Polaris Industries, Inc. v. Ken E. Sharar

IN THE COURT OF APPEALS OF IOWA

No. 14-1648
Filed April 22, 2015

POLARIS INDUSTRIES, INC.,
Plaintiff-Appellant,

vs.

KEN E. SHARAR,
Defendant-Appellee.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, Lawrence P.

McLellan, Judge.

Polaris Industries, Inc. appeals from the district court’s affirmance of the

Iowa Workers’ Compensation Commission’s award of permanent partial disability

benefits to Ken Sharar. AFFIRMED.

D. Brian Scieszinski of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des

Moines, for appellant.

Matthew T.E. Early of Fitzgibbons Law Firm, L.L.C., Estherville, for

appellee.

Considered by Danilson, C.J., and Potterfield and Bower, JJ.
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POTTERFIELD, J.

Polaris Industries, Inc. (“Polaris”) appeals from the district court’s

affirmance of the Iowa Workers’ Compensation Commission’s award of

permanent partial disability benefits to Ken Sharar.

I. Factual and Procedural Background

Sharar has been employed by Polaris since 2003. His work at Polaris, like

most of his employment history, primarily involved physical labor. On November

3, 2009, he fell while performing his work duties and sustained serious injuries to

his right shoulder. He underwent two surgeries and extensive physical therapy.

He returned to work on light duty but struggled with clerical tasks that required

the use of a computer.1 He eventually settled into a position operating an air lift.

He was able to perform these work tasks largely unassisted.

Sharar achieved maximum medical improvement (MMI) on February 21,

2011. The doctor who determined he had reached MMI opined Sharar suffered

“a total impairment rating of 5% of the right upper extremity due to his decreased

range of motion.” A second doctor performed an independent medical evaluation

of Sharar. He calculated a fifteen percent permanent impairment of the

extremity—equivalent to a nine percent whole-person impairment—and

estimated Sharar could lift thirty-five pounds using both hands. A vocational

consultant wrote in an evaluation of Sharar, “It is reasonably likely that he has

suffered a reduction in employability of 61% and a reduction in labor market

1
The record shows Sharar struggled with a learning disability and participated in special
education classes throughout his elementary and secondary education. He has no post-
secondary degree.
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access of approximately 70%. This is reasonably expected to result in a loss in

earning capacity estimated at approximately 65%.”

Sharar filed for permanent partial disability benefits. A deputy

commissioner at the agency conducted a hearing. He found Sharar to have

sustained a forty percent loss of earning capacity and awarded him 200 weeks of

industrial disability benefits. Polaris appealed the decision of the deputy

commissioner, and the commissioner affirmed the award. Polaris petitioned the

district court for judicial review, and the court affirmed. Polaris now appeals from

the district court’s affirmance.

II. Standard and Scope of Review

We review for correction of errors at law. Kohlhaas v. Hog Slat, Inc., 777

N.W.2d 387, 390 (Iowa 2009). We review the district court decision by applying

the standards of the Iowa Administrative Procedure Act—Iowa Code chapter 17A

(2013)—to the agency action to determine if our conclusions are the same as the

district court’s. Id. at 390.

We review the agency’s factual findings for substantial evidence. Swiss

Colony, Inc. v. Deutmeyer, 789 N.W.2d 129, 133 (Iowa 2010). Substantial

evidence is “the quantity and quality of evidence that would be deemed sufficient

by a neutral, detached, and reasonable person, to establish the fact at issue

when the consequences resulting from the establishment of that fact are

understood to be serious and of great importance.” Iowa Code

§ 17A.19(10)(f)(1). “Evidence is not insubstantial merely because the court could

draw a different conclusion from the record.” Swiss Colony, 789 N.W.2d at 133.
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“The ultimate question is whether the record when viewed as a whole supports

the finding actually made.” Id. at 133–34.

III. Discussion

Iowa Code section 85.34(2)(u) provides:

In all cases of permanent partial disability other than those
hereinabove described . . . , the compensation shall be paid during
the number of weeks in relation to five hundred weeks as the
reduction in the employee’s earning capacity caused by the
disability bears in relation to the earning capacity that the employee
possessed when the injury occurred.

We refer to a reduction in earning capacity as “industrial disability.” Westling v.

