IN THE SUPREME COURT OF IOWA 

No. 82 / 06–1377 

Filed August 15, 2008 

MIDWEST AMBULANCE SERVICE and

COMBINED SPECIALTY INSURANCE, 

f/k/a/ VIRGINIA SURETY COMPANY, INC., 

 Appellants, 

vs. 

JODI RUUD, 

 Appellee. 

 On review from the Iowa Court of Appeals. 

 Appeal from the Iowa District Court for Polk County, Leo Oxberger, 

Senior Judge. 

 Employer and insurance carrier seek further review of award of 

workers’ compensation benefits. DECISION OF COURT OF APPEALS 

AND JUDGMENT OF DISTRICT COURT AFFIRMED. 

 Steven M. Nadel of Ahlers & Cooney, P.C., Des Moines, for 

appellants. 

Mindi M. Vervaecke of Fitzsimmons & Vervaecke Law Firm, P.L.C., 

Mason City, for appellee. 
2

APPEL, Justice. 

This case involves an appeal of a decision of the district court 

affirming an award of workers’ compensation benefits to a former 

employee. The employer claims that the workers’ compensation 

commissioner erroneously determined that the claim was timely, that the 

employer was not entitled to credit for medical expenses paid through 

COBRA, and that the employer was required to repay medical benefits 

paid by the employee’s private insurer. After a divided court of appeals 

sitting en banc affirmed the judgment of the district court, we granted 

further review. We now affirm. 

I. Factual and Procedural Background. 

Jodi Ruud is a certified emergency medical technician who began 

working for Midwest Ambulance Service (Midwest) in Des Moines in 

1998. On May 12, 2000, Ruud dislocated her left shoulder while 

spraying the inside of ambulance walls with disinfectant and wiping 

them down. With the assistance of a co-worker, Ruud was able to 

relocate the shoulder. 

Ruud filed an accident report the day of the incident and was sent 

by Midwest to Dr. David Berg for medical treatment. Berg diagnosed a 

left shoulder dislocation, returned Ruud to work immediately without 

restriction, and referred her to physical therapy. No further treatment 

was recommended by Berg. In his notes, however, Berg observed that 

Ruud’s shoulder will “dislocate again!” 

Ruud attended one physical therapy session. According to Ruud, 

the physical therapist told her that she “may” need surgery or 

“eventually” would need surgery sometime in the future. 

Ruud’s shoulder injury did not cause her to miss work and did not 

greatly affect her physical mobility. Her shoulder did, however, continue 
3

to dislocate over the next several months when Ruud was performing 

mundane tasks. When these dislocations occurred she was able to 

relocate her shoulder on her own and did not seek further medical 

treatment. Ruud testified that she did not seek medical treatment 

because her shoulder injury did not affect her daily work, she was 

uncertain as to who would be financially responsible for treatment, and 

she was in denial over fear that surgery might ruin her career. 

On June 16, 2002, Ruud reinjured and dislocated her shoulder 

while diving at an off-duty social event. The reinjured shoulder now, for 

the first time, prevented her from returning to work. On June 20, Ruud 

made a request in writing to Midwest for shoulder treatment. 

On July 11, Ruud reported to Midwest that she experienced left 

shoulder pain and strain after lifting a patient who was lying on a cot. 

Midwest sent her to see Dr. Virginia Geary. Geary refused to provide 

treatment, stating that Ruud’s employer was denying workers’ 

compensation liability because the injury was not work-related and that, 

in any event, more than two years had elapsed since the initial work 

injury of May 12, 2000. Geary, however, excused Ruud from work 

pending further treatment. Geary further advised Ruud to see an 

orthopedist using her private medical insurance. 

