IN THE COURT OF APPEALS OF IOWA

							                   IN THE COURT OF APPEALS OF IOWA

                              No. 4-492 / 03-1352
                            Filed December 8, 2004



HAWKEYE WOOD SHAVINGS, INC., and GREAT WEST CASUALTY
COMPANY,
    Petitioners-Appellants,

vs.

JAMES PARRISH,
    Respondent-Appellee.



      Appeal from the Iowa District Court for Polk, Glenn E. Pille, Judge.



      In this workers’ compensation action an employer appeals from the district

court ruling that affirmed the decision of the workers’ compensation

commissioner. AFFIRMED.




      Stephen Spencer and Joseph Barron of Peddicord, Wharton, Spencer &

Hook, L.L.P., Des Moines, for appellants.



      Max Schott of Max Schott & Associates, P.C., Des Moines, for appellee.




      Heard by Sackett, C.J., and Vogel, Zimmer, Hecht, and Eisenhauer, JJ.
                                        2


ZIMMER, J.

      Hawkeye Wood Shavings, Inc. (Hawkeye), a trucking company, and its

workers’ compensation insurer, Great West Casualty Company (Great West),

appeal from a district court ruling that affirmed a decision of the workers’

compensation commissioner.        The decision awarded James Parrish, an

employee of Hawkeye, permanent partial disability and penalty benefits. Upon

review, we agree with the district court that the agency decision should be

upheld.

      I. Background Facts and Proceedings.

      James Parrish, fifty-nine years old at the time of his administrative

hearing, works as a dispatcher for Hawkeye. His job requires him to locate and

secure loads to be hauled by the company’s drivers.        Parrish has held this

position since 1990, and has worked as a dispatcher, for various companies,

since 1975. Prior to 1975, Parrish performed manual labor. He has a high

school degree, but no other formalized education or specialized training.

      Although Parrish’s previous dispatching jobs required physical exertion

and extended periods of standing, Parrish’s job at Hawkeye is sedentary. During

each workday he spends approximately three to four hours on the telephone,

speaking with drivers and writing down information. He also spends a significant

amount of time at his desk writing up orders, and generally eats his lunch and

takes his breaks at his desk. He is, however, free to stand up, move around, and

leave the office area, and frequently does so.     For the first ten years of his

employment, Parrish worked between twelve and thirteen hours per day five
                                           3


days per week, and an additional seven hours on Saturday. Beginning in 2000,

Hawkeye reduced Parrish’s schedule to eleven to twelve hours per day five days

per week, and eliminated his Saturday shift.           The reduction was a purely

economic decision.

       In September 1999 Parrish began to experience right hip/buttock pain. He

sought treatment from his personal physician, Dr. Gregory Peterson. After the

pain grew more severe, and began radiating down Parrish’s right leg and into his

foot, Dr. Peterson ordered an MRI.         The March 2000 MRI revealed both a

degenerative disk condition as well as a disk herniation. Dr. Peterson referred

Parrish to neurosurgeon Douglas Koontz.            The consultation narrative from

Parrish’s initial April 2000 visit to Dr. Koontz’s office recommended conservative

treatment, including a selective nerve root block.1 Nothing in the medical records

from April and May 2000 indicates a connection between Parrish’s condition, and

his employment at Hawkeye.

       Parrish underwent the nerve block, and the conservative treatment initially

provided him relief. His pain eventually returned, however, and increased in

severity.   Dr. Koontz recommended surgery.          Other than some minimal time

related to doctors’ visits and testing, Parrish had not yet missed work due to his

condition. Parrish spoke with Hawkeye’s president, Frank Sloan, and arranged

to take vacation during the time of his surgery, hospitalization, and initial

recuperation. Parrish initially informed Sloan his back condition was not work

related.


1
  There is some dispute as to whether, at this particular visit, Parrish was seen by Dr.
Koontz, or by Dr. Koontz’s nurse practitioner.
                                          4


       Dr. Koontz performed surgery on September 19, 2000.            During the

discharge conference on September 22 Dr. Koontz informed Parrish he could not

return to work in a couple of weeks, as Parrish had hoped; rather he would need

to be off of work eight to twelve weeks. Dr. Koontz also informed Parrish that the

years of prolonged sitting at Hawkeye had caused or contributed to his

degenerative disk condition. Parrish called Sloan on or about September 25 and

asked if a workers’ compensation claim could be submitted. Sloan stated it could

not, because Parrish had previously indicated the condition was not work related.

