              IN THE SUPREME COURT OF IOWA
                             No. 15 / 03-1221

                        Filed November 9, 2007


LAKESIDE CASINO and
ZURICH-AMERICAN INSURANCE GROUP,

      Appellees,

vs.

DANA BLUE,

      Appellant.


      Appeal from the Iowa District Court for Clarke County, William H.

Joy, Judge.



      Injured worker appeals district court judgment on judicial review

reversing Workers’ Compensation Commissioner’s award of workers’

compensation benefits. REVERSED AND REMANDED.



      Max J. Schott of Max Schott & Associates, P.C., Des Moines, for

appellant.



      Donna R. Miller and Nicholas J. Mauro of Grefe & Sidney, P.L.C.,

Des Moines, for appellees.
                                      2

TERNUS, Chief Justice.

      The appellant, Dana Blue, injured her foot when she stumbled on her

employer’s stairs as she returned to work from a break. The Workers’

Compensation Commissioner awarded benefits to Blue for her injury,

concluding her work subjected her to the inherently dangerous activity of

traversing stairs.   On judicial review, the district court rejected the

Commissioner’s conclusion that stairs are inherently dangerous and

reversed the award of benefits, stating Blue’s injury coincidentally occurred

at work and was not compensable. Blue has appealed this decision. Upon

our consideration of the parties’ arguments, we reverse the decision of the

district court and remand this case for entry of a judgment affirming the

Workers’ Compensation Commissioner’s award of benefits.

      I. Background Facts and Proceedings.

      The facts surrounding the occurrence of Blue’s injury are largely

undisputed. At the time of her injury, Blue was employed as a cocktail

server by appellee, Lakeside Casino. On December 31, 2000, she became

light-headed and nauseated while on duty and was directed by her

supervisor to go to the employee’s lounge until she felt better.         After

spending approximately forty-five minutes in the lounge, Blue’s symptoms
disappeared, and she felt well enough to return to work. Blue left the

lounge with several of her coworkers, walked forty feet to a set of stairs, and

descended the stairs with no problem. Still conversing with her coworkers,

she turned a corner and began walking down a second set of stairs. As she

descended the steps, Blue stumbled and grabbed onto a coworker so as not

to fall down the stairs. Although she immediately felt a pain in her ankle,

Blue continued to the bottom of the staircase without incident. She later

denied any light-headedness or nausea at the time of this incident.
                                       3

      Within the next couple of days, Blue’s ankle became painful and

swollen, and she could not walk without limping. Despite treatment, Blue

continues to have pain in her ankle. She has been diagnosed with possible

early complex regional pain syndrome, and her physicians have related this

condition to the staircase incident.

      Blue sought workers’ compensation benefits from her employer and

its insurer, appellee Zurich-American Insurance Group. A deputy workers’

compensation commissioner presided over the hearing on her claim and

determined Blue’s ankle problems arose out of and in the course of her

employment at Lakeside Casino. Acknowledging there must be “a causal

relationship between the employment and the injury” to satisfy the “arising

out of” requirement for compensability, the deputy relied on two Iowa

Supreme Court cases that stated this requirement was satisfied if “the

nature of the employment exposes the employee to risk of such an injury” or

if the injury is a “rational consequence of the hazard connected with the

employment.” See Hanson v. Reichelt, 452 N.W.2d 164, 168 (Iowa 1990);

Burt v. John Deere Waterloo Tractor Works, 247 Iowa 691, 700, 73 N.W.2d

732, 737 (1955).    The deputy concluded:     “Stairs are inherently more

dangerous than a flat, smooth, unobstructed walking surface. A stumble

while descending stairs in the course of employment can, as here, cause

injury arising out of that employment.”

      On appeal to the Workers’ Compensation Commissioner, the

Commissioner affirmed and adopted the deputy’s decision as the final

agency action, supplementing that decision with some additional analysis.

The Commissioner stated:

             When injured, [Blue] was on duty and on the employer’s
      premises. Her employment compelled her to traverse those
      stairs. Accordingly, any injury she sustained as a result of
      traversing the stairs arose out of and in the course of her
                                     4
      employment unless something in the evidence establishes
      otherwise.