Ruud was unable to return to work after July 2002. She exercised 

her COBRA benefits in order to continue her health insurance coverage 

under Midwest’s group medical plan. During the period of COBRA 

coverage, Ruud paid the required premiums personally and in full. On 

September 25, 2002, Ruud had arthroscopic surgery to repair the tear 

and reconstruct her left shoulder. Ruud was subsequently placed on 

restricted duty and provided physical therapy. 
4

Ruud filed a workers’ compensation claim on September 10, 2003 

against Midwest and Midwest’s workers’ compensation insurer, 

Combined Specialty Insurance (Combined). The deputy workers’ 

compensation commissioner determined that Ruud’s claim was time 

barred. According to the deputy, Iowa Code section 85.23 (2003) 

requires a claimant to give notice of the occurrence of an injury to the 

employer within ninety days of the date of the occurrence. The deputy 

recognized that the time period for giving notice does not begin to run 

until the claimant knows or should have known the nature, seriousness, 

and probable compensable character of the injury. The deputy found, 

however, that a reasonable person in Ruud’s position should have been 

aware of the seriousness of her injury as of May 12, 2000. Because 

Ruud did not inform her employer of the injury within the statutory 

period, her claim was barred. 

On intra-agency appeal, the commissioner reversed the decision. 

The commissioner found that at the time of Dr. Berg’s examination, “it 

was reasonable for claimant to be optimistic about the condition and to 

not consider it to be serious even though she realized it had the potential 

to become serious at some undetermined time in the future.” The 

commissioner determined that it was not until June 2002 that Ruud was 

placed on notice of the severity of her injury. As a result, the 

commissioner held that Ruud’s September 10, 2003 petition was brought 

within two years of the date at which Ruud knew or should have known 

of the seriousness of the injury. 

 In light of his holding that Ruud’s claim was not time barred, the 

commissioner considered the remaining issues presented in the case. 

With respect to the issue of whether the employer was entitled to a credit 

against benefits owed for payments made by Ruud’s health insurance, 
5

the commissioner determined that because Ruud herself paid the 

premiums for the COBRA benefits, the employer was not entitled to a 

credit. The commissioner further concluded that amounts paid by 

Ruud’s private insurance were attributable to her as if she had made the 

payments directly. Ruud was thus entitled to reimbursement for those 

payments. 

Midwest and Combined appealed the commissioner’s decision to 

the district court. On appeal, the district court affirmed the 

commissioner on the statute of limitations issue. The district court held 

that the question of whether a worker knew or should have known of the 

seriousness of an injury is a question of fact to be determined in the first 

instance by the commissioner. The district court held that the finding of 

the agency that Ruud did not or should not have known of the 

seriousness of the injury was supported by substantial evidence. 

The district court also affirmed the commissioner’s determination 

that the employer was not entitled to a credit for COBRA benefits paid by 

Ruud’s group health insurer. The district court did not rule on the issue 

of reimbursement for private insurance payments and declined the 

motion of Midwest and Combined to expand its findings and conclusions 

with respect to that issue. 

Midwest and Combined appealed and the case was transferred to 

the court of appeals, which considered the case en banc. A six-member 

majority affirmed the district court’s holdings on the statute of 

limitations issue, the credit issue, and the private insurance issue. 

Three members of the court of appeals dissented, asserting that Ruud’s 

claim was time barred by the applicable statute of limitations. 

We granted further review. On further review, we affirm the 

decision of the court of appeals. 
6

II. Standard of Review. 

Iowa Code chapter 17A governs judicial review of decisions of the 

workers’ compensation commissioner. Iowa Code § 86.26. Factual 

findings of the commissioner are reversed only if they are not supported 

by substantial evidence. Id. § 17A.19(10)(f). Application of workers’ 

compensation laws to facts as found by the commissioner is clearly 

vested in the commissioner. Mycogen Seeds v. Sands, 686 N.W.2d 457, 

465 (Iowa 2004). As a result, we may reverse the commissioner’s 

application of the law to the facts only if it is “irrational, illogical, or 

wholly unjustifiable.” Iowa Code § 17A.19(10)(m); Finch v. Schneider 

Specialized Carriers, Inc., 700 N.W.2d 328, 330 (Iowa 2005). Finally, 

interpretation of workers’ compensation statutes and related case law 

has not been clearly vested within the discretion of the agency, so this 

court is free to substitute its judgment de novo for the agency’s 

interpretation of law. Id.