During this conversation Parrish informed Sloan he had recently learned his

condition was in fact work related.

       After Sloan declined to report the claim Parrish contacted Iowa Workforce

Development, who in turn contacted Hawkeye and advised it of reporting

requirements. A claim for workers’ compensation benefits was then filed, on or

about October 6, 2000. Hawkeye’s workers’ compensation insurer, Great West,

conducted a recorded interview with Parrish on October 11. On October 12

Great West wrote Dr. Koontz and requested Parrish’s medical records.           No

records were received, and on October 27 Great West sent Parrish a letter

denying the claim. The letter stated, in pertinent part:

       [W]e have now completed our investigation of the facts surrounding
       your workers’ compensation claim of October 6, 2000.
              As you are probably aware, the employer/insurer’s obligation
       is not to pay all claims, but only those claims were [sic] the
       accident, injury, and/or disease arose out of an in the course of
       employment. We have been unable to secure medical data to
       support that your employment with Hawkeye Wood Shavings, Inc.
       was a substantial factor in causing the injury/illness you allege.
              Therefore, we will be unable to provide you benefits under
       the Iowa Workers’ Compensation Act.
                                          5



        On November 13, 2000, Dr. Koontz released Parrish to return to work with

the recommendation that he “get up and move around often.”                Dr. Koontz

subsequently clarified the restriction to provide that Parrish “get up and move

around at least every hour to change positions.” Dr. Koontz also imposed a forty

to fifty pound lifting requirement, and recommended against “frequent bending,

lifting, and twisting.” Parrish returned to work and, except for a brief period in

April 2001, continued to work for Hawkeye up to and including the time of the

arbitration hearing.

        Parrish filed two claims for workers’ compensation benefits, alleging a

cumulative injury occurring alternatively on September 18 and 25, 2000. 2 Parrish

obtained opinions from Dr. Koontz in support of his claim.           Approximately a

month prior to the December 2001 arbitration hearing Parrish was examined by

Dr. William Boulden, an orthopaedic surgeon retained by Hawkeye and Great

Western. Dr. Boulden opined that Parrish’s condition was age related, and not

caused by his employment.

        In the July 2002 arbitration decision, the deputy workers’ compensation

commissioner determined Parrish had suffered a cumulative, work-related injury

on September 19, 2000, and had incurred a twenty-six percent industrial

disability.   The deputy awarded Parrish healing period and permanent partial

disability benefits and medical expenses.       The deputy also awarded Parrish

$5,000 in penalty benefits, concluding Great West’s reason for denying the claim

on October 27 was “wholly insufficient,” and that the company had no fairly
2
    The second petition initially alleged an injury date of October 6, 2000, but at the
arbitration hearing was amended to allege an injury date of September 25, 2000.
                                         6


debatable reason for denying the claim at that time. The award represented

twenty-five percent of the total benefits delayed up to the time of Dr. Boulden’s

opinion. The deputy rejected the assertion by Hawkeye and Great West that

Parrish had known the work-related nature of his injury as early as April 2000,

and thus had not provided timely notice of his injury.

       Hawkeye and Great West appealed. In the appeal decision the interim

workers’ compensation commissioner reduced Parrish’s permanent partial

disability benefits, concluding Parrish had suffered only a ten percent industrial

disability. The commissioner further concluded that only $500 in penalty benefits

were warranted. The commissioner reasoned the award should be limited to a

percentage of Parrish’s healing period benefits, as the permanency issue had

been rendered fairly debatable after Parrish returned to work and performed the

same job, on the same schedule, and at the same pay. The remainder of the

deputy’s decision was affirmed.

       Hawkeye petitioned for judicial review.      Parrish filed a cross-petition,

challenging the agency’s reduction of the permanent partial disability and penalty

benefits. Rejecting the claims of both sides, the district court affirmed the agency

decision.   Hawkeye and Great West (hereinafter collectively referred to as

Hawkeye) then filed this appeal.        Hawkeye asserts the agency erred in

concluding that Parrish’s injury arose out of his employment with Hawkeye, that

Parrish suffered a ten percent industrial disability, that Parrish provided timely
                                             7


notice of his injury, and that penalty benefits were warranted. Parrish did not file

a cross-appeal.3

       II. Scope and Standards of Review.

       Review of agency actions is limited to correcting errors at law. Iowa R.

