Opinion ID: 1931968
Heading Depth: 1
Heading Rank: 4

Heading: Whether the District Court Erred in its Interpretation and Application of Iowa Code Sections 85B.11 and 85B.8.

Text: An employer is liable, as provided in this chapter and subject to the provisions of chapter 85, for an occupational hearing loss to which the employment has contributed, but if previous hearing loss, whether occupational or not, is established by an audiometric examination or other competent evidence, whether or not the employee was exposed to excessive noise level within six months preceding the test, the employer is not liable for the previous loss, nor is the employer liable for a loss for which compensation has previously been paid or awarded. The employer is liable only for the difference between the percent of occupational hearing loss determined as of the date of the audiometric examination used to determine occupational hearing loss and the percentage of loss established by the pre-employment audiometric examination. An amount paid to an employee for occupational hearing loss by any other employer shall be credited against compensation payable by an employer for the hearing loss. An employee shall not receive in the aggregate greater compensation from all employers for occupational hearing loss than that provided in this section for total occupational hearing loss. A payment shall not be made to an employee unless the employee has worked in excessive noise level employment for a total period of at least ninety days for the employer from whom compensation is claimed. (Emphasis added.) Iowa Code section 85B.8 provides, in pertinent part: A claim for occupational hearing loss due to excessive noise levels may be filed six months after separation from the employment in which the employee was exposed to excessive noise levels. The date of the injury shall be the date of the occurrence of any one of the following events: 1. Transfer from excessive noise level employment by an employer. 2. Retirement. 3. Termination of the employer-employee relationship. . . . . (Emphasis added.) B. The parties' contentions. Predictably, the parties' contentions follow the reasoning of the commissioner and the district court, respectively. Weyerhaeuser argues that section 85B.11 provides an affirmative defense to employers and demonstrates the legislature's intent to hold an employer harmless for an employee's preexisting hearing loss. Weyerhaeuser agrees with the commissioner that pursuant to section 85B.11, an employer is not liable for hearing loss incurred under a prior employer if the loss has already been compensated or if the prior loss has been documented. In addition, pursuant to section 85B.8, the termination of the employer-employee relationship triggers the applicable filing period for an occupational hearing-loss claim. Therefore, Weyerhaeuser concludes, Grundmeyer's date of injury, for purposes of filing a claim for hearing loss incurred before Weyerhaeuser's acquisition of the box factory, was August 1, 1987, the date on which her relationship with Mead ended. In addition, Weyerhaeuser contends the district court erred in applying the last injurious exposure rule of Iowa Code section 85A.10 to this case. See Iowa Code § 85A.10 (employer in whose employment the employee was last injuriously exposed to the hazards of an occupational disease is liable for the compensation). Weyerhaeuser argues that the legislature's failure to include such a provision in chapter 85B shows its intent not to apply such a rule in occupational hearing-loss cases. Grundmeyer contends that pursuant to section 85B.11, an employer is liable for an occupational hearing loss to which the employment has contributed. Grundmeyer points out that section 85B.11 does not limit an employer's liability to a loss to which the employer has contributed. Therefore, Grundmeyer concludes, a successor employer is responsible for the occupational hearing loss to which the employment contributed, regardless of whether some of the employment was performed for a different owner of the employment. Grundmeyer further contends that no change in employment occurred in this case when Weyerhaeuser took over the box factory. To support this contention, Grundmeyer points to several facts on which the district court relied: there was no change in location of employment, Grundmeyer's job and job duties remained the same, her pay remained the same, neither her employment nor the employment of any fellow employees was terminated, there were no changes in employee policy or procedures, and Grundmeyer's seniority date continued from her first day of work for Mead. Finally, Grundmeyer contends the purpose and policy behind our workers' compensation law  to benefit workers  support an interpretation of chapter 85B that would render the successor employer liable for the entire occupational hearing loss. C. Analysis. For reasons that follow, we think Weyerhaeuser has the better argument. Workers' compensation law is statutory and certain well-recognized principles control its construction. Ehteshamfar, 555 N.W.2d at 453. The ultimate goal is to ascertain and give effect to the intention of the legislature. John Deere Dubuque Works v. Weyant, 442 N.W.2d 101, 104 (Iowa 1989). We seek a reasonable interpretation that will best effectuate the purpose of the statute and avoid absurd results. Id. We consider all parts of the statute together without attributing undue importance to any single or isolated portion. Id. When we are reviewing the commissioner's interpretation of the statutes governing the agency, we defer to the agency's expertise, but reserve for ourselves the final interpretation of the law. IBP, Inc. v. Harker, 633 N.W.2d 322, 325 (Iowa 2001). Because the primary purpose of the workers' compensation statute is to benefit the worker, we liberally construe the statute in favor of the worker. Id. However, there is one very important limitation on this rule of construction: We liberally construe the statute insofar as statutory requirements permit. Id. In Muscatine County v. Morrison, we had the first opportunity to interpret Iowa Code chapter 85B. 