Ranney v. Parawax Co., Inc.
582 N.W.2d 152
Iowa
1998
Check Treatment

*1 par- for Standard’s motion requested by insurer fendant American providing documents summary judgment, and we affirm. tial objectively basis reasonable an established coverage plaintiff-insured for denial AFFIRMED. present evidence sufficient thus failed claim). support bad faith reject contention Sampson’s

alsoWe investigation was

that American Standard’s first-party bad faith

inadequate. In a alone, standing investigation, imperfect “an III, Appellant, Joseph RANNEY W. recovery insur for if the sufficient objectively reasonable basis

er in fact has v. State denying the claim.” Reuter for Defendant, COMPANY, INC., PARAWAX Co., Mut. Auto. Ins. Farm (Iowa 1991); Hollingsworth see also 254-55 (Iowa Schminkey, Company Insurance American States 1996); Kooyman Bureau v. Farm but cf. Insurance, Western f/d/b/a 1982) 30, 35 Ins. Mut. Appellee. (failure alone, standing may investigate, No. 96-2004. third-party bad faith faith establish bad claim). Supreme Court Iowa. summary, that reason- we conclude July finding minds would not differ able Rehearing Denied Oct. policy Sampson’s claim for benefits under fairly debatable, Sampson’s based thereof, records, Ameri- or lack medical possession

can had in its Standard Sampson demand.

time of the settlement produce substantial evidence

thus failed reasonable American lacked a Standard denying policy her claim. See for limits

basis Accordingly,

Thompson, 559 N.W.2d at 292. question Sampson’s

the initial of whether policy

claim for the full limits of UM fairly coverage

medical debatable

appropriate for to decide district court of law.

a matter arguments

We have considered other unnecessary and find

raised them or without merit. address Disposition.

IV. conclude that minds would claims, finding Sampson’s differ pay her its full

that defendant limits coverage, un- motorist and medical

uninsured policy were fair-

der the issued defendant

ly American Standard thus had debatable. objectively denying reasonable basis

Sampson’s a matter of law. The demand as de- properly granted court therefore

district

TERNUS, Justice. This case application involves the discovery rule principle and the notice to a latent arising case Iowa’s workers’ law. See Iowa (1993). Code ch. 85 The district court af- firmed the industrial commissioner’s sum- mary judgment ruling that appellant’s claim was barred statute' of limitations for claims. 85.26(1). § See id. We affirm. Scope

I. Review. Judicial review of the industrial commis- governed sioner’s decisions is the adminis- act, procedure trative Code 17A. § See id. may 86.26. The court reverse if the commissioner’s decision is affected 17A.19(8)(e). error of law. See id. Here, appellant claims the commissioner erred in his governing the law summary judgments. is,

Summary judgment appropriate when genuine there are no issues of material fact moving party and the entitled to as a matter of law. See Iowa R. Civ. P. 237(c). reviewing the record before the correctly commissioner to' determine if he applied this we consider the evidence light party most favorable to the oppos- ing summary judgment. the motion for See Comm’n, DeLaMater v. Marion Civ. Serv. Background II. Proceedings. Facts and facts, following record shows the light appel- viewed most favorable to the lant, Joseph W. III. worked defendant, Inc., for Company, Parawax through February from 1975 During exposed that time he was to toxic materials regular in the course of his duties. became ill and was with Hodgkin’s disease.

John Conroy, W. Kocourek Kocourek & P.C., Bluffs, appellant. Council Ranney suspected beginning Stuart, Peters, Tinley,

