IN THE SUPREME COURT OF IOWA

No. 13–0474

Filed May 29, 2015

WARREN PROPERTIES and ACE AMERICAN INSURANCE COMPANY,

Appellees,

vs.

JANICE STEWART,

Appellant.

Appeal from the Iowa District Court for Polk County, 

Christopher L. McDonald, Judge. 

A workers’ compensation claimant appeals the district court ruling 

on judicial review of a decision of the Iowa Workers’ Compensation 

Commissioner. AFFIRMED IN PART, REVERSED IN PART, AND 

REMANDED WITH DIRECTIONS. 

Martin Ozga of Neifert, Byrne & Ozga, P.C., West Des Moines, for 

appellant. 

Mark A. King and Jason W. Miller of Patterson Law Firm, L.L.P., 

Des Moines, for appellees. 

Matthew D. Dake of Wertz & Dake, P.C., Cedar Rapids, for amicus 

curiae Workers’ Compensation Core Group. 
2

CADY, Chief Justice.

In this workers’ compensation appeal, we are asked to revisit our 

rule governing apportionment resulting from successive work injuries at 

multiple places of employment in light of the 2004 amendments to the 

workers’ compensation permanent disabilities statute. The deputy 

workers’ compensation commissioner awarded benefits to the worker 

based on a finding of two successive injuries to the back and a shoulder 

injury and applied the full-responsibility rule with no apportionment for 

the preexisting disability. Our review follows reviews by the workers’ 

compensation commissioner, who affirmed, and the district court, which 

affirmed in part, reversed in part, and remanded. We conclude an 

employer who is liable to compensate an employee for a successive 

unscheduled work injury is not liable to pay for the preexisting disability 

that arose from employment with a different employer or from causes 

unrelated to employment when the employee’s earning capacity was not 

reevaluated in the competitive job market or otherwise reevaluated prior 

to the successive injury. We affirm in part and reverse in part the 

decision of the district court. We remand the case to the district court to 

remand the case back to the workers’ compensation commissioner for 

further proceedings consistent with this opinion. 

I. Background Facts and Proceedings.

Janice Stewart was working two jobs in 2006. She had begun 

working as an assistant property manager for a business in Des Moines 

called Warren Properties in 2005. Her duties included typing, answering 

the phone, showing apartments to prospective tenants, inspecting 

property, and preparing rental agreements. Stewart received a salary 

and a rent allowance for this work. In June 2006, Stewart began a 
3

second full-time job with Wal-Mart. She worked as a customer service 

representative and assistant manager. 

In November 2006, Stewart injured her lower back at Wal-Mart 

while moving shopping carts. She quit the job a week later, but 

continued working for Warren Properties. Stewart began seeking medical 

treatment for her back injury. She saw a variety of doctors over a period 

of several years for treatment and evaluation. 

In May 2008, Dr. Cassim Igram determined Stewart had reached 

maximum medical improvement for her back injury and concluded she 

sustained a ten percent permanent impairment of the body as a whole. 

Two months later, Dr. William Boulden expressed the same opinion. In 

October 2008, Dr. Daniel McGuire expressed an opinion that Stewart 

suffered a thirteen percent permanent physical impairment as a 

consequence of her back injury.

On May 20, 2009, Stewart and Wal-Mart entered into a contested 

case settlement on her claim for workers’ compensation benefits. The 

settlement was based on a forty percent industrial disability

determination. It resulted in the payment of $60,000 in compensation, 

plus $11,000 in medical bills. 

Stewart continued her employment at Warren Properties 

throughout the duration of the medical treatment for her 2006 back 

injury. On the evening of February 2, 2009, she fell on ice as she left 

work. This was more than three months prior to her contested case 

settlement with Wal-Mart. She experienced back pain with radiating 

pain down one leg as well as pain in her shoulders and neck. As with 

the Wal-Mart injury, Stewart sought medical treatment following her fall 

and saw a variety of doctors for treatment and evaluation. 
4

An evaluation in May 2009 found Stewart had obtained maximum 

medical improvement. Physicians expressed differing views on the 

question whether Stewart’s fall on the ice caused her any permanent 

physical impairment. In September 2009, Dr. Martin Rosenfeld opined 

Stewart suffered a one percent physical impairment to her shoulder as a 

consequence of the fall. In 2010, Dr. Thomas Carlstrom opined that

Stewart suffered no new physical impairment from her fall.1 In July 

2010, Dr. Jacqueline Stoken opined the fall had exacerbated Stewart’s 

preexisting back condition and caused a right shoulder impairment. 

Dr. Stoken viewed the low-back impairment as falling within the ten to 

thirteen percent impairment range and assigned Stewart a thirteen 

percent impairment of the body as a whole for this injury and ten percent 

impairment to the body as a whole for the shoulder injury. Dr. Lazaro 

Rabang opined Stewart’s 2009 fall merely temporarily aggravated the

back injury sustained in the 2006 Wal-Mart incident. 

