Court Opinion

ID: 4092896
Source: CourtListenerOpinion
Date Created: 2016-10-26 15:08:03.71871+00
Date Added: 2024-06-11T14:36:09.582663
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                     No. 15-1786
                               Filed October 26, 2016

STARK CONSTRUCTION and CHARLES STARK,
    Petitioners-Appellees,

vs.

JOHN LAUTERWASSER,
     Respondent-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Linn County, Ian K. Thornhill,

Judge.

      An employee appeals following the district court’s order remanding this

workers’ compensation case to the agency. REVERSED AND REMANDED.

      Thomas M. Wertz and Daniel J. Anderson of Wertz, Drake & Anderson,

Cedar Rapids, for appellant.

      Matthew G. Novak and Bradley J. Kaspar of Pickens, Barnes &

Abernathy, Cedar Rapids, for appellees.

      Considered by Vogel, P.J., and Doyle and Bower, JJ.
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VOGEL, Presiding Judge.

        John Lauterwasser injured his hand on a saw while working in September

2009.    After receiving treatment, he filed a claim for workers’ compensation

benefits against Stark Construction in 2010. After hearing testimony in 2011, the

deputy    workers’   compensation      commissioner     denied    benefits,   finding

Lauterwasser was not an employee of Stark Construction but was instead a

subcontractor. On intra-agency appeal, the deputy’s decision was reversed, and

Lauterwasser was awarded benefits.

        Stark Construction sought judicial review with the district court, and the

court concluded the agency erred in finding Lauterwasser was an employee.

The district court reversed the agency’s decision, finding the agency’s conclusion

that Lauterwasser was an employee was “illogical.” The case was appealed to

this court, and we reversed the district court’s judicial review decision, concluding

substantial evidence supported the agency’s factual findings and its application

of law to the facts was not irrational, illogical, or wholly unjustifiable. See Stark

Constr. v. Lauterwasser, No. 13-0609, 2014 WL 1495479, at *1 (Iowa Ct. App.

Apr. 16, 2014). However, because Lauterwasser’s employment status was not

the only issue raised on judicial review, we remanded the case to the district

court “for consideration of the remaining challenges to the commissioner’s

award.” See id. at *9.

        On remand the district court noted the only remaining issue was Stark

Construction’s claim Lauterwasser failed to give timely notice of his injury, which

would have precluded him from recovering benefits under Iowa Code section

85.23 (2009). The district court stated there was no agency ruling on the lack-of-
                                         3

notice issue but that the issue of the timeliness of notice was a factual

determination. It then remanded the matter to the agency “for issuance of a

decision on [Stark Construction’s] argument that [Lauterwasser] failed to give

notice of his work injury under Iowa Code §§ 85.23 and 85.24.”

       Lauterwasser appeals, claiming the district court’s remand to the agency

was improper because the lack of agency ruling on this issue is indicative of

Stark Construction’s failure to preserve error on the issue of its notice defense for

judicial review. Lauterwasser claims that the district court should have concluded

the lack of error preservation precluded Stark Construction from raising the

notice issue on judicial review and simply issued a ruling affirm the agency’s final

decision awarding him benefits. In response, Stark Construction asserts this

court does not have jurisdiction to hear this appeal because Lauterwasser filed

an improper 1.904(2) motion that failed to toll the time for filing the notice of

appeal. Stark Construction therefore claims this appeal is untimely, depriving

this court of jurisdiction.   In the alternative, Stark Construction asserts the

remand to the agency was proper as the district court did not have “jurisdiction”

to address the notice defense or error preservation claim without first having a

ruling from the agency.

I. The Validity of the Rule 1.904(2) Motion.

       Before we can address the merits of Lauterwasser’s appeal, we first must

determine whether this matter was timely appealed. A notice of appeal must be

filed within thirty days after the final order or judgment.       Iowa R. App. P.

6.101(1)(b). “A failure to file a timely notice of appeal leaves us without subject

matter jurisdiction to hear the appeal.” Hills Bank & Trust Co. v. Converse, 772
                                           4

N.W.2d 764, 771 (Iowa 2009). The notice of appeal in this case was filed well

beyond the thirty-day deadline; however, it was filed within thirty days of the

district court’s ruling on Lauterwasser’s motion under Iowa Rule of Civil

Procedure 1.904(2). A proper motion under rule 1.904(2) will toll the time for

filing a notice of appeal. See Iowa R. App. P. 6.101(1)(b); In re Marriage of

Okland, 699 N.W.2d 260, 265–66 (Iowa 2005) (“[A]n untimely or improper rule

1.904(2) motion cannot extend the time for appeal.”). So we must determine

whether the 1.904(2) motion was proper.

       When a rule 1.904(2) motion amounts to nothing more than a
       rehash of legal issues previously raised, we will conclude the
       motion does not toll the time for appeal. Explore Info. Servs. v. Ct.
       Info. Sys., 636 N.W.2d 50, 57 (Iowa 2001). By contrast, when used
       to obtain a ruling on an issue that the court may have overlooked,
       or to request the district court enlarge or amend its findings when it
       fails to comply with rule 1.904(1), the motion is proper and will toll
       the time for appeal.

