Lori A. Gregory Vs. Second Injury Fund Of Iowa

IN THE SUPREME COURT OF IOWA

No. 07–1764

Filed January 22, 2010

LORI A. GREGORY,

Appellant,

vs.

SECOND INJURY FUND OF IOWA,

Appellee.

Appeal from the Iowa District Court for Polk County, Carla T.

Schemmel, Judge.

Employee appeals from the district court’s judgment affirming the

workers’ compensation commissioner’s denial of her claim against the

Second Injury Fund. DISTRICT COURT JUDGMENT REVERSED AND

CASE REMANDED.

Corey J. L. Walker of Walker & Billingsley, Newton, for appellant.

Thomas J. Miller, Attorney General, and Greg Knoploh, Assistant

Attorney General, Des Moines, for appellee.

2

HECHT, Justice.

In this appeal, we must decide whether the workers’ compensation

commissioner erred in concluding a claimant who sustained successive

injuries in the course of her employment is not entitled to benefits from

the Second Injury Fund (the Fund). The commissioner concluded the

Fund owes nothing in this case under Iowa Code section 85.64 (2001)

because the first injury sustained by the claimant, Lori Gregory

(Gregory), resulted in surgeries and functional losses to both of her arms

and shoulders and functional limitations extending into the whole body.

On appeal from the district court’s judgment affirming the

commissioner’s decision, we reverse and remand for further proceedings

consistent with this opinion.

I. Background Facts and Proceedings.

Gregory began working for Jeld-Wen, Inc. d/b/a Doorcraft of Iowa

(Doorcraft) in 1999. In September 2000, she experienced bilateral upper

extremity dysfunction. She underwent a right carpal tunnel surgery on

December 15, 2000, and had the same surgery on the left side on

February 19, 2001. These procedures left Gregory with a two percent

functional impairment of her left hand and a six percent functional

impairment of her right hand.

In the spring and summer of 2001, Gregory underwent bilateral

surgical procedures intended to decompress her distal clavicles and treat

pain in her shoulders. The orthopedist who performed these procedures

subsequently opined Gregory sustained a ten percent impairment of her

right arm and a ten percent impairment of her left arm secondary to the

surgical treatment of her clavicles.

Gregory was able to continue her employment at Doorcraft after

her recovery from the surgeries. However, she sustained a new injury in

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the course of her employment on October 8, 2002, when a door end-rail

fell, fracturing her right foot. During the ensuing months, Gregory was

treated for persistent pain in the injured foot and in her right leg.

Gregory filed a petition with the Iowa Workers’ Compensation

Commissioner on July 6, 2004, seeking compensation from Doorcraft for

the injury to her right foot. 1 The petition also asserted Gregory was

entitled to benefits from the Fund, alleging the 2000 injury to her left

hand constituted a first qualifying injury and the 2002 injury to her right

foot constituted a second qualifying injury. 2 The industrial

commissioner denied Gregory’s claim against the Fund, concluding the

2000 injury did not constitute a first qualifying injury under Iowa Code

section 85.64 because the resulting functional limitations “clearly

extend[ed] beyond the bilateral arms and into the whole body.” The

commissioner reasoned that the 2000 injury could not constitute a first

qualifying injury because it resulted in permanent partial bilateral

disability to Gregory’s hands, arms, and shoulders for which

compensation was calculated as an injury to the body as a whole under

Iowa Code section 85.34(2)(u).

Gregory sought judicial review, and the district court affirmed the

commissioner’s decision.

1Although the fracture was situated in the right foot, Gregory’s petition initially

alleged an injury to the body as a whole because a treating physician had diagnosed

symptoms of reflex sympathetic dystrophy (RSD) in the right leg. The RSD symptoms

resolved, however, and Gregory subsequently abandoned her claim that the 2002 injury

extended permanently beyond the right foot, a scheduled member under Iowa Code

section 85.34(2)(n).

