James Delire v. Key City Transport, Inc. and Great West Casualty Company, 16-0720

Background

James Delire was hired as an over-the-road truck driver; pay was by mileage plus drop fees and he worked ~3 weeks before being injured on his third week.
His actual weekly earnings for the three weeks were: $412.04 (week 1), $1,294.26 (week 2), $1,665.62 (week 3/injury week).
The workers’ compensation agency initially used hypothetical annual earnings to compute weekly earnings; appellate court rejected that method and remanded to apply the statutory formula.
On remand the commissioner, applying Iowa Code §85.36(7) with no evidence of comparable employees, computed Delire’s weekly earnings as the average of his actual weeks, yielding $1,026.14.
Delire appealed, arguing the commissioner should have excluded the atypical first week, inferred employer-held evidence of comparable wages, and given weight to prior agency findings that he’d been told he’d earn ~$75,000/year.
The district court affirmed the commissioner’s remand calculation; the Court of Appeals likewise affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Proper method to compute weekly earnings under Iowa Code §85.36 for employee employed <13 weeks	§85.36(7) requires applying §85.36(6)’s 13-week averaging and excluding atypical weeks (exclude week 1)	Where earnings of other employees cannot be determined, §85.36(7) mandates averaging the employee’s actual weeks	Held: §85.36(7) is unambiguous; absent evidence of comparable employees, use the claimant’s actual average weeks (no exclusion)
Whether an adverse inference should be drawn against employer for not producing wages of similar employees	Delire: employer controlled that evidence; adverse inference warranted	Employer: claimant has burden to produce evidence; mere control doesn’t compel inference here	Held: No adverse inference; plaintiff failed to produce evidence and prior opinion rejected speculation
Whether prior agency finding about promised $75,000/year should control on remand	Delire: commissioner’s earlier finding that he was told ~$75,000 should be given deference	Respondent: appellate mandate required applying the statutory method; prior hypothetical-based finding was reversed	Held: Law-of-the-case and prior appellate ruling barred reliance on hypothetical annual earnings; remand must follow statutory formula
Whether remand decision lacked substantial evidence or was irrational	Delire: including the low first week and ignoring hire promise was irrational and unsupported	Respondent: commissioner’s calculation is supported by the uncontroverted payroll amounts and statute	Held: Decision supported by substantial evidence and rational under the plain statutory text

Key Cases Cited

Evenson v. Winnebago Indus., Inc., 881 N.W.2d 360 (Iowa 2016) (standard for reviewing agency legal interpretations and factual findings)
Iowa Ins. Inst. v. Core Grp. of Iowa Ass'n for Just., 867 N.W.2d 58 (Iowa 2015) (courts decline deference to commissioner’s chapter 85 statutory interpretations)
Neal v. Annett Holdings, Inc., 814 N.W.2d 512 (Iowa 2012) (district court’s appellate-capacity review and application of administrative standards)
Mycogen Seeds v. Sands, 686 N.W.2d 457 (Iowa 2004) (standard for appellate review of agency decisions)
Hanigan v. Hedstrom Concrete Prods., Inc., 524 N.W.2d 158 (Iowa 1994) (where no evidence of comparable employees exists, averaging claimant’s actual wages is fair)
Bearce v. FMC Corp., 465 N.W.2d 531 (Iowa 1991) (definition of substantial evidence)
Swiss Colony, Inc. v. Deutmeyer, 789 N.W.2d 129 (Iowa 2010) (limits on judicial modification of clear statutory text)
United Fire & Cas. Co. v. Iowa Dist. Ct., 612 N.W.2d 101 (Iowa 2000) (law-of-the-case doctrine binding on later proceedings)