App. P. 6.4; IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001). In reviewing

the district court’s decision, we apply the standards of Iowa Code chapter 17A

(2001) to determine whether our conclusions are the same as those of the district

court. Grundmeyer v. Weyerhaeuser Co., 649 N.W.2d 744, 748 (Iowa 2002). If

they are the same, we affirm; if not, we reverse. Id.

       In reviewing the agency’s factual determinations, we look to see whether

those determinations are supported by substantial evidence.                Iowa Code §

17A.19(10)(f). This requires that the entirety of the record—including supporting

and detracting relevant evidence as well as credibility assessments—be

sufficient to allow a reasonable and neutral person to reach the same conclusion

as the agency. Id.       We broadly and liberally apply the agency’s findings to

uphold rather than to defeat its decision. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621,

632 (Iowa 2000).



       III. Causation.

3
    Parrish argues the ten percent industrial disability award and the $500 in penalty
benefits assessed by the agency were inadequate, and requests this court to remand
both issues to the agency for re-determinations that “more adequately” reflect the
evidence in this case. However, as the district court decided both these claims
adversely to Parrish, his failure to file a cross-appeal has waived any error. See
Johnson Equip. Corp. v. Industrial Indem., 489 N.W.2d 13, 17 (Iowa 1992) (holding that
a party need not cross-appeal a trial court's rejection of a ground urged in the trial court
in order to preserve error on a claim decided in the party's favor, but that a party must
cross-appeal to preserve an issue on a claim decided adversely to the party).
                                         8


       As a threshold matter, Parrish bore the burden of proving, by a

preponderance of the evidence, that his back injury arose out of and in the

course of his employment with Hawkeye.          Iowa Code § 85.3(1).      Thus, the

starting point for our analysis is the agency’s finding that Parrish’s back condition

did arise out of his employment.4 Hawkeye asserts the record does not contain

substantial evidence to support this finding. We cannot agree.

       The words "arising out of" refer to the “causal relationship between the

employment and the injury.”      2800 Corp. v. Fernandez, 528 N.W.2d 124, 128

(Iowa 1995). Although the agency must consider all the evidence pertaining to

causation, medical causation is essentially within the domain of expert testimony.

See Dunlavey v. Economy Fire & Cas. Co., 526 N.W.2d 845, 853 (Iowa 1995).

The weight to be given to an expert opinion depends on the accuracy of the facts

relied upon by the expert as well as other surrounding circumstances. Sherman

v. Pella Corp., 576 N.W.2d 312, 321 (Iowa 1998). However, it is the role of the

agency to determine the weight to be given to any of the evidence, and it may

accept or reject a controverted expert opinion in whole or in part. Id.

       Here, the agency was presented with conflicting expert medical opinions

as to the cause of Parrish’s degenerative disk condition. Dr. Koontz recognized

that many factors contributed to Parrish’s degenerative condition, including his

age, but nevertheless opined that “sitting for thirteen hours a day over ten and a

half years would accelerate his degenerative process,” and that “long hours of

sitting over many years . . . accelerated his lumbar degenerative disc disease


4
   There is no dispute Parrish’s injury arose in the course of his employment with
Hawkeye.
                                         9


causing his need for surgery.” Although Dr. Petersen opined there was “no way

to absolutely prove that an individual’s length of time sitting at his job would

accelerate degenerative arthritis,” he did agree that prolonged sitting “certainly

would aggravate” Parrish’s condition, and he had “no objection to Dr. Koontz’s

opinion.” Dr. Boulden disagreed with Dr. Koontz’s conclusions, opining Parrish’s

degenerative disk disease was age-related, and not caused by his employment.

      In concluding that Parrish’s degenerative disk condition was causally

related to his employment, the agency expressly placed greater weight on Dr.

Koontz’s testimony than it did on Dr. Boulden’s. This is a decision entrusted to

the agency, and not one in which we will generally interfere. See Sherman, 576

N.W.2d at 321.     Although Hawkeye asserts Dr. Boulden’s testimony is more

consistent with the factual history in this matter, there is not such a disparity

between the factual record and Dr. Koontz’s opinion that the opinion would be

disregarded by any reasonable person. See Stephenson v. Furnas Elec. Co.,

522 N.W.2d 828, 831 (Iowa 1994) (noting courts are not bound by factual

findings "as to which there is no room for difference of opinion among reasonable

minds"); see also Fazio v. Brotman, 371 N.W.2d 842, 844 (Iowa Ct. App. 1985)

(noting it is only when “[t]he testimony of a witness [is] so impossible and absurd

and self-contradictory that it should be deemed a nullity by the court”). Nor is the

agency’s reference to Dr. Koontz’s status as a treating physician, and Dr.

