City of Davenport v. Laura Paulsen F/K/A Laura Timm ( 2014 )

IN THE COURT OF APPEALS OF IOWA
No. 13-1357
Filed November 13, 2014
CITY OF DAVENPORT,
Plaintiff-Appellant,
vs.
LAURA PAULSEN f/k/a LAURA TIMM,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Michael D. Huppert,
Judge.
The City of Davenport appeals from the district court’s dismissal of its
petition for interlocutory judicial review of an order from the Iowa Workers’
Compensation Commission. AFFIRMED.
Amanda M. Richards and Peter J. Thill of Betty, Neuman & McMahon,
P.L.C., Davenport, for appellant.
Anthony J. Bribriesco, Andrew W. Bribriesco, and William J. Bribriesco of
William J. Bribriesco & Associates, Bettendorf, for appellee.
Heard by Vogel, P.J., and Vaitheswaran and Potterfield, JJ.
2
POTTERFIELD, J.
The City of Davenport appeals from the district court’s dismissal of its
petition for interlocutory judicial review of an order from the Iowa Workers’
Compensation Commission. The City claims the district court erred by
dismissing its petition and denying its requested stay.
I. Factual and Procedural Background
The City offered to hire Laura Paulsen as a police officer on December 14,
2009. The offer was contingent on Paulsen’s completion of a series of
evaluations and tests. The City asked her to complete the Iowa Law
Enforcement Academy. While enrolled in the academy, Paulsen was injured.
The City paid for Paulsen’s wages, surgery, and ongoing medical care until the
date of her maximum medical improvement.
Paulsen returned to work, but the City assigned her only simple office
tasks. On March 17, 2010, Paulsen’s supervisors asked her to resign within two
days. They told her if she did not do so, she would be terminated. Paulsen
submitted her resignation based on the ultimatum, but subsequently sent a letter
to the city expressing her desire to withdraw the resignation.
Paulsen later applied for a disability pension with the Municipal Fire and
Police Retirement System of Iowa (MFPRS), under chapter 411 of the Iowa
Code. She learned that her resignation/termination disqualified her from
receiving these benefits to which she otherwise would have been entitled.
After learning that she was ineligible for further benefits from MFPRS,
Paulsen applied for workers’ compensation benefits. In the agency proceeding,
the City moved to dismiss for lack of subject matter jurisdiction. The City
3
asserted Paulsen was still entitled to benefits under Iowa Code chapters 410 and
411 (2009), precluding her from filing a claim for workers’ compensation under
Iowa Code chapter 85. The motion was denied. The City moved for summary
judgment based on the same underlying legal argument.1 The motion was
denied on the basis that it raised the same issues as the motion to dismiss,
which had already been ruled upon. The City filed an application for rehearing,
which was denied.
The City filed an application for interagency interlocutory appeal. On
appeal, the agency decided the motion for summary judgment was distinct from
the motion to dismiss and warranted its own decision. The summary judgment
motion was remanded for determination. On remand, the motion for summary
judgment was granted. Paulsen appealed, and the commissioner reversed the
grant of summary judgment and remanded for hearing on the workers’
compensation benefits.
The City filed a petition for judicial review of the reversal. It also filed an
application to stay agency action pending judicial review. Paulsen filed an
application to stay the judicial review proceeding until the agency issued a final
ruling. The district court challenged sua sponte its subject matter jurisdiction
over the petition for interlocutory judicial review. It found the requirements for
interlocutory review were not satisfied and it therefore did not have jurisdiction. It
dismissed the petition and denied both applications to stay proceedings.
1
After the City filed the motion for summary judgment, Paulsen voluntarily dismissed her
petition without prejudice. She refiled her petition eight months later, the City refiled its
motion for summary judgment, and the proceedings picked up where they had left off.
4
The City appeals, asserting the district court erred in dismissing the
petition and denying its motion to stay the agency proceedings. Because our
analysis leads us to affirm the district court’s dismissal, we need not reach the
issue of the petition for stay of agency action.
II. Scope and Standard of Review
The City’s petition for judicial review is interlocutory. The parties agree
there is no final agency action at this stage in litigation. This appeal is instead a
review only of the district court’s disposition: the dismissal for lack of jurisdiction.
Therefore the proper standard of review is for errors at law in the district court’s
dismissal. Barnes v. State, 611 N.W.2d 290, 292 (Iowa 2000). The dismissal
was based upon a determination that the petition for review did not satisfy the
requirements for interlocutory review and the court otherwise lacked subject
matter jurisdiction.
