Work Comp Defendants Need to Appeal to Courts to Get Proper Temporary Benefit Overpayment Credits

Since the Iowa Supreme Court ruling in Swiss Colony v. Deutmeyer, 789 N.W.2d 129 (Iowa 2010), claimant attorneys began to argue that the expansive language in the Deutmeyer ruling applied not only to permanency benefit overpayments (historically governed by Iowa Code 85.34(5)) but also to temporary benefit overpayments (historically governed by Iowa Code 85.34(4)). (see our prior blog, Re-Evaluating Iowa Code 85.34(4) and (5) and Deutmeyer, addressing such).  Unfortunately, the Commissioner’s office accepted this argument.  See Elmer v. Clayton County Recycling, File No. 5030948 (App. dec. Sep. 24, 2012); Gaffney v. Nordstrom, File No. 5026533 (App. dec. Sept. 7, 2011).  Due to the fact that these cases generally involve credits being lost of only hundreds on up to less than a couple of thousands of dollars, defendants have generally not been inclined to incur the costs of appeal to correct these erred rulings.

In an attempt to get these erred rulings corrected once and for all, Patterson Law Firm attorney Cory D. Abbas volunteered his time to take the Elmer case to appeal to the courts.  The Elmer case involved an overpayment of temporary benefits due to a rate variation.  Claimant argued the credit would only be to a future injury’s permanency under Deutmeyer.  Defendants argued the credit would be towards the current injury’s permanency under 85.34(4) as Deutmeyer only applied to 85.34(5) cases (permanency overpayments).  The Commissioner accepted Claimant’s argument.  In appeal to the District Court, Defendants pointed out how Deutmeyer only involved an interpretation of 85.34(5) and application of credits for permanency overpayments, and the Honorable Douglas F. Staskal agreed with the reasoning, finding that overpayments of temporary benefits were directed by 85.34(4) to be credited against the current injury’s permanency.  See District Court Ruling.  The case was remanded to the Commissioner for entry of a ruling in conformance with the District Court’s findings.

Commissioner Godfrey did as directed by the District Court in his remand ruling, granting the Elmer Defendants the credit they deserved, but he then explained in dicta why he would ignore the District Court’s interpretation of Deutmeyer for all subsequent factually similar cases.  See Remand Decision.  A secondary attempt was made to get Commissioner Godfrey to realize that his erasure of Iowa Code 85.34(4) by his interpretation of Deutmeyer was in error, but he remained entrenched in his position.  See Motion and Final Ruling.

In the end, although the Commissioner will continue to make his errant rulings regarding credits for overpayments of temporary benefits, workers’ compensation defendants now know that in cases where there has been an overpayment of temporary benefits, they most likely do have a right to a credit against the current injury’s permanency as directed under 85.34(4).  Unfortunately, it will still take having to incur the costs of appeal to the courts to get the credit they deserve.  This will be true until a case finally gets before the Court of Appeals or Supreme Court (which will be difficult, as the District Court will likely find in defendants’ favor and claimants are unlikely to appeal) or a legislative fix is passed and applied.

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