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IN THE COURT OF APPEALS OF IOWA No. 2-376 / 11-1636 Filed June 27, 2012

WENDY LEAVENS, Petitioner-Appellant, vs. SECOND INJURY FUND OF IOWA, Respondent-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, Richard G. Blane II, Judge.

Wendy Leavens appeals from the district court's ruling on judicial review, affirming the denial of benefits under the Second Injury Fund. AFFIRMED.

Steven C. Jayne, Des Moines, for appellant. Thomas J. Miller, Attorney General, and Julie A. Burger, Assistant Attorney General, for appellee.

Heard by Vogel, P.J., and Tabor and Bower, JJ.

2 VOGEL, P.J. Wendy Leavens appeals from the district court's ruling on judicial revi ew, affirming the denial of benefits under the Second Injury Fund. We agree with the Fund that: (1) the May 2008 settlement agreement entered between Leavens and her employer, Maytag, would not be given preclusive effect in establishing whether Leavens sustained a second injury because the Second Injury Fund did not have an opportunity to fully and fairly litigate the issue; (2) the agency did not act in an unreasonable, arbitrary, or capricious manner, or abuse its discretion, when the application for rehearing was deemed denied under Iowa

Administrative Code rule 876-4.24, because the commissioner's affirmance of Leavens's appeal to the commissioner met the requirements of Iowa Code section 17A.16(1) (2011); and (3) substantial evidence supports the agency's determination that Leavens did not sustain a permanent disability as a result of her December 20, 2006 injury. We therefore affirm. I. Background Facts and Proceedings Wendy Leavens began working for Maytag in 1994. On October 15, 2007, Leavens filed an arbitration petition before the Iowa Workers' Compensation Commissioner based on a December 20, 2006 injury. She alleged the injury was caused by cumulative and repetitive employment duties, resulting in bilateral carpal tunnel syndrome.1 This petition was resolved through a compromise

settlement under Iowa Code section 85.35(3) (2007) and approved by the

1

On Leavens's motion, this matter was consolidated with a previous matter, where Leavens alleged an injury from May 26, 2005.

3 agency on May 20, 2008. The settlement stated Leavens suffered a permanent disability of six percent of the body pursuant to Iowa Code section 85.34(2)(s). On June 2, 2008, Leavens filed a Second Injury Fund petition, alleging a first qualifying injury to her right hand in 2000, and a second qualifying injury of bilateral carpal tunnel syndrome, from December 20, 2006.2 After a hearing, the deputy commissioner issued an arbitration decision on August 6, 2009. In this decision, the deputy found the approved settlement from May 2008 was presumptively valid and because the disputed issues "involve[d] mutuality of interest between Maytag and the Fund," the Fund was without recourse. The deputy concluded Leavens's hand and wrist losses resulted in an industrial disability of twenty percent of the whole body and that Leavens was entitled to 56.4 weeks of Fund benefits. Asserting the deputy did not appropriately consider all of her injuries, Leavens applied for rehearing.3 An amended and substituted arbitration decision was filed on November 30, 2009. In this decision, the deputy stated that

subsequent to the original arbitration decision the controlling agency authority on the preclusive effect of settlement agreements was expressly reversed and the previous controlling authority was restored. The deputy noted that under the new authority, "The only preclusive effect of an agreement for settlement between

2

We note that the actual Second Injury Fund petition stated the injury was on or about May 26, 2005. In the August 6, 2009 arbitration decision, however, it was noted that at the hearing, "it became apparent that Leavens had filed her petition against the Fund under the wrong file number, actually intending to file the claim under [the file number related to the December 20, 2006 injury]" and that for purposes of the arbitration decision, all disputes in the claim related to the December 20, 2006 injury and not the May 26, 2005 injury. 3 Leavens also alleged the deputy did not follow the "fresh start rule" or consider her alternative argument under the odd-lot doctrine.

4 worker and employer is upon the parties who entered into that agreement, and the settlement does not establish the compensability of any injury or the extent of entitlement to disability benefits in a subsequent claim against the Second Injury Fund." The deputy then recited that Leavens had the burden of proving by a preponderance of the evidence that the injury was a proximate cause of the disability on which her claim was based. He concluded Leavens failed to meet this burden of proof and therefore was not entitled to an award of Fund benefits. Leavens appealed to the commissioner, asserting her settlement with Maytag resolved the issue as to whether she sustained permanent disability as a result of the December 20, 2006 injury and as such, she was entitled to Fund benefits. In a February 15, 2011 appeal decision, the commissioner concluded the deputy appropriately relied on the new authority regarding the effect of settlement agreements and that the deputy did not err in finding certain medical opinions regarding Leavens's permanent functional impairment more persuasive than others. Leavens filed an application for rehearing on February 16, 2011; as it was not granted within twenty days, the application was deemed denied. Iowa Admin. Code r. 876-4.24. On March 31, 2011, Leavens filed a petition for judicial review; a hearing was held on July 22, 2011. On September 9, 2011, the district court ruled that (1) the commissioner did not err in declining to give limited preclusive effect to the settlement agreement for the December 20, 2006 injury; (2) the commissioner's failure to address the issue regarding the weight given to certain medical reports in Leavens's motion for rehearing was not "unreasonable, arbitrary, capricious, or an abuse of discretion"; (3) there was substantial

5 evidence in the record to support the deputy's finding that Leavens did not sustain a permanent scheduled loss of use of the right and left arms as a result of the December 20, 2006 injury; and (4) there was no merit in Leavens's argument that the deputy's finding that she did not sustain a permanent scheduled loss of use of the right and left arms as a result of the December 20, 2006 injury was irrational, illogical, or wholly unjustifiable application of law to fact. Leavens appeals. II. Standard of Review Leavens sought judicial review of the decision of the workers' compensation commissioner. Iowa Code section 17A.19(10) governs judicial review of agency decision making. We will apply the standards of section 17A.19(10) to determine whether we reach the same results as the district court. The district court may grant relief if the agency action has prejudiced the substantial rights of the petitioner, and the agency action meets one of the enumerated criteria contained in section 17A.19(10)(a) through (n). Evercom Sys., Inc. v. Iowa Utilities Bd., 805 N.W.2d 758, 762 (Iowa 2011). The agency's decision in this case was based on an interpretation of Iowa Code section 85.64 (2011). "The level of deference afforded to an agency's interpretation of law depends on whether the authority to interpret that law has clearly been vested by a provision of law in the discretion of the agency." Burton v. Hilltop Care Ctr., 813 N.W.2d 250, 256 (Iowa 2012) (internal citation omitted). The court must now examine each statute to determine whether discretion is vested in the commissioner. Id. at 256

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