The Commissioner then reviewed the evidence and concluded Blue had no

health impairment that caused her to trip, and therefore, her stumble was

not idiopathic. He further observed there was no evidence of “[a] defect in

the stairs or other hazardous condition that caused her to trip, beyond the

hazard inherent in stairs.”      The Commissioner found Blue “simply

stumbled, perhaps through her own negligence by not being sufficiently

careful while traversing the stairs.”    Noting “traversing stairs [is] an

inherently hazardous activity,” the Commissioner ruled Blue’s injury was

compensable:

      [T]he injury occurred from the hazard of traversing stairs and
      the trauma of stumbling on those stairs while [Blue] was on the
      employer’s premises and performing actions necessary for her
      to perform in order to perform the duties of her job. Her injury
      is compensable.

      The employer and insurer sought judicial review. The district court

reversed the Commissioner’s decision, rejecting his “legal conclusion” that

stairs are inherently dangerous. The court then applied the actual-risk

doctrine and determined Blue’s injury did not arise out of her employment.

The district court reasoned:

             In this case there is no indication that the design of the
      stairs, condition of the stairs or the lighting of the stairs
      contributed to Blue’s injury. Nor is there any indication that
      the conditions of Blue’s employment exposed her to a hazard
      not generally associated with traversing stairs (for instance,
      she was not asked to or required to carry large, heavy, or
      awkward objects while traversing the stairs). Blue’s injury
      “coincidentally occurred while at work” and therefore did not
      arise out of work.

Blue has appealed the district court’s judicial review decision.
                                          5

       II. Scope of Review.

       Our review is governed by Iowa Code chapter 17A. See Wal-Mart

Stores, Inc. v. Caselman, 657 N.W.2d 493, 498 (Iowa 2003). We apply the

standards of section 17A.19(10) to the Commissioner’s decision and decide

whether the district court correctly applied the law in exercising its judicial

review function. Herrera v. IBP, Inc., 633 N.W.2d 284, 286–87 (Iowa 2001).

       In determining the proper standard of review, we must first identify

the nature of the claimed basis for reversal of the Commissioner’s decision.

Here, the employer asserted the Commissioner incorrectly held the

employee’s injury arose out of her employment. This issue “presents a

mixed question of law and fact.” Meyer v. IBP, Inc., 710 N.W.2d 213, 218

(Iowa 2006). The factual aspect of this decision requires the Commissioner

to determine “the operative events that [gave] rise to the injury.” Id. Once

the facts are determined, a legal question remains: “[W]hether the facts, as

determined, support a conclusion that the injury ‘arose out of . . . [the]

employment,’ under our workers’ compensation statute.” Id. (quoting Hawk

v. Jim Hawk Chevrolet-Buick, Inc., 282 N.W.2d 84, 87 (Iowa 1979)).

       In the case before us, there is no dispute as to the facts. Rather, the

dispute centers on the Commissioner’s application of the law to the facts.
This aspect of the Commissioner’s decision-making process “can be affected

by [various] grounds of error such as erroneous interpretation of law;

irrational reasoning; failure to consider relevant facts; or irrational, illogical,

or wholly unjustifiable application of law to the facts.” Id. (citing Iowa Code

§ 17A.19(10)(c), (i), (j), (m) (2001)).

       Based on the arguments made in the petition for judicial review and

the district court’s discussion of the issues in its decision, we conclude our

review is governed by section 17A.19(10)(c), (m):
                                     6
      The court shall reverse, modify, or grant other appropriate
      relief from agency action . . . if it determines that substantial
      rights of the person seeking judicial relief have been prejudiced
      because the agency action is any of the following:
            ....
            c. Based upon an erroneous interpretation of a provision
      of law whose interpretation has not clearly been vested by a
      provision of law in the discretion of the agency.
            ....
            m. Based upon an irrational, illogical, or wholly
      unjustifiable application of law to fact that has clearly been
      vested by a provision of law in the discretion of the agency.