Stewart filed a complaint against Warren Properties with the 

workers’ compensation commissioner in November 2009 to recover 

compensation for her February 2, 2009 injury. Following a hearing in 

October 2010, a deputy commissioner found Stewart sustained a 

permanent partial unscheduled disability from the injury. The deputy 

commissioner credited the medical opinion of Dr. Stoken and found 

Stewart sustained a thirteen percent physical impairment to her body as 

a whole due to the back injury. The deputy commissioner found no 

specific percentage of permanent physical impairment to Stewart’s 

1In his original evaluation in April 2010, Dr. Carlstrom did not address what 

impairment was attributable to the 2006 or the 2009 injuries. In October 2010, 

Dr. Carlstrom supplemented his evaluation and opined that no new impairment 

resulted from the 2009 injury. 

 
5

shoulder as a result of the 2009 injury. The deputy commissioner 

concluded Stewart’s disability to her back and shoulder resulted in a fifty 

percent industrial disability. Stewart was awarded benefits without any 

apportionment for the preexisting disability that resulted from the 2006 

injury. On appeal, the commissioner affirmed the decision of the deputy 

commissioner. 

Warren Properties filed a petition for judicial review with the 

district court. The district court held the commissioner erred in failing to 

apportion Stewart’s preexisting disability that arose from the 2006 injury 

when calculating the benefits owed by Warren Properties for the 2009 

injury. In doing so, the court held Stewart’s compensation for the 2009 

injury is limited to the amount of the industrial disability caused by that

injury and rejected Warren Properties’ contention that apportionment 

should be effected by crediting the amount previously paid by Wal-Mart 

to Stewart for the 2006 back injury. The court determined the 

commissioner was required to award compensation based on the

percentage of the worker’s disability attributable to the 2009 injury 

without considering the prior disabilities the employee possessed for 

which the employer was not responsible. Additionally, the court held 

that the finding by the commissioner of a thirteen percent impairment 

resulting from the 2009 injury was too uncertain in light of the evidence 

that Stewart suffered a thirteen percent impairment to her back from her 

2006 injury. The court concluded the commissioner’s impairment 

finding could not be sustained without an additional finding that the 

prior impairment to the back had healed before the 2009 injury. The 

district court remanded the case to the commissioner specifically to 

determine if the 2009 injury resulted in any new back disability. 
6

Stewart and Warren Properties both appealed the decision of the 

district court. On appeal, Stewart claims the district court erred in 

concluding that the disability arising from the 2006 and 2009 injuries 

should be apportioned. She also claims the evidence was sufficient to 

support the commissioner’s finding that the 2009 fall permanently 

aggravated her preexisting back injury and created a new permanent 

injury to her shoulder, which combined to sustain a finding of fifty 

percent industrial disability. 

Warren Properties claims on appeal that the district court erred by 

remanding the case for a new impairment finding because the evidence 

presented at the hearing does not support any finding of a new disability

arising from the 2009 injury. Warren Properties also claims that, if a 

new impairment rating is warranted, the preexisting disability arising 

from the 2006 injury must be apportioned through a credit to the 

employer equal to the forty percent industrial disability paid by Wal-Mart 

as a consequence of the contested case settlement. 

We conclude the 2004 amendments to the workers’ compensation 

permanent disabilities statute require an evaluation by the commissioner 

of Stewart’s earning capacity both before and after a successive injury 

sustained in the course and scope of employment with a concurrent 

employer and that Warren Properties is therefore liable to compensate 

Stewart for only the reduction in earning capacity caused by the 2009

injury. 

II. Standard of Review. 

Judicial review of workers’ compensation cases is governed by Iowa 

Code chapter 17A. Neal v. Annett Holdings, Inc., 814 N.W.2d 512, 518 

(Iowa 2012). On our review, we determine whether we arrive at the same 

conclusion as the district court. Sherman v. Pella Corp., 576 N.W.2d 
7

312, 316 (Iowa 1998). We have determined the legislature has not vested 

the commissioner with the authority to interpret Iowa Code section 

85.34(2)(u) and (7)(a). Roberts Dairy v. Billick, 861 N.W.2d 814, 817

(Iowa 2015). Therefore, we review the commissioner’s interpretation “to 

correct errors of law on the part of the agency.” Teleconnect Co. v. Iowa 

State Commerce Comm’n, 404 N.W.2d 158, 161 (Iowa 1987). 

We are bound by the agency’s findings of fact unless they are not 

supported by substantial evidence. Mycogen Seeds v. Sands, 686 

N.W.2d 457, 465 (Iowa 2004). However, we “are not bound by the 

agency’s interpretation [of law] and may substitute our own to correct a 

misapplication of law.” SZ Enters., LLC v. Iowa Utils. Bd., 850 N.W.2d 

441, 449 (Iowa 2014); accord Iowa Code § 17A.19(10)(c) (2009). 

III. History and Background of Successive Disabilities.

Over 100 years have come and gone since our legislature 

established an administrative agency system to compensate injured 

workers in this state. See 1913 Iowa Acts ch. 147 (codified at Iowa Code 

§§ 2477-m to 2477-m50 (Supp. 1913)). This system was established for 

workers in Iowa to avoid litigating claims over work injuries and to 

provide them with an efficient and speedy resolution and award of 

compensation. Shepard v. Carnation Milk Co., 220 Iowa 466, 469, 262 

N.W. 110, 112 (1935). Over time, the system has become increasingly 

complex and litigious. See generally Joan T.A. Gabel & Nancy R. 

