                IN THE SUPREME COURT OF IOWA
                              No. 82 / 06–1377

                            Filed August 15, 2008


MIDWEST AMBULANCE SERVICE and
COMBINED SPECIALTY INSURANCE,
f/k/a/ VIRGINIA SURETY COMPANY, INC.,

      Appellants,

vs.

JODI RUUD,

      Appellee.


      On review from the Iowa Court of Appeals.



      Appeal from the Iowa District Court for Polk County, Leo Oxberger,

Senior Judge.



      Employer and insurance carrier seek further review of award of

workers’ compensation benefits.     DECISION OF COURT OF APPEALS

AND JUDGMENT OF DISTRICT COURT AFFIRMED.


      Steven M. Nadel of Ahlers & Cooney, P.C., Des Moines, for

appellants.



      Mindi M. Vervaecke of Fitzsimmons & Vervaecke Law Firm, P.L.C.,

Mason City, for appellee.
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APPEL, Justice.

        This case involves an appeal of a decision of the district court

affirming an award of workers’ compensation benefits to a former

employee.      The employer claims that the workers’ compensation

commissioner erroneously determined that the claim was timely, that the

employer was not entitled to credit for medical expenses paid through

COBRA, and that the employer was required to repay medical benefits
paid by the employee’s private insurer. After a divided court of appeals

sitting en banc affirmed the judgment of the district court, we granted

further review. We now affirm.

        I. Factual and Procedural Background.

        Jodi Ruud is a certified emergency medical technician who began

working for Midwest Ambulance Service (Midwest) in Des Moines in

1998.     On May 12, 2000, Ruud dislocated her left shoulder while

spraying the inside of ambulance walls with disinfectant and wiping

them down.      With the assistance of a co-worker, Ruud was able to

relocate the shoulder.

        Ruud filed an accident report the day of the incident and was sent

by Midwest to Dr. David Berg for medical treatment. Berg diagnosed a
left shoulder dislocation, returned Ruud to work immediately without

restriction, and referred her to physical therapy. No further treatment

was recommended by Berg. In his notes, however, Berg observed that

Ruud’s shoulder will “dislocate again!”

        Ruud attended one physical therapy session. According to Ruud,

the physical therapist told her that she “may” need surgery or

“eventually” would need surgery sometime in the future.

        Ruud’s shoulder injury did not cause her to miss work and did not

greatly affect her physical mobility. Her shoulder did, however, continue
                                       3

to dislocate over the next several months when Ruud was performing

mundane tasks.     When these dislocations occurred she was able to

relocate her shoulder on her own and did not seek further medical

treatment.   Ruud testified that she did not seek medical treatment

because her shoulder injury did not affect her daily work, she was

uncertain as to who would be financially responsible for treatment, and

she was in denial over fear that surgery might ruin her career.
      On June 16, 2002, Ruud reinjured and dislocated her shoulder

while diving at an off-duty social event. The reinjured shoulder now, for

the first time, prevented her from returning to work. On June 20, Ruud

made a request in writing to Midwest for shoulder treatment.

      On July 11, Ruud reported to Midwest that she experienced left

shoulder pain and strain after lifting a patient who was lying on a cot.

Midwest sent her to see Dr. Virginia Geary.           Geary refused to provide

treatment,   stating   that   Ruud’s       employer   was   denying   workers’

compensation liability because the injury was not work-related and that,

in any event, more than two years had elapsed since the initial work

injury of May 12, 2000.       Geary, however, excused Ruud from work

pending further treatment.      Geary further advised Ruud to see an
orthopedist using her private medical insurance.