Iowa Code § 17A.19(10)(c), (m) (2005).     “The interpretation of workers’

compensation statutes and related case law has not been clearly vested by a

provision of law in the discretion of the agency.”       Finch v. Schneider

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

give the Commissioner’s interpretation of the law no deference and are free

to substitute our own judgment. Id. On the other hand, application of the

workers’ compensation law to the facts as found by the Commissioner is

clearly vested in the Commissioner. See Mycogen Seeds v. Sands, 686

N.W.2d 457, 465 (Iowa 2004).             Therefore, we may reverse the

Commissioner’s application of the law to the facts only if it is “irrational,

illogical, or wholly unjustifiable.” Finch, 700 N.W.2d at 331.
      III. Test For “Arising Out Of.”

      A. Governing Principles. In order for an injury to be compensable

in Iowa, there must be “a connection between the injury and the work.”

Meyer, 710 N.W.2d at 221. That connection is established by showing the

injury arose out of and in the course of the worker’s employment. Iowa

Code § 85.31(1) (2001); Meyer, 710 N.W.2d at 220.          In this case, the

employer does not dispute that Blue’s stumble on the stairs occurred in the

course of her employment, but it does contest the Commissioner’s

determination that Blue’s injury arose out of her employment. Not only do
                                             7

the parties disagree whether Blue has carried her burden to prove her

injury arose out of her employment, the parties disagree on the proper test

under which this element is to be determined. Consequently, we begin our

analysis with a discussion of the legal standard that should be employed to

determine whether an injury arises out of the worker’s employment.

       As this court has noted in prior cases, “[i]njuries that occur in the

course of employment or on the employer’s premises do not necessarily

arise out of that employment.” Miedema v. Dial Corp., 551 N.W.2d 309, 311

(Iowa 1996). “The two tests are separate and distinct and both must be

satisfied in order for an injury to be deemed compensable.”                      Id. It is

important, therefore, to understand the “in the course of” test before we

address the “arising out of” test.

       The element of “in the course of” refers “to the time, place, and

circumstances of the injury.” Id. To satisfy this requirement, the injury

must take place “ ‘within the period of the employment, at a place where the

employee reasonably may be, and while the employee is fulfilling work

duties or engaged in doing something incidental thereto.’ ” Meyer, 710

N.W.2d at 222 (quoting 1 Arthur Larson & Lex K. Larson, Larson’s Workers’

Compensation Law ch. 12, scope, at 12-1 (2005)). 1



       1In Meade v. Ries, 642 N.W.2d 237 (Iowa 2002), we stated that the “arising out of”
requirement is satisfied when the incident that caused the injury “ ‘occurr[ed] while the
employee [was] engaged in some activity or duty which [the employee was] authorized to
undertake, and which [was] calculated to further, indirectly or directly, the employer’s
business.’ ” Meade, 642 N.W.2d at 245 (quoting 82 Am. Jur. 2d Workers’ Compensation
§ 265, at 261-62 (1992)). This statement seems indistinguishable from the test for the “in
the course of” element of causation, as set forth in Meyer. For this reason, we reject the
Am. Jur. 2d test as an appropriate definition of the “arising out of” element under Iowa law,
disavow any contrary statements in our prior cases, and do not employ the Am. Jur. 2d test
in determining whether Blue’s injury arose out of her employment by Lakeside Casino. (We
note the most recent edition of Am. Jur. 2d has omitted the statement quoted in Meade
from its discussion of the meaning of the phrase “arising out of.” See 82 Am. Jur. 2d
Workers’ Compensation § 239, at 228–29 (2003)).
                                             8

       The element of “arising out of” requires proof “that a causal

connection exists between the conditions of [the] employment and the

injury.” Miedema, 551 N.W.2d at 311. “In other words, the injury must not

have coincidentally occurred while at work, but must in some way be

caused by or related to the working environment or the conditions of [the]

employment.” Id.; accord McIlravy v. N. River Ins. Co., 653 N.W.2d 323, 331

(Iowa 2002) (stating injury “must be related to the working environment or

the conditions of employment”); Griffith v. Norwood White Coal Co., 229 Iowa

496, 502, 294 N.W. 741, 744 (1940) (stating “injury arises out of the

employment if it can reasonably be said to result from a hazard of the

employment”). In Hanson, this court adopted the actual-risk rule:

       If the nature of the employment exposes the employee to the
       risk of such an injury, the employee suffers an accidental
       injury arising out of and during the course of the employment.
       And it makes no difference that the risk was common to the
       general public on the day of the injury.