409 N.W.2d 685, 687 (Iowa 1987). We observed that the legislature enacted Iowa Code chapter 85B, the Occupational Hearing Act, to make it easier for a claimant to prove the compensability of hearing loss attributable to prolonged exposure to noise at work. Id. Before passage of the Act, workers suffering such a loss faced nearly insurmountable procedural and substantive obstacles in their attempts to recover benefits. Id. However, the Act does provide some limitations. For example, an employer is not liable if a hearing loss incurred under a prior employer has been compensated, or if the prior hearing loss has been documented. Iowa Code § 85B.11. The Act provides a method by which an employer can limit its liability for gradual hearing loss by establishing previous hearing impairment with a pre-employment audiometric examination. Id. In addition, we recognized in Morrison that section 85B.11 differs from the occupational disease statute [Iowa Code section 85A.10] that provides the last employer is liable for all compensation payable for an occupational disease. Morrison, 409 N.W.2d at 688 n. 2. Given these limitations, we doubt the legislature intended the language to which the employment has contributed in section 85B.11 and the language after the separation from the employment in section 85B.8 to have the broad meaning that the district court gave such language. In effect, the district court's interpretation would make the last employer liable for all compensation payable for an occupational hearing loss. If the legislature had intended such a result, it could have easily said so, as it did for occupational diseases. Additionally, we believe the district court's application of the successor in interest liability theory was not supported by the evidence. Three events may constitute the date of injury and trigger the filing of a claim: 1. [t]ransfer from excessive noise exposure employment by an employer[,] 2. [r]etirement[,][or] 3. [t]ermination of the employer-employee relationship. Iowa Code § 85B.8. Here, Grundmeyer was not transferred from an excessive noise environment. She did, however, retire. The date of injury as to Weyerhaeuser is therefore her retirement date, August 31, 1996. As the commissioner noted, the issue narrows to whether Grundmeyer had an earlier date of injury in 1987, when the ownership of the box factory changed hands. On this question, the commissioner found two facts significant. First, Mead employees were required to reapply for their positions if they wished to work for Weyerhaeuser. Second, although none of Grundmeyer's work conditions changed, her employer did change. The commissioner found that this is not a case where an employer merely changes its corporate name. A new employer and a new employer-employee relationship occurred in 1987. Without expressly saying so, the commissioner made a finding that Weyerhaeuser was not a successor in interest to Mead. A successor in interest has been defined as [o]ne who follows another in ownership or control of property. In order to be a successor in interest, a party must continue to retain the same rights as [the] original owner without [a] change in ownership and there must be [a] change in form only and not in substance.... In [the] case of corporations, the term ordinarily indicates statutory succession as, for instance, when [a] corporation changes its name but retains the same property. Black's Law Dictionary 1431-32 (6th ed.1990) (quoting City of New York v. Turnpike Development Corp., 36 Misc.2d 704, 233 N.Y.S.2d 887, 890 (N.Y.Sup.Ct. 1962)). We think substantial evidence supports the commissioner's finding that Weyerhaeuser was not a successor in interest to Mead and for that reason a new employer-employee relationship occurred in 1987. The result might have been different had there been merely a change in name as the commissioner suggested. Or had there been a merger where the surviving corporation succeeds to both the rights and liabilities of the constituent corporation. Cf. LTV Steel Co. v. Workers' Compensation Appeal Bd., 562 Pa. 205, 754 A.2d 666, 676-77 (2000) (holding that substantial evidence supported workers' compensation judge's decision that company, which acquired business through merger, was a successor in interest and not a new employer and, thus, was the sole employer and responsible for all of claimant's hearing loss). Here, Weyerhaeuser purchased some of Mead's assets and assumed only limited liabilities. In these circumstances, we have said there is no successor-in-interest liability. DeLapp v. Xtraman, Inc., 417 N.W.2d 219, 220 (Iowa 1987) (The general rule is that where one company sells or otherwise transfers all its assets to another company, the purchasing company is not liable for the debts and liabilities of the transferor.). We have also recognized four exceptions to this rule: (1) there is an agreement to assume such debts and liabilities of the selling corporation; (2) there is a consolidation (or merger) of the two corporations; (3) the purchasing corporation is a mere continuation of the selling corporation; or (4) the transaction was fraudulent. Arthur Elevator Co. v. Grove, 236 N.W.2d 383, 391-92 (Iowa 1975). There is no record evidence to support exceptions 1, 2, or 4. As to exception 3  the purchasing corporation is a mere continuation of the selling corporation  some facts tend to support the exception. For example, Grundmeyer's job site, rate of pay, and work rules remained the same, and her hired date for purposes of seniority and pension benefits remained the same. However, the controlling factor is whether the transferor continues to own and control the new corporation. Id. at 392-93. There was no record evidence that the seller  Mead  owned and controlled Weyerhaeuser. The commissioner's implicit finding that Weyerhaeuser was not a successor in interest constituted a finding that none of the four exceptions applied. Substantial evidence supports this finding. Weyerhaeuser is therefore liable only for any hearing loss that resulted after August 1, 1987, the date the company purchased Mead's assets. That brings us to the final issue in this case.