Mansfield, Practicing in the Evolving Landscape of Workers’ Compensation 

Law, 14 Lab. Law. 73 (1998) (discussing the effects that changing 

common law and new federal laws on disability and family leave have 

had on workers’ compensation practice). At the same time, the courts 

have continued to play an important role through the process of judicial 

review. See Iowa Code § 17A.19 (2009) (governing judicial review of 
8

administrative actions). This role has led to a century of judicial 

application of the statutes governing the workers’ compensation system, 

and these statutes have been enforced and supplemented by many court 

rules and doctrines developed to help carry out the intent and purpose of 

the statutory framework. See, e.g., Larson Mfg. Co. v. Thorson, 763 

N.W.2d 842, 851–53 (Iowa 2009) (tracing the development of the 

cumulative injury rule in Iowa law); Guyton v. Irving Jensen Co., 373 

N.W.2d 101, 105 (Iowa 1985) (adopting the “odd-lot doctrine” for disabled 

employees with no stable job market available). 

One fertile area of statutory review by courts over the years has 

involved the apportionment of compensation for successive injuries. The 

original statute provided for the apportionment of successive injuries, 

Iowa Code § 2477-m15(h) (Supp. 1913), and our early cases began the 

process of applying the statutory doctrine to particular cases. See, e.g.,

Pappas v. N. Iowa Brick & Tile Co., 201 Iowa 607, 612–13, 206 N.W. 146, 

147–48 (1925) (apportioning for initial arm loss when loss of second arm 

resulted in total disability, but noting a correction by the legislature to 

cover successive injuries resulting in total disability); Jennings v. 

Mason City Sewer Pipe Co., 187 Iowa 967, 970–71, 174 N.W. 785, 786

(1919) (apportioning first eye-loss award from the total disability award of

an employee who lost his second eye during the course of employment). 

Following a decade of early judicial decisions, the legislature 

amended the successive-injury statute to provide more specifically for the 

apportionment of compensation for injured employees who had been 

previously disabled and were drawing compensation at the time of a 

subsequent injury. Compare Iowa Code § 822(h) (1919), with Iowa Code 

§ 1397(8) (1924) (clarifying the apportionment from the proportion of the 

incapacity and disability caused by the injury to simply the proportion of 
9

the disability caused by the injury). See also Iowa Code § 2477-m9(j)(17) 

(Supp. 1913) (providing that the loss of any two of certain scheduled 

members would constitute permanent total disability); Iowa Code 

§ 816(j)(19) (1919) (amending the statute to require the double loss occur 

in a single accident to constitute permanent total disability). Aside from 

statute renumbering and minor grammatical changes, the statute then 

remained unchanged from 1924 until 2004. Compare Iowa Code 

§ 1397(8) (1924), with Iowa Code § 85.36(9)(c) (2003). 

Over the intervening eighty years, however, we developed a 

comprehensive body of law to apply this statutory principle of 

apportionment to a variety of different circumstances. See Gregory v. 

Second Injury Fund of Iowa, 777 N.W.2d 395, 402–03 (Iowa 2010) 

(Cady, J., dissenting) (discussing the development of the Second Injury 

Fund for apportionment of scheduled permanent injuries); Varied 

Enters., Inc. v. Sumner, 353 N.W.2d 407, 411 (Iowa 1984) (limiting 

apportionment to cases in which a prior injury or illness “produces some 

ascertainable portion of the ultimate industrial disability”), abrogated on 

other grounds by P.D.S.I. v. Peterson, 685 N.W.2d 627, 635 (Iowa 2004); 

Ziegler v. U.S. Gypsum Co., 252 Iowa 613, 620, 106 N.W.2d 591, 595 

(1960) (holding an aggravated injury is compensable to the extent of the 

injury instead of apportionable). In particular, we adopted the fullresponsibility rule and the fresh-start rule. See Ziegler, 252 Iowa at 620, 

106 N.W.2d at 595 (describing a fresh-start rule that when an employee 

is hired the employer takes him subject to any active or dormant health 

impairments); Rose v. John Deere Ottumwa Works, 247 Iowa 900, 908, 

76 N.W.2d 756, 760–61 (1956) (describing a full-responsibility rule that if 

a preexisting condition was “aggravated, accelerated, worsened or ‘lighted 

up’ ” by the injury the employee was entitled to recover). Together, these 
10

two judicial doctrines impacted the apportionment of compensation 

statute by substantially limiting apportionment in determining the 

compensation for successive disabilities. 

IV. Statutory Changes to Successive Disabilities and 

Calculation of Compensation. 

In 2004, the General Assembly amended the 1924 statutory 

apportionment rule by repealing the old successive disabilities statute

and replacing it with a new enactment. See 2004 Iowa Acts 1st 

Extraordinary Sess. ch. 1001, §§ 9–21 (codified in part in scattered 

sections of Iowa Code chs. 85–86 (2005)). In the Act, the legislature 

specifically declared its intent in enacting the new statutes, which 

included the intent to modify our apportionment, fresh-start, and fullresponsibility rules. Id. § 20. We had not had the opportunity to 

interpret directly the statutory changes until our recent decision in 

Roberts Dairy. 

