Annett Holdings, Inc. v. Anthony Roland

IN THE COURT OF APPEALS OF IOWA

No. 15-0043
Filed February 10, 2016

ANNETT HOLDINGS, INC.,
Petitioner-Appellant,

vs.

ANTHONY ROLAND,
Respondent-Appellee.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, Arthur E. Gamble,

Judge.

An employer appeals the district court’s judicial review decision affirming

the workers’ compensation commissioner’s alternate medical care ruling.

AFFIRMED.

Sasha L. Monthei of Scheldrup, Blades, Schrock & Smith, P.C., Cedar

Rapids, for appellant.

Nicholas L. Shaull and Christopher D. Spaulding of Spaulding, Berg &

Schmidt, P.L.C., Des Moines, for appellee.

Heard by Vaitheswaran, P.J., and Doyle and Mullins, JJ.
2

MULLINS, Judge.

Annett Holdings, Inc. appeals the district court’s judicial review decision,

which affirmed the alternate medical care decision of the workers’ compensation

commission (the agency). Annett Holdings claims the district court erred in

concluding substantial evidence supported the agency’s determination that the

medical care the employer offered to Roland in Des Moines was unreasonable

and unduly inconvenient. In addition, Annett Holdings claims the district court

erred in affirming the agency’s decision that the “Memorandum of Understanding

and Consent” Roland signed when he started work with Annett Holdings violated

Iowa Code section 85.18 (2013).

I. Background Facts and Proceedings.

Anthony Roland works as an over-the-road truck driver for Annett

Holdings. He injured his right elbow in Indiana on March 4, 2014, and he initially

received medical care there. He was released to light-duty work, and pursuant to

a memorandum of understanding,1 Roland traveled to Des Moines to perform

1
The document Roland signed when he started work in October 2013 provided, in part:
Consistent with the Iowa Supreme Court’s decision in Neal v AHI,
as a condition of your employment with the Company, you acknowledge
and agree that the Company may require you to temporarily relocate to
Des Moines, Iowa for modified duty work in the event you suffer a work
injury. Iowa Law allows Annett Holdings to suspend workers
compensation benefits to an injured worker if an injured worker fails to
accept and work in the modified duty position offered by Annett Holdings,
Inc. Iowa Code [§] 85.33.
....
Because drivers agree to be away from home as an essential
function and an agreed upon term of their employment with Annett
Holdings, injured workers are expected to temporarily relocate and
perform their modified duty work in Des Moines, Iowa, irrespective of your
state of residence. The temporary relocation will include staying away
from your home for up to two weeks at a time. By accepting employment
with the Company, you acknowledge there is nothing you are aware of
3

modified-duty work. When conservative treatment in Des Moines failed to

address the injury, Annett Holdings authorized Roland to see John R. Payne,

M.D., an orthopedic surgeon located in Anniston, Alabama, near Roland’s

residence. Dr. Payne performed surgery on Roland’s elbow on May 9, 2014.

Following surgery, Roland was taken off work and received a referral for physical

therapy, which initially occurred in Alabama. When Roland was once again

released to light-duty work, Annett Holdings had him temporarily relocate to Des

Moines to perform modified-duty work and provided him with physical therapy in

the hotel where he was staying.

Dissatisfied with the physical therapy being provided in the hotel in Des

Moines, Roland filed a petition for alternate medical care with the agency on

June 5, 2014, requesting his physical therapy be provided in Alabama. On June

18, 2014, the agency granted Roland’s petition, concluding, “Treatment offered

897 miles from Roland’s residence is unreasonable and unduly inconvenient for

claimant.” The deputy went on to provide,

The agreement signed by Roland is contrary to the law and case
law of Iowa because it attempts to use an agreement to relieve the
employer from part of its liability to provide reasonably suited

which would prevent you from temporarily relocating to Des Moines, Iowa
for up to two weeks at a time to perform modified duty work assignments
in the event you suffer a work injury.
....
Annett Holdings will provide temporary housing for the modified
duty employee at no expense to the employee and will provide any
necessary transportation to and from the temporary housing and work, if
necessary. If ongoing medical care is required by the medical condition
of the injured worker, Annett Holdings will coordinate the modified duty
work schedule with medical appointments to ensure the least amount of
disruption between the two. Des Moines, Iowa has world-class facilities
and medical professionals available and is an ideal location for ongoing
medical care.
4

treatment for the injury without undue inconvenience to the
employee under Chapter 85. The agreement appears to be an
attempt to either avoid or eliminate both the “reasonable” and
“undue inconvenience” clauses in Iowa Code section 85.27(4). . . .
Use of any device as an attempt to relieve the employer from
liability under workers’ compensation law is prohibited by Iowa
Code section 85.18.