All actions taken by the agency in both its arbitration and appellate
proceedings are outside our scope of review. Even if this court were so inclined,
we may not at this stage render a determination of Paulsen’s eligibility for
benefits or pass upon the agency’s appellate reversal of its prior grant of
summary judgment.
III. Discussion
Interlocutory review is subject to particularized jurisdictional requirements.
“A preliminary, procedural, or intermediate agency action is immediately
reviewable if all adequate administrative remedies have been exhausted and
review of the final agency action would not provide an adequate remedy.” Iowa
Code § 17A.19(1). This is a two-part inquiry. First, the City must satisfy the
5
“exhaustion of administrative remedies” doctrine by showing that there are no
further actions to be taken at the agency level that could resolve the issue to be
appealed. City of Des Moines v. City Dev., Bd., 633 N.W.2d 305, 309 (Iowa
2001). Second, the party seeking interlocutory review bears the burden to
establish that “waiting for the administrative process to be completed would not
provide an adequate remedy.”2 Id.For a party to show that administrative proceedings cannot provide an
adequate remedy, “[w]e require . . . a clear showing of an irreparable injury of
substantial dimension.” Riley v. Boxa, 542 N.W.2d 519, 522 (Iowa 1996).
“Monetary losses caused by litigation expenses ordinarily are insufficient to justify
judicial intervention at this stage.” Iowa Indus. Com’r v. Davis, 286 N.W.2d 658,
662 (Iowa 1979).
The City’s claim is procedural in nature. It asserts Iowa Code section
85.1(4) renders it immune from litigation before the agency and removes subject
matter jurisdiction from the agency. Section 85.1(4) provides, “[The workers’
compensation] chapter does not apply to [] persons entitled to benefits pursuant
to chapters 410 and 411.”3
2
“Since both requirements must be satisfied before intermediate judicial review is
permitted, the failure to meet one requirement disposes of the issue.” Richards v. Iowa
State Commerce Comm’n, 270 N.W.2d 616, 620 (Iowa 1978). Because we ultimately
conclude the City has not satisfied the second requirement, we need not undertake an
analysis of the first.
3
Eligibility for the benefits for which Paulsen applied is controlled by Iowa Code section
411.6(3):
Upon application to the system, of a member in good standing or of the
chief of the police or fire departments, respectively, any member in good
standing shall be retired by the system, not less than thirty and not more
than ninety days next following the date of filing the application, on an
ordinary disability retirement allowance, if the medical board after a
medical examination of the member certifies that the member is mentally
6
The City asserts under the plain language of this statute, it “is immune
from suit under the Workers’ Compensation Act for cases where Chapters 410
and 411 apply.” Based on the City’s interpretation of the statute, litigating
Paulsen’s claim would cause irreparable harm “because [the City] would have
had to undergo litigation it was never intended to have to undergo.” It
acknowledges that the costs of the litigation are not an irreparable injury, but
asserts instead the violation of its claimed immunity is irreparable injury in the
abstract.
However, the City cites no case law and presents no evidence of
legislative intent to support its characterization of the statute as either a grant of
immunity or a deprivation of subject matter jurisdiction.4 It notes that “workers’
compensation and chapter 411 benefits . . . are mutually exclusive.” Goebel v.
or physically incapacitated for further performance of duty, that the
incapacity is likely to be permanent, and that the member should be
retired. . . . A member who is denied a benefit under this subsection, by
reason of a finding by the medical board that the member is not mentally
or physically incapacitated for the further performance of duty, shall be
entitled to be restored to active service in the same position held
immediately prior to the application for disability benefits. The member-
in-good-standing requirement of this subsection may be waived for good
cause as determined by the board. The burden of establishing good
cause is on the member.
The City does not specify which subsection of chapters 410 or 411 it relies upon to
assert that Paulsen is eligible for benefits, but we infer from its legal argument that it
relies upon Iowa Code section 410.18:
Cities shall provide hospital, nursing, and medical attention for the
members of the police and fire departments of the cities, when injured
while in the performance of their duties as members of such department,
and shall continue to provide hospital, nursing, and medical attention for
injuries or diseases incurred while in the performance of their duties for
members being paid a pension by the city . . . .
It is undisputed that the City paid Paulsen’s medical expenses that arose as a result of
the injury.
4
The only such citation is to a case in Florida. Citizens Prop. Ins. Corp. v. San Perdido
Ass’n, Inc., 104 So. 3d 344, 353 n.6 (Fla. 2012). The case concerns a state-created
property insurer, and it is not instructive in determining the intent of the Iowa legislature
relative to workers’ compensation claims.