In Roberts Dairy, we examined the scope and meaning of the 2004 

statutory approach to apportionment for successive disabilities. 861 

N.W.2d at 822. We determined the new statutes took two broad steps. 

The first step was to provide a new rule to compute compensation for a 

permanent partial disability in cases involving unscheduled injuries. Id.

at 822–23; see Iowa Code § 85.34(2)(u) (2009). Compensation under this 

rule is computed by considering “the reduction in the employee’s earning 

capacity caused by the disability [as it] relat[es] to the earning capacity 

that the employee possessed when the injury occurred.” Iowa Code 

§ 85.34(2)(u). 

The second step provided new rules to govern successive 

disabilities. Roberts Dairy, 861 N.W.2d at 823; see Iowa Code § 85.34(7). 

This new statute first articulated two principles applicable to successive 
11

disability cases. The first rule made “[a]n employer . . . liable for 

compensating all of an employee’s disability that arises out of and in the 

course of the employee’s employment with the employer.” Iowa Code

§ 85.34(7)(a). The second rule declared that an employer was “not liable 

for compensating an employee’s preexisting disability that arose out of 

and in the course of employment with a different employer or from 

causes unrelated to employment.” Id. Thus, the first statutory principle 

dealt with successive disabilities with the same employer, and the second 

statutory principle dealt with successive disabilities with a different 

employer. See id. The remaining portion of the second step provided a 

special method of compensating successive disabilities incurred with the 

same employer and further addressed how a merger, purchase, or 

change in employment affected the same-employer rule. See id.

§ 85.34(7)(b)–(c). These two new statutory rules for successive disabilities 

departed from our prior caselaw. For example, our successive disability 

caselaw evolved without distinguishing between successive disabilities 

arising from employment with the same or different employers. See

Venegas v. IBP, Inc., 638 N.W.2d 699, 701 (Iowa 2002) (“We find no basis 

for distinguishing between work-related disabilities with the same 

employer and work-related disabilities with different employers in the 

application of the full-responsibility rule.”). 

In Roberts Dairy, we held the statutory principle described in 

section 85.34(7)(a)—an employer is not liable for compensating the 

preexisting disability of an employee from employment with a different 

employer—did not apply when the earning capacity of the employee had 

been reevaluated by the competitive labor market. 861 N.W.2d at 823. 

Thus, we found that the workers’ compensation commissioner correctly 

decided the employer in the case was not entitled to apportion liability for 
12

permanent partial disability benefits paid to an employee based on the 

losses of earning capacity suffered from two prior injuries while working 

for different employers because the market had reevaluated earning 

capacity when the employer hired the employee. Id. at 824–25. We 

found the legislature intended to preserve the fresh-start rule when an 

employee is reevaluated by the competitive labor market with a change in 

employment following a permanent partial disability in a prior 

employment with a different employer. Id. at 823. 

V. Liability of Warren Properties for Preexisting Disability. 

The issues presented in this case are similar to those presented in 

Roberts Dairy, but arise from different facts. This factual difference does 

not permit us to rely on Roberts Dairy to resolve the issue. The 

important distinguishing fact is that the preexisting disability at the 

center of this case did not occur with a previous employer. Instead, it 

occurred with a concurrent employer. Stewart was working for Warren 

Properties at the time she sustained the forty percent loss of earning 

capacity from a permanent partial disability caused by an injury arising 

out of her employment with Wal-Mart. As a result, Warren Properties 

argues the apportionment principle under Iowa Code section 85.34(7)(a) 

applies in this case because the reduction in Stewart’s earning capacity 

from the Wal-Mart injury was never adjusted by the competitive labor 

market. Stewart claims a market adjustment was unnecessary because 

she maintained her employment with Warren Properties without a 

diminution in earnings despite her permanent partial disability. She 

argues the loss of her concurrent job with Wal-Mart without an 

accompanying loss of her job at Warren Properties gave her a fresh start 

and served to reestablish her earning capacity. The arguments of the 
13

parties first require us to examine the legislative intent behind the 2004 

statutory changes. 

Our sole goal in interpreting statutes is to apply the intent of the 

legislature. Thomas v. Gavin, 838 N.W.2d 518, 523 (Iowa 2013). The 

legislature expressed in detail its intent behind the statutes at issue in

this case.2 Thus, we rely on this intent to guide the application of the 

statute to the claim for compensation under the facts of this case. 

2The legislative intent section, 2004 Iowa Acts 1st Extraordinary Sess. ch. 1001, 

§ 20, states:

It is the intent of the general assembly that this division of this Act will 

prevent all double recoveries and all double reductions in workers’ 

compensation benefits for permanent partial disability. This division 

modifies the fresh start and full responsibility rules of law announced by 

the Iowa supreme court in a series of judicial precedents. 

The general assembly recognizes that the amount of 

compensation a person receives for disability is directly related to the 

person’s earnings at the time of injury. The competitive labor market 

determines the value of a person’s earning capacity through a strong 

correlation with the level of earnings a person can achieve in the 

competitive labor market. The market reevaluates a person as a working 

unit each time the person competes in the competitive labor market, 

causing a fresh start with each change of employment. The market’s 

determination effectively apportions any disability through a reduced 

level of earnings. The market does not reevaluate an employee’s earning 

capacity while the employee remains employed by the same employer. 

