Summary
The Iowa Supreme Court reviewed an award of penalty benefits under Iowa Code section 86.13 for Snap-on Tools Corporation's delayed payment of workers' compensation benefits. The court upheld the $10,000 penalty for unreasonable delay after August 25, 1999, but rejected additional penalties for the earlier period and held that section 86.13 does not authorize penalties on delayed interest payments. The court also held that interest on the penalty award ran from the date of the commissioner's remand decision and remanded with directions to affirm that decision.
Topics
Practice areas
Questions Presented
- Whether the district court erred by remanding for determination of penalty benefits for the period from July 26 through August 25, 1999.
- Whether substantial evidence supported the finding of unreasonable delay and the $10,000 penalty award for the period after August 25, 1999.
- Whether Iowa Code section 86.13 authorizes penalty benefits for unreasonable delay in paying interest due on workers' compensation benefits.
- Whether interest on the penalty-benefit award began to accrue from the deputy commissioner's May 15, 2001 decision or from the commissioner's August 25, 2005 remand decision.
Holdings
- The commissioner properly found that Snap-on had a reasonable cause or excuse for delaying payment through August 25, 1999; the district court therefore erred in remanding for determination of additional penalty benefits for that period.
- Substantial evidence supported the finding that Snap-on unreasonably delayed payment after August 25 and supported the $10,000 penalty-benefit award.
- Interest due on workers' compensation benefits is not itself a benefit under section 86.13, so penalty benefits are unavailable for an unreasonable delay in paying that interest.
- Interest on the penalty-benefit award began to accrue on August 25, 2005, the date of the commissioner's final remand decision, rather than on May 15, 2001, when the deputy commissioner initially awarded penalty benefits.
Key quotations
“A “benefit” is distinct and separate from “interest” due on a benefit.” (14)
“Based on the plain meaning of the word “benefit,” the statutory scheme used by the legislature to award benefits and interest on those benefits, and the legislative history of section 86.13, we find the legislature did not intend the word “benefits” in section 86.13 to include the interest due on an award of compensation.” (15)
Factual background
The workers' compensation commissioner awarded Schadendorf $72,166.32 in benefits plus interest on July 26, 1999. After communications with Schadendorf's counsel, Snap-on agreed on August 16 to pay the award but did not make its first payment until September 8, made another payment on September 24, and paid the remaining amount on September 29. The commissioner found the delay reasonable through August 25 but unreasonable thereafter and awarded a $10,000 penalty benefit.
Procedural history
The workers' compensation commissioner awarded Schadendorf penalty benefits for Snap-on's unreasonable delay in paying a workers' compensation award. The district court affirmed the $10,000 penalty but remanded for determination of whether additional penalty benefits were due for an earlier period, and it held that penalty benefits were unavailable for delayed interest and that interest on the penalty award ran from the commissioner's remand decision. Both parties appealed. The Supreme Court of Iowa reversed the remand for additional penalty benefits, affirmed the remaining portions of the district court's decision, and remanded for entry of judgment affirming the commissioner's August 25, 2005, remand decision.
Remand instructions
Remand to the Iowa District Court for Kossuth County to enter judgment affirming the August 25, 2005 remand decision of the workers' compensation commissioner. The district court must not remand for determination of additional penalty benefits for the period from July 26 through August 25, 1999.