III. Discussion. 

A. Statute of Limitations Issue. The threshold issue in this case 

is whether Ruud’s petition was timely under Iowa Code section 85.26. In 

determining whether the statute of limitations began to run, the 

commissioner used the correct legal standard, namely, whether Ruud 

acting as a reasonable person knew or should have known that her 

physical condition was serious enough “to have a permanent adverse 

impact on the claimant’s employment or employability. . . .” Herrera v. 

IBP, Inc., 633 N.W.2d 284, 288 (Iowa 2001) (citing Orr v. Lewis Cent. Sch. 

Dist., 298 N.W.2d 256, 257 (Iowa 1980)). As a result, the provisions of 

Iowa Code section 17A.19(10)(c), which vest authority in this court to 

reverse an agency determination based upon an erroneous interpretation 

of law not vested in the agency’s discretion, has no application. 
7

Instead, this court can reverse the decision only if the 

commissioner’s factual determinations are not supported by substantial 

evidence as provided in Iowa Code section 17A.19(10)(f) or upon a

showing that the commissioner’s application of law to the facts of this 

case meets the demanding “irrational, illogical, or wholly unjustifiable” 

standard of section 17A.19(10)(m). See generally Clark v. Vicorp Rests., 

Inc., 696 N.W.2d 596, 603–04 (Iowa 2005). 

We turn first to the findings of the commissioner regarding 

whether Ruud knew or should have known of the nature, seriousness, 

and probable compensability of her claim. Based upon his review of the 

record in this case, the commissioner found that Ruud did not miss work 

or incur any expenses related to her shoulder injury until June or July 

2002. The commissioner noted that her failure to realize that her injury 

was serious was reasonable in light of Dr. Berg having immediately 

released her to return to work without restrictions and without 

recommending further care other than a brief amount of physical 

therapy. The commissioner found that Ruud was not and could not have 

been aware as a reasonable person, of the probable nature, seriousness, 

and compensable character of her injury until June 2002, when her 

injury became sufficiently serious to force her to miss work and undergo 

surgical repair of her shoulder. The question of whether a claimant 

knew, or should have known, of the nature, seriousness, and probable 

compensability of her injury is a question of fact to be determined by the 

commissioner. Gates v. John Deere Ottumwa Works, 587 N.W.2d 471, 

475 (Iowa 1998); Dillinger v. City of Sioux City, 368 N.W.2d 176, 182 

(Iowa 1985). 

As suggested by Midwest and Combined, there was evidence in the 

record which could have been marshaled to support a contrary 
8

determination. Shortly after her original injury, a physical therapist 

suggested that surgery “might” or “eventually would” be required. In the 

months following her original injury, Ruud experienced repeated 

shoulder separations with some soreness. There was also evidence in 

the record that Ruud was concerned that her injury could eventually 

cause her work-related problems. 

Mere recognition that there is substantial contrary evidence in the 

record does not mean that the commissioner’s determination may be 

successfully attacked on appeal. The burden on the party who was 

unsuccessful before the commissioner is not satisfied by a showing that 

the decision was debatable, or even that a preponderance of evidence 

supports a contrary view. The burden is on the unsuccessful party to 

show that the commissioner’s determination is lacking in substantial 

evidence. Meyer v. IBP, Inc., 710 N.W.2d 213, 218 (Iowa 2006). 

Like the majority of the court of appeals, we simply cannot reach 

that conclusion in light of the evidence when reviewed as a whole. 

Dr. Berg allowed Ruud to go back to work the day of her initial injury 

without restriction and prescribed only a minimal amount of physical 

therapy as part of a conservative treatment plan. Until June 2002, Ruud 

was able to work without restrictions. Until the diving incident in 2002, 

Ruud’s shoulder problem was more of a nuisance than anything else. 

There was sufficient evidence in the record from which the commissioner 

could conclude that Ruud was not and should not have been aware that 

her condition was serious enough “to have a permanent adverse impact 

on the claimant’s employment or employability . . .” until after that time. 

Herrera, 633 N.W.2d at 288. 