Hormel Foods Corp., 810 N.W.2d 247, 253 (Iowa 2012); see Diederich v. Tri-City

R. Co., 258 N.W. 899, 902 (Iowa 1935).

A determination of a reduction in earning capacity is an issue of fact. See,

e.g., Excel Corp. v. Smithart, 654 N.W.2d 891, 900–901 (Iowa 2002). “The focus

is not solely on what the worker can or cannot do; industrial disability rests on the

ability of the worker to be gainfully employed.” Clark v. Vicorp Restaurants, Inc.,

696 N.W.2d 596 (Iowa 2005) (citation omitted). “Several factors are

considered . . . includ[ing] the employee’s functional impairment, age, education,

intelligence, work experience, qualifications, ability to engage in similar

employment, and adaptability to retraining.” Keystone Nursing Care Center v.

Craddock, 705 N.W.2d 299, 306 (Iowa 2005). We may also consider the

employee’s pre- and post-injury earnings, though “[a] reduction in earning

capacity can be shown even though the employee’s actual earnings have

increased.” Id.
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Polaris does not contest that Sharar is entitled to some amount of

industrial disability benefits, but it contends the award of forty percent is

excessive and not supported by substantial evidence. However, on our review of

the record and consideration of the applicable factors, we find substantial

evidence to support the agency’s determination. Sharar’s functional impairment

prevents him from engaging in heavy physical labor, and most of his prior work

experience and qualifications relate to physical labor. At the time of the hearing,

Sharar was forty-eight years old and high-school educated. The record shows

he experienced difficulties adapting to retraining and learning new skills.

Although Sharar’s actual earnings at the time of the hearing were higher than at

the time of the injury, the report of the vocational consultant indicates that

Sharar’s earning capacity in the general labor market had decreased.

Polaris relies on two cases to argue that Sharar is not entitled to forty

percent industrial disability “as a matter of law”: Wright v. MidAmerican Energy

Co., No. 01-0312, 2002 WL 987870, at *3 (Iowa Ct. App. May 15, 2002), and

Mayhew v. Tri County, Inc., No. 5035006 (Iowa Workers’ Comp. Comm’n Oct. 4,

2011) (appeal decision). We first note that a determination of the extent of

Sharar’s loss of earning capacity is an issue of fact, not of law. Because we are

reviewing a determination of fact, we do not agree with Polaris’s assertion that

the agency’s award is “inconsistent with [its] prior practice and precedents.”

What Polaris describes as inconsistencies between Sharar’s case and his cited

cases are simply different findings of fact based upon the circumstances unique

to each case.
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The two cases to which Polaris cites are factually distinguishable from the

case before us. In Wright, the employee had developed new skills at work that

expanded his potential employment opportunities. Wright, 2002 WL 987870, at

*3. His injury did not negatively impact his ability to work in his field, and “[a]

comparison between [his] potential earning capacity prior to the accident and his

earning potential after the accident reveal[ed] no change.” Id. The record before

us shows Sharar has been unable to develop new skills to improve his

employability. His injury impacts his ability to engage in physical labor, and his

earning capacity has decreased. Wright does not undermine the agency’s

determination.

In Mayhew, the agency found that its initial award of forty percent

industrial disability was too high because some percentage of the employee’s

loss of earning capacity resulted from a non-work-related injury. Mayhew, No.

5035006, slip op. at 2. Our record does not reflect Sharar has suffered an injury

outside of work that negatively impacted his earning capacity, and Mayhew has

no applicability in this case.

Polaris next argues the agency improperly speculated as to Sharar’s

future earnings in making its determination. In its consideration of Sharar’s

adaptability to retraining, the agency found, “[Sharar’s] ability to retrain appears

to be rather limited and his ability to access the labor market if he were not

employed by Polaris would be clearly diminished.” Polaris has mischaracterized

this finding as the agency’s speculation that Sharar is “likely to lose his job at

Polaris.” The agency’s statement is not speculation as to Sharar’s future

employment at Polaris; rather, it is a proper consideration of one factor bearing
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upon Sharar’s employability in the general labor market in the abstract based on

his condition at the time of the hearing.

We, like the district court, find substantial evidence supports the agency’s

award of forty percent industrial disability. We further find the agency did not

engage in any improper speculation in reaching its conclusion. We affirm.

AFFIRMED.