      Ruud was unable to return to work after July 2002. She exercised

her COBRA benefits in order to continue her health insurance coverage

under Midwest’s group medical plan.            During the period of COBRA

coverage, Ruud paid the required premiums personally and in full. On

September 25, 2002, Ruud had arthroscopic surgery to repair the tear

and reconstruct her left shoulder.         Ruud was subsequently placed on

restricted duty and provided physical therapy.
                                    4

      Ruud filed a workers’ compensation claim on September 10, 2003

against   Midwest    and   Midwest’s    workers’   compensation   insurer,

Combined Specialty Insurance (Combined).            The deputy workers’

compensation commissioner determined that Ruud’s claim was time

barred.   According to the deputy, Iowa Code section 85.23 (2003)

requires a claimant to give notice of the occurrence of an injury to the

employer within ninety days of the date of the occurrence. The deputy
recognized that the time period for giving notice does not begin to run

until the claimant knows or should have known the nature, seriousness,

and probable compensable character of the injury. The deputy found,

however, that a reasonable person in Ruud’s position should have been

aware of the seriousness of her injury as of May 12, 2000.        Because

Ruud did not inform her employer of the injury within the statutory

period, her claim was barred.

      On intra-agency appeal, the commissioner reversed the decision.

The commissioner found that at the time of Dr. Berg’s examination, “it

was reasonable for claimant to be optimistic about the condition and to

not consider it to be serious even though she realized it had the potential

to become serious at some undetermined time in the future.”            The
commissioner determined that it was not until June 2002 that Ruud was

placed on notice of the severity of her injury.         As a result, the

commissioner held that Ruud’s September 10, 2003 petition was brought

within two years of the date at which Ruud knew or should have known

of the seriousness of the injury.

      In light of his holding that Ruud’s claim was not time barred, the

commissioner considered the remaining issues presented in the case.

With respect to the issue of whether the employer was entitled to a credit

against benefits owed for payments made by Ruud’s health insurance,
                                     5

the commissioner determined that because Ruud herself paid the

premiums for the COBRA benefits, the employer was not entitled to a

credit.   The commissioner further concluded that amounts paid by

Ruud’s private insurance were attributable to her as if she had made the

payments directly. Ruud was thus entitled to reimbursement for those

payments.

      Midwest and Combined appealed the commissioner’s decision to
the district court.      On appeal, the district court affirmed the

commissioner on the statute of limitations issue. The district court held

that the question of whether a worker knew or should have known of the

seriousness of an injury is a question of fact to be determined in the first

instance by the commissioner. The district court held that the finding of

the agency that Ruud did not or should not have known of the

seriousness of the injury was supported by substantial evidence.

      The district court also affirmed the commissioner’s determination

that the employer was not entitled to a credit for COBRA benefits paid by

Ruud’s group health insurer. The district court did not rule on the issue

of reimbursement for private insurance payments and declined the

motion of Midwest and Combined to expand its findings and conclusions
with respect to that issue.

      Midwest and Combined appealed and the case was transferred to

the court of appeals, which considered the case en banc. A six-member

majority affirmed the district court’s holdings on the statute of

limitations issue, the credit issue, and the private insurance issue.

Three members of the court of appeals dissented, asserting that Ruud’s

claim was time barred by the applicable statute of limitations.

      We granted further review.         On further review, we affirm the

decision of the court of appeals.
                                     6

      II. Standard of Review.

      Iowa Code chapter 17A governs judicial review of decisions of the

workers’ compensation commissioner.        Iowa Code § 86.26.       Factual

findings of the commissioner are reversed only if they are not supported

by substantial evidence.     Id. § 17A.19(10)(f).   Application of workers’

compensation laws to facts as found by the commissioner is clearly

vested in the commissioner. Mycogen Seeds v. Sands, 686 N.W.2d 457,
465 (Iowa 2004).      As a result, we may reverse the commissioner’s

application of the law to the facts only if it is “irrational, illogical, or

wholly unjustifiable.”   Iowa Code § 17A.19(10)(m); Finch v. Schneider

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

interpretation of workers’ compensation statutes and related case law

has not been clearly vested within the discretion of the agency, so this

court is free to substitute its judgment de novo for the agency’s

interpretation of law. Id.