2Gregory’sworkers’ compensation claim against Doorcraft for the 2000 bilateral

hand and shoulder disabilities was resolved by a special case settlement agreement

under Iowa Code section 85.35 on July 19, 2004.

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II. Scope of Review.

An appeal of a workers’ compensation decision is reviewed under

standards described in chapter 17A. Iowa Code § 86.26. “The agency

decision itself is reviewed under the standards set forth in section

17A.19(10).” Mosher v. Dep’t of Inspections & Appeals, 671 N.W.2d 501,

508 (Iowa 2003). The agency’s decision in this case was based on an

interpretation of Iowa Code section 85.64. Interpretation of the workers’

compensation statute is an enterprise that has not been clearly vested by

a provision of law in the discretion of the commissioner. Finch v.

Schneider Specialized Carriers, Inc., 700 N.W.2d 328, 330 (Iowa 2005).

Thus, we will reverse the agency’s decision if it is based on “an erroneous

interpretation” of the law. Iowa Code § 17A.19(10)(c).

III. Discussion.

Gregory contends the commissioner erred in concluding her 2000

left-hand injury cannot qualify as a first injury under section 85.64. The

Fund asserts the commissioner correctly concluded Gregory’s 2000

injury resulting in impairment to more than one member enumerated in

the statute, considered for purposes of workers’ compensation together

with impairment to Gregory’s shoulders in determining disability to her

body as a whole, cannot qualify as a first injury under the statute. A

brief review of the Fund’s legislative history will aid our resolution of this

issue.

The General Assembly passed legislation establishing the Fund in

1945. The statute originally provided in relevant part:

If an employee who has previously lost, or lost the use of,

one hand, one arm, one foot, one leg, or one eye, becomes

permanently and totally disabled by a compensable injury

which has resulted in the loss of or loss of use of another

such member or organ, the employer shall be liable only for

the degree of disability which would have resulted from the

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latter injury if there had been no preexisting disability. In

addition to such compensation, and after the expiration of

the full period provided by law for the payments thereof by

the employer, the employee shall be paid out of the “Second

Injury Fund” created by this Act the remainder of such

compensation as would be payable for permanent total

disability after first deducting from such remainder the

compensable value of the previously lost member or organ.

1945 Iowa Acts ch. 81, § 2. The scope of the statute was extended less

than a decade later when the General Assembly amended the law and

eliminated the requirement that the claimant prove total permanent

disability as a result of the second injury to establish the Fund’s liability.

1951 Iowa Acts ch. 59, § 6 (expressing in its title the intent “to liberalize

the provisions of the second injury fund”). Under the current version of

section 85.64, the Fund is implicated in a workers’ compensation claim

when an employee suffers successive qualifying injuries.

We have noted the Fund was conceived by the legislature to

encourage the employment of disabled persons “by making the current

employer responsible only for the disability the current employer causes.”

Second Injury Fund v. Shank, 516 N.W.2d 808, 812 (Iowa 1994); see also

Second Injury Fund v. Neelans, 436 N.W.2d 355, 358 (Iowa 1989) (noting

the purpose of second injury fund statutes “was to provide a more

favorable climate for the employment of persons injured through service

in World War II”); Anderson v. Second Injury Fund, 262 N.W.2d 789, 791–

92 (Iowa 1978) (stating the purpose of second injury fund statutes is to

encourage employers to hire disabled workers). 3 The Fund’s salutary

3It has been suggested that this court’s decisions have mischaracterized the

General Assembly’s primary purpose in adopting the Fund and that the primary

purpose of second injury fund statutes is mitigation of the harsh consequences of the

apportionment rule for employees and the full-responsibility rule for employers in

certain cases involving successive injuries to body parts enumerated in section 85.64.

Although mitigation of the harsh consequences of the full-responsibility rule might have

motivated legislatures in other states as they adopted their second injury fund statutes,

such motivation was not likely a substantial factor in Iowa. See Lee M. Jackwig, The

Second Injury Fund of Iowa: How Complex Can a Simple Concept Become? 28 Drake L.