Annett Holdings filed a petition for judicial review with the district court,

challenging the agency’s decision. After hearing arguments from both sides, the

district court affirmed the agency’s decision. The district court agreed with Annett

Holdings that the issue of the validity of the offer of light-duty work in Des Moines

as “suitable work” under section 85.33(5) was not properly before the agency in

the alternate medical care proceeding. But the district court also determined the

agency properly addressed whether the memorandum of understanding was a

contract that operated to relieve Annett Holdings, in whole or in part, of its duty to

provide reasonable medical care without undue inconvenience to Roland. While

Annett Holdings argued it did not force Roland to travel 897 miles for treatment,

instead only providing him treatment while he was 897 miles away from home for

light-duty work, the district court determined “[t]he deputy rightly avoided the

circular dilemma of trying to answer which came first, the light duty or the

physical therapy.” The district court noted that without the memorandum of

understanding Annett Holdings could not compel Roland to travel to Des Moines.

See Neal v. Annett Holdings, Inc., 814 N.W.2d 512, 525 (Iowa 2012) (noting

substantial evidence supported the agency’s determination that the offer of light

duty work 387 miles from the injured worker’s home was not “suitable work” for

an over-the-road truck driver, but also noting there was no evidence the injured
5

worker agreed as a condition of employment to any relocation the company may

require). The district court concluded,

Since Roland lives in Alabama, where he was recovering from an
authorized surgery, the employer cannot legally use this
[memorandum of understanding] as a device to compel Roland to
relocate 897 miles away from Anniston where reasonable medical
care in the form of physical therapy can be provided without undue
inconvenience.

The district court also concluded substantial evidence supported the

agency’s conclusion that the treatment offered in Des Moines was not

reasonable and was unduly inconvenient to Roland. The district court noted the

surgery occurred in Alabama, as did the initial physical therapy. The court

agreed with the agency that Annett Holdings unreasonably interfered with

Dr. Payne’s prescription for an electric cooling machine because the travel to

Des Moines prevented Roland from using the machine. Finally, the district court

concluded substantial evidence supported the conclusion that the therapy

provided in Alabama was medically superior to the care offered in the hotel in

Des Moines.

Annett Holdings appeals.

II. Scope and Standard of Review.

We review judicial review cases for correction of errors at law. Iowa R.

App. P. 6.907. Iowa Code section 17A.19(10) controls our review, and we apply

those statutory standards to determine whether we reach the same conclusions

as the district court. Neal, 814 N.W.2d at 518. If the conclusions are the same,

we affirm; otherwise, we reverse. Id.
6

The particular standard of review from section 17A.19(10) that we apply

depends on the issues raised on appeal. Jacobson Transp. Co. v. Harris, 778

N.W.2d 192, 196 (Iowa 2010). “Because of the widely varying standards of

review, it is ‘essential for counsel to search for and pinpoint the precise claim of

error on appeal.’” Id. (citation omitted).

Here, Annett Holdings first challenges the agency’s ruling granting

alternate medical care to Roland. The main thrust of Annett Holdings’s claim is

that there was not substantial evidence to support the agency’s decision. When

the challenge is to the substantial evidence to support the agency’s decision, our

review is governed by Iowa Code section 17A.19(10)(f). Factual findings are

clearly vested in the discretion of the agency, and “we defer to the

commissioner’s factual determinations if they are based on ‘substantial evidence

in the record before the court when that record is viewed as a whole.’” Larson

Mfg. Co. v. Thorson, 763 N.W.2d 842, 850 (Iowa 2009) (quoting Iowa Code

§ 17A.19(10)(f)). Substantial evidence is defined as “the quantity and quality of

evidence that would be deemed sufficient by a neutral, detached, and reasonable

person, to establish the fact at issue when the consequences resulting from the

establishment of that fact are understood to be serious and of great importance.”

Id. (quoting Iowa Code § 17A.19(10)(f)(1)). “[T]he question before us is not

whether the evidence supports different findings than those made by the

commissioner, but whether the evidence ‘supports the findings actually made.’”

Id. (quoting St. Luke’s Hosp. v. Gray, 604 N.W.2d 646, 649 (Iowa 2000)).
7

To the extent Annett Holdings challenges the ultimate conclusion reached

by the agency, our review is to determine whether the agency’s decision is

“irrational, illogical, or wholly unjustifiable” under section 17A.19(10)(m) because

a challenge to the ultimate conclusion is a challenge to the agency’s application

of law to the facts. Burton v. Hilltop Care Ctr., 813 N.W.2d 250, 259 (Iowa 2012).

Annett Holdings also claims the agency erred in reaching a decision on

whether the memorandum of understanding comports with Iowa law. It claims

this was not a proper consideration for the agency in the alternate medical care

proceeding. This challenge implicates the agency’s interpretation of the law, and

we therefore review the agency’s decision under Iowa Code section

17A.19(10)(c)—“Based upon an erroneous interpretation of a provision of law

whose interpretation has not clearly been vested by a provision of law in the

discretion of the agency.”

