Opinion ID: 1996425
Heading Depth: 1
Heading Rank: 3

Heading: Background of Governing Legal Theories.

Text: Before addressing specific issues raised on appeal, we will review the underlying legal theories driving the central dispute presented on appeal. The parties do not dispute that Smithart sustained a work-related injury resulting in disability, and that compensation is due. The disagreement concerns the amount of disability and whether the disability resulted from a single injury or two separate and discrete cumulative injuries. The dispute over the number and nature of the injuries arises because the amount of compensation can vary dramatically depending on whether a disability results from a single injury or from two separate injuries. The reason for the difference in the amount of compensation relates to the impact of the cumulative injury rule and the full-responsibility rule. We first examine these two rules and then consider their impact on the issues presented on appeal. We first recognized the cumulative injury rule in McKeever Custom Cabinets v. Smith, 379 N.W.2d 368, 373-74 (Iowa 1985). In McKeever, a worker developed a gradual injury to his wrist from a series of work activities beginning when he commenced employment. There was no single disabling injury, but the condition eventually caused the worker to quit his employment three years later. He then filed a report of injury and instituted a workers' compensation claim a few months later. The employer argued that the claim was not filed within the two-year statutory period of limitations because the work activity that first gave rise to the injury began when he started his employment. We rejected the argument and adopted a rule that the injury in such a case does not occur until the disability is apparent, such as that time when it prevents the employee from working. McKeever, 379 N.W.2d at 374; see also Ellingson v. Fleetguard, Inc., 599 N.W.2d 440, 444 (1999). In doing so, we recognized that workers' compensation liability was not confined to disabilities arising from accidents, but includes disabilities which gradually develop over a period of time. McKeever, 379 N.W.2d at 373. This principle is known as the cumulative injury rule. As subsequently developed by other cases, it simply means that when a worker develops a disability over time from work activities, the compensable injury itself occurs when the claimant becomes aware he or she suffers from a condition or injury and such condition or injury was caused by the claimant's employment. Herrera, 633 N.W.2d at 288. It is also known as the gradual injury rule. McKeever, 379 N.W.2d at 373. We have also adopted what we call the full-responsibility rule. See Second Injury Fund v. Nelson, 544 N.W.2d 258, 265 (Iowa 1995). This rule provides, [w]hen there are two successive work-related injuries, the employer liable for the second injury `is generally held liable for the entire disability resulting from the combination of the prior disability and the present injury.' Id. (quoting Celotex Corp. v. Auten, 541 N.W.2d 252, 254 (Iowa 1995)). This rule is actually another way of describing our general rule governing apportionment of disability in workers' compensation proceedings. See generally Celotex Corp., 541 N.W.2d at 254. Absent a statute, we generally do not apportion the disability of two successive work-related injuries. [1] Id. These two rules have no doctrinal relationship, but converge to produce different amounts of compensation in those cases where disability results from work-related injuries or conditions to the same area of the body during the course of employment. [2] Generally, the full-responsibility rule means a worker will receive greater total compensation for such an injury if the disability results from two separate injuries causing disability as opposed to a single cumulative injury, or the aggravation of a prior work-injury. See Floyd v. Quaker Oats, 646 N.W.2d 105, 108-09 (Iowa 2002). For example, if a worker sustains a back injury resulting in a permanent partial disability of twenty percent and later, after returning to work, sustains a second separate back injury resulting in a permanent partial disability of forty percent, the worker is entitled to be compensated for the forty percent disability based on the second injury even though the worker has previously received compensation for the twenty percent disability. Although the worker has a forty percent disability, the worker actually receives a total disability award between the two disabilities of sixty percent. On the other hand, if multiple injuries to a single area of the body are considered to be cumulative in nature, the employer is only required to pay compensation based on the disability resulting from the cumulative injury. [3] In this situation, the compensation is based on the percentage of disability at the time of the cumulative injury. In Ellingson, we acknowledged that one benefit to a worker who establishes two separate injuries, as opposed to a subsequent aggravation of a prior injury, is that the second injury claim is compensated using current wages, which will normally provide a higher wage base and result in greater compensation to the worker. See Ellingson, 599 N.W.2d at 444. The present case, however, illustrates even a greater benefit to a worker who establishes two separate injuries, as opposed to a single cumulative injury or an aggravation of a prior injury. If a cumulative injury is established, the employer only pays compensation based on the disability resulting from that single injury. In such a case, the full-responsibility rule does not apply, and the claimant is compensated for the amount of the resulting disability. However, if two separate injuries are established or if two separate cumulative injuries are established, compensation is based on the existence of the two separate disabilities, both of which are recoverable under the full-responsibility rule, unless otherwise provided by statute. Excel forcefully argues that the rule against apportionment of disability resulting from separate and discrete injuries to the same portion of the body permits a worker to piecemeal a chronic work-related condition to a single area of the body in such a manner that the worker will eventually be awarded benefits for a disability that could exceed one hundred percent of the whole body. As applied to this case, Excel argues it is unfair to be required to pay