Boulden’s status as a retained expert, tantamount to concluding Dr. Koontz’s

opinion was entitled to more weight simply because he was the treating

physician. See Gilleland v. Armstrong Rubber Co., 524 N.W.2d 404, 408 (Iowa
                                                10


1994) (“[W]e have rejected the proposition that, as a matter of law, a treating

physician's testimony will be given more weight than a physician who examines

the patient in anticipation of litigation.”).

       The commissioner’s appeal decision adequately explained the bases for

the findings and conclusions contained therein.                 See Murillo v. Blackhawk

Foundry, 571 N.W.2d 16, 20 (Iowa 1997) (requiring adequate reasons and

explanations by the agency so that reviewing courts can evaluate if the agency is

acting arbitrarily or has misapplied the law). Viewing all the expert opinions in

light of the remaining evidence, the totality of the record provides substantial

support for the agency’s finding that Parrish’s degenerative disk condition arose

out of his employment with Hawkeye.                  There is also substantial evidence to

support, and in fact Hawkeye does not contest, the agency’s conclusion that

Parrish suffered a twenty-six percent functional impairment to the body as a

whole. We therefore turn to Hawkeye’s assertion that the agency erred in finding

Parrish had suffered a ten percent industrial disability as a result of his injury.

       IV. Industrial Disability.

       Industrial disability is measured by the extent to which the injury has

reduced a claimant’s earning capacity. Thilges v. Snap-On Tools Corp., 528

N.W.2d 614, 616 (Iowa 1995). It is the result of many factors, including the level

of functional disability, the employee’s age, education, experience, and the

employee’s “inability, because of the injury, to engage in employment for which

[the employee] is fitted." Acuity Ins. v. Foreman, 684 N.W.2d 212, 219 (Iowa

2004) (citations and internal quotation marks omitted). Considering “all the . . .
                                        11


factors” pertinent to an industrial disability assessment, the agency concluded

Parrish had incurred a ten percent industrial disability. “[M]ost pertinent” to its

decision was the fact that Parrish had a sizable functional impairment but no

actual reduction in earnings, and the “small chance” he would be compelled to

seek work other than as a dispatcher.

      In challenging the agency’s award, Hawkeye focuses on the fact that

Parrish has not suffered a reduction in actual earnings, and that he has

continued to perform his former position despite his injury. These factors were

clearly considered by the agency in limiting the industrial disability award to ten

percent. They do not however, in and of themselves, conclusively demonstrate

the absence of an industrial disability. See Second Injury Fund v. Hodgins, 461

N.W.2d 454, 456 (Iowa 1990); Arrow-Acme Corp. v. Bellamy, 500 N.W.2d 92,

95 (Iowa Ct. App. 1993).

      Other factors support the conclusion that Parrish has incurred an industrial

disability to some extent.    Parrish suffered a twenty-six percent functional

impairment to his body as a whole, and a functional assessment concluded,

based on Dr. Koontz’s restrictions, that Parrish could perform only “select

medium, light and sedentary work” which would allow him to perform work in

“roughly 40 percent of the job market.” In addition, Parrish’s own job history

indicated some dispatching jobs had physical requirements Parrish could no

longer perform.

      The record, when viewed as a whole, contains substantial support for the

agency’s industrial disability award. Hawkeye nevertheless asserts that it should
                                          12


be relieved from the obligation to pay workers’ compensation benefits, as Parrish

failed to comply with the notice requirements of Iowa Code section 85.23. We

therefore turn to that question.

       V. Notice Defense.

       Parrish was required to inform Hawkeye of his injury, and the fact the

injury was work-related, within ninety days after the injury occurred. Iowa Code §

85.23; Robinson v. Department of Transp., 296 N.W.2d 809, 811 (Iowa 1980).

The time for providing notice began to run once Parrish, as a reasonable man,

should have recognized the “nature, seriousness, and probable compensable

character of his injury . . . .” Robinson, 296 N.W.2d at 812; see also Herrera v.

IBP, Inc., 633 N.W.2d 284, 288 (Iowa 2001) (clarifying a cumulative injury occurs

“when the claimant, as a reasonable person, would be plainly aware (1) that he

or she suffers from a condition or injury, and (2) that this condition or injury was

caused by the claimant’s employment”). If Parrish failed to provide timely notice,

no compensation is allowed. Iowa Code § 85.23.