Baur v. Baur Farms, Inc., 832 N.W.2d 663, 668–69 (Iowa 2013).

       In this case, the district court, in its ruling, articulated Lauterwasser’s claim

was that Stark Construction failed to preserve error on its lack-of-notice defense

because the agency failed to rule on the defense and Stark Construction’s failed

to file a motion for a rehearing in the agency before it filed its petition for judicial

review.   The district court, however, did not rule on Lauterwasser’s error-

preservation issue; instead it remanded the matter to the agency to issue a

decision on the lack-of-notice defense. Because the district court did not decide

Lauterwasser’s error-preservation claim, the rule 1.904(2) motion was proper as

it was used “to obtain a ruling on an issue that the court may have overlooked.”
                                         5

Id. at 669. We thus conclude the notice of appeal was timely filed, giving this

court jurisdiction to hear Lauterwasser’s appeal.

II. The District Court’s Remand to the Agency.

       Lauterwasser claims the district court erred in remanding the matter to the

agency for the agency to issue a decision on Stark Construction’s lack-of-notice

defense. Lauterwasser claims Stark Construction failed to get a ruling from the

agency on its affirmative defense before filing its petition for judicial review, and

as a result, Stark Construction has waived the issue.

       Stark Construction asserts, and we agree, that it raised the affirmative

defense of the lack of notice before both the deputy commissioner at the

arbitration hearing and before the commissioner on intra-agency appeal.

However, when the agency issued its appeal decision awarding Lauterwasser

benefits, there is no mention of Stark Construction’s lack-of-notice defense.

       When an agency fails to address an issue in its ruling and a party
       fails to point out the issue in a motion for rehearing, we find that
       error on these issues has not been preserved. Our respect for
       agency processes in administrative proceedings is comparable to
       that afforded to district courts in ordinary civil proceedings. Just as
       we do not entertain issues that were not ruled upon by the district
       court and that were not brought to the district court’s attention
       through a proper posttrial motion, Meier v. Senecaut, 641 N.W.2d
       532, 540 (Iowa 2002), we decline to entertain issues not ruled upon
       by an agency when the aggrieved party failed to follow available
       procedures to alert the agency of the issue.

KFC Corp. v. Iowa Dep’t of Revenue, 792 N.W.2d 308, 329 (Iowa 2010). A

court’s consideration of issues on judicial review “is limited to questions

considered by the agency.”        Office of Consumer Advocate v. Iowa State

Commerce Comm’n, 465 N.W.2d 280, 283 (Iowa 1991).                Issues not raised

before, or decided by, the agency are deemed waived on judicial review. Id.
                                         6

      The district court remanded the case to the agency pursuant to its

authority under Iowa Code section 17A.19(7).        Iowa Code section 17A19(7)

provides:

              In proceedings for judicial review of agency action a court
      may hear and consider such evidence as it deems appropriate. In
      proceedings for judicial review of agency action in a contested
      case, however, a court shall not itself hear any further evidence
      with respect to those issues of fact whose determination was
      entrusted by Constitution or statute to the agency in that contested
      case proceeding. Before the date set for hearing a petition for
      judicial review of agency action in a contested case, application
      may be made to the court for leave to present evidence in addition
      to that found in the record of the case. If it is shown to the
      satisfaction of the court that the additional evidence is material and
      that there were good reasons for failure to present it in the
      contested case proceeding before the agency, the court may order
      that the additional evidence be taken before the agency upon
      conditions determined by the court. The agency may modify its
      findings and decision in the case by reason of the additional
      evidence and shall file that evidence and any modifications, new
      findings, or decisions with the reviewing court and mail copies of
      the new findings or decisions to all parties.

This provision provides a district court with the discretion to remand a matter to

the agency in a contested case proceeding when a party articulates a reason

additional evidence is material and good reasons exist for failing to present that

evidence to the agency in the initial contested case proceeding. Iowa Code

§ 17A.19(7). The remand ordered in this case does not involve a party needing

to present additional evidence to the agency in a contested case proceeding.

Instead, the district court is requesting the agency to simply rule on an issue

previously presented to the agency based on the existing factual record. Thus,

section 17A.19(7) does not provide the court with the ability to remand the matter

to the agency for a ruling on Stark Construction’s lack-of-notice defense.
                                         7

       We agree with Lauterwasser the district court erred in remanding the case

to the agency for a ruling on an issue previously presented to the agency. In light

of Stark Construction’s failure to preserve error by neglecting to file a motion for

rehearing when the agency did not rule on its lack-of-notice defense prior to filing

the petition for judicial review, the district court should have denied Stark

Construction’s petition for judicial review and affirmed the agency’s final decision

awarding benefits to Lauterwasser.      We reverse the district court’s decision

remanding this matter to the agency and remand for the entry of an order

consistent with this opinion.

       REVERSED AND REMANDED.