7
City of Cedar Rapids, 267 N.W.2d 388, 390 (Iowa 1978). But there is no
indication in our jurisprudence that such mutual exclusivity carries jurisdictional
weight. There is no evidence of legislative intent that permits us to categorize a
hearing determining Paulsen’s eligibility for benefits as “litigation [the City] was
never intended to have to undergo.”
In order to make the claim that section 85.1(4) renders it immune from the
workers compensation action and deprives the agency of subject matter
jurisdiction, the City asserts a conclusory statement that Paulsen is “entitled to
benefits pursuant to chapters 410 and 411.”5 For the district court to have
found—or for this court to find—Paulsen is entitled to these benefits in the
manner contemplated by section 85.1(4), it would have to reach a conclusion on
the substantive law controlling Paulsen’s eligibility for benefits. In other words,
the City asks this court to render a substantive determination in order to allow it
to avoid litigating that very issue of substantive law. The City’s claim simply begs
the question, which is to say it assumes its own conclusion. The City argues a
5
The City clarified its interpretation of the statute in oral arguments before this court.
The City claims Paulsen’s past eligibility for medical and wage benefits under chapters
410 and 411 obviate the need to consider her present ineligibility for disability pension
benefits. It argues section 85.1(4) is unambiguous in its mandate that any eligibility for
any kind of benefits under chapters 410 and 411 at any time removes an employee from
workers’ compensation benefit eligibility.
There are both legal and factual disputes as to whether the City’s interpretation
and application is correct. It is clear that Paulsen has been denied benefits (i.e., a
disability pension) under chapters 410 and 411 due to ineligibility, but she has already
received other benefits under those sections (i.e., wages and medical benefits). The
agency has not made specific findings of fact or determinations of law for this court to
review the substantive matter underlying the action. Therefore we cannot accept as fact
the City’s bare assertion that Paulsen is “entitled to benefits” as that phrase was
intended to operate by the legislature in Iowa Code section 85.1(4). There are
ambiguities that first require an interpretation for our review. For example, section
85.1(4) does not make clear whether an employee’s entitlement to benefits under
chapters 410 and 411 renders that employee ineligible for benefits under chapter 85
contemporaneously with eligibility for benefits under chapters 410 and 411 or
permanently.
8
matter of substantive law should insulate it from litigating the substantive law
upon which it relies to insulate itself.
The foundational flaw in the City’s claim makes it impossible to establish
that a review of a final agency action would be insufficient. To the contrary, it is
impossible to judicially review the matter of Paulsen’s eligibility without an agency
determination to that effect. To determine the applicability of section 85.1(4), the
parties must litigate the merits of the case. Our legislature could not have
intended to immunize employers such as the City from litigation merely by the
employer’s own unilateral declaration of an employee’s eligibility for certain
benefits.6
The City’s characterization of an issue of substantive law as a grant of
immunity from litigation is not supported by our law. The City claims Paulsen is
ineligible for benefits under Iowa Code chapter 85. Even if the City is ultimately
correct, the appropriate remedy should be determined after the issue is fully
developed before the agency. It is not a proper remedy to dismiss the case
without substantively establishing Paulsen’s eligibility under chapters 85, 410,
and 411. The City’s claimed remedy of immunity is not one provided to it by law.
Therefore, the district court was correct to find that the City will not be irreparably
harmed by litigating the matter before the agency. Judicial review of the final
6
We agree with the agency’s statement:
It would be an absurd result to deny a disabled law enforcement officer
any form of compensation due to the legal crevasse into which [Paulsen]
has fallen—especially in light of the path upon which [the City] sent her
down by meeting with her regarding her future as a police officer and the
lack of notice as to the implications as to her rights to compensation for a
non-disputed work-related injury.
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agency action will adequately provide the City with any remedies to which it is
entitled.
The City has failed to establish that waiting for the conclusion of the
agency proceeding would provide an inadequate remedy. The district court was
therefore unable to hear the matter as an interlocutory petition. The district court
could only hear the matter if it were to review a final agency disposition.
Because there was no final agency disposition, the district court had no subject
matter jurisdiction over the petition. See Iowa Code § 17A.19(1). Without either
a proper interlocutory petition or subject matter jurisdiction, the district court
properly dismissed the action on its own motion.
IV. Conclusion
The district court correctly found the City has not shown that irreparable
harm will result in waiting for a final agency decision before judicial review.
