Court Opinion

ID: 9727527
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:41:48.48778+00
Date Added: 2024-06-11T18:25:39.781787
License: Public Domain

CADY, J.
(specially concurring).
I concur in the result of this case, but respectfully disagree with the narrow in*310terpretation of the penalty statute given by the majority in deciding the case. Even though this interpretation leads to the correct result under these facts, it may fail to fully protect workers in other cases from employers who have a reasonable basis to deny a worker’s claim but unnecessarily prolong the claim process by unreasonably failing to communicate the reason for the denial of the claim to the worker. This interpretation has also unnecessarily required us to disavow a prior case. Our principles of judicial restraint require us to strive to interpret language of our prior cases, when possible, to support, not disavow, their pronouncements. See Kiesau v. Bantz, 686 N.W.2d 164, 180 (Iowa 2004) (Cady, J., dissenting) (collecting cases).
The majority interprets section 86.13 to mean that penalty benefits are permitted only when the employer or insurer had “no reasonable basis for the denial of the claim.” In other words, a worker cannot receive penalty benefits when the employer had a reasonable basis to deny the claim. While this interpretation appears logical and sound, it will not lead to the correct result in all circumstances. I believe the correct interpretation of section 86.13 examines whether there was a reasonable basis for the delay in benefits, not only whether there was a reasonable basis for the denial of benefits.
The salient facts that give rise to the claim for penalty benefits in this case must be kept in mind. Shortly after Craddock returned to work following her injury, Keystone asked the treating physician-if she hád suffered any permanent disability. In October 1998, the physician responded that Craddock had a whole-body impairment rating of seven percent. After receiving this information, Keystone did not voluntarily pay permanent partial disability benefits. Moreover, it was not until November 15, 1999, more than a year later, that Keystone first informed Craddock that permanent partial disability benefits would not be paid. The reason given by Keystone for not paying benefits after receiving the permanency rating was that it did not believe that Craddock suffered any industrial disability from her injury.
Under these facts, Craddock ultimately argued that Keystone had a duty to convey its denial of permanent partial disability benefits in October 1998, at the time it decided not to voluntarily pay permanent partial disability benefits, not silently sit on its hands until November 1999. In other words, Craddock claimed a penalty was required because Keystone’s actions, or inactions, resulted in an unreasonable delay in the payment of benefits.
The majority resolves this claim by concluding that the delay was reasonable because Keystone had a reasonable basis to contest the claim, and the language of the penalty statute does not require an employer to give a worker notice of its reasons to deny benefits. While I agree with both propositions, I believe the penalty statute still requires us to decide whether there was a delay in the commencement of benefits and, if so, was the delay, reasonable. It is not enough for the majority to conclude that Keystone had a reasonable basis to contest the benefits and that the statutory notice, see Iowa Code § 86.13 (“If commenced, the payments shall be terminated only when the employee has returned to work, or upon thirty days’ notice stating the reason for the termination .... ”), did not apply. This is because a delay in the payment of benefits can occur not only when there are reasonable grounds to contest a claim, but also when the employer utilizes unreasonable investigative or other stonewalling tactics that needlessly prolong the ultimate payment of benefits. We have recognized as much. See Robbennolt v. Snap-On Tools *311Corp., 555 N.W.2d 229, 237-38 (Iowa 1996) (per curiam); see also Christensen v. Snap-On Tools Corp., 554 N.W.2d 254, 260 (Iowa 1996) (per curiam) (“The focus is on whether timely payment of the benefits due was made and if not, whether there was a reasonable excuse for the failure to make timely payment of the amount owed.”)- In other words, an employer may have a reasonable basis to contest a claim, but can still unreasonably delay the claim by engaging in delay tactics. Yet, the majority’s failure to address the real issue — whether delay that did occur was reasonable — can only lead to the conclusion that the issue is not important when a reasonable basis for contesting benefits is found. Consequently, the approach taken by the majority gives the false impression that no penalty can be imposed against an employer when the employer is found to have had a reasonable basis to contest the claim, even when there were other unreasonable procedural reasons for the delay. Of course, the obvious problem with this approach is that it fails to distinguish between procedural and substantive reasons for delay, and it fails to recognize how procedural matters can independently be responsible for a delay. To a worker, unreasonable procedural delay is just as menacing as delay without a meritorious substantive reason.
In this case, the dispositive matter is not that the basis for Keystone’s contest of benefits was reasonable, or that the statute does not require notice. Instead, it is the facts that show the delay in this case was reasonable. The delay was reasonable because Craddock never asked for permanent partial disability benefits, and Keystone did not do anything to deprive Crad-dock of the opportunity to make a claim for benefits earlier, or otherwise cause unreasonable delay.
I also disagree with the majority’s decision to disavow Meyers. Craddock misread Meyers as a source of her claim that an employer must give a worker notice of the reasons for nonpayment of benefits at the time the employer first has a reason for the delay, and we are obligated to correct the confusion, not compound it. Of course, if Meyers had imposed such a requirement, Craddock clearly would have been entitled to penalty benefits in this case. Moreover, I can understand how Meyers has been read to support the proposition responsible for the confusion. However, a careful examination of the case reveals it is misplaced and is taken out of context. It is important for us to read the principles expressed in our prior cases in the context they were intended.
Meyers was not forging new ground by imposing a new notice requirement. Instead, as clearly expressed in the opinion, it was merely summarizing our existing principles from our prior cases. In that context, it is unfair to read it to impose a new requirement.
Meyers did not inject the concept of contemporaneous notice of the reason for a delay as a requirement. Rather, Meyers spoke an undeniable truth as expressed by the language of the penalty statute: If the reason for the denial of a claim is “fairly debatable,” and the employee is notified of the reason at the beginning of the delay, no penalty can be imposed. Meyers v. Holiday Express Corp., 557 N.W.2d 502, 504-05 (Iowa 1996) (citing Robbennolt, 555 N.W.2d at 236; Christensen, 554 N.W.2d at 259). Under these two circumstances, no penalty could be imposed because the delay could only be attributable to the resolution of the debatable claim. Under a statute based on unreasonable delay, prompt notice of a reasonably debatable claim could never lead to a penalty.
Placed in proper context, the pronouncements in Meyers did not mean to suggest *312that contemporaneous notice of the reason is required to avoid a penalty. Instead, it was merely a succinct and accurate summary of those circumstances when an employer could always avoid a penalty under the statute. Consequently, there .is no need to disavow our prior case. The issue in the imposition of a penalty is not whether- the employer justifies and communicates the reason for the delay at the time delay begins, but whether the employer in fact had a good reason for any and all delay that occurred. A claim may be “fairly debatable” so as to excuse a delay in the payment of benefits, but that reason would not also excuse any additional delay brought on by the failure of the employer to respond to claim inquiries by the employee, or any other unreasonable delay.
Nothing in the language or purpose of the penalty statute, or our prior case law, supports the narrow interpretation given to the statute by the majority. The statute should be interpreted to protect the worker from any kind of unreasonable conduct by an employer that causes any unreasonable delay.