are not liable for 

claimant’s continued shoulder problems.” The rehearing decision also stated: 

“Since the April 2, 2012 appeal decision, defendants have not provided claimant 

with a second opinion regarding care for his shoulder injury. Defendants are 

therefore ordered, once again, to provide the alternate medical care prescribed in 

the October 27, 2010 arbitration decision in this case.” The decision continued:

“Defendants’ continued denial of the order to provide alternate medical care was 

not warranted by existing law.” The agency then imposed attorney’s fees and 

costs as a sanction against NID.

NID sought judicial review of the rehearing decision pursuant to the Iowa 

Administrative Procedure Act (“IAPA”), Iowa Code Chapter 17A. NID argued the 

agency erred (1) in ruling on the merits of the alternate medical care request 

when causation was at issue, (2) in determining causation in the alternate 

medical care proceeding, (3) in using the alternate medical care proceeding to 

enforce the appeal decision, and (4) in awarding attorney fees. The district court 

determined the agency’s application of the res judicata doctrine was error 

because Monahan’s “shoulder injury was stipulated to, [so] it was never actually 

litigated.” The district court concluded the application for alternate medical care 

“should have been dismissed” because causation was still at issue. The district 
6

court explained that if Monahan wanted to enforce the appeal decision and 

obtain a second opinion, Monahan “should have sought judicial enforcement of 

the order” pursuant to Iowa Code section 86.42. Although the court recognized 

that dismissal of the application for alternate medical care was required when 

causation and liability were disputed, the court, in an attempt to bring closure to 

this Jarndyce-like case, remanded the case to the agency to hold a hearing on 

causation. 

Both parties filed post-ruling motions. Monahan’s motion acknowledged 

res judicata did not apply, but, for the first time in this proceeding, asked the court 

to apply the doctrine of judicial estoppel. The court summarily denied all postruling motions. This appeal and cross-appeal followed. 

II.

The standard of review in this case is governed by the IAPA. Under the 

IAPA, we may grant relief only if we determine the “substantial rights of the 

person seeking judicial relief have been prejudiced” due to certain types of 

enumerated errors. Iowa Code § 17A.19(10). As relevant here, we review final 

agency action for correction of errors at law. See Kohlhaas v. Hog Slat, Inc., 777 

N.W.2d 387, 390 (Iowa 2009). We review the agency’s findings to determine if 

they are supported by substantial evidence. See id. at 391. “‘Substantial 

evidence’ means the 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.” Iowa Code 
7

§ 17A.19(10)(f)(1). We review the agency’s application of the law to the facts for 

an abuse of discretion. See Meyer v. IBP, Inc., 710 N.W.2d 213, 219 (Iowa 

2006). “An abuse of discretion occurs when the commissioner’s exercise of 

discretion is ‘clearly erroneous or rests on untenable grounds.’” Kohlhaas, 777 

N.W.2d at 391 (citation omitted).

III.

A.

The district court concluded the agency erred in holding that res judicata 

barred NID from contesting causation and liability. Monahan concedes the 

agency erred in applying the doctrine of res judicata. He argues that the agency 

decision should nonetheless be affirmed by application of the doctrine of judicial 

estoppel. 

Our supreme court has explored the application of the doctrine of judicial 

estoppel in workers’ compensation proceedings. See Tyson Foods v. Hedlund, 

740 N.W.2d 192, 195-99 (Iowa 2007); Winnebago Indus. v. Haverly, 727 N.W.2d 

567, 573-75 (Iowa 2006). “[J]udicial estoppel is a ‘commonsense doctrine’ that 

‘prohibits a party who has successfully and unequivocally asserted a position in 

one proceeding from asserting an inconsistent position in a subsequent 

proceeding.’” Tyson Foods, 740 N.W.2d at 195 (quoting Vennerberg Farms, Inc. 

v. IGF Ins. Co., 405 N.W.2d 810, 814 (Iowa 1987)). It is “designed to protect the 

integrity of the judicial process.” Id. The doctrine applies to administrative 

proceedings as well as judicial proceedings. See Winnebago Indus., 727 N.W.2d 

at 573-74. If there is a significant change in the facts after an initial position, then 
8

a change in position does not violate the doctrine of judicial estoppel. 

Winnebago Indus., 727 N.W.2d at 575. Because the doctrine primarily is 

intended to protect the integrity of the legal process, an appellate court may raise 

judicial estoppel on its own motion. See State v. Duncan, 710 N.W.2d 34, 43-44 

(Iowa 2006).