James E. Thorn of might causally his condition connected to Bluffs, Hughes, Thorn & appel- Council his work with toxic chemicals. The lee. regarding symptoms he first consulted judicial by the district review report in a affirmed following statements

made the appeal followed. and this re- court patient does “The 1985: June dated and he asso- working paint solvents port principle appeal that the argues on with these in some manner work ciates this apply in latent *3 relationship to the The episodes.... recent argues that Alternatively, he injury cases. an may suggest paint is unclear solvents triggered until he here inquiry notice was not however, the unilateral component; allergic probable compensa- showing facts the knew argue symptoms episodic adenopathy and He claims he of disease. ble character ques- testified he Ranney against this.” until 1991 when have such facts did not about subsequent treating physicians linking expert opinion tioned an medical obtained his work with possible exposure. connection between to his chemical disease “the but none of and his disease chemicals III. Discussion. themselves, one commit doctors would or the other.” requires the of this case The resolution of law: principles three related of law 1987, Ranney’s wife started Then in limitations, discovery rule the the year she took or in Later that school. Parawax has the burden notice. discussing in which she read cases a course defense; Ranney has prove its limitations to occupational caused diseases any exception to the the burden to establish Ranney discussed wife chemicals. appli ordinary period, such as ma- exposure to toxic possibility that his discovery rule. See Estate cability of the caused his condition. at Parawax terials Co., Agric. Montag v. T H & Nutrition Ranney his condition testified he associated (Iowa 1993); Sparks v. Met It was exposure at that time. his chemical Inc., alcraft, 1991, however, Ranney asked not until whether there was newa limitations and A. The statute expo- his work-related causal link between petition for discovery rule. A benefits disease, Hodgkin’s that a doctor sure and filed chapter 85 must be “within theory of Ranney’s causation. confirmed years from the date of occurrence filed compensation case was This workers’ Iowa injury for which benefits are claimed.” employer against Ranney’s former in 1992 85.26(1). interpreted this We have Code carrier, appel- its and workers’ that the occurs when statute to mean Company. American States Insurance lee City Dillinger discovered. See disease claimed (Iowa 1985). 176, 181 City, 368 N.W.2d Sioux expo- causally connected his work-related begins Thus, He relied on to toxic chemicals. sure or in employee discovers] when “the to run two-year statute discovery rule to extend the diligence should of reasonable the exercise applicable chapter 85 work- nature, ... seriousness ] discovert ers’ claims.1 inju character” Dist., ry or disease. Orr v. Lewis Cent. Sch. a mo- granted The industrial commissioner (Iowa 1980). by Ameri- summary judgment filed tion for here, require principles applied these States, As ruling that the limitations can imputed Ranney have or knowl- petition expired before nature, edge seriousness and ruling was commissioner’s for benefits. The employer originally to be liable. The commissioner petition Ranney’s for benefits 85A, that Ran- facts established chapter occu- held Iowa's filed under Iowa Code ney’s exposure to toxic materials at Parawax petition later last pational disease The law. year prior to than one his disable- occurred more amended to add a claim under Hodgkin's from ment challenge ruled that industrial commissioner chapter addition, 85A.Í2, appeal. ruling by § this barred 85A claim was as parties do to whether not raise issue requires or death from that disablement which occupational qualifies year disease occupational "within one disease occur chapter 85A. exposure” disease under injurious in order for ... after last (8th Cir.1994) compensable character of his disease in order (holding no- period. commence the limitations began tice when the “knew or should Cf. Franzen v. Deere & injuries have known of her and their (Iowa 1985) (applying discovery IUD”) rule added) to tort connection to her stating injured person claim and must have (applying law); Jones v. Maine Cent. imputed “actual or knowledge of all the ele- R.R., (D.Me.1988) F.Supp. 75-77 action”). ments of the dispute There is no (holding, aas matter of that statute of had actual limitations commenced when nature and seriousness of his condition more hearing “thought,” loss and years prior filing than two petition “suspected,” “presumed” it resulted from controversy benefits. The here is whether noise). workplace purpose of the inves- *4 imputed knowledge he had probable of the tigation tois ascertain whether the known compensable disease, i.e., nature of his probably, condition opposed is merely to his disease workplace was caused ex- possibly, compensable. posure to toxic brings chemicals. That us to Similarly, Ranney argues also that he inquiry the issue of notice. inquiry was not