Opinion ID: 2093705
Heading Depth: 1
Heading Rank: 6

Heading: The Record Supplementation Issue.

Text: Humboldt Schools contends the district court abused its discretion in not allowing it to supplement the record in the judicial review proceeding to show an intervening settlement of approximately $2 million in the Fleming Estate's medical malpractice case against Dr. Hizon. The purpose of taking the additional evidence was to obtain a credit for workers' compensation benefits paid pursuant to Iowa Code section 85.22(1), which provides: If compensation is paid the employee... under this chapter, the employer by whom the same was paid, or the employer's insurer which paid it, shall be indemnified out of the recovery of damages to the extent of the payment so made, with legal interest, except for such attorney fees as may be allowed, by the district court, to the injured employee's attorney or the attorney of the employee's personal representative, and shall have a lien on the claim for such recovery and the judgment thereon for the compensation for which the employer or insurer is liable. If a court finds additional evidence is material and the party seeking to supplement the record has shown a good reason for not presenting it before the agency, the court is to remand the matter to the agency for a new determination. Zenor v. Iowa Dep't of Transp., 558 N.W.2d 427, 431 (Iowa App.1996). Evidence is material if it is reasonably capable of influencing an agency's decision. Interstate Power Co. v. Iowa State Commerce Comm'n, 463 N.W.2d 699, 702 (Iowa 1990). In this case, the claimant contends our decision in Toomey v. Surgical Services, P.C., 558 N.W.2d 166 (Iowa 1997), precludes Humboldt Schools from obtaining such a lien, so any evidence to support the claim for a lien is not material. Toomey considered whether a workers' compensation carrier could assert an Iowa Code section 85.22(1) lien against an employee's recovery in a medical negligence action against the physician who treated the employee's injury. We held it could not, for policy reasons, Toomey, 558 N.W.2d at 170, and invited the legislature to respond if it believed this result would have an adverse effect ... on employers and their workers' compensation carriers and then act, or not, as it deems appropriate concerning future cases. The legislature has not acted to negate the ruling of Toomey. We hold that, under Toomey, the evidence sought to be added to the record was not material because the tort recovery could not be subjected to the employer's lien in any event. The district court therefore did not abuse its discretion in denying the request to supplement the record. Of course, Humboldt Schools' failure to obtain a lien under section 85.22(1) will not deprive it of its underlying claim for indemnity; the lien and the right to indemnification are separate matters. See Shirley v. Pothast, 508 N.W.2d 712, 717 (Iowa 1993); Armour-Dial, Inc. v. Lodge & Shipley Co., 334 N.W.2d 142, 145 (Iowa 1983). AFFIRMED.