III. Substantial Evidence.

An injured worker can seek an order from the workers’ compensation

commission when that worker is not satisfied with the medical care being

provided by the employer for a work injury. See Iowa Code § 85.27(4) (“If the

employee has reason to be dissatisfied with the care offered, the employee

should communicate the basis of such dissatisfaction to the employer, in writing if

requested, following which the employer and the employee may agree to

alternate care reasonably suited to treat the injury. If the employer and employee

cannot agree on such alternate care, the commissioner may, upon application

and reasonable proofs of the necessity therefor, allow and order other care.”).
8

The statute outlines the expedited procedure through which the agency decides

disputes over medical care. See id.2 The employee bears the burden to prove

that the care authorized by the employer is unreasonable. R.R. Donnelly & Sons

v. Barnett, 670 N.W.2d 190, 195 (Iowa 2003). “If the treatment provided by the

employer is not prompt, not ‘reasonably suited to treat the injury,’ or is unduly

inconvenient to the employee, the commissioner has authority to order the

alternate care.” Id. (quoting West Side Transp. v. Cordell, 601 N.W.2d 691, 695

(Iowa 1999)).

Here, the agency determined alternate care was warranted after finding

Roland lived 897 miles away from Des Moines, the physical therapy provided in

Des Moines was inferior to the physical therapy provided in Alabama, and the

required travel to Des Moines interfered with Roland’s medical care by

preventing him from using the prescribed cooling machine. Annett Holdings

challenges the factual support for each of these findings and also claims the

agency should not have disregarded the expert reports it submitted as evidence

to establish that the care provided in Des Moines was the same as the care

provided in Alabama.

2
Iowa Code 85.27(4) provides, in part:
An application made under this subsection shall be considered an original
proceeding for purposes of commencement and contested case
proceedings under section 85.26. The hearing shall be conducted
pursuant to chapter 17A. Before a hearing is scheduled, the parties may
choose a telephone hearing or an in-person hearing. . . . The workers’
compensation commissioner shall issue a decision within ten working
days of receipt of an application for alternate care made pursuant to a
telephone hearing or within fourteen working days of receipt of an
application for alternate care made pursuant to an in-person hearing.
The Iowa Administrative Code rule 876-4.48 provides further guidelines governing the
alternate medical care proceeding, including the form of the request, the evidence
permitted, and the restrictions on hearing briefs.
9

Roland’s attorney asserted in the petition for alternate medical care and

during the hearing that the distance between Roland’s home and Des Moines

was 897 miles. Annett Holdings did not dispute this number. However, Annett

Holdings asserts it did not force Roland to come to Des Moines solely for medical

treatment but only provided him treatment when he was in Des Moines for

modified-duty work pursuant to the memorandum of understanding. Thus,

Annett Holdings claims the medical care provided in Des Moines was both

reasonable and not unduly inconvenient. Setting aside the distance between

Roland’s home and the physical therapy being provided in Des Moines, we still

must determine whether substantial evidence supports the agency’s

determination that Roland satisfied his burden of proof to justify alternate care in

Alabama.

Roland testified the physical therapy in Des Moines was provided in the

exercise room of the hotel where he stayed while in town for modified duty.

There was no specialized physical therapy equipment in the exercise room, and

the physical therapist did not bring any other equipment to the hotel to assist in

the therapy. There was not even a chair for Roland to sit in while he used a

heating pad on his elbow during the therapy sessions; Roland testified he had to

sit on the floor. In contrast, Roland used a variety of equipment in his therapy

sessions in Alabama including a hand bicycle, weight balls, clips for finger

dexterity, and shock therapy to increase blood flow to the arm.

Roland testified the therapy sessions were sixty to ninety minutes long in

Alabama, and lasted on average only about thirty minutes in Des Moines. He
10

noticed considerably less swelling and improved mobility following physical

therapy in Alabama compared to the therapy offered in Des Moines. He testified

following therapy in Alabama he was able to brush his teeth and hold a spoon in

his right hand.

Roland was unable to use the prescribed cooling machine when he

traveled between Des Moines and Alabama because the machine could not be

taken on a plane, and it could not be used in a vehicle because the machine

required electricity. Roland testified the surgeon emphasized the need to keep

swelling down because swelling could cause damage to the arm. Annett

Holdings asserts in its brief Roland did not raise his concerns regarding the

cooling machine until he filed the alternate medical care petition. However,

Roland testified he informed Annett Holdings of the need for the cooling machine

at the time he was asked to travel. While Annett Holdings also points out in its

appellate brief that there are many adapters that can be used in vehicles to run

electrical equipment, Roland was not provided or even offered this equipment

when he informed Annett Holdings of the need for the cooling machine during

travel. Instead, he was told to stop frequently to obtain ice on the 897-mile road

trip.