The general assembly intends that an employer shall fully 

compensate all of an injured employee’s disability that is caused by 

work-related injuries with the employer without compensating the same 

disability more than once. This division of this Act creates a formula 

that applies disability payments made toward satisfaction of the 

combined disability that the employer is liable for compensating, while 

taking into account the impact of the employee’s earnings on the amount 

of compensation to be ultimately paid for the disability. 

The general assembly does not intend this division of this Act to 

change the character of any disability from scheduled to unscheduled or 

vice versa or to combine disabilities that are not otherwise combined 

under law existing on the effective date of this section of this division of 

this Act. Combination of successive scheduled disabilities in section 

85.34, subsection 7, as enacted in this division of this Act, is limited to 

disabilities affecting the same member, such as successive disabilities to 

the right arm. A disability to the left arm that is followed by a disability 

to the right arm is governed by section 85.64 and is not a successive 

 
14

The starting point for the resolution of the apportionment issue 

presented by the arguments of the parties is the statutory principle 

expressed in the second sentence of section 85.34(7)(a). This statutory 

rule of apportionment is applicable to the “preexisting disability that 

arose out of and in the course of employment with a different employer.” 

Iowa Code § 85.34(7)(a). The legislative intent behind this rule was to 

“prevent all double recoveries and all double reductions in workers’ 

compensation benefits for permanent partial disability.” 2004 Iowa Acts 

1st Extraordinary Sess. ch. 1001, § 20. The statute does not specifically 

mention concurrent employers, but concurrent employers are also 

different employers.3 The text of the statute clearly captures concurrent 

employers. Thus, Stewart was not beyond the scope of the governing 

rule simply because her preexisting disability with a “different employer” 

was sustained at the time she also maintained employment with Warren 

Properties. We are required to use the plain language of the statute 

when construing statutes. Neal, 814 N.W.2d at 519. 

disability under this division. This division does not alter benefits under 

the second injury fund, benefits for permanent total disability under 

section 85.34, subsection 3, the method of determining the degree of 

unscheduled permanent partial disability, the compensable character of

aggravation injuries, or an employer’s right to choose the care an injured 

employee receives, expand the fresh start rule to scheduled disabilities, 

or change existing law in any way that is not expressly provided in this 

division. 

The general assembly intends that changes in the identity of the 

employer that do not require the employee to reenter the competitive 

labor market will be treated as if the employee remained employed by the 

same employer.

3The statute also excepts injuries unrelated to employment from the employer’s 

liability. Iowa Code § 85.34(7)(a). The legislature clearly wished to limit an employer’s 

liability to only disabilities “aris[ing] out of and in the course of the employee’s 

employment with the employer” and no others. Id. 

_________________________
15

The concern expressed by the legislature over double recoveries 

and double reductions for successive permanent partial disabilities can 

be traced to the role of a preexisting disability in the payment of 

compensation for a subsequent injury. See, e.g., Ziegler, 252 Iowa at 

619–20, 106 N.W.2d at 594–95 (evaluating subrogation rights of 

employer to employee’s settlement with third-party tortfeasor of original 

injury in an injury-aggravation case). When a successive injury 

increases a preexisting permanent disability to the body as a whole, the 

benefits provided for the successive injury must not include a double 

recovery for the first disability or a double reduction for the first 

disability. See 2004 Iowa Acts 1st Extraordinary Sess. ch. 1001, § 20. 

The legislature intended to address this issue by enacting Iowa 

Code section 85.34(7)(a). Importantly, it did not just express an intent to 

apportion preexisting disabilities from different employers to prevent 

double recoveries. Iowa Code § 85.34(7)(a). It also expressed its intent to 

prevent double reductions by adopting the fresh-start rule we had 

developed in our prior cases. See id.; 2004 Iowa Acts 1st Extraordinary 

Sess. ch. 1001, § 20. While the legislature sought to relieve employers of 

any “liab[ility] for compensating an employee’s preexisting disability” that 

arose in employment with a different employer or outside of employment, 

it expressed its clear intent to adopt a modification of the fresh-start rule 

to recognize the reevaluation of earning capacity achieved through the 

“competitive labor market . . . with each change of employment.” Iowa 

Code § 85.34(7)(a) (first quote); 2004 Iowa Acts 1st Extraordinary Sess. 

ch. 1001, § 20 (second quote). The legislature accepted the general 

premise that the competitive labor market reestablishes a worker’s 

earning capacity following a disabling injury and further observed that 

this market “effectively apportions any disability through a reduced level 
16

of earnings.” 2004 Iowa Acts 1st Extraordinary Sess. ch. 1001, § 20. 

Thus, the legislative intent reveals the modified fresh-start rule does not 

run afoul of the statutory principle that employers must not be liable for 

compensating an employee’s preexisting disability with a different 

employer. Id.; see Iowa Code § 85.34(7)(a). No double recovery occurs 

because the preexisting disability has been integrated into a new working 

unit, with a new earning capacity recognized by the competitive labor 

market. 2004 Iowa Acts 1st Extraordinary Sess. ch. 1001, § 20. The 

fresh-start rule does not make an employer liable for compensating an 

employee’s preexisting disability with a different employer because 

apportionment effectively took place prior to the second injury through 

the forces of the competitive labor market associated with a change in 

employment. See id. 