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purpose is accomplished by an award of compensation after a second

qualifying injury to “an employee who has previously lost, or lost the use

of, one hand, one arm, one foot, one leg, or one eye.” Iowa Code § 85.64.

Thus, Gregory’s entitlement to benefits from the Fund is dependent upon

proof of the following propositions: (1) she sustained a permanent

disability to a hand, arm, foot, leg, or eye (a first qualifying injury);

(2) she subsequently sustained a permanent disability to another such

member through a work-related injury (a second qualifying injury); and

(3) the permanent disability resulting from the first and second injuries

exceeds the compensable value of “the previously lost member.” Id.;

Shank, 516 N.W.2d at 812.

Each party believes the plain language of section 85.64 supports

its position. The Fund reads the statute to mean a first qualifying loss

must be confined to a body part enumerated in the statute. As Gregory’s

disability arising from the 2000 injury included not only a partial

functional loss of her left hand but also included disabling injuries to

both of her shoulders resulting in compensation for industrial disability,

the State contends the commissioner correctly concluded the Fund has

no liability in this case. Gregory views section 85.64 more broadly. She

posits the statute must be interpreted to include within the universe of

_________________________

Rev. 889, 890–91 (1978–1979) (noting that under Iowa law antedating the adoption of

Iowa’s Fund, “employers in Iowa had already been assured that if they hired a one-eyed,

one-armed, or one-legged individual they would be liable only for any actual loss of the

other eye or limb in a subsequent work-related injury because liability for total

disability depended upon loss of two such organs or limbs in the same accident,” and

suggesting the General Assembly’s purpose in establishing the Fund was providing

disabled persons with “a means of reasonably sufficient recovery in the event [they

sustain] a subsequent compensable injury that combines with a prior disability so as to

result in a degree of disability that exceeds the sum of the compensable values of the

prior and subsequent disabilities”). Although a further exegesis as to which conception

of the General Assembly’s purpose merits the designation of “primary” could be of

academic interest, we believe it would be of little significance to the appropriate

disposition of this case. To be sure, “the general purpose of encouraging employers to

hire [disabled persons] is not defeated [by the Fund].” Id. at 891.

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qualifying first losses any disability to an enumerated body part whether

or not it coexists with one or more disabilities simultaneously sustained

in other enumerated or unenumerated body parts. We find each of these

interpretations to be plausible, rendering the statute ambiguous.

When interpreting a statute, our “ultimate goal is to determine and

effectuate the intent of the legislature.” Beier Glass Co. v. Brundige, 329

N.W.2d 280, 283 (Iowa 1983). We generally presume words contained in

a statute are used in their ordinary and usual sense with the meaning

commonly attributed to them. Am. Home Prods. Corp. v. Iowa State Bd.

of Tax Review, 302 N.W.2d 140, 142–43 (Iowa 1981). In discerning the

meaning of an ambiguous statute, we construe terms according to their

accepted usage when they are not defined in the statute. State v. Bower,

725 N.W.2d 435, 442 (Iowa 2006). We strive for “an interpretation that is

reasonable, best achieves the statute’s purpose, and avoids absurd

results.” Id.

We also give careful attention to the purpose of a statute as we

engage in interpretation. Am. Home Prods., 302 N.W.2d at 143. Workers’

compensation statutes are to be liberally construed in favor of the

employee. Myers v. F.C.A. Servs., Inc., 592 N.W.2d 354, 356 (Iowa 1999).

The legislature enacted the workers’ compensation statute

primarily for the benefit of the worker and the worker’s

dependents. Therefore, we apply the statute broadly and

liberally in keeping with the humanitarian objective of the

statute. We will not defeat the statute’s beneficent purpose

by reading something into it that is not there, or by a narrow

and strained construction.

Holstein Elec. v. Breyfogle, 756 N.W.2d 812, 815–16 (Iowa 2008)

(citations omitted).