on notice until 1991 when a B. Inquiry notice. Knowledge is physician informed him that his disease was imputed to a gains claimant when he infor causally connected to his work with toxic mation person sufficient to alert a reasonable He chemicals. relies on the federal district of the need investigate. to See Estate of States, court’s decision in Brazzell v. United Montag, 470; Franzen, 509 at N.W.2d 377 (N.D.Iowa 1985). F.Supp. 62 In Braz- at N.W.2d 662. As of that date he is on zell, the court held the statute of limitations inquiry notice of all facts that would have under the Federal Tort Claims Act did not by reasonably been disclosed diligent inves begin to run plaintiffs until the doctor made 2,11 Franzen, tigation. See at N.W.2d a medical determination of causation. 633 reject Ranney’s inquiry assertion that F.Supp. court, however, at 69. This has apply notice does not here because he suf interpreted never so Iowa’s statute of limita injury. fered from a latent When Roth, (“[Ujnder tions. See 27 F.3d at 1308 disease in knowledge actual of a causal rela 1985, latent; longer condition was no tionship required is not begin to running point, was then known. At that limitations.”). of the statute of We have held subject duty to investigate the same as is “positive medical information is unneces any plaintiff other who he knows has sus sary if [the claimant] has information from Thus, injury. tained an we turn now puts source which him on notice of [the e analysis of the applied notice rule as injury’s] probable compensabl nature.” to the facts of this ease. Department Robinson v. Transp., 296 809, 1980) The record shows that sus add pected beginning ed); Larson, accord 7 Arthur Larson’s Work disease was expo 78.41(f), caused Compensation work-related ers’ Law at 15-286 (1998). 1988, By Thus, sure to toxic materials. duty 1987 or investigate does learned that chemical depend can cause “on exact of the na persons suffering disease and that problem from such ture of the injury.” caused the successfully Franzen, damages. diseases sued for per N.W.2d at 662. “[O]nee a possible He concedes he compen- knew the son problem, duty is aware of a he has a ” sable nature of investigate. Sparks, his condition at that time. 352; 408 N.W.2d at claims, however, Franzen, (“It inqui he was not on accord 377 N.W.2d at 662 is ry alerting notice until he had facts him person sufficient that aware be that a existed.”). compensable problem nature of his con purpose of the in dition. We think that vestigation once a claimant knows is to ascertain the exact nature of possibly or should know that his condition problem caused the See compensable, Franzen, investigate. he has the Consequently, N.W.2d at 662. 1303, See Roth v. G.D. Searle 27 F.3d expert opinion the lack of an supporting cau- a factual insufficient to create these facts are commencement prevent does sation applicability principle issue on the the statute State, 514 rule. Vachon inquiry notice. Cf. (Iowa 1994) (affirming summary The fact that on statute-of- the defendant confirming suspicions was unsuccessful plaintiffs despite the grounds, limitations of limitations. not toll does begin until he did not claim that statute Kubrick, U.S. United States report him to that alerted doctor’s received plaintiff 62 L.Ed.2d 259 negligence). the defendant’s and its knew of his Ranney’s interpretation of adopted If we not know of the defendant’s but triggered, begin element negligence, an additional post ning of the until 1971 when completion of the poned improper. him the defendant’s treatment successful investigation. Such at 62 L.Ed.2d at 100 S.Ct. U.S. contrary to discovery rule would be suit. at then filed Montag and Fran- holdings our Estate 62 L.Ed.2d Franzen, “[t]he stated in zen. As we affirming judgment defendant *5 limit for mak is the outer time grounds, the United statute-of-limitations investigation bringing the action. ing the and Supreme Court stated: States person the begins at the time period The incompetently plaintiff] may ad- be [The Franzen, N.W.2d at inquiry notice.” on community may the medical vised or added); (emphasis accord Estate Mon negligence, the crucial issue of of divided tag, experts proved the trial of to be on as the plaintiff] is [the this case. But however agree commissioner with the industrial advised, putative malpractice plaintiff the latest, Ranney by or at the that period of limita- within the must determine enough trigger had information to his not, pre- which is tions whether sue or Warden, 64 F.3d investigate. See Nasim claim- cisely the that tort other Cir.1995) (4th summary (affirming bring If suit ants' must make. he fails complaint on statute-of-limita- dismissal of incompetently mistakenly or because he plaintiff was on grounds the tions because case, a we told he does not have that that condition was caused visiting no sound reason discern (1) exposure he knew that by asbestos consequences of error on the defen- such asbestos, exposed to that asbestos he was of claim delaying dant the accrual he presented a health hazard and that suf- informed or is otherwise