Given this evidence in the record, Midwest and Combined in effect 

invite us to engage in a “scrutinizing analysis” of the commissioner’s 
9

finding, an approach which we have expressly disavowed. Terwilliger v. 

Snap-On Tools Corp., 529 N.W.2d 267, 272 (Iowa 1995). Such 

“scrutinizing analysis” would tend to undercut the overarching goal of 

the workers’ compensation system, “ ‘for, if we trench in the slightest 

degree upon the prerogatives of the commission, one encroachment will 

breed another, until finally simplicity will give way to complexity, and 

informality to technicality.’ ” Zomer v. West River Farms, Inc., 666 

N.W.2d 130, 133 (Iowa 2003) (quoting Flint v. City of Eldon, 191 Iowa 

845, 847, 183 N.W. 344, 345 (1921)). 

Given the binding findings of the commissioner, we next consider 

the question of whether the application of law to these facts was 

“irrational, illogical, or wholly unjustifiable.” Iowa Code § 17A.19(10)(m). 

We cannot conclude that the commissioner’s application was any of the 

above. The commissioner determined that Ruud was not aware, and 

should not have been aware, of the nature, seriousness, and probable 

compensability of her injury until June 2002. Given this factual finding, 

we conclude that under Iowa Code section 85.26, the statute of 

limitations did not begin to run until June 2002. Because her petition 

was filed within two years of June 2002, the commissioner’s conclusion 

that it was timely was correct. 

B. Credit for Payment of Medical Expenses. The district court 

affirmed a holding by the commissioner that Midwest and Combined 

were not entitled to a credit for the payment of medical expenses made 

by Ruud’s group health insurance carrier. The issue arises because a 

portion of Ruud’s medical expenses were paid during a period when 

Ruud had exercised her COBRA rights.
10

Iowa Code section 85.38(2) relates to the issue of employer credits 

when payments are made by a group health plan. This provision 

provides, in relevant part: 

In the event the employee with a disability shall receive

any benefits, including medical, surgical, or hospital 

benefits, under any group plan covering nonoccupational 

disability contributed to wholly or partially by the employer

. . . then the amounts so paid to the employee from the group 

plan shall be credited to or against any compensation 

payments. . . .

Iowa Code § 85.38(2) (emphasis added). 

Midwest and Combined argue that as long as Midwest contributed 

to “any group plan,” it is entitled to a credit under this statutory 

provision. Midwest and Combined assert that under the literal language 

of the statute, it is irrelevant that Ruud paid the premiums for the 

continuation of her group health insurance coverage as long as the 

employer was contributing in some fashion to the underlying group plan. 

Since the employer continued to contribute to the group plan for 

employees other than Ruud, Midwest and Combined argue that the 

statutory requirement for crediting any group plan payments against 

workers’ compensation benefits has been met. 

Ruud counters that Midwest and Combined’s interpretation of 

Iowa Code section 85.38(2) is contrary to legislative intent. Ruud argues 

that the legislature did not intend an employer to receive credit under 

Iowa Code section 85.38(2) when the employer is not contributing to the 

premiums of the claimant. 

We agree with Ruud. The obvious purpose of Iowa Code section 

85.38(2) is to avoid duplication of payments by an employer to an 

employee. It would be odd, moreover, for an employer to be entitled to a 

credit against a workers’ compensation award to employee A because the 
11

employer made contributions for group health insurance for employees 

B, C, and D, but not A. 

While the ambiguous statutory language is not a model of clarity, 

the statutory purpose of workers’ compensation would not be advanced 

by the illogical approach advocated by Midwest and Combined. State v. 

Ross, 729 N.W.2d 806, 810 (Iowa 2007). We therefore hold that under 

Iowa Code section 85.38(2), the employer must contribute in whole or in 

part to a group insurance plan for the benefit of the claimant in order to 

be entitled to the statutory credit. Because Midwest and Combined have 

not proven that they contributed to Ruud’s COBRA payments, they 

cannot prevail on their claim under section 85.38(2). 