452 N.W.2d at 168.          Consequently, with limited exceptions, 2 we have

abandoned any requirement that the employment subject the employee to a




       2A claimant seeking compensation for a nontraumatic mental injury caused only by
mental stimuli must prove “that the mental injury ‘was caused by workplace stress of
greater magnitude than the day-to-day mental stresses experienced by other workers
employed in the same or similar jobs,’ regardless of their employer.” Dunlavey v. Econ. Fire
& Cas. Co., 526 N.W.2d 845, 857 (Iowa 1995) (quoting Graves v. Utah Power & Light Co.,
713 P.2d 187, 193 (Wyo. 1986), superseded by statute, Wyo. Stat. Ann. § 27-14-102(a)(xi)(J)
(Cum. Supp. 1996)). When workers’ compensation benefits are sought for an employee’s
heart attack, the legal causation required to establish the injury arose out of the
employment can be shown in three different ways:
       (1) heavy exertions ordinarily required by the job are superimposed on a
       defective heart, aggravating or accelerating the previous condition; (2)
       unusually strenuous employment exertion is superimposed on a preexisting
       diseased condition; or (3) damage results from continued exertion required
       by the employment after the onset of the heart attack symptoms.
Wilson v. Good Will Publishers, 671 N.W.2d 479, 480-81 (Iowa 2003), abrogated on other
grounds by P.D.S.I. v. Peterson, 685 N.W.2d 627, 635 (Iowa 2004).
                                             9

risk or hazard that is greater than that faced by the general public. 3 Floyd

v. Quaker Oats, 646 N.W.2d 105, 108 (Iowa 2002) (stating requirement of

increased hazard or exertion only applies to claims of heart attack and

mental illness).

       Applying these principles, this court has held the following injuries

were not compensable or, in the penalty-benefits/bad-faith context,

arguably not compensable, because they did not arise out of the employee’s

employment: (1) a knee injury that occurred as the employee was walking

across a level floor, McIlravy, 653 N.W.2d at 331 4 ; (2) a neck injury that

happened when the employee straightened up after bending over to sign an

invoice, Gilbert v. USF Holland, Inc., 637 N.W.2d 194, 200 (Iowa 2001)5 ; (3) a


       3As  the claimant points out in her brief, this court commented in Miedema on the
absence of any evidence that the employment in that case exposed the claimant to an
increased hazard or risk. Miedema, 551 N.W.2d at 311. These observations were merely
incidental to the primary holding in that case that the claimant had failed to prove a causal
connection between his back injury and a hazard or condition of his employment. Id. We
disavow any intent in Miedema to retreat from our decision in Hanson to reject the
increased-risk rule in favor of the actual-risk rule.
       4This   case presented a bad-faith claim brought by a workers’ compensation
claimant against the workers’ compensation insurer, claiming the insurer had had no
reasonable basis to deny his claim for workers’ compensation benefits. McIlravy, 653
N.W.2d at 326-27. The initial information available to the insurer was that the claimant’s
knee popped as he was walking across a level cement floor. Id. at 326. A later doctor’s
report stated that claimant’s work made him more susceptible to the occurrence of such an
injury. Id. at 327. We held the information initially available to the insurer gave the
insurer a reasonable basis to deny the claim. Id. at 331. Based on this limited
information, there was no evidence the injury was “related to the working environment or
the conditions of employment.” Id.
       5This  workers’ compensation case included a claim for penalty benefits. Gilbert, 637
N.W.2d at 195. There was evidence to support a finding that the claimant was injured
when his neck popped as he straightened up after signing an invoice, but there was also
evidence that he was injured when he tugged on a stuck dock plate. Id. at 195-96.
Although the Commissioner ultimately determined the injury occurred when the claimant
pulled on the dock plate, we held the claimant’s claim was fairly debatable. Id. at 197, 201.
 We held the claimant’s initial explanation of his injury—that it occurred as he
“straightened up after signing some work documents”—provided a basis for the employer to
dispute whether the injury arose out of the claimant’s employment. Id. at 199–200. We
noted that if the injury had occurred in this manner, it “would arguably be coincidental to
work and would not necessarily be related to the conditions of employment.” Id. at 200.
                                     10