This proposition established the basis of our holding in Roberts 

Dairy, 861 N.W.2d at 823. In that case, the worker had changed 

employment after sustaining permanent partial disabilities, and his 

earning capacity was effectively reset by the competitive labor market 

that accompanied each change of employment, including his employment 

at the time of his injury. Id. at 816, 823–24. We applied the modified 

fresh-start rationale adopted by the legislature in enacting Iowa Code 

section 85.34(7)(a). Id. at 823. 

The legislature, however, did not preserve the fresh-start rule 

beyond the competitive-job-market rationale. Additionally, it specifically 

found “[t]he market does not reevaluate an employee’s earning capacity 

while the employee remains employed by the same employer.” 2004 Iowa 

Acts 1st Extraordinary Sess. ch. 1001, § 20. Thus, to ensure employers 

are not liable for compensating preexisting disabilities incurred at a 

different employer or outside employment, the rule does not apply when 
17

earning capacity has not been reset by the competitive labor market after 

the prior permanent partial disability was established. When earning 

capacity has not been reevaluated by the market, Iowa Code section 

85.34(7)(a) must be observed in determining the compensation paid for 

successive disabilities. 

We recognize the legislature did not establish a specific method of 

apportionment for successive disabilities with different employers when 

no market reevaluation has taken place, as it did for successive 

disabilities with the same employer. See Iowa Code § 85.34(7)(b). In 

Roberts Dairy, we used this observation as a secondary rationale to 

support our conclusion that the legislature did not intend to apportion 

liability for successive disabilities between different employers when a 

competitive labor market reevaluation has occurred. 861 N.W.2d at 823.

While the maxim expressio unius est exclusio alterius tells us to infer all 

omissions are intentional exclusions when “a statute designates a form of 

conduct, the manner of its performance and operation,” and what it 

refers to, 2A Norman J. Singer & Shambie Singer, Statutes and Statutory 

Construction § 47:23, at 406–13 (7th ed. 2014) (footnotes omitted), it does 

not apply without evidence the legislature specifically intended for all 

other options to be excluded, id. § 47:25, at 446; see also Andover 

Volunteer Fire Dep’t v. Grinnell Mut. Reins. Co., 787 N.W.2d 75, 86 (Iowa 

2010) (considering the history and purpose of the statute as well as 

ordinary meaning of a term and its context when construing the meaning 

of a statute). Considering the legislature’s intent to avoid double 

recoveries and double reductions, we find that, although a specific 

method of apportionment was not established, the legislature did not 

intend to exclude from apportionment successive disabilities with 

different employers when no market reevaluation has occurred. The 
18

compensation formula provided by the legislature in section 85.34(2)(u), 

used for all successive disabilities with separate employers, can be used 

in conjunction with the rule in section 85.34(7)(a) to apportion the loss in 

earning capacity when a market reevaluation has not occurred.

In this case, the fresh-start rule recognized by the legislature does 

not apply to refresh Stewart’s earning capacity lost due to the permanent 

partial disability arising from her 2006 injury sustained while working 

for Wal-Mart. She never competed in the labor market after the 

Wal-Mart injury. This is the critical distinction separating this case from 

Roberts Dairy. Thus, Stewart is not entitled to compensation from 

Warren Properties under section 85.34(2)(u) for the forty percent loss of 

earning capacity resulting from the 2006 Wal-Mart injury. 

Notwithstanding, we acknowledge that the absence of a 

competitive-job-market readjustment of an injured worker’s earning 

capacity does not mean their postinjury industrial disability will always 

remain constant. See 7 Arthur Larson & Lex K. Larson, Larson’s 

Worker’s Compensation Law § 81.03[1], at 81-13 (2014) [hereinafter 

Larson] (actual earnings only “create a presumption which may be 

overcome by other evidence showing that the actual earnings do not 

fairly reflect claimant’s capacity”). The absence of a market readjustment 

merely means an injured worker does not receive the benefit of an 

automatically refreshed earning capacity in computing benefits for the 

successive disability. A change in earning capacity can be shown by 

evidence other than new employment, including changes in the 

employee’s functional capacity, education, qualifications, experience, and 

training. See Oscar Mayer Foods Corp. v. Tasler, 483 N.W.2d 824, 831 

(Iowa 1992); see also 7 Larson, §§ 81.05–.06, at 81-19 to 81-21 (citing 

factors like actual pre- and post-injury wages, increased training, and 
19

education as things to be considered when calculating earning capacity). 