With these principles in mind, we must interpret section 85.64 to

determine whether Gregory “lost, or lost the use of, one hand, one arm,

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one foot, one leg, or one eye” as a consequence of the 2000 injury.

Although not controlling here, our recent decision in Second Injury Fund

v. George, 737 N.W.2d 141 (Iowa 2007), is instructive. In George, the

claimant sustained a work-related injury in 1996 resulting in a seven

percent disability to her left leg. 737 N.W.2d at 144. In 2000, George

sustained another work-related injury that caused disability to both of

her legs. Id. The Fund contended George’s 2000 right leg injury was not

a qualifying second injury because her left leg was also injured in the

same incident. Id. at 145. Affirming the commissioner’s determination

that the bilateral nature of the 2000 injury did not preclude its

qualification as a second injury under section 85.64, we interpreted the

phrase “loss of or loss of use of another such member” to mean a

subsequent loss to another enumerated member notwithstanding more

than one enumerated member was disabled as a consequence of the

same incident. Id. at 147.

Although George interpreted only that part of section 85.64 which

addresses the second qualifying injury, we believe its reasoning is

relevant here. Liability of the Fund under section 85.64 expressly turns

on the part(s) of the body permanently injured in successive injuries. The

focus of our analysis must therefore be on whether Gregory sustained a

partial permanent loss of at least two enumerated members in successive

injuries. She clearly did. Given our decision in George that a

subsequent injury to an enumerated member is not disqualified as a

second injury merely because it occurred simultaneously with an injury

to another enumerated member, we believe it would be senselessly

inconsistent to conclude a first qualifying injury cannot likewise occur

simultaneously with an injury to another such member.

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Our determination that Gregory’s 2000 left hand injury qualifies as

a first injury under section 85.64 is not affected by the fact that the

incident also caused bilateral shoulder impairment and was therefore

compensated as an unscheduled injury under Iowa Code section

85.34(2)(u). The plain language of section 85.64 does not support the

Fund’s contention that it is significant to the determination of whether

the 2000 injury is a first qualifying loss that compensation was

calculated under “the schedule” found in Iowa Code section 85.34(2)(a)–

(t), rather than under section 85.34(2)(u) as one of the factors bearing

upon the nature and extent of an injured worker’s industrial disability.

Just as a first qualifying injury need not be a work-related injury, the

method of calculating compensation for a first qualifying injury cannot

be controlling on this issue. Moreover, the fact that the physical

impairment of Gregory’s left hand was presumably considered by the

parties when they negotiated a compromise special case settlement of

Gregory’s claim for the 2000 injury will not impede the calculation of the

Fund’s credit for the compensable value of the partial loss of that

enumerated member (two percent). 4

We recognize the statute establishing the Fund has been

characterized by commentators as a “narrow” second injury fund regime

and that some jurisdictions have opted for statutory formulations with

broader reach. See Harry W. Dahl, The Iowa Second Injury Fund—Time

for Change, 39 Drake L. Rev. 101, 103 (1989–1990). 5 However, our

4As we have already noted, Gregory and Doorcraft agreed upon a lump sum

special case settlement of the 2000 claim under Iowa Code section 85.35. Doorcraft

paid $27,500 as a full and final settlement of that claim. The medical records

supporting the settlement agreement approved by the commissioner evidenced Gregory

sustained a two percent permanent impairment of her left hand as a consequence of the

2000 injury.

5Forexample, some other jurisdictions impose liability on their second injury

funds without regard to whether a claimant’s previous disabling injury was situated in

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determination that Gregory’s 2000 injury is a first qualifying injury

under section 85.64 respects the General Assembly’s choice of a

comparatively narrow statute. The 2000 injury to Gregory’s left hand

qualifies as a first injury only because it was situated in an enumerated

member and was not confined to an unenumerated part of her body.

