The Supreme Court of Iowa Clarified the Statute of Limitations Provisions in I.C.A. §85.26(2) in Circumstances Where an Employer’s Payment of Indemnity Benefits Cease Prior to an Arbitration Award.

by | May 29, 2013

In Coffey v. Mid Seven Transportation Co. 2013 WL 1922810 (Iowa 2013), the Supreme Court of Iowa determined that the statute of limitations to request further benefits runs at the later of the last payment of indemnity benefits or the date of the Award detailing the same.  Essentially, if all applicable benefits are paid prior to an Award, and that Award determines that the claimant is not entitled to benefits beyond what was previously paid, the statute of limitations will still be calculated from the later date of Award, not the earlier date of last payment.

In Coffey, a workers’ compensation Claimant was injured while working for his employer. Claimant filed a claim with the Workers’ Compensation Commissioner. Benefits on the compensable claim were paid prior to the Arbitration Award which although finding that Claimant incurred a significant industrial disability, did not determine that he was permanently and totally disabled. Due to the amount previously paid by the workers’ compensation insurer prior to the Arbitration Award and the amount received by the Claimant for a third party settlement, the employer contended all that remained owed was a one-third fee for the Claimant’s attorney’s work in the third party action. Although the amount was disputed by Claimant’s attorney, the employer issued a check subsequent to the Arbitration Award for “reimbursement of attorney fees.” No other indemnity was paid.

More than three years later, Claimant filed a Petition for Review Reopening pursuant to I.C.A. §85.26(2).  In the Petition for Review Reopening, Claimant sought additional indemnity disability benefits. The Workers’ Compensation Commissioner rejected Claimant’s request for additional benefits based on the three year statute of limitations for review reopening matters. The Commission noted that where no payment of benefits occurs after the Arbitration Award, the three year period runs from the final agency action awarding benefits. As the employer paid no benefits subsequent to the Arbitration Award, the Commission determined that the statute of limitations would run from the date of the Arbitration Award.

The Supreme Court of Iowa determined that it was faced with the issue of determining when the statute of limitations for a review reopening Petition commences when an employer and its insurer are entitled to credit for benefits under I.C.A. § 85.22(1) when a Claimant received all benefits owed prior to the Award. The applicable statute of limitations stated that a review reopening proceeding may be filed “within three years from the date of the last payment of weekly benefits made under the Award or agreement.” The Supreme Court of Iowa indicated that if the employer was deemed to have paid all weekly benefits prior to the date of the Arbitration Award, the correct date for calculation of the statute of limitations was the date of the Arbitration Award, not the date of the last made earlier payment. The Supreme Court of Iowa reasoned that its conclusion furthered the goal of liberally construing workers’ compensation statutes in favor of the employee and provided certainty in predictability by using a reasonably identifiable event as the date when the limitation period commences.

As a practical effect, in matters that have proceeded to hearing before the Commission, employers and insurers should be aware that a Claimant’s ability to file an action for review reopening requesting greater indemnity benefits will not be time bared by a statute of limitations until three years subsequent to the later of the last payment of indemnity benefits or the date of the Arbitration Award. Despite the plain language of the relevant statute of limitations stating that the statute of limitations should be calculated from the date of the last payment, the Supreme Court of Iowa appears to have grafted on an unwritten element to the statute of limitations to the benefit of Claimants.

For more information regarding the effect of the Supreme Court of Iowa’s decision or applicable payment of benefits in Iowa workers’ compensation matters, please contact Baylor Evnen’s Iowa workers’ compensation attorneys Tim Clarke, Caroline Westerhold, or Paul Barta at (402) 475-1075.