Nevertheless, no such evidence was presented in this case to show 

Stewart’s reduced earning capacity resulting from her 2006 Wal-Mart 

injury had been restored in whole or in part as a consequence of

unexpected healing, a change in her qualifications, training, education, 

or other factors prior to the 2009 Warren Properties injury. The 

argument by Stewart that her continued employment with Warren 

Properties following her permanent partial disability while at Wal-Mart 

served to produce a fresh start and effectively apportioned her 

preexisting disability is inconsistent with the legislative intent behind the 

statutory changes. 2004 Iowa Acts 1st Extraordinary Sess. ch. 1001, 

§ 20. The legislature made it clear that the fresh-start rule is now based 

on the reevaluation of earning capacity occurring in the competitive labor 

market with a change of employment. Id. Stewart’s earning capacity 

underwent no reevaluation during her continuing employment with 

Warren Properties.4 Additionally, earning capacity is not necessarily 

coextensive with actual earnings. See 7 Larson, § 81.01, at 81-2 to 81-5

(indicating actual earnings are not the same as earning capacity); see 

also Clark v. Vicorp Rests., Inc., 696 N.W.2d 596, 605 (Iowa 2005) (finding 

a reduction in actual earnings is not necessary to show reduced earning 

capacity). 

Accordingly, the compensation in this case must be computed 

under the formula set out in section 85.34(2)(u), and the apportionment 

rule in section 85.34(7)(a) must be applied to assure that any 

compensation paid by Warren Properties for the 2009 injury is based on 

4There is no evidence in this case that Stewart competed for a job within her 

employment with Warren Properties following the initial injury. 

 
20

the loss of earning capacity resulting from that injury and not the forty 

percent loss of earning capacity sustained by Stewart as a consequence 

of the 2006 injury. 

VI. Statutory Calculation of Successive Disabilities. 

Under the compensation formula for unscheduled injuries in 

section 85.34(2)(u) as amended, employees who suffer successive 

permanent partial disabilities are paid benefits based on their weekly 

earnings for a number of weeks determined by the application of two 

factors.5 Iowa Code § 85.34(2)(u). One factor is the earning capacity 

possessed when the successive injury occurred, and the other factor is 

the reduction in earning capacity, or disability, caused by the successive 

injury. Id. The compensation paid for a successive injury equals “the 

reduction in the employee’s earning capacity caused by the disability . . .

in relation to the earning capacity” possessed at the time of the injury 

relative to 500 weeks. Id. When successive disabilities are involved, this 

formula must be applied in a way that will not make the successive 

employer liable for a preexisting disability arising from an injury 

sustained by the employee while working for another employer. See id. 

§ 85.34(7)(a). To accomplish this statutory requirement, the preexisting 

disability must be apportioned from the formula when it has not been 

effectively apportioned by the competitive labor market through a fresh 

start with a new employer. In other words, without a market adjustment 

through a change in employment, any preexisting disability must be 

5Compensation for scheduled injuries specifically listed in the statute is based 

on a different statutory scheme assigning a number of weeks of compensation for 

different scheduled members. Iowa Code § 85.34(2)(a)–(t). The Second Injury 

Compensation Act governs compensation for certain successive injuries to multiple 

scheduled members. See id. §§ 85.63–.69.

 
21

apportioned so that only the new disability resulting from a successive 

injury is determined based on the two factors considered in the formula. 

See 2004 Iowa Acts 1st Extraordinary Sess. ch. 1001, § 20. The earning 

capacity possessed at the time of the successive injury does not include 

any earning capacity lost as a consequence of a prior work-related injury 

or due to causes unrelated to employment, and the reduction in earning 

capacity caused by the successive injury therefore cannot include any 

earning capacity that was lost and not regained before the successive 

injury at issue in a particular case.6 See id. 

6The application of the compensation formula for unscheduled injuries in cases 

of successive permanent partial disabilities arising from different employers with no 

market reevaluation or other change in earning capacity following the first disability can 

be illustrated with the following example by using percentages consistent with evidence 

of functional impairments and loss of earning capacity common to workers’ 

compensation hearings. A worker injures his back on the job and suffers a ten percent 

permanent impairment of his body as a whole and a forty percent loss of earning 

capacity. Compensation is paid under section 85.34(2)(u) for 200 weeks. The reduction 

in earning capacity caused by the disability was forty percent, and the earning capacity 

possessed when the injury occurred was 100%. Forty percent of 500 weeks equals 200 

weeks. Two years later, while working for a different employer and—as in this case—

without any labor market reevaluation in earning capacity, the same worker is again 

injured on the job. As a result of the new injury, the worker now has a thirteen percent 

permanent impairment to the body as a whole and a fifty percent loss of earning 

capacity. 

Compensation is paid under section 85.34(2)(u) “during the number of weeks in 

relation to five hundred weeks as the reduction in the employee’s earning capacity 

caused by the disability bears in relation to the earning capacity that the employee 

possessed when the injury occurred.” Iowa Code § 85.34(2)(u). We have recognized the 

phrase “in relation to” to require a division computation between the compared 

numbers in other contexts. See In re Marriage of Benson, 545 N.W.2d 252, 255 (Iowa 

1996) (calculating divorcing spouse’s share of pension benefits). In a mathematical 

formulation, the reduction in earning capacity divided by earning capacity possessed is 

equal to the number of weeks compensated divided by 500 weeks. Applying this 

formula to our hypothetical scenario, the reduction in earning capacity caused by the 

successive injury was ten percent (fifty percent minus forty percent) and the earning 

capacity possessed when the injury occurred was sixty percent (100 percent minus forty 

percent). To determine the compensable change in earning capacity, we divide the 

reduction in earning capacity, ten percent, by the earning capacity possessed when the 

successive injury occurred, sixty percent. In this example, that calculation equals 

16.67%, and 16.67% of 500 weeks equals 83.3 weeks. 