back injury that occurred when an employee twisted to flush the toilet,

Miedema, 551 N.W.2d at 312; and (4) a back injury that occurred when the

employee was leaning against a wall for balance while putting on an

overshoe, Musselman v. Cent. Tel. Co., 261 Iowa 352, 361, 154 N.W.2d 128,

133 (1967). We concluded or suggested there was nothing in the conditions

of the work environment that caused or was related to the employees’

injuries. See McIlravy, 653 N.W.2d at 331; Gilbert, 637 N.W.2d at 200;

Miedema, 551 N.W.2d at 311; Musselman, 261 Iowa at 359–60, 154 N.W.2d

at 132.

      In contrast to these decisions, we have held the following injuries did

arise out of the employee’s employment: (1) death of an employee caused by

a deranged co-employee, Cedar Rapids Cmty. Sch. v. Cady, 278 N.W.2d 298,

302 (Iowa 1979); and (2) a head injury that occurred when a mining

employee riding a “man trip” struck his head on a beam in the roof of the

mine shaft, Griffith, 229 Iowa at 502, 294 N.W. at 744. In both cases, we

concluded the injuries were causally connected to a hazard of the

employment. Cady, 278 N.W.2d at 302–03; Griffith, 229 Iowa at 502, 294

N.W. at 744. In a third case, this court held an injury occurring when a

teacher slipped on ice while checking on the condition of the highway prior
to the students leaving school was compensable without any specific

discussion of the “arising out of” requirement other than a statement of the

basic definition. See Crowe v. De Soto Consol. Sch. Dist., 246 Iowa 402, 410,

68 N.W.2d 63, 67–68 (1955).

      B. Commissioner’s Interpretation of the Governing Legal

Principles. With this background, we now turn to the Commissioner’s

decision and his discussion of the applicable law. As noted above, the

Commissioner adopted the deputy’s proposed decision, but added some
                                      11

additional analysis of his own. We will separately consider both bases of

the Commissioner’s decision.

        The deputy concluded in his proposed decision that the claimant had

to establish a causal connection between her injury and a condition, risk, or

hazard of her employment in order to prove her injury arose out of her

employment.      We find no error in this interpretation of the workers’

compensation statute. As noted above, this court adopted the actual-risk

rule in Hanson, and the deputy’s statement of the law is consistent with this

rule.

        Although the Commissioner incorporated the deputy’s actual-risk

analysis into his final decision, the Commissioner also appeared to interpret

Iowa law to allow compensation under the positional-risk doctrine. See

generally 1 Arthur Larson & Lex K. Larson, Larson’s Workers’ Compensation

Law § 3.04, at 3–5 (2007) (stating under the actual-risk doctrine, the injury

is compensable “as long as the employment subjected [the] claimant to the

actual risk that caused the injury”); id. § 3.05, at 3–6 (stating under the

positional-risk rule, “[a]n injury arises out of the employment if it would not

have occurred but for the fact that the conditions and obligations of the

employment placed claimant in the position where he would be injured”).
The Commissioner stated in his decision:

               When injured, [Blue] was on duty and on the employer’s
        premises. Her employment compelled her to traverse those
        stairs. Accordingly, any injury she sustained as a result of
        traversing the stairs arose out of and in the course of her
        employment unless something in the evidence establishes
        otherwise.

The Commissioner seems to be applying the rule “that causal connection is

sufficiently established whenever [the employment] brings claimant to the

position where he or she is injured.” Id. ch. 7, scope, at 7–1. Iowa has not
                                          12

adopted the positional-risk rule, and we decline to do so now under the

circumstances presented by this case.

       Larson argues in his treatise that an unexplained fall should be

compensated under the positional-risk rule. Id. § 7.04[1][a], at 7–28 to 7–

29. Blue argues her injury arose from an unexplained fall, and Iowa should

permit compensation under the positional-risk rule.               We disagree that

Blue’s stumble is unexplained. The Commissioner found that Blue tripped

when she lost her footing on the stairs. 6 Such an occurrence is easily

explained by the process of going down stairs: one must necessarily lift

one’s foot to clear the current step, carefully position one’s foot on the next

step, and all the while maintain one’s balance. Blue did not do so. Thus,

Blue’s stumble was readily explainable by the natural configuration of stairs

and the care required to traverse them.