injuries, psychological and physical fered suit, bring even himself determines to (2) exposure that his he believed years passed have though more than two linked). date, Ranney was As of that were plaintiffs discovery of the rele- diligent inves- on notice what a about vant facts tigation disclosed. would have L.Ed.2d at however, Ranney argues, that he conduct- into reasonably diligent investigation ed a applies condition, reasoning same here unable to We think the but was cause Ranney’s investigation ex- obtain confirmation that work-related cause of his disease. See Cochran Hodgkin’s disease. posure caused his Corp., 666 A.2d Ranney’s “in- GAF 542 Pa. undisputed facts establish (1995) (affirming summary judgment for the asking vestigation” consisted of despite the claim a causal con- defendant physicians there was whether lung had not discovered nection between his chemical years until he filed suit: show cancer before facts also the statute of limita- “It is well settled that not commit one physicians that his not tolled mistake misunder- they him the cause tions is or the other or Also, investigation may standing. unknown. We hold disease was require one to seek further medical examina- applied to compensa- such workers’ competent legal representa- tion as well as tion In arriving claims. at this decision we tion.”) (citations omitted). recognized By 1988 at the courts do not favor statutes latest, of limitations and that apply we must knew of the connec- workers’ statute broadly tion employment; between his disease and liberally in furtherance of its he had two humanitarian complete from that date to Orr, objective. 298 N.W.2d at 261. Under and file suit. inability His be- expert support theory, to find for his of cau- gan run “when employee discovered or prevent sation within that time does not in the exercise of diligence should running.2 from nature; have discovered the seriousness and We conclude the commissioner did not err inju- character” of the in ruling as a matter of law that ry causing disability for which benefits claim was barred added). claimed. Id. Although statute of limitations. this con- agree majority with the statement barring clusion has the effect of possibly controversy “[t]he here is whether he [Ran- meritorious is the unfortunate ney] imputed knowledge of result of limitations. There compensable nature of his disease.” I also must come a pre- time when the interest in agree Ranney was on notice when he venting stale precedence claims takes over first became “aware of facts that would policy deciding eases on their merits. prompt reasonably prudent person begin That time has arrived this case. seeking problem information as to the and its AFFIRMED. Montag causes.” Estate Agric. v. T H & Nutrition justices ANDREASEN, All except concur *6 LARSON, LAVORATO, SNELL, JJ., and It that, is clear from the record when part. who in dissent diagnosed Hodgkin’s with disease in Ranney inquiry made as to whether the dis- ANDREASEN, (dissenting Justice in by ease was caused his place exposure work part). to toxic chemicals. attempted He to estab- respectfully I part dissent in from the ma- lish a link causal between his disease and the jority opinion. exposed. chemicals to which he was He was Under Iowa Code section 85.26 a his that the medical estab- petition for workers’ benefits lishment did not Hodg- know what caused must be filed within two from the date kin’s disease. He investigate continued to injury occurrence of the for which inquire as to the cause of his disease. benefits are claimed. In Orr v. Lewis Cen He inquiries made numerous as to the cause District, tral School 261 of the physicians disease of different who (Iowa 1980), we held the first examining were treating him between adopted by the court in Chrischilles v. Gris undisputed Ranney and 1992. It is wold, 453, 463, 260 Iowa 100 first became aware of the causal Ranney's 2. believing reliance on Bressler v. Graco Chil- that his chemicals Prods., Inc., (8th Cir.1994), dren's Rather, F.3d 379 Hodgkin's Ranney cause his disease. as Blenderman, and Baines v. (Iowa 1974), 223 N.W.2d 199 testified, physicians simply he consulted Bressler, misplaced. plain- is In themselves, would not commit one or the SIDS, were tiffs told their child died of rather factually distinguishable. other. Baines is also Eighth than suffocation. 43 F.3d at 380. The Baines, plaintiff symp- was told that the Appeals Circuit Court of held there was a experienced surgery tempo- toms he after precluding summary judgment issue toas wheth- rary. Consequently, 223 N.W.2d at 202. he did reasonably er “conducted a not know or have reason to know the true nature investigation.” Id. at 381. Even if we assume injury trigger duty investigate. of his so as to a preclude such a summary factual issue would contrast, Ranney Id. at 203. In knew the nature judgment underlying under Iowa facts injury of his in 1985 when he was Here, here are different from those in Bressler. ' n Hodgkin’s with physicians was not misled into ignorant than of the fact rights; rather legal employment and his his disease