Our decision in George and our disposition of the issues in this

case are faithful to the well-established principle that chapter 85 is to be

liberally construed in favor of the injured employee. In both instances,

the Fund has advocated an interpretation of section 85.64 favoring

claimants with fewer previously disabled body parts over claimants with

a more complex array of disabilities. Our rejection of the Fund’s

interpretation conforms to our understanding that the General Assembly

did not intend to disadvantage claimants with histories of more complex

combinations of enumerated and unenumerated member injuries.

Gregory’s claim for Fund benefits alleged a 2000 injury to her left

hand as a first qualifying injury. The uncontroverted medical evidence in

the record establishes that this injury resulted in a two percent

functional impairment of that hand. The fact that Gregory combined in a

single workers’ compensation proceeding her claim for that scheduled

loss with other scheduled and unscheduled injuries did not disqualify it

as a first qualifying injury under section 85.64.

_________________________

an enumerated member. See, e.g., Christie v. Coors Transp. Co., 933 P.2d 1330, 1335 &

n.2 (Colo. 1997) (observing 1975 amendment to Colorado’s statute expanded benefits by

replacing a first-injury requirement that the employee “previously suffered the loss, or

total loss of use, of one hand, one arm, one foot, one leg, or the vision of one eye” with a

requirement of a “previous permanent partial industrial disability”); Church v. McKee,

387 A.2d 754, 757 (Me. 1978) (stating “[t]he legislature clearly intended to expand the

kinds of pre-existing conditions which an employee could have and still be eligible for

compensation from the Second Injury Fund” by moving from a “one hand, one arm”

formulation to a broader formulation); Am. Mut. Liab. Ins. Co. v. Commonwealth, 398

N.E.2d 491, 495 (Mass. 1979) (concluding a previous version of Massachusetts statute

that was analogous to Iowa’s statute “provided relief in only a limited class of cases

where the previous personal injury resulted in the actual or functional loss of hand,

foot, or eye, and a subsequent injury of the same type resulted in further disability”).

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Our interpretation of section 85.64 permitting a loss of an

enumerated member to qualify as a first injury for purposes of the

Fund’s liability notwithstanding the fact the injury was combined with

disability to one or more unscheduled body parts for purposes of

compensation under section 85.34(2)(u) will not result in a double

recovery for Gregory. In determining the Fund’s liability under section

85.64, the commissioner shall consider only the extent to which

Gregory’s earning capacity was diminished by the combined effect of the

2000 and 2002 losses to her enumerated extremities. See Iowa Code

§ 85.64. This new and discrete assessment by the commissioner of the

loss of earning capacity for purposes of the Fund’s liability shall consider

only Gregory’s disability to the left hand resulting from the 2000 injury

and her disability to the right foot resulting from the 2002 injury.

Accordingly, the assessment of the Fund’s liability in this case will not

provide additional compensation to Gregory for the loss of earning

capacity resulting from any disability to other enumerated or

unenumerated body parts arising from the injury in 2000.

IV. Conclusion.

We conclude the commissioner erred in interpreting section 85.64.

Accordingly, we reverse the district court’s judgment and remand this

matter to the commissioner for further proceedings consistent with this

decision.

DISTRICT COURT JUDGMENT REVERSED AND CASE

REMANDED.

All justices concur except Cady, J., Ternus, C.J., and Streit, J.,

who dissent.

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#07–1764, Gregory v. Second Injury Fund

CADY, Justice (dissenting).

I respectfully dissent. I would affirm the district court. Gregory

did not sustain a qualifying first injury.

The majority builds its decision upon the often-repeated declared

purpose of the Iowa Second Injury Fund statute—to encourage the

employment of disabled persons. Second Injury Fund v. Shank, 516

N.W.2d 808, 812 (Iowa 1994). While this observation is a part of our

case law, it is incorrect and has likely contributed to an overly broad

interpretation of our Second Injury Fund statute over the years. Today’s

decision by the majority continues this unfortunate trend.

