950 N.W.2d 246
Iowa2020Background:
- On October 14, 2015 Brian Terry, an employee of Lutheran Services in Iowa (LSI), was assaulted by an LSI client and suffered serious injuries.
- Brian filed a workers’ compensation claim; the parties submitted two documents to the Workers’ Compensation Commissioner: a "Compromise Settlement" (limited to workers’ compensation claims) and "Additional Terms of Settlement" (45,000 lump sum and broader release language covering LSI, insurer, and employees).
- The Commissioner approved the compromise settlement documents.
- Brian and his wife Lisa sued Megan Dorothy, Brian’s former supervisor, in district court for gross negligence (Brian) and loss of consortium (Lisa).
- Dorothy moved for summary judgment arguing the approved workers’ comp settlement and the release language barred the claims; the district court granted summary judgment on statutory and contract grounds.
- The court of appeals reversed on the statutory theory; the Iowa Supreme Court granted further review and affirmed the district court on contract grounds while rejecting the statutory-barring rationale.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether commissioner-approved workers’ comp compromise extinguishes a common-law gross negligence claim against a coemployee | Terry: gross negligence is a common-law claim outside the workers’ comp statutory scheme, so approval does not bar it | Dorothy: an approved compromise is a final bar to all further rights under the workers’ comp statutes, extinguishing coemployee claims | Court: Rejected Dorothy’s statutory theory — gross negligence against a coemployee survives outside the statute |
| Whether the parties’ settlement contractually released Brian’s gross negligence claim (and Lisa’s derivative consortium claim) | Terry: additional release should not be read to bar common-law claims (or is ambiguous) | Dorothy: additional terms expressly and unambiguously release LSI, insurer, and any employees from all liability | Court: Agreed with Dorothy on contract grounds — Additional Terms’ broad, unambiguous release bars the gross negligence and derivative consortium claims |
| Whether the contract-release theory was preserved on appeal | Terry: argued the court of appeals erred to rely on contract release | Dorothy: raised contract-release argument on appeal | Court: Contract theory was raised and preserved; district court’s contract ruling was a proper basis for affirmance |
| Whether Lisa’s loss-of-consortium release required her signature | Terry: (not raised below) | Dorothy: release of spouse derivative claims follows from release of underlying claim | Court: Not considered because appellants did not raise the issue |
Key Cases Cited
- Bankers Standard Ins. Co. v. Stanley, 661 N.W.2d 178 (Iowa 2003) (approved compromise is a final bar to further rights under workers’ compensation statutes)
- Craven v. Oggero, 213 N.W.2d 678 (Iowa 1973) (historical rule: immunity from workers’ comp settlements initially applied only to employers)
- Gourley v. Nielson, 318 N.W.2d 160 (Iowa 1982) (statutory amendment preserved coemployee common-law claims for gross negligence)
- Stetzel v. Dickenson, 174 N.W.2d 438 (Iowa 1970) (a release is a contract governed by ordinary contract rules)
- Verne R. Houghton Ins. Agency v. Orr Drywall Co., 470 N.W.2d 39 (Iowa 1991) (contract interpretation: plain language controls absent ambiguity)
- Griffin Pipe Prods. Co. v. Bd. of Rev., 789 N.W.2d 769 (Iowa 2010) (issues preserved for appeal need not be hypertechnical)
- Bandstra v. Covenant Reformed Church, 913 N.W.2d 19 (Iowa 2018) (standards governing appellate review of summary judgment)