       It is clear Hawkeye was not informed that Parrish’s injury was work related

until September 25, 2000.          The agency determined this notice was timely,

concluding Parrish was not plainly aware that his degenerative condition was

work-related until after his surgery. Hawkeye asserts this determination was not

supported by substantial evidence, because Parrish was aware of the casual

connection as early as April 2000. Hawkeye points to deposition testimony from

Parrish that indicates Dr. Koontz informed Parrish, in April 2000, that there was a

“possibility” his employment was causing his current back problems.
                                        13


         The agency acknowledged this portion of Parrish’s deposition testimony,

but concluded Parrish “did not learn of the probable compensable character of

his condition until on or about September 25, 2000, when he was told by Dr.

Koontz.” (Emphasis supplied). This conclusion is adequately supported by the

record. There is no evidence, outside of this deposition statement, that Parrish

was informed about even a possible causal relationship between his condition

and his employment at any time prior to September 2000.          Moreover, in his

deposition Parrish went on to state it was not until after his September 19 surgery

that Dr. Koontz informed him the degenerative condition was “probably” related

to his employment, and that he “first [had the] belief” his back problems were

“caused by just the years of sitting.”       During his hearing testimony Parrish

confirmed these later statements.      He also asserted that he did not recall

discussing the cause of his injury with Dr. Koontz prior to September.

Significantly, despite the inconsistency, the agency specifically found Parrish to

be a credible witness.

         The foregoing provides substantial evidence to support the agency’s

determination that a reasonable person in Parrish’s position would not have been

plainly aware of the work-related nature of the injury until September 2000.

Given such a finding, timely notice was provided to Hawkeye. See Iowa Code §

85.23.      Accordingly, we turn to Hawkeye’s last assignment of error in this

appeal, and address whether there was substantial evidence to support an award

of penalty benefits.

         VI. Penalty Benefits.
                                        14


      The agency has an obligation to award penalty benefits to an employee

any time a claim for workers’ compensation benefits is denied, and thus the

payment of compensation is delayed, unless the denial is supported by a

“reasonable or probable cause or excuse.” Iowa Code § 85.13. In addressing

this question, the agency must consider the insurer’s affirmative obligation to act

in a reasonable manner after a claim for benefits is filed. See Christensen v.

Snap-On Tools Corp., 554 N.W.2d 254, 260 (Iowa 1996) (quoting Boylan v. Am.

Motorists Ins. Co., 489 N.W.2d 742, 743 (Iowa 1992)).

      A denial of benefits is supported by reasonable cause if the claim is “fairly

debatable based on a good faith dispute over the employee's factual or legal

entitlement to benefits . . . [or] where a reasonable delay in payment is necessary

to allow the insurer to investigate the claim.” Gilbert v. USF Holland, Inc., 637

N.W.2d 194, 199, n.2 (Iowa 2001). However, the reason for the denial must be

communicated to the employee contemporaneously with the denial. See Meyers

v. Holiday Express Corp., 557 N.W.2d 502, 505 (Iowa 1996). If the reason “is not

one that a reasonable fact finder could accept,” then no cause or excuse exists,

and penalty benefits must be awarded. Id.

      Hawkeye asserts the claim was fairly debatable, relying on a number of
                                          15


factors.5 However, as both the agency and the district court pointed out, the

reason for denial actually communicated to Parrish was limited to the absence of

medical documentation in support of his claim. Thus, the question is whether a

reasonable    fact   finder   could   conclude   that   this   absence    of   medical

documentation was in fact a reasonable excuse. The agency concluded it was

not, and we must agree.

       “An employer's bare assertion that a claim is ‘fairly debatable’ does not

make it so. . . . [T]he employer must assert facts upon which the commissioner

could reasonably find that the claim was ‘fairly debatable.’” Meyers, 557 N.W.2d

at 505. Here, those facts are fairly limited. As we have mentioned, the claim for

benefits was filed on October 6, 2000, approximately two and one half weeks

after Parrish’s surgery. When Hawkeye denied the claim in a letter to Parrish

dated October 27, the only fact relied on by Hawkeye was its inability to secure

medical data in support of the claim. There is no evidence that, prior to denying

the claim, Hawkeye ever requested medical documentation from Parrish himself,

or conducted an inquiry or investigation beyond taking Parrish’s statement and

requesting Parrish’s medical records from Dr. Koontz in a letter dated October

12. There is no indication that, at the time of denial, Hawkeye possessed any

medical documentation, much less any medical evidence that would refute or

discredit a causal connection between Parrish’s work and his injury.