 
22

In this case, the commissioner applied the formula without 

apportioning the prior loss of earning capacity attributable to the prior 

injury while working at Wal-Mart. This constituted legal error because 

Stewart’s earning capacity was not refreshed in the competitive labor 

market prior to the 2009 injury. Accordingly, the commissioner must 

recompute the benefits payable to Stewart under the evidence in this 

case. See Swiss Colony, Inc. v. Deutmeyer, 789 N.W.2d 129, 136 (Iowa 

2010) (remanding “for a recalculation of benefits under the proper 

standard”). 

VII. Evidence to Support Successive Disabilities. 

Warren Properties claims it is unnecessary to remand the case to

the commissioner to recompute benefits under the compensation formula 

because the evidence in this case did not support a finding of a new 

disability arising from the February 2, 2009 injury. It argues the only 

logical conclusion that can be drawn from the evidence in this case is the 

unscheduled injury in 2009 did not increase Stewart’s functional 

impairment that arose from the 2006 injury and could not have 

increased her industrial disability beyond the forty percent loss 

compensated by Wal-Mart under the contested case settlement of the 

2006 injury. See Frost v. S.S. Kresge Co., 299 N.W.2d 646, 648 (Iowa 

1980) (reversing the commissioner due to disagreement on a legal 

conclusion concerning the facts of the case). Warren Properties asserts 

Stewart suffered no new disability to her back because her permanent 

physical impairment of thirteen percent after the 2006 injury was not 

increased by the 2009 injury. 

Permanent partial disability results from the loss, or functional 

impairment, of an unscheduled part of the body, such as the back, 

shoulder, neck, or hip. See Iowa Code § 85.34(2)(u). The original 
23

impairment is permanent and cannot form the sole basis for a second 

permanent partial disability claim for benefits. See Yeager v. Firestone 

Tire & Rubber Co., 253 Iowa 369, 374–75, 112 N.W.2d 299, 302 (1961) 

(“If his condition was aggravated . . . so it resulted in the disability found 

to exist, plaintiff was entitled to recover therefor. Of course he was not 

entitled to compensation for the results of a pre-existing injury or 

disease.”). A new or additional permanent impairment must be 

established for an impairment to be the sole basis of a new award. See 

Excel Corp. v. Smithart, 654 N.W.2d 891, 898 (Iowa 2002) (distinguishing 

between separate injuries and cumulative injuries for purposes of 

compensation), superseded by statute, 2004 Iowa Acts 1st Extraordinary 

Sess. ch. 1001, § 12, as stated in Roberts Dairy, 861 N.W.2d at 819 n.1;

cf. Blacksmith v. All-Am., Inc., 290 N.W.2d 348, 350 (Iowa 1980) (holding 

a subsequent change in earning capacity proximately caused by the 

original injury, even without a change in physical condition, may 

constitute a compensable change in industrial disability). 

An award of compensation for a successive unscheduled 

permanent partial disability requires a finding of a loss of earning 

capacity caused by the successive injury. As we have already noted, one 

of the factors in determining the extent of an unscheduled disability is 

permanent physical impairment. In this case, the record includes 

medical evidence tending to prove the permanent functional impairment 

resulting from the 2006 back injury could have been as low as ten 

percent or as high as thirteen percent. The commissioner found Stewart

suffered a thirteen percent functional impairment following the 2009 

injury, with no finding made regarding the 2006 impairment. There is 

evidence in the record tending to prove Stewart’s 2009 injury was not 

confined to the back and resulted in permanent partial functional 
24

impairment to the shoulder. Accordingly, there is substantial evidence in 

the record supporting the commissioner’s finding that the 2009 injury 

caused some increase in Stewart’s permanent physical impairment 

affecting the determination of Stewart’s industrial disability in this case. 

We therefore reject Warren Properties’ contention that the evidence 

pertaining to Stewart’s loss of functional capacity arising from the 2006 

injury precludes a finding that Stewart suffered an industrial disability 

as a consequence of the 2009 injury. Notwithstanding, the 

commissioner must show the process as now required under section 

85.34(2)(u) to reach his decision. See Bridgestone/Firestone v. Accordino, 

561 N.W.2d 60, 62 (Iowa 1997) (indicating the commissioner must detail 

the process used to reach conclusions to permit adequate judicial 

review). The formula requires the commissioner to determine the earning 

capacity when the successive injury occurred and the reduction in 

earning capacity caused by the disabilities.

VIII. Conclusion. 

We conclude the commissioner erred in interpreting section 

85.34(7)(a) and applying the compensation formula under section 

85.34(2)(u). We affirm in part and reverse in part the decision of the 

district court and remand the case to the district court to remand the 

case back to the commissioner for further proceedings consistent with 

this decision. See Staff Mgmt. v. Jimenez, 839 N.W.2d 640, 658 (Iowa 

2013). We tax the costs of this action equally between the parties. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

WITH DIRECTIONS.