In truth, the Second Injury Fund concept was not conceived to

encourage employers to employ disabled workers. Instead, it was

enacted to resolve a fundamental dilemma that surfaced early in the

development of our workers’ compensation law. This dilemma can be

traced to a faulty assumption upon which the early compensation

scheme was predicated. This early scheme assumed a worker, prior to a

compensable injury, was a “normal [person], with a body and all

members” that functioned normally. Pappas v. N. Iowa Brick & Tile Co.,

201 Iowa 607, 609, 206 N.W. 146, 147 (1925). Of course, not all workers

have limbs and body parts that function normally. Thus, when a worker

with an existing disability suffers a work-related injury, the disability

produced by combining the existing disability and the new injury can be

“far greater than would be reflected by merely adding together the

schedule allowances for each injury existing separately.” 5 Arthur

Larson & Lex K. Larson, Larson’s Workers’ Compensation Law § 90.01, at

90–2 (2009) [hereinafter Larson’s Workers’ Compensation]. A classic

example of the successive injury problem is a leg amputee who loses a

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second leg in a work-related accident. The problem, of course, is “[t]he

loss of a leg, which would ordinarily mean only partial disability to a

normal person, results in total disability to the man who has already,

from whatever cause, lost the other leg.” Id. This dilemma impacts both

the disabled worker and the employer and is responsible for the tension

that gave rise to the need for a Second Injury Fund statute.

For employees faced with such successive injuries, a fair

compensation system would include compensation for the additional

disability produced by the combined effect of the injury to an employee

with the existing disability. For employers faced with successive injuries

to employees, a fair system of compensation would not impose liability

for disability not caused by the employment. Some courts sided with the

employee by holding the employer fully responsible for the total disability

from successive injuries, while other courts sided with the employer by

apportioning responsibility for successive injuries by limiting the

responsibility of the employer to the disability caused only by the second

injury.

In recognizing the merits of both positions, the Second Injury Fund

was conceived as a legislative solution to the dilemma courts were forced

to grapple with by adopting one side or the other, or by fashioning some

form of apportionment. One of the first cases to discuss the successive-

injury dilemma was from the state of New York in 1915. In this case, a

worker named Jacob Schwab had his left hand amputated in 1892 for an

unknown reason and later suffered the severance of his right hand in a

work-related accident. Schwab v. Emporium Forestry Co., 153 N.Y.S.

234, 235 (N.Y. App. Div. 1915). The court found the employer liable for

Schwab’s total permanent disability, rejecting the employer’s argument

that it should be responsible only for the scheduled amount for the loss

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of the right hand. Id. at 236. The next year, the New York legislature

responded with a novel solution—the country’s prototype second-injury-

fund law. Harry W. Dahl, The Iowa Second Injury Fund—Time for

Change, 39 Drake L. Rev. 101, 104 (1989) [hereinafter Dahl]. The

New York law provided second-injury-fund compensation for “an

employee who has previously incurred permanent partial disability

through the loss of one hand, one arm, one foot, one leg, or one eye, [and

who] incurs permanent total disability through the loss of another

member or organ . . . .” 1916 N.Y. Laws 2045.

As early as 1919, we confronted the successive-injury dilemma by

holding the employer responsible for the resulting total disability.

Jennings v. Mason City Sewer Pipe Co., 187 Iowa 967, 971, 174 N.W.

785, 786 (1919). Yet, we subsequently interpreted two statutory

amendments relating to the successive-injury problem by requiring the

subsequent injury be “apportioned according to the proportion of

incapacity and disability caused by the respective injuries.” Pappas, 201

Iowa at 612, 206 N.W. at 148. Importantly, we acknowledged the

hardship this limited recovery would place on the employee, even in light

of our rule of liberal construction of compensation statutes. Id. at 613,

206 N.W. at 149.

At the time of these early cases, the idea of a Second Injury Fund

in Iowa to pay for the additional disability produced by the combined

effect of successive injuries was not a vision shared by our legislature.

Nor did the concept become an immediate national phenomenon. By

1945, however, a different attitude had surfaced around the country.

