                   IN THE COURT OF APPEALS OF IOWA

                                  No. 14-0565
                            Filed January 14, 2015

JBS SWIFT & COMPANY and
ZURICH AMERICAN INSURANCE
COMPANY,
     Petitioners-Appellants,

vs.

WAYNE HEDBERG,
     Respondent-Appellee.
________________________________________________________________

       Appeal from the Iowa District Court for Polk County, Randy V. Hefner,

Judge.



       Appeal from the district court decision on judicial review, affirming the

agency’s award of permanent total disability benefits.       REVERSED AND

REMANDED.



       Jennifer A. Clendenin and Nicholas J. Pellegrin of Ahlers & Cooney, P.C.,

until withdrawal, then Mark A. King of Patterson Law Firm, L.L.P., Des Moines,

for appellants.

       Nathaniel R. Boulton of Hedberg & Boulton, P.C., Des Moines, for

appellee.



       Heard by Mullins, P.J., and Bower and McDonald, JJ.
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McDONALD, J.,

       JBS Swift & Company and Zurich American Insurance Company,

(hereinafter “employer” or “Swift”) appeal from the district court ruling affirming

the agency’s award of permanent and total disability benefits to workers’

compensation claimant Wayne Hedberg.

                                         I.

       Hedberg commenced employment with Swift in 1990. In 2010, Hedberg

sustained a work-related injury to his right shoulder and filed a claim for workers’

compensation benefits. During the agency proceeding, the parties stipulated to

the following facts:

       Hedberg sustained an injury to his right shoulder and arm on May
       7, 2010. After his injury Hedberg continued working in light-duty
       positions within his temporary work restrictions until his surgery on
       December 31, 2010. Hedberg moved to Minnesota on January 3,
       2011. As of March 28, 2011, Swift notified Hedberg there was work
       available to him within his temporary work restrictions, but did not
       provide job descriptions. Swift notified Hedberg there was work
       available for him within his permanent work restrictions. Hedberg
       did not return to work at Swift after his December 31, 2010 surgery
       and did not seek other employment. Hedberg was notified on
       August 8, 2011, that he was deemed a voluntary quit for failing to
       report back to work.

       Hedberg moved to Minnesota following his December 31 surgery because

he was unable to care for himself following the unexpected death of his wife in

December 2010. Hedberg’s inability to care for himself following his wife’s death

was unrelated to his work injury. Instead, the record reflects Hedberg suffered a

variety of conditions for most of his life—including cerebral lupus, mild cerebral

palsy, and significant hearing impairment—that required him to have the

assistance of others. Because of these and other conditions, Hedberg’s family
                                           3



decided Hedberg would move to Minnesota to live with his younger brother.

Hedberg testified if his wife had not died, he would have stayed in Iowa and

continued to work at Swift.

       After Hedberg’s surgery in December 2010, two doctors provided opinions

regarding Hedberg’s work restrictions and impairment rating.             Dr. Neff was

Hedberg’s treating physician/surgeon; Dr. Bansal performed an independent

medical evaluation. On May 23, 2011, Dr. Neff stated, “I am pleased with his

progress; but I agree he will never have the same shoulder that he had before,

and repetitive intensive overhead activity is not going to be possible.” In his

evaluation on July 20, 2011, with Hedberg having attained maximum medical

improvement, Dr. Neff opined:

              I am not certain how best to proceed determining impairment
       evaluation for the right upper extremity. Active range of motion
       done by the patient upon request shows significant disparity
       between passive motion.
              In light of the above, I do not feel comfortable attributing
       impairment based on range of motion loss. The 5th edition of the
       AMA Guides reflects a 10% impairment attributable as a result of
       AC joint resection arthroplasty; and consequently, it is my opinion
       that he has a 10% impairment to the right upper extremity as a
       result of AC joint resection arthroplasty and a 1% impairment to the
       right upper extremity as a result of elbow range of motion loss.
       There is no impairment attributed as a result of cubital tunnel
       syndrome.
              Consequently, adding these he has an 11% impairment to
       the right upper extremity as a result of his ongoing circumstance.

Dr. Bansal recommended the following restrictions: “no lifting greater than lifting

up to 15 pounds along with no lifting over shoulder level or away from her [sic]

body . . . ; no frequent lifting, pushing, or pulling . . . ; no pushing, pulling greater

than 20 lbs.” Dr. Bansal gave Hedberg a 10% upper extremity impairment rating
                                          4



for his right shoulder, with a 16% impairment of the whole person, and a 6.7%

upper extremity rating for his right elbow, with a 4% rating of the whole person.

       Two experts conducted vocational evaluations of Hedberg: Carma

Mitchell, retained by Hedberg; and Lana Sellner, retained by Swift. In her report,

Mitchell opined:

       Mr. Hedberg has an excellent employment record and has worked
       the past 20 years despite problems with his hearing and speech.
       He has sought treatment in an effort to improve the functioning of
       his right shoulder and upper extremity. The 69% loss of access to
       the labor market is based on the physical restrictions Mr. Hedberg
       has from his work related injury. When looking at Mr. Hedberg as a
       whole with all his limitations his employment options are extremely
       limited. It is my opinion that with the functional limitations and pain
       and numbness Mr. Hedberg describes when trying to use his right
       shoulder and upper extremity along with his limited intellectual
       functioning, hearing loss and speech impediment he would not be
       able to obtain or sustain full-time competitive employment.

