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Wal-Mart Stores2/26/2003
USF Holland, Inc., 637 N.W.2d 194, 198 (Iowa 2001); Christensen v. Snap-On Tools Corp., 554 N.W.2d 254, 260 (Iowa 1996); Meyers, 557 N.W.2d at 504-05; Robbennolt, 555 N.W.2d at 236-37. Delay may be justified if "(1) the delay was necessary for the insurer to investigate the claim or (2) the employer had a reasonable basis to contest the employee's entitlement to benefits." Meyers, 557 N.W.2d at 504. In other words, a reasonable basis for delay is synonymous with a fairly debatable claim. Meyers, 557 N.W.2d at 504.
Two delays in payment are at issue here. First, when Wal-Mart commenced paying Caselman's workers' compensation benefits, it applied the lower Kansas rate rather than the rate required by Iowa law. Wal-Mart argues that it was at least fairly debatable that Caselman was entitled to Kansas, rather than Iowa, workers' compensation benefits. Its argument is not persuasive.
Kansas law grants it jurisdiction of worker's injury claims outside the state if Kansas is the principal place of employment. Kan. Stat. Ann. ยง 44-506 (1999). Caselman was dispatched out of Kansas but worked in several states, made his employment contract in Iowa, and was injured in Iowa. The deputy observed that Wal-Mart would have challenged Iowa's jurisdiction if there had been a fairly debatable basis for Wal-Mart's claim that Kansas law applied. Moreover, the company admitted in August 1998 that paying benefits under Kansas law was in error but it failed to pay the differential until October 1998. Although Wal-Mart eventually paid interest as a result of the error, we agree that substantial evidence supports the deputy's finding that Wal-Mart's position on the point was not fairly debatable. A penalty award was thus justified.
The deputy also assessed the penalty because weekly disability checks were not delivered to Caselman on time. Workers' compensation checks must be mailed or personally delivered on the date the payment is due. Meyers, 557 N.W.2d at 505. Imposition of a penalty is unjustified only if the employer has a reasonable excuse for the delay and "conveys that reason to the employee contemporaneously with the beginning of the delay." Id. at 504.
Wal-Mart admits that at least two or three checks were late. Based on Caselman's testimony, however, the deputy could have found that between ten and twenty checks were mailed late. So also could the deputy infer from the record a lack of contemporaneous explanation for the delay. For example, not until sending a letter dated April 7 to Caselman's counsel did the company explain the reason for delay of payments due March 16 and March 30.
The district court rejected these findings, seemingly satisfied that the delay merely resulted from "a recurring problem with Wal-Mart's auto pay computer program for workers' compensation benefits." Like the deputy, we do not believe this explanation comports with the spirit of section 86.13. While isolated delays occasioned by computer glitches may be unavoidable and, hence, reasonable, recurring and unexplained technical problems affecting the timely receipt of benefits are not. In short, the record amply supports the penalty award imposed by the agency. We therefore reverse and remand for entry of an order affirming that award.
REVERSED AND REMANDED.
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