We conclude there is no basis to apply the doctrine of judicial estoppel 

here. Monahan contends NID previously stipulated to causation and liability. In 

his main and reply briefs, Monahan never identifies where in the record the 

alleged stipulation can be found. At oral argument, Monahan’s counsel was 

unable to identify where in the record the alleged stipulation can be found. On 

our review of the record, we conclude NID stipulated only that Monahan suffered 

a work-related injury. At no point in these proceedings did NID stipulate as to 

causation and liability. As set forth above, NID actually contested causation and 

liability at every point in these proceedings. An employer may properly admit to 

an injury arising out of and in the course of employment while still contesting 

liability for all of the consequences and any disability claimed to result from such 

injury. See McGowan v. Brandt Constr. Co., No. 09-1033, 2010 WL 2079704, at 

*4 (Iowa Ct. App. May 26, 2010). Because NID has not asserted inconsistent

positions, there is no reason for this court to apply the doctrine of judicial 

estoppel, and we decline Monahan’s request to do so.

We thus affirm the district court insofar as it held the agency committed 

legal error in holding res judicata barred NID from denying causation and liability. 
9

We also affirm the district court insofar as it declined to judicially estop NID from 

denying causation and liability.

B.

We next address issues related to the remedies the agency ordered. In 

his second application for alternate medical care at issue in this appeal, 

Monahan essentially sought enforcement of the appeal decision following 

arbitration. Alternate medical care proceedings are summary proceedings. See 

Iowa Admin. Code r. 876-4.1, 876-4.48(7); see also Iowa Code § 85.27(4); 

McGowan, 2010 WL 2079704, at *4 (describing alternate medical care 

proceedings as summary proceedings). The agency does not have the authority

in an alternate medical care proceeding under section 85.27(4) to enforce a prior 

order. We agree with the district court that section 86.42 is the appropriate 

method for seeking judicial enforcement of the agency’s orders and that the 

agency erred by ordering compliance with the agency’s prior order in the context 

of an alternate care proceeding. See Iowa Code § 86.42 (stating a party may 

present the district court with an order or decision of the commissioner in order to 

have it enforced if timely petition for judicial review has not been filed).

The agency also awarded Monahan fees and costs as a sanction against 

NID. Monahan contends that sanctions are appropriate here regardless of 

whether the agency erred in its application of res judicata. We disagree. The 

agency’s primary basis for imposing sanctions was NID’s failure to comply with 

the appeal decision and obtain a second medical opinion regarding Monahan’s 

shoulder. As indicated above, that issue was not properly before the agency in 
10

this alternate medical care proceeding. Further, NID had a legitimate basis to 

contest causation and liability. Thus, sanctions were not appropriate in this 

context. 

C.

Finally, we address what further proceedings are necessary given our 

conclusion the agency erred in applying res judicata, erred in issuing an 

enforcement order in an alternate medical care proceeding, and erred in 

imposing sanctions. The district court ordered the case remanded for a hearing 

on causation and liability. NID argues this was erroneous and that the 

appropriate remedy is remand to the agency for dismissal of the alternate 

medical care petition. Monahan agrees that dismissal is the appropriate remedy. 

We reach the same conclusion. Alternate medical care is available only where 

the employer does not contest the compensability of the injury—the issue of 

compensability is totally removed from the alternate medical care process. See

R.R. Donnelly & Sons v. Barnett, 670 N.W.2d 190, 196-97 (Iowa 2003). Because 

NID denied causation and liability, the application for alternate care should have 

been dismissed. See Iowa Admin. Code r. 876-4.48(7) (“Application [for 

alternate care] cannot be filed under this rule if the liability of the employer is at 

issue. If an application is filed where the liability of the employer is an issue, the 

application will be dismissed without prejudice.”).

IV.

For the foregoing reasons, we affirm in part and reverse in part the district 

court’s ruling on NID’s petition for judicial review. This matter shall be remanded 
11

to the agency for dismissal of Monahan’s petition for alternate medical care. 

NID’s motion to strike certain portions of the appendix not part of the record and 

certain portions of Monahan’s reply brief referring to material outside the record 

is denied. However, the court has not considered those parts of the appendix not 

in the record, those arguments in Monahan’s main brief and reply brief relying on 

material outside the record, and the new arguments raised for the first time in 

Monahan’s reply brief. See Sun Valley Iowa Lake Ass’n v. Anderson, 551 

N.W.2d 621, 642 (Iowa 1996); Jones v. Madison Cnty., 492 N.W.2d 690, 693-94 

(Iowa 1992); Kliege v. Iowa Emp’t Security Comm’n, 206 N.W.2d 123, 126 (Iowa 

1973).

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.