During World War II, hospital ships laden with disabled veterans

returned to America, prompting lawmakers to examine the laws and

programs that would aid the returning soldiers. See Dahl at 104

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(“Second injury funds became popular at the end of World War II as an

attempt to remove obstacles facing disabled veterans who were re-

entering the job market.”).

Around the same time, data began to emerge from around the

country to show handicapped workers in states that did not apportion

responsibility for successive injuries were at a competitive disadvantage

due to the full responsibility rule. See Larson’s Workers’ Compensation

§ 91.01, at 91–2 (stating “[a]s soon as it became clear that a particular

state had adopted a rule requiring an employer to bear the full cost of

total disability for loss of the worker’s remaining leg or arm, employers

had a strong financial incentive to discharge all workers who might bring

upon them this kind of aggravated liability”). The competitive

disadvantage occurred because employers did not want to become liable

for the combined disability of successive injuries by hiring or retaining

handicapped workers. Id.

Consequently, in those states that followed the full responsibility

rule for employers, the Second Injury Fund statute was viewed as a

means to encourage the employment of handicapped workers by making

the current employer only responsible for the disability caused by a

second injury. Id. at 91–4. This observation is the source of the

statutory purpose declared by the majority. Yet, in states like Iowa, that

already protected employers from full responsibility for successive

injuries, the Second Injury Fund statute was not needed to encourage

the employment of handicapped workers by making the current employer

responsible only for the disability caused by the current employment.

See Lee M. Jackwig, The Second Injury Fund of Iowa: How Complex Can a

Simple Concept Become?, 28 Drake L. Rev. 889, 890–91 (1978–1979)

(recognizing that employers were not liable for the total disability of

16

successive injuries at the time the Second Injury Fund was adopted, but

were only liable for the loss caused by the second injury). Instead, the

purpose of adopting the Second Injury Fund statute in states like Iowa

was simply to provide a remedy for inadequate awards to handicapped

workers caused by the apportionment of disability. Id. at 891

(recognizing purpose of Second Injury Fund was to provide means to fully

compensate a worker for the combined total of successive injuries).

It simply makes no sense for us to continue to proclaim a false

legislative purpose behind Iowa’s Second Injury Fund statute. Moreover,

it is not merely an academic debate at stake. It is important to correctly

articulate the legislative purpose of all statutes because the statutory

purpose guides us in the interpretation of the statute. Courts risk

making an incorrect interpretation of a statute by failing to recognize the

true purpose of the statute.

If there is a single element of clarity under the statute, it is that the

legislature did not intend to include all handicapped workers under its

umbrella. Instead, the language of the Second Injury Fund statute only

includes persons who had previously lost, or lost the use of, “one hand,

one arm, one foot, one leg, or one eye.” Iowa Code § 85.64 (2001). Thus,

the legislature clearly did not intend to include handicapped persons due

to a disability to other parts of the body, such as the back, neck, hip, or

shoulder. See Second Injury Fund v. Nelson, 544 N.W.2d 258, 269 (Iowa

1995) (providing examples of unscheduled injuries). This cannot be

disputed.

While there may be no clear explanation why the statute would

give special benefits (full compensation for combined effects of successive

injuries) to some handicapped workers and not others, such line drawing

is not up to courts, but is done by the legislature, who is responsible for

17

doling out benefits based on limited resources and policy making.

Nevertheless, the fundamental question is whether the legislature

intended for the Second Injury Fund statute to cover handicapped

workers with an existing disability that extended to both a specified and

unspecified portion of the body.

In my mind, the portion of the Second Injury Fund statute that

provides the greatest clarity in answering this question is the language

that requires “the compensable value of the previously lost member or

organ” to be deducted from the Second Injury Fund award. Iowa Code

§ 85.64. In other words, the Second Injury Fund statute makes the

employer “liable only for the degree of disability” as if there was “no pre-

existing disability.” Id. Once the employer has completed making such

payments, the statute makes the Fund responsible for paying the

remainder of the total combined disability. Id. However, since this total

combined disability necessarily includes the first injury that was

previously compensated by a workers’ compensation award if it was

work-related (or not compensated as a nonwork-related injury or

disability), the statute requires “the compensable value of the previously

lost member or organ” to be deducted from the Second Injury Fund

award to prevent double recovery. Id. As such, the Second Injury Fund

statute works as it should—to provide fair compensation to those

handicapped workers chosen by the legislature to receive benefits.