5
      These include Hawkeye’s notice defense, the fact Parrish informed Sloan the
condition was not work-related, allegations by Sloan that even after surgery Parrish
asserted both that the condition was not work related and that he was pursuing a
workers’ compensation claim purely for financial reasons, the fact that sitting actual
relived Parrish’s symptoms, disputes over how much time Parrish spent sitting each day,
and the fact that Dr. Koontz had failed to provide medical records in response to
Hawkeye’s pre-denial request.
                                         16


         As noted by both the agency and the district court, this evidence falls far

short of establishing that Hawkeye met its affirmative obligation to act in a

reasonable manner after the claim for benefits was filed. See Christensen, 554

N.W.2d at 260.       Under the circumstances, its stated excuse is not one a

reasonable fact finder would accept as reasonable under the circumstances.

Accordingly, the agency was required to impose penalty benefits. Hawkeye has

not challenged the amount of those benefits, and a review of the record indicates

that the amount is supported by substantial evidence. Thus, the penalty benefit

award must be upheld.

         VII. Conclusion.

         All of the agency’s findings were supported by substantial evidence, and

its decision is not effected by an error of law. We therefore affirm the district

court.

         AFFIRMED.

         All judges concur except Hecht, J., who concurs specially, and Sackett,

C.J., and Vogel, J., who concurs in part and dissents in part.
                                       17


HECHT, J., (concurs specially)

      I join the majority’s opinion and write separately to specifically articulate

my reasons for affirming on the penalty issue.        The agency assessed the

reasonableness of Great West’s denial of this claim in light of certain well-

established legal principles. Among these is the rule that an insurance carrier’s

duty to act reasonably includes the duty to fully and fairly investigate a claim.

The agency applies the standard of “a professional adjustor who is reasonably

competent    in   workers’   compensation     matters”    when    assessing    the

reasonableness of an insurer’s investigation.     After conducting a reasonable

investigation, the insurer may deny a claim without penalty exposure if a

reasonable basis for the denial is contemporaneously conveyed to the claimant.

Meyers v. Holiday Express Corp., 557 N.W.2d 502, 504 (Iowa 1996).          But an

insurer’s denial of a workers’ compensation claim is not conclusive, for the duty

to investigate continues after the denial is communicated as additional

information becomes available.

      Our supreme court implicitly recognized in Holiday Express that the

contemporaneous communication of the reason(s) for denial of a claim is crucial

both for the claimant and the insurer in our workers’ compensation system. The

insurer’s contemporaneous communication informs the claimant of what

additional information might be supplied to aid the insurer in its ongoing duty to

investigate the claim.   And the articulation of the reason(s) for the denial is

likewise essential to the insurer who wishes to avoid a penalty by expressing the

reasonable grounds for its decision. The agency’s decision to impose a penalty in
                                      18


this case should be affirmed because Great West’s denial letter of October 27,

2000 informed Parrish that his claim was denied because the insurer was

“unable to secure medical data” tending to establish medical causation. I am

unable to find evidence in this record that Great West relied on any medical

opinion when it made its medical causation assessment and decision to deny the

claim.    Indeed, it appears Great West had requested but had not received

medical records from Parrish’s surgeon when the denial was communicated.

And although Great West later solicited and obtained the opinion of Dr. Bolden

on the subject of medical causation, this was not accomplished until shortly

before the arbitration hearing. Under these circumstances, the agency’s finding

that Great West failed to make a reasonable investigation before denying the

claim is supported by substantial evidence in the record. As the agency aptly

noted, “[t]o hold otherwise would absolve those who might . . . deny first [and]

investigate later.”

         Great West’s brief contends the agency erred in imposing a penalty

because the insurer had numerous legitimate reasons other than medical

causation to deny Parrish’s claim.    However, these other reasons were not

contemporaneously communicated with Great West’s denial and therefore do not

provide the insurer safe harbor under the rule announced in Holiday Express.
                                        19




SACKETT, C.J., (concurs in part; dissents in part)

       I agree with the majority in all respects except I would reverse the penalty

benefit.

Vogel, J., joins the partial dissent.