       Sellner’s report was admitted into evidence as part of Exhibit K. Sellner’s

report includes a labor market survey of suitable employment in Minnesota and

Iowa as well as a survey of positions at Swift. The report included seven job

descriptions of permanent positions at Swift. Referring specifically to the seven

positions described in the report, Sellner opined “these occupations identified are

viable and within Dr. Neff’s restrictions. If one considers Dr. Bansal’s restrictions,

the occupations identified continue to be viable with the exception [of two of

them].” The report also notes the seven identified positions were not the only

positions available because “other positions maybe [sic] suitable as well.”

       Hedberg’s workers’ compensation claim proceeded to hearing.               In its

arbitration decision, the deputy commissioner noted Sellner’s report included jobs

at Swift. The arbitration decision found that Swift offered Hedberg suitable light
                                         5



duty work beginning March 28, 2011, and concluded that Swift was thus not

liable for healing period benefits between March 28 and July 20, 2011. The

deputy commissioner also found that Swift offered Hedberg permanent

employment within Hedberg’s restrictions, that Hedberg did not accept the

employment, and that Hedberg was not an odd-lot employee. The arbitration

decision found Hedberg had an 80% industrial disability but was not permanently

and totally disabled. The parties appealed.

       The intra-agency appeal was decided by the commissioner’s designee.

The appeal decision adopted the arbitration decision with a “modification as to

the extent of claimant’s permanent disability.”     The commissioner’s designee

found and concluded Hedberg’s injury “permanently disable[d] him from

performing work within his experience, training, education, and physical

capacities.   Therefore, claimant is entitled to an award of permanent total

disability benefits.” In support of the award of permanent total disability benefits,

the commissioner’s designee stated that Swift failed to provide any descriptions

of the work available to Hedberg and that Sellner failed to conduct a market

survey of the jobs available at Swift:

       No further explanation of the jobs that Swift stood ready to provide
       to the claimant appear in the record. There is a joint stipulation that
       the claimant was notified there was work available for him within his
       permanent restrictions in 2011. Even Lana Sellner, the vocational
       rehabilitation consultant hired by the defendants, did not provide
       any jobs from the defendants in her labor market survey. While Ms.
       Sellner did identify several jobs available to people who would be
       limited to the light to medium duty work activity, she did not indicate
       in her report which jobs claimant could actually perform with his
       hearing and speech impediments.

The appeal decision continued:
                                          6



       There was no evidence provided herein that actual job openings
       were available to claimant within the very narrow categories
       identified in the vocational report by Ms. Sellner, nor was there any
       credible basis to believe that this worker with his limited education,
       significant work restrictions, and a work history only in menial
       physical labor would be a successful candidate for such positions,
       should they actually exist.

The commissioner’s designee continued:

       There was no competitive employment that the claimant could
       believably work following his shoulder injury. Despite the offers
       made by the defendants, none of them had any detail even when
       both Dr. Neff and the counsel for the claimant requested it. The
       lack of response by the defendants suggests the positions were
       make work at best.

       Swift petitioned for judicial review, and the district court affirmed the

agency’s action. The district court summarized Swift’s contentions as follows: (1)

the deputy commissioner failed to give any weight to the report of Lana Sellner of

Care Solutions regarding the extent of Hedberg’s industrial disability, and (2) the

deputy commissioner failed to reconcile the award of permanent and total

disability benefits with prior appeal decisions refusing such awards after an

employer offered suitable work.       The court conducted substantial evidence

review and determined the appeal decision “was not illogical, unreasonable,

arbitrary or capricious, or inconsistent with prior agency action.”

                                          II.

       Iowa Code chapter 17A governs our review of the agency’s decision. See

Iowa Code § 86.26 (2013); Mike Brooks, Inc. v. House, 843 N.W.2d 885, 888

(Iowa 2014). The district court acts in an appellate capacity to correct errors of

law when reviewing the agency’s decision. See Watson v Iowa Dep’t of Transp.,

829 N.W.2d 566, 568 (Iowa 2013); Ludtke v. Iowa Dep’t of Transp., 646 N.W.2d
                                         7



62, 64 (Iowa 2002). “On appeal, we apply the standards of chapter 17A to

determine whether we reach the same conclusions as the district court. If we

reach the same conclusions, we affirm; otherwise we may reverse.”               See

Watson, 829 N.W.2d at 568 (citation omitted).