link between at or its causes. petition'for injury February 1992. He of his in recog- After four months 62 L.Ed.2d compensation benefits S.Ct. reasonably competent doctors would nizing later. have should not known have suggests that once majority opinion Neomycin, stat- the Court treated been of his disease and its knew ed: employment, he had connection with duty investigate must, finding, Crediting as we Kubrick this began Apparent- to run. limitation among inquiry doc- only have made need duty to investi- under a ly, once training average experience aiid tors with notice), if made no difference gate (inquiry it that he discovered matters have such investigation revealed the cause a reasonable of action. The probably good is This unknown. of his disease appear difficulty is that inquiry notice doctrine interpretation any inquiry, although made Kubrick ever majority opinion state- conflicts with spe- several had consulted meanwhile “[tjhe purpose of ments hearing and had his loss of cialists about known condition ascertain whether possession of the facts about the all been merely possibly, opposed to probably, as January cause of his since that, Ranney had compensable,” and Furthermore, no to doubt there is reason duty trigger enough information to Soma, Dr. in 1971volunteered who n date, Ranney was on investigate, of that “[a]s opinion had been that Kubrick’s treatment reasonably diligent investi- notice what opin- improper, have had the same have disclosed.” gation would plaintiff sought ion had the asking is not statute be completion of his tolled successful 360-61, 122-23,100 62 L.Ed.2d Id. at impose a Inquiry notice did investigation. at 269-70. him to investigate. agree record of do only run if a dili- period should many Ranney’s repeated examin- proba- gent investigation would disclose the ing physicians to the cause compensable character of ble to create disease is insufficient application of the previous our *7 application on the of the dis- a factual issue doctrine, we stated: covery The record establishes rule.' possessed on they The information pres- inquiry, made reasonable or at least the plainly sufficient of the accident was date ques- disputed issue on this ence of concerning put them on in suggestion tion. There is no the record They wagon. in possible defects diligence” that “in the exercise they investigate at that time. When of a or “in exercise investigated, they alleged later found Ranney, per- investigation” or a reasonable rely they defects now on. son, implied acquired would have 660, Franzen v. Deere & compensable na- probable of the State, (Iowa 1985), quoted in Vachon v. ture of claim before June filing his claim. prior to Kubrick, 444 U.S. United States inquiry no- application Our court’s of the 62 L.Ed.2d 259 reasonably diligent in- malpractice suit in tice when a medical doctrine Court vestigation this case would disclose 1992 stated: “It is employee’s in- January compensable of the 1969 Kubrick was aware of character Kubrick, requirement of the jury, “guts” the basic cause.” its discovery be- rule that L.Ed.2d U.S. added). or should gins employee discovered The Court was addressing have discovered the I affirm the ignorant rule of his character where dismissing summary judgment ruling ruling

chapter claim and reverse the 85A chapter the claim

dismissing under remand to the commis-

would then industrial proceedings further

sioner for

LARSON, SNELL, LAVORATO, JJ.,

join this dissent. MAGINA, Appellant, F.

Kenneth BARTLETT, Appellee.

L.Max

No. 96-1596.

Supreme Court of Iowa.

July