      III. Discussion.

      A. Statute of Limitations Issue. The threshold issue in this case

is whether Ruud’s petition was timely under Iowa Code section 85.26. In

determining whether the statute of limitations began to run, the
commissioner used the correct legal standard, namely, whether Ruud

acting as a reasonable person knew or should have known that her

physical condition was serious enough “to have a permanent adverse

impact on the claimant’s employment or employability. . . .” Herrera v.

IBP, Inc., 633 N.W.2d 284, 288 (Iowa 2001) (citing Orr v. Lewis Cent. Sch.

Dist., 298 N.W.2d 256, 257 (Iowa 1980)). As a result, the provisions of

Iowa Code section 17A.19(10)(c), which vest authority in this court to

reverse an agency determination based upon an erroneous interpretation

of law not vested in the agency’s discretion, has no application.
                                      7

      Instead,   this   court   can   reverse   the   decision   only   if   the

commissioner’s factual determinations are not supported by substantial

evidence as provided in Iowa Code section 17A.19(10)(f) or upon a

showing that the commissioner’s application of law to the facts of this

case meets the demanding “irrational, illogical, or wholly unjustifiable”

standard of section 17A.19(10)(m). See generally Clark v. Vicorp Rests.,

Inc., 696 N.W.2d 596, 603–04 (Iowa 2005).
      We turn first to the findings of the commissioner regarding

whether Ruud knew or should have known of the nature, seriousness,

and probable compensability of her claim. Based upon his review of the

record in this case, the commissioner found that Ruud did not miss work

or incur any expenses related to her shoulder injury until June or July

2002. The commissioner noted that her failure to realize that her injury

was serious was reasonable in light of Dr. Berg having immediately

released her to return to work without restrictions and without

recommending further care other than a brief amount of physical

therapy. The commissioner found that Ruud was not and could not have

been aware as a reasonable person, of the probable nature, seriousness,

and compensable character of her injury until June 2002, when her
injury became sufficiently serious to force her to miss work and undergo

surgical repair of her shoulder.      The question of whether a claimant

knew, or should have known, of the nature, seriousness, and probable

compensability of her injury is a question of fact to be determined by the

commissioner. Gates v. John Deere Ottumwa Works, 587 N.W.2d 471,

475 (Iowa 1998); Dillinger v. City of Sioux City, 368 N.W.2d 176, 182

(Iowa 1985).

      As suggested by Midwest and Combined, there was evidence in the

record which could have been marshaled to support a contrary
                                    8

determination.   Shortly after her original injury, a physical therapist

suggested that surgery “might” or “eventually would” be required. In the

months following her original injury, Ruud experienced repeated

shoulder separations with some soreness.      There was also evidence in

the record that Ruud was concerned that her injury could eventually

cause her work-related problems.

      Mere recognition that there is substantial contrary evidence in the
record does not mean that the commissioner’s determination may be

successfully attacked on appeal.     The burden on the party who was

unsuccessful before the commissioner is not satisfied by a showing that

the decision was debatable, or even that a preponderance of evidence

supports a contrary view. The burden is on the unsuccessful party to

show that the commissioner’s determination is lacking in substantial

evidence. Meyer v. IBP, Inc., 710 N.W.2d 213, 218 (Iowa 2006).

      Like the majority of the court of appeals, we simply cannot reach

that conclusion in light of the evidence when reviewed as a whole.

Dr. Berg allowed Ruud to go back to work the day of her initial injury

without restriction and prescribed only a minimal amount of physical

therapy as part of a conservative treatment plan. Until June 2002, Ruud
was able to work without restrictions. Until the diving incident in 2002,

Ruud’s shoulder problem was more of a nuisance than anything else.

There was sufficient evidence in the record from which the commissioner

could conclude that Ruud was not and should not have been aware that

her condition was serious enough “to have a permanent adverse impact

on the claimant’s employment or employability . . .” until after that time.

Herrera, 633 N.W.2d at 288.