out total benefits equal to a sixty percent disability to Smithart when he has only sustained a forty percent disability. Excel adumbrates that such a result will become a powerful disincentive for employers to re-employ injured workers. We explained the rationale for the full-responsibility rule in Celotex. Celotex Corp., 541 N.W.2d at 254-55. Essentially, it is built on the concept that an industrial disability is not a final indicator of the degree to which a worker can use his or her body to earn wages, and it does not consider the human capacity and spirit to overcome a disability through rehabilitation, adjustments, simple perseverance, or other methods. See id. Thus, regardless of the disability sustained, a worker who returns to work does so as a working unit. Id. If the worker has resumed employment for the employer by performing the assigned work, there is no reason to treat the worker as disabled in the event a second disabling injury is sustained. Thus, an employer receives no credit or apportionment for the previous compensation paid. The perceived unfairness articulated by Excel not only ignores this working unit rationale for the rule against apportionment of successive work-related injuries, but also overlooks the predicate requirement for the full-responsibility rule that each injury resulting in increased disability be separate and discrete. See Floyd, 646 N.W.2d at 109; Ellingson, 599 N.W.2d at 444-45. The separate and discrete requirement prevents a worker from transforming a chronic condition into multiple injuries, and obtaining the multiple separate recoveries feared by Excel. Thus, employers are protected against paying for the prior disability over and over by the separate and discrete requirement. Additionally, the distinction between the manner in which compensation is awarded for a single cumulative injury to an area of the body and two separate and discrete injuries to the same area has been partially diffused by section 85.36(9)(c). This section alters our apportionment rule, in some instances, by providing, in relevant part: In computing the compensation to be paid to any employee who, before the accident for which the employee claims compensation, was disabled and drawing compensation under the provisions of this chapter, the compensation for each subsequent injury shall be apportioned according to the proportion of disability caused by the respective injuries which the employee shall have suffered.... Iowa Code § 85.36(9)(c). Thus, apportionment of disability between two work-related injuries is statutorily permitted when the worker is disabled and drawing compensation at the time of the accident for which the employee claims compensation. Id. In this case, the industrial commissioner found Smithart suffered two separate disabilities, and Excel challenges the evidence to support this finding. Before addressing this question, however, we observe that the benefit to the worker of basing a claim for compensation on two separate injuries, as opposed to one cumulative or gradual injury, must be considered in light of the legislative exception to the full-responsibility rule. If this limitation applies in this case, the impact of the distinction between the existence of a single injury or separate injuries is diminished. The exception to the full-responsibility rule carved out by our legislature in section 85.36(9)(c) applies in those cases where a worker makes a claim for a work activity injury but was disabled and drawing compensation based on a prior injury at the time of the accident giving rise to the claim. The same working unit rationale that supports the full-responsibility rule likely supports the statutory exception. If a worker was disabled from a prior injury and still receiving benefits for that prior injury, the worker has not yet, in theory, resumed employment as a working unit. Thus, when two injuries occur too close in time, it is the apparent judgment of our legislature that the worker loses his or her entitlement to two separate compensable disabilities and may only recover compensation for the total disability as a result of both injuries. We recognize section 85.36(9)(c) applies only when the employee is disabled and drawing compensation for the first injury at the time of the second injury subject to the compensation claim. Of course, Smithart was not actually receiving compensation at the time of the second injury in this case because the first claim had not yet been adjudicated. Nevertheless, compensation awards are made retroactive to the date of injury and we apply the statute in the same manner. Moreover, the rationale for apportionment of disability applies to either situation. The worker was disabled at the time of the second injury and the second injury occurred before the compensation period for the disability ended. Nevertheless, the court of appeals held that section 85.36(9)(c) did not apply to this case based on the theory that apportionment takes place only when the prior injury is unrelated to employment. Thus, it reasoned that any statute providing for apportionment is also limited to cases where the prior injury is unrelated to employment. This approach, however, misreads our prior cases. In developing what we have now labeled as the full-responsibility rule, we made an exception in those cases where a prior injury or illness, unrelated to the employment, independently produces some ascertainable portion of the ultimate industrial disability following a second injury. Celotex, 541 N.W.2d at 255. Thus, we permit apportionment where the prior injury was `unrelated to the employment.' Tussing v. George A. Hormel & Co., 461 N.W.2d 450, 453 (Iowa 1990) (citation omitted). This was a judicially created restriction to the application of the rule. Yet, our legislature created its own exception in those cases where disabilities overlap. This exception stands on its own, and is not affected by our exception involving prior injuries unrelated to employment. Accordingly, whether or not the injury in this case is a cumulative injury, an aggravation of a prior injury, or two separate and distinct injuries, Smithart cannot be compensated for more than his ultimate percentage of disability because his periods of disability overlap. The major dispute between the parties, therefore, loses much of its fight, and is reduced to a determination over the base wage to use in calculating benefits. We now turn to the issues presented.