       To the extent the Commissioner interpreted Iowa law to permit an

award of benefits under the positional-risk rule, the Commissioner erred.

Notwithstanding this error, we do not believe the employer’s substantial

rights were prejudiced because the claimant met the “arising out of”

requirement      under    the    actual-risk    analysis    incorporated      in   the

Commissioner’s final decision. Focusing then on the actual-risk rule, we
now examine whether the Commissioner’s decision was “[b]ased upon an

irrational, illogical, or wholly unjustifiable application of law to fact.” Iowa

Code § 17A.19(10)(m).

       IV. Application of Law to The Facts of This Case.

       In light of the principles and case law reviewed above, we are not

persuaded the Commissioner’s application of the actual-risk rule to the

facts of this case was irrational, illogical, or wholly unjustifiable. Blue

       6The Commissioner found that Blue’s stumble was not idiopathic, and the employer
does not challenge this finding on judicial review.
                                             13

injured her ankle when she stumbled as she was walking down stairs. It

was not disputed that these stairs were a condition existing in her

workplace. Moreover, it is a matter of common knowledge that stairs pose

an actual risk of stumbling or falling when traversing them, similar to the

risk posed by going up and down ladders. Although Blue did not stumble

due to any particular defect in or condition of the stairs, it is not necessary

under Iowa case law that the stairs in Blue’s workplace be more dangerous

than a typical set of steps. 7 In addition, it matters not that she stumbled

through her own inattention. Blue’s misstep was causally related to the

fact that she was walking on stairs, and therefore, the Commissioner

rationally concluded her injury arose out of her employment.

       This case is decidedly different from McIlravy, in which the employee

injured his knee walking across a level floor, Gilbert, in which the employee

arguably injured his neck straightening up from signing a document,

Miedema, in which the employee injured his back turning to flush the toilet,

and Musselman, in which the employee injured his back leaning against a

wall for balance. See McIlravy, 653 N.W.2d at 326; Gilbert, 637 N.W.2d at

195; Miedema, 551 N.W.2d at 310; Musselman, 261 Iowa at 356, 154

N.W.2d at 130. In each of these cases, although the employee may have
been in the course of his employment, there was no condition of his

employment, no risk of his employment activities, and no hazard in his




        7The district court concluded the Commissioner incorrectly held a causal connection

between Blue’s employment and her injury was established under the actual-risk rule. In
explaining why Blue’s injury did not arise out of her employment, the court pointed out
there was no “indication that the conditions of Blue’s employment exposed her to a hazard
not generally associated with traversing stairs.” Although the district court purported to
apply the actual-risk rule, its rationale is more consistent with the discarded increased-risk
rule. This detour to increased-risk analysis may account for the district court’s mistaken
conclusion that the Commissioner’s application of the actual-risk rule was incorrect.
                                            14

workplace that was related to his injury. 8 In contrast, in the present case,

Blue stumbled on the stairs, the Commissioner finding that “[t]he injury

occurred from the hazard of traversing stairs.” (Emphasis added.) It is this

causal relationship between a condition of Blue’s employment—the stairs—

and her injury that distinguishes the present case from those in which we

have determined the employee’s injury was not compensable.

       V. Conclusion and Disposition.

       We     disagree    with     the   district    court’s    conclusion      that    the

Commissioner erred in ruling Blue’s injury arose out of her employment.

Therefore, we reverse the district court’s judgment and remand this case for

entry of a judgment affirming the Commissioner’s decision awarding

workers’ compensation benefits to Blue under the actual-risk rule.

       REVERSED AND REMANDED.




       8We  make this statement in reference to McIlravy and Gilbert on the basis of the
factual scenario held by the court to provide a reasonable basis for the insurer’s denial of
the employee’s claim, not on the basis of the facts as found by the Commissioner for
purposes of awarding workers’ compensation benefits.