      Given this evidence in the record, Midwest and Combined in effect

invite us to engage in a “scrutinizing analysis” of the commissioner’s
                                     9

finding, an approach which we have expressly disavowed. Terwilliger v.

Snap-On Tools Corp., 529 N.W.2d 267, 272 (Iowa 1995).                 Such

“scrutinizing analysis” would tend to undercut the overarching goal of

the workers’ compensation system, “ ‘for, if we trench in the slightest

degree upon the prerogatives of the commission, one encroachment will

breed another, until finally simplicity will give way to complexity, and

informality to technicality.’ ”   Zomer v. West River Farms, Inc., 666
N.W.2d 130, 133 (Iowa 2003) (quoting Flint v. City of Eldon, 191 Iowa

845, 847, 183 N.W. 344, 345 (1921)).

      Given the binding findings of the commissioner, we next consider

the question of whether the application of law to these facts was

“irrational, illogical, or wholly unjustifiable.” Iowa Code § 17A.19(10)(m).

We cannot conclude that the commissioner’s application was any of the

above.   The commissioner determined that Ruud was not aware, and

should not have been aware, of the nature, seriousness, and probable

compensability of her injury until June 2002. Given this factual finding,

we conclude that under Iowa Code section 85.26, the statute of

limitations did not begin to run until June 2002. Because her petition

was filed within two years of June 2002, the commissioner’s conclusion
that it was timely was correct.

      B. Credit for Payment of Medical Expenses. The district court

affirmed a holding by the commissioner that Midwest and Combined

were not entitled to a credit for the payment of medical expenses made

by Ruud’s group health insurance carrier. The issue arises because a

portion of Ruud’s medical expenses were paid during a period when

Ruud had exercised her COBRA rights.
                                     10

      Iowa Code section 85.38(2) relates to the issue of employer credits

when payments are made by a group health plan.               This provision

provides, in relevant part:
              In the event the employee with a disability shall receive
      any benefits, including medical, surgical, or hospital
      benefits, under any group plan covering nonoccupational
      disability contributed to wholly or partially by the employer
      . . . then the amounts so paid to the employee from the group
      plan shall be credited to or against any compensation
      payments. . . .
Iowa Code § 85.38(2) (emphasis added).

      Midwest and Combined argue that as long as Midwest contributed

to “any group plan,” it is entitled to a credit under this statutory

provision. Midwest and Combined assert that under the literal language

of the statute, it is irrelevant that Ruud paid the premiums for the

continuation of her group health insurance coverage as long as the

employer was contributing in some fashion to the underlying group plan.

Since the employer continued to contribute to the group plan for

employees other than Ruud, Midwest and Combined argue that the

statutory requirement for crediting any group plan payments against

workers’ compensation benefits has been met.

      Ruud counters that Midwest and Combined’s interpretation of

Iowa Code section 85.38(2) is contrary to legislative intent. Ruud argues

that the legislature did not intend an employer to receive credit under

Iowa Code section 85.38(2) when the employer is not contributing to the

premiums of the claimant.

      We agree with Ruud. The obvious purpose of Iowa Code section

85.38(2) is to avoid duplication of payments by an employer to an

employee. It would be odd, moreover, for an employer to be entitled to a

credit against a workers’ compensation award to employee A because the
                                   11

employer made contributions for group health insurance for employees

B, C, and D, but not A.

      While the ambiguous statutory language is not a model of clarity,

the statutory purpose of workers’ compensation would not be advanced

by the illogical approach advocated by Midwest and Combined. State v.

Ross, 729 N.W.2d 806, 810 (Iowa 2007). We therefore hold that under

Iowa Code section 85.38(2), the employer must contribute in whole or in
part to a group insurance plan for the benefit of the claimant in order to

be entitled to the statutory credit. Because Midwest and Combined have

not proven that they contributed to Ruud’s COBRA payments, they

cannot prevail on their claim under section 85.38(2).