At the alternate medical care hearing, Annett Holdings offered expert

opinions that the therapy Roland was receiving in Des Moines was identical to

the therapy he was receiving in Alabama. The agency disregarded the testimony

from these experts because there was no indication in the record to show upon

what information the opinions were based, and neither expert had the benefit of
11

Roland’s description of the therapies provided in both locations. It is up to the

agency to determine the credibility of witnesses. E.N.T. Assocs. v. Collentine,

525 N.W.2d 827, 830 (Iowa 1994). In addition, we evaluate whether substantial

evidence supports the agency’s decision according to the witnesses whom the

agency believed. Arndt v. City of Le Claire, 728 N.W.2d 389, 394–95 (Iowa

2007). Accepting the credibility of Roland and disregarding the expert opinions

offered by Annett Holdings as we must, we conclude substantial evidence

supports the agency’s decision to award alternate medical care to Roland. The

evidence supports the conclusion that the physical therapy provided in Des

Moines was not reasonably suited to treat the injury.

IV. Section 85.18.

Next, Annett Holdings asserts neither the agency nor the district court

should have addressed the legal validity of the memorandum of understanding.

Annett Holdings maintains the memorandum of understanding was only relevant

in the alternate medical care proceeding to the extent that it factually explained

why Roland was receiving medical care in Des Moines. It thus claims it was an

error for the agency and the district court to assess the legal validity of the

memorandum of understanding as that issue was not germane to the alternate

medical care proceeding.

Annett Holdings in one breath relies on the memorandum of

understanding to justify providing medical care to Roland in Des Moines, 897

miles away from his home, and in another breath asserts the validity of the

memorandum of understanding should not have been addressed in the alternate
12

medical care proceeding. It cannot have it both ways. By relying on the

memorandum of understanding to demonstrate the reasonableness and

convenience of the care being provided, Annett Holdings puts into issue the legal

validity of the memorandum of understanding. The district court correctly noted

the issue of whether alternate care should be ordered could not be decided in a

vacuum in light of Annett Holding’s use of the memorandum of understanding to

justify Roland’s presence in Des Moines where the challenged care was

provided. In addition, the memorandum of understanding specifically addressed

the issue of medical care being provided to injured workers who are compelled to

relocate to Des Moines for their convalescence. The memorandum of

understanding provided:

If ongoing medical care is required by the medical condition of the
injured worker, Annett Holdings will coordinate the modified duty
work schedule with medical appointments to ensure the least
amount of disruption between the two. Des Moines, Iowa has
world-class facilities and medical professionals available and is an
ideal location for ongoing medical care.

Thus, we conclude that under the facts of this case and the arguments advanced

by Annett Holdings neither the agency nor the district court erred in considering

the legal validity of the memorandum of understanding as part of the alternate

medical care proceeding.

Both the district court and the agency concluded the memorandum of

understanding violated Iowa Code section 85.18, which provides, “No contract,

rule, or device whatsoever shall operate to relieve the employer, in whole or in

part, from any liability created by this chapter except as herein provided.” The

employer is required under section 85.27(4) to provide prompt medical treatment
13

that is “reasonably suited to treat the injury without undue inconvenience to the

employee.” The agency determined the memorandum of understanding was

used to either avoid or eliminate Annett Holdings’s obligation under both

“reasonable” and “undue inconvenience” clauses in section 85.27(4). The district

court agreed with this conclusion and affirmed the agency’s decision.

Annett Holdings used the memorandum of understanding to compel

Roland to relocate to Des Moines from Alabama for modified-duty work. While

the memorandum of understanding stated Annett Holdings would coordinate the

modified work schedule with Roland’s medical appointments “to ensure the least

amount of disruption between the two,” what resulted in Roland’s case was the

transfer of care from the physical therapist in Alabama, who had provided

treatment to Roland immediately after surgery, to a physical therapist in Des

Moines. While Annett Holdings continued to allow Roland to return to Alabama

to treat with Dr. Payne, the same accommodation was not provided for Roland’s

physical therapy appointments. This transfer of care mid-stream was neither

convenient nor reasonable. Roland lost the consistency in the physical therapy

treatment being provided as he recovered from surgery, he received care not

reasonably suited to treat his injury, he had to endure the stress and strain of

traveling an 1800-mile round trip to and from Des Moines every two weeks, and

he lost the ability to use his medically-prescribed cooling device due to the

difficulty it caused with traveling. As applied in this case, we, like the district

court, conclude the agency did not err in concluding the memorandum of

understanding violated section 85.18.
14

Because we conclude substantial evidence supports the agency’s

decision to award alternate medical care to Roland and determine the agency did

not err in holding the memorandum of understanding violated section 85.18, we

affirm the district court’s judicial review decision.

AFFIRMED.