C. Direct Payments to Ruud. The final issue for us to consider 

is whether the commissioner erred in ordering Midwest and Combined, 

pursuant to Iowa Code section 85.27, to reimburse Ruud directly for any 

medical payments made by insurance plans to which Midwest did not 

contribute. Section 85.27(1) provides that the employer shall furnish 

reasonable medical services and supplies for injuries compensable under 

workers’ compensation. 

Midwest and Combined argue that under Rethamel v. Havey, 715 

N.W.2d 263 (Iowa 2006), Ruud must prove that she paid the medical 

expenses herself in order to receive reimbursement. In Rethamel, we 

stated that a claimant must make “a specific showing that the claimant 

himself paid the medical expenses.” Rethamel, 715 N.W.2d at 267 

(emphasis added). While Ruud concedes that she and her husband did 

not directly pay the medical bills from their own funds, they argue that 

they essentially paid for the medical bills by purchasing private 

insurance coverage. 
12

The Rethamel case relied upon our previous decision in Krohn v. 

State, 420 N.W.2d 463 (Iowa 1988). In Krohn, we held that a workers’ 

compensation claimant was not entitled to be paid sums for medical and 

hospital expenses absent a showing that the worker personally paid the 

medical suppliers. Krohn, 420 N.W.2d at 464–65. As a result, the 

employer was entitled to make an arrangement for providing medical and 

hospital benefits through a group nonoccupational medical and 

insurance plan, instead of making direct repayments. Id. at 465. 

We find that Rethamel and Krohn are not dispositive of the issue in 

this case. Language in Rethamel and Krohn suggests that there must be 

a specific showing that claimant paid the medical expenses directly in 

order to be entitled to be paid for these expenses. While it may be true 

that the commissioner’s decision in Rethamel states that the claimant 

did obtain medical and health insurance at her or her husband’s 

expense, neither our decision in Rethamel or in Krohn specifically 

addressed the issue presented in this case, namely, whether the payment 

of insurance premiums not provided by the employer amounts to 

personally paying for the underlying medical benefits. 

The commissioner concluded that amounts paid by private 

insurance are attributable to the plaintiff as if she made those payments 

herself. The commissioner reasoned that other health insurance plans 

may have subrogation rights against an insured who receives benefits 

under workers’ compensation. In order to avoid a situation where a 

health insurance company sought reimbursement from the claimant for 

expenses that the employer has not paid, the commissioner held that the 

employer must pay to the claimant an amount equal to the medical 

benefits that were covered by the insurer. 
13

We believe that the commissioner has adopted the most sensible 

approach to this unusual issue. Doe v. Ray, 251 N.W.2d 496, 504 (Iowa 

1977) (“In construing a statute we attempt to give it a sensible, practical, 

workable and logical construction.”). We note that under Iowa Code 

section 85.38(2), an employer who wholly or partially provides insurance 

under a group plan is entitled to a credit not simply of the premiums 

paid, but of the full amount of benefits paid by the group plan for 

injuries covered by workers’ compensation. In light of this statutory 

provision, the reverse should also be true, namely, that an employee who 

pays group health insurance premiums has, in effect, paid for medical 

expenses covered by the group plan. See State v. Gonzalez, 718 N.W.2d 

304, 308 (Iowa 2006) (“The interpretation of a statute requires an 

assessment of the statute in its entirety, not just isolated words or 

phrases.”). We therefore hold that the commissioner did not err in 

ordering direct payment to the claimant for past medical expenses paid 

through insurance coverage obtained by the claimant independent of any 

employer contribution. 

IV. Conclusion. 

The district court’s holding that Ruud’s claim is not time barred 

and that Midwest and Combined are not entitled to a credit for payments 

made by Ruud’s CORBA insurance is affirmed. In addition, we hold that 

the commissioner properly determined that Ruud is entitled to direct 

payment of funds from Midwest and Combined to cover the cost of 

medical expenses paid for by other insurance. 

DECISION OF COURT OF APPEALS AND JUDGMENT OF 

DISTRICT COURT AFFIRMED. 

All justices concur except Baker, J., who takes no part.