       The crux of the parties’ dispute in this appeal is the nature of the question

presented and the standard of review. Hedberg argues the sole issue on appeal

is whether the appeal decision is supported by substantial evidence. Under this

standard, we are bound by the agency’s factual determinations if supported by

“substantial evidence in the record before the court when that record is viewed as

a whole.” Iowa Code § 17A.19(10)(f); see Watson, 829 N.W.2d at 568 (setting

forth standard); Cedar Rapids Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839, 845

(Iowa 2011) (setting forth standard). On substantial evidence reivew, our task “is

not to determine whether the evidence supports a different finding; rather, our

task is to determine whether substantial evidence . . . supports the findings

actually made.” See id. Swift contends this case does not present a routine

question of substantial evidence review. Instead, Swift argues the agency failed

to consider a relevant and important matter; took action that was unreasonable,

arbitrary, capricious, or an abuse of discretion; and reached a decision that is a

product of illogical reasoning. See Iowa Code § 17A.19(10)(f), (i), (j), (m), & (n).

Specifically, Swift asserts the agency failed to consider and/or explicitly misstated

record evidence; failed to consider Hedberg’s refusal of full-time work within his

permanent work restrictions; and failed to consider Hedberg voluntarily left his
                                         8



employment for reasons unrelated to his work injury. Swift has the better of the

argument.

      The record reflects the commissioner’s designee simply ignored or

overlooked record evidence. The appeal decision correctly notes the “arbitration

decision and the defendants’ arguments that claimant is employable seem[] to

stem from the job offer made by the defendants for sedentary work which would

be within claimant’s work restrictions.” The appeal decision then states “[t]here is

no description in the record what kind of work this entailed” and there is “[n]o

further explanation of the jobs that Swift stood ready to provide to the claimant

appear in the record.” The commissioner’s designee goes on to state “[e]ven

Lana Sellner, the vocational rehabilitation consultant hired by the defendants, did

not provide any jobs from the defendants in her labor market survey.” All three

statements regarding the state of the record are demonstrably incorrect.

Sellner’s report includes job descriptions and other information for seven

positions in Swift’s ham boning, kill, and cut departments. The appeal decision

also states Sellner “did not indicate in her report which jobs claimant could

actually perform with his hearing and speech impediments.” Again, the agency’s

statement of the record is demonstrably incorrect. Page 4 of Sellner’s report

concludes: “It should be noted these occupations identified are viable and within

Dr. Neff’s restrictions.    If one considered Dr. Bansal’s restrictions, the

occupations identified continue to be viable with the exception of [two positions].”

Page 2 of the report explicitly accounts for Hedberg’s “hearing loss and speech

impediment.” The overlooked evidence is not immaterial; the heart of the appeal
                                          9



decision is based upon the designee’s conclusion that Swift failed to provide

evidence of available work and that this purported failure of proof demonstrated

Swift had only make-work available for Hedberg.

       The deference afforded the agency on substantial evidence review is

predicated on the assumption the agency reviewed and considered the evidence

in reaching its decision. Where the record affirmatively discloses the agency did

not review and consider the evidence, as is the case here, then substantial

evidence review is inapplicable. The agency is entitled to reconcile competing

evidence, not ignore competing evidence. We thus conclude the commissioner’s

designee’s action is unreasonable, arbitrary, capricious, an abuse of discretion,

and the product of illogical reasoning. See Iowa Code § 17A.19(10)(i), (j), (m), &

(n); Meyer v. IBP, Inc., 710 N.W.2d 213, 225 (Iowa 2006) (“We have said that the

commissioner commits error by failing to weigh and consider all of the

evidence.”); Armstrong v. State of Iowa Bldgs. and Grounds, 382 N.W.2d 161,

165 (Iowa 1986) (stating it is reversible error for the commissioner to fail to

“weigh and consider all the evidence”); Buttrey v. Second Injury Fund, No. 11-

0205, 2011 WL 4578449, at *8 (Iowa Ct. App. Oct. 5, 2011) (stating an agency’s

“opinion grounded upon inaccurate facts does not warrant the deference

normally accorded”); Beef Prods., Inc. v. Rizvic, No. 10-2083, 2011 WL 3688976,

at *6 (Iowa Ct. App. Aug. 24, 2011) (holding commissioner’s decision was

“illogical, irrational, and wholly unjustifiable” where commissioner’s findings relied

on misstatements of record evidence).
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      When the commissioner fails to consider all the evidence, the appropriate

remedy is “remand for the purpose of allowing the agency to re-evaluate the

evidence” unless the facts are established as a matter of law. Armstrong, 382

N.W.2d at 165; see also Meyer, 710 N.W.2d at 225 (stating the remedy for failure

to consider all evidence “is to remand the case for a decision by the

commissioner on the existing record”); Rizvic, 2011 WL 3688976, at *6 (affirming

district court’s remand to agency). Here, we cannot conclude the relevant facts

are established as a matter of law. Accordingly, this matter shall be remanded

for the purpose of allowing the agency to make a decision based on the existing

record.

                                        III.

      For the foregoing reasons, we reverse the decision of the district court and

remand this case to the agency for a decision based on the totality of the existing

record.

      REVERSED AND REMANDED.