      C. Direct Payments to Ruud. The final issue for us to consider

is whether the commissioner erred in ordering Midwest and Combined,

pursuant to Iowa Code section 85.27, to reimburse Ruud directly for any

medical payments made by insurance plans to which Midwest did not

contribute.   Section 85.27(1) provides that the employer shall furnish

reasonable medical services and supplies for injuries compensable under

workers’ compensation.

      Midwest and Combined argue that under Rethamel v. Havey, 715
N.W.2d 263 (Iowa 2006), Ruud must prove that she paid the medical

expenses herself in order to receive reimbursement.      In Rethamel, we

stated that a claimant must make “a specific showing that the claimant

himself paid the medical expenses.”      Rethamel, 715 N.W.2d at 267

(emphasis added). While Ruud concedes that she and her husband did

not directly pay the medical bills from their own funds, they argue that

they essentially paid for the medical bills by purchasing private

insurance coverage.
                                     12

      The Rethamel case relied upon our previous decision in Krohn v.

State, 420 N.W.2d 463 (Iowa 1988). In Krohn, we held that a workers’

compensation claimant was not entitled to be paid sums for medical and

hospital expenses absent a showing that the worker personally paid the

medical suppliers.     Krohn, 420 N.W.2d at 464–65.      As a result, the

employer was entitled to make an arrangement for providing medical and

hospital   benefits   through   a   group   nonoccupational   medical   and
insurance plan, instead of making direct repayments. Id. at 465.

      We find that Rethamel and Krohn are not dispositive of the issue in

this case. Language in Rethamel and Krohn suggests that there must be

a specific showing that claimant paid the medical expenses directly in

order to be entitled to be paid for these expenses. While it may be true

that the commissioner’s decision in Rethamel states that the claimant

did obtain medical and health insurance at her or her husband’s

expense, neither our decision in Rethamel or in Krohn specifically

addressed the issue presented in this case, namely, whether the payment

of insurance premiums not provided by the employer amounts to

personally paying for the underlying medical benefits.

      The commissioner concluded that amounts paid by private
insurance are attributable to the plaintiff as if she made those payments

herself. The commissioner reasoned that other health insurance plans

may have subrogation rights against an insured who receives benefits

under workers’ compensation.        In order to avoid a situation where a

health insurance company sought reimbursement from the claimant for

expenses that the employer has not paid, the commissioner held that the

employer must pay to the claimant an amount equal to the medical

benefits that were covered by the insurer.
                                    13

      We believe that the commissioner has adopted the most sensible

approach to this unusual issue. Doe v. Ray, 251 N.W.2d 496, 504 (Iowa

1977) (“In construing a statute we attempt to give it a sensible, practical,

workable and logical construction.”).    We note that under Iowa Code

section 85.38(2), an employer who wholly or partially provides insurance

under a group plan is entitled to a credit not simply of the premiums

paid, but of the full amount of benefits paid by the group plan for
injuries covered by workers’ compensation.       In light of this statutory

provision, the reverse should also be true, namely, that an employee who

pays group health insurance premiums has, in effect, paid for medical

expenses covered by the group plan. See State v. Gonzalez, 718 N.W.2d

304, 308 (Iowa 2006) (“The interpretation of a statute requires an

assessment of the statute in its entirety, not just isolated words or

phrases.”).   We therefore hold that the commissioner did not err in

ordering direct payment to the claimant for past medical expenses paid

through insurance coverage obtained by the claimant independent of any

employer contribution.

      IV. Conclusion.

      The district court’s holding that Ruud’s claim is not time barred
and that Midwest and Combined are not entitled to a credit for payments

made by Ruud’s CORBA insurance is affirmed. In addition, we hold that

the commissioner properly determined that Ruud is entitled to direct

payment of funds from Midwest and Combined to cover the cost of

medical expenses paid for by other insurance.

      DECISION OF COURT OF APPEALS AND JUDGMENT OF

DISTRICT COURT AFFIRMED.

      All justices concur except Baker, J., who takes no part.