Importantly, the phrase “previously lost member or organ” in the

deduction portion of the statute refers only to the first injury or disability

to “one hand, one arm, one foot, one leg, or one eye,” not the back, neck,

shoulder, or hip. See id. (“If an employee who has previously lost, or lost

the use of, one hand, one arm, one foot, one leg, or one eye, becomes

permanently disabled by a compensable injury which has resulted in the

18

loss of or loss of use of another such member or organ . . . .” (emphasis

added)). Thus, the statute clearly only mandates that the compensable

value of the first injury to a hand, arm, foot, leg, or eye be deducted from

the compensation paid by the Fund. If the statute is interpreted to

include handicaps involving both a hand, arm, foot, leg, or eye and

another area of the body (back, neck, shoulder, or hip), there is no

corresponding language in the statute directing the prior compensable

value of the back, neck, shoulder, or hip to be deducted. As a result, if

the Second Injury Fund statute is interpreted to include first injuries or

disabilities that extend to the back, neck, shoulder, or hip, then the

handicapped worker with such a disability will be compensated twice for

a portion of the first injury or disability, or will be compensated for a

nonwork-related disability. This clearly could not have been the intent of

the legislature.

The majority obviously recognizes the absence of any language in

the statute that calls for the full amount of the first injury to be deducted

from the amount of compensation payable by the Fund. They, of course,

avoid this flaw by simply directing the commissioner to determine the

new combined disability based on the combined effect of only the first

and second qualifying injuries, ignoring the portion of the prior disability,

and the new combined disability, attributable to the nonqualifying

portion of the first injury covering the back, neck, shoulder, or hip.

Thus, the majority lowers the threshold of the statute to include workers

with comprehensive disabilities (handicap due to injuries to both

qualified and nonqualified parts of the body under the statute) by simply

directing the commissioner to apply the statute as if workers are

burdened with a different, less severe disability. While we strive to

interpret workers’ compensation statutes liberally in favor of the worker,

19

the majority’s maneuver goes well beyond any acceptable rule of

construction. The majority is no longer interpreting the statute, but

rewriting the statute. Such an approach has serious and broad

implications.

Moreover, the approach adopted by the majority falls well short of

the true goal of the statute to provide full compensation for disabled

workers who suffer a new injury. If the commissioner must ignore the

true nature of the first disability in applying the statute as directed by

the majority, then the worker will likely not be fully compensated for the

true combined disability that results when the existing disability is

combined with the new injury. Of course, the majority is able to accept

this result by continuing to maintain that the purpose of the statute was

merely to encourage employment of disabled workers, instead of

recognizing its true fundamental goal of full compensation.

I agree the Second Injury Fund is confusing, if not outdated, and

even perhaps unfair as it is currently written. However, it is not up to

the courts to rewrite a statute. Instead, the legislature is the

governmental body that should revisit the statute and decide whether or

not it should be extended to include handicapped workers with whole

body injuries as the first injury. 6

For those reasons, I respectfully dissent.

Ternus, C.J., and Streit, J., join this dissent.

6It has been suggested that Second Injury Fund statutes in those states that

impose low thresholds have become expensive and counterproductive. Larson’s

Workers’ Compensation § 91.03(8), at 91–58. Low thresholds can tend to place such

states at a competitive disadvantage to neighboring states with high thresholds by

requiring larger annual assessments or the imposition of other funding burdens

thought to discourage new business. Id. Many states have eliminated or severely

restricted their Second Injury Funds, including Nebraska, Minnesota, and

South Dakota. Id. at 91–58.1.