Because we affirm the district court’s dismissal, the City’s appeal of the court’s
denial of its petition to stay agency action pending decision on judicial review is
moot. We therefore further affirm the district court’s denial of the City’s petition to
stay.7 We agree with the City’s sentiment expressed at oral argument: the
7
We note that an analysis of the petition for stay of agency proceedings yields the same
result. The applicable test asks us to balance the City’s likelihood of prevailing on
judicial review, any irreparable injury to the City, and any substantial harm to Paulsen.
See Iowa Code § 17A.19(5)(c). The City’s procedural argument is erroneous and was
not likely to prevail before the court. (And if the statute is interpreted as the City
describes in its brief, neither party appears to be obviously more likely than the other to
prevail in the underlying action before the agency.) There is no irreparable injury to the
City because litigating the substantive issue of Paulsen’s eligibility would ultimately be
required regardless of the stay. There may be substantial harm to Paulsen because, if
she is in fact eligible for benefits, this lengthy litigation process would continue to delay
her receipt of any benefits owed. The factors do not weigh in the City’s favor. Denial of
its petition to stay agency action was proper, and the district court did not abuse its
discretion in doing so. See Grinnell Coll. v. Osborn, 751 N.W.2d 396, 398 (Iowa 2008)
10
ultimate goal of the present action is to have an appropriate body apply the facts
of this case to the legislature’s mandate in Iowa Code section 85.1(4). The most
appropriate forum for such an analysis is the workers’ compensation
commission. In the absence of pending judicial review, the agency may proceed
to the merits of Paulsen’s petition.
AFFIRMED.
Vaitheswaran, J., concurs; Vogel, P.J., dissents.
(noting “the issuance of a stay is discretionary” and “review of the district court’s decision
whether to stay agency action . . . is for abuse of discretion”).
11
VOGEL, P.J. (dissenting)
I respectfully dissent, as I would find the district court erred in concluding it
did not have subject matter jurisdiction to hear the appeal.
On January 9, 2012, the City moved for summary judgment, asserting that
because Paulsen had received benefits under Iowa Code chapters 410 and 411,
“the Workers’ Compensation Commissioner has no subject matter jurisdiction
over this case and the same should be dismissed.” In an intra-agency appeal of
the deputy’s decision denying the motion for summary judgment, the
commissioner determined the City’s motion for summary judgment, “shall be
remanded back to a deputy workers’ compensation commissioner for
consideration of whether the division has subject matter jurisdiction on this
claim.”
On remand, the deputy found, the claimant, “is not entitled to benefits
under Chapter 85 and that [the City] is entitled to summary judgment.” The
deputy ordered, “Paulsen takes nothing under Iowa Code chapter 85.”
When Paulsen appealed that decision, the commissioner found, “The Iowa
workers’ compensation act is therefore her only appropriate and remaining
remedy.” The commissioner found chapter 85 precluded only those found to be
“entitled” to benefits under chapters 410 and 411, and Paulsen had been found
not to be “entitled” to any form of disability benefits. The commissioner therefore
reversed the deputy’s decision granting the City summary judgment and
concluded, “This matter shall be promptly set for hearing on the arbitration
hearing docket.” That is, the commissioner determined it did have jurisdiction
and the workers’ compensation commission was the proper entity for Paulsen to
12
pursue her claim for benefits. Her arbitration petition would therefore go forward,
going to the merits of her claim, that she suffered an injury arising out of her
employment and proving what benefits she would be entitled to. See Meyer v.
IBP, Inc., 710 N.W.2d 213, 220 n.2 (Iowa 2006) (providing a claimant in a
workers’ compensation proceeding needs to establish (1) an employer-employee
relationship at the time of the injury, (2) an injury arising out of and in the course
of employment, and (3) the injury proximately caused the employee’s disability).
On judicial review, the district court initially noted, “the commissioner
determined that [Paulsen] was found to be entitled to recover workers’
compensation benefits under Iowa Code chapter 85 and not through Iowa Code
chapters 410 or 411.” However, it then shifted positions by stating, “It is clear to
this court that the ultimate determination of the legal issue presented; i.e.,
whether [Paulsen] is covered by Iowa Code chapter 85, would best be
accomplished by a full exposition of the relevant evidence in a contested case
proceeding.” The district court then dismissed the appeal for lack of subject
matter jurisdiction.
While the majority affirms this ruling, I would find the district court did have
jurisdiction to decide the issue, as the commissioner had made the final agency
ruling on the issue of whether Paulsen could pursue her claim under chapter 85.
Therefore, I would reverse the district court, and remand to allow the district court
to review whether the commissioner was correct in finding it had jurisdiction
under chapter 85 to allow Paulsen’s claim to move forward.