Opinion ID: 1721256
Heading Depth: 2
Heading Rank: 2

Heading: Interest Computations

Text: Robbennolt challenges the court's allowance and computation of interest. To compute interest on compensation payments, we must determine (1) the amount of weekly compensation, (2) the date the compensation begins, (3) the date the weekly compensation is due, (4) when payment is made, and (5) how partial compensation payments are applied. Although Snap-On initially made PPD compensation payments of $286.10 per week in September 1991 after Robbennolt's finger was amputated, Snap-On agrees the correct amount of the weekly compensation is $330.64 per week. We look to the statutory provisions for determining when healing period, PPD compensation, and all other workers' compensation begins and when it is due. Iowa Code section 85.34 provides in part: 1. Healing Period. If an employee has suffered a personal injury causing permanent partial disability for which compensation is payable ..., the employer shall pay to the employee compensation for a healing period ... beginning on the date of injury, and until the employee has returned to work.... 2. Permanent Partial Disabilities. Compensation for permanent partial disability shall begin at the termination of the healing period provided in subsection 1 [of this section]. It is clear PPD payments begin at the termination of the healing period. Teel v. McCord, 394 N.W.2d 405, 407 (Iowa 1986). Iowa Code section 85.32 provides in part: Except as to injuries resulting in permanent partial disability, compensation shall begin on the fourth day of disability after the injury. Our statutory provisions are quite specific as to when temporary or PPD compensation begins, see sections 85.32-.34, but are not as clear as to when the payment of compensation is due. Section 85.30 provides: Compensation payments shall be made each week beginning on the eleventh day after the injury, and each week thereafter during the period for which compensation is payable, and if not paid when due, there shall be added to the weekly compensation payments, interest at the rate provided in section 535.3 for court judgments and decrees. When construing statutes, our goal is to ascertain and give effect to the intention of the legislature. Harden v. State, 434 N.W.2d 881, 884 (Iowa 1989). We seek a reasonable interpretation that will best effect the purpose of the statute and avoid an absurd result. Id. When more than one statute is pertinent to the inquiry, we consider the statutes together in an attempt to harmonize them. Id. We conclude section 85.30 provides for an eleven-day grace period following the injury to allow an evaluation and investigation of the injury and a determination of the correct weekly compensation rate before the first compensation payment is due. If the required weekly compensation is timely paid at the end of the compensation week, no interest will be imposed. Likewise, if full payment of the weekly compensation is not made at the end of the compensation period, interest will be imposed. As an example, if Monday is the first day of the compensation week, full payment of the weekly compensation is due the following Monday. In Teel, the employee received weekly healing period payments following his injury on February 4, 1974. These payments stopped after the employee returned to work on May 7. The employee received no PPD payments for more than one year. He later underwent further surgery and was unable to work. He received weekly payments for the various periods of time that he was unable to work, but he did not receive PPD compensation. In 1976, he petitioned for determination of his PPD benefits. The extent of his disability became known after his last operation in 1980. The commissioner awarded him 150 weeks of PPD compensation with interest to accrue from the date of the award in 1982. The district court reversed the ruling and held interest on the award accrued from the day he returned to work on May 7, 1974, excluding those weeks he received healing-period payments. Teel, 394 N.W.2d at 406. We affirmed the district court ruling. We acknowledged there was no question the employee suffered some disability as a result of his injuries. Id. at 407. We recognized the apparent purpose of section 85.30 was to secure compensation for injured employees and their dependents at the earliest time. Id. (quoting Farmers Elevator Co. v. Manning, 286 N.W.2d 174, 180 (Iowa 1979)). We also stated: Thus, the legislature could conclude that when the extent of a disability is unknown until after treatment, the employer should pay interest for the period between the termination of the healing period and the award. After all, the employer in effect is holding the employee's money, and presumably earning interest on it. By paying this amount back the employer is only returning money it does not rightfully own. Id. Robbennolt is entitled to healing period compensation from August 17, 1990, the date he received an injury resulting in PPD. He is entitled to PPD compensation payments at the termination of the healing period. The weekly PPD compensation payment is due at the end of the week for which compensation is being paid. If the weekly PPD payment is not made, interest is added to the compensation due. When an employee receives an injury that results in PPD, the employee is entitled to the PPD compensation for that injury. Although the extent of the disability may be unknown at the time of the injury, the employee is entitled to be fully compensated for the injury. If the compensation payments are not fully made, section 85.30 allows for recovery of interest to assure full compensation to the injured worker. We next consider the issue as to when payments are made and how they are applied. In Kiesecker v. Webster City Custom Meats, Inc., 528 N.W.2d 109, 112 (Iowa 1995), we held weekly compensation payments are made when they are mailed to the claimant, not when they are received. We later approved a district court order that weekly benefit payments should be considered paid when placed in the United States mail addressed to the claimant. Thilges v. Snap-On Tools Corp., 531 N.W.2d 644, 644 (Iowa 1995). Here, the parties have stipulated as to the date the compensation checks were issued and the dates the checks were mailed to or delivered to Robbennolt. Based on our prior decisions, a check mailed directly to Robbennolt is considered paid on the date the check was mailed. As to a check that was delivered to him, the payment is made on the date of delivery. The employer may choose the manner of payment of workers' compensation. We have recently clearly stated how compensation payments are allocated where interest is due. In Christensen v. Snap-On Tools Corp., 554 N.W.2d 254 (Iowa 1996), we recognized our adherence to the United States rule regarding allocation of interest. We said: Under that rule, when partial payments are made they are allocated first toward the interest due. Any payment which exceeds the interest due is applied towards the judgment principal. Subsequent interest is to be computed on the remaining principal. We now adopt that rule regarding late payments in workers' compensation cases. Christensen, 554 N.W.2d at 262. The commissioner has no discretion to ignore the statutory requirement that interest be added to the weekly compensation payment when compensation is payable but not fully paid when due. Neither the commissioner's finding that Snap-On acted timely in assuring that payment of any liquidated compensation due claimant was made to claimant on a timely basis or the district court's conclusion that the record notes that payment was consistently made during the required period is supported by the facts in the record. The assessment of a ten percent annual interest (current rate under section 535.3 as provided in section 85.30) is not a penalty; it merely provides full compensation to the worker. However, the imposition of interest may discourage delay in payment of benefits and encourage payment of full compensation to the injured employees and their dependents at the earliest time. Because the commissioner and court failed to award interest as provided by statute, we reverse the court with instructions to remand to the commissioner for the determination and allowance of interest in accordance with this opinion.