author: STREIT, Justice.

text:
    In re the MARRIAGE OF Michele Renee FENNELLY AND Ted Ernst BRECKENFELDER. Upon the Petition of Michele Renee Fennelly, Appellee, And Concerning Ted Ernst Breckenfelder, Appellant.
    No. 05-1765.
    Supreme Court of Iowa.
    July 20, 2007.
    Rehearing Denied Aug. 21, 2007.

      Frank Steinbach III of McEnroe, Gots-diner, Brewer, Burdette & Steinbach, P.C., West Des Moines, and Arthur Buzzell, Davenport, for appellant.
    Lori L. Klockau and Chad A. Kepros of Bray & Klockau, P.L.C., Iowa City, for appellee.

      . As evidence of their communication difficulties, Michele testified most of their discussions were in writing.

   STREIT, Justice.

What is equitable in a divorce is an endless source of debate. Michele Fennelly and Ted Breckenfelder divorced after nearly fifteen years of marriage. They have two children. The district court gave Michele primary physical care of the children and Ted liberal visitation. The district court equally divided all of their property except property the parties brought to the marriage.

Ted argues he should have been awarded primary physical care or at least joint physical care of the children. Ted also complains of the district court’s disparate treatment of their premarital property. Michele kept her premarital property which had significantly appreciated whereas Ted merely got the premarital value of his property. Because Michele is a competent and loving caretaker and both parties testified against joint physical care, we affirm the district court’s award of primary physical care to Michele. We reverse the district court’s property division because we find it equitable to equally divide the appreciation of all of the parties’ premarital assets. However, because Ted dissipated marital assets through unexplained cash advances on his credit cards, we set aside $22,000 of debt for him. After setting aside the value of their premarital property at the time of the marriage and the $22,000 in cash advances, we order the parties’ remaining assets and debts to be divided equally. We vacate the decision of the court of appeals. We remand to the district court so it may modify the decree in accordance with this decision.

I. Facts and Prior Proceedings

Michele and Ted were married in December 1990. At the time of the marriage, Michele had obtained a bachelor’s degree in management information systems and Ted had obtained a bachelor’s degree in finance and a law degree. Michele was a systems engineer at IBM and Ted practiced law at a Moline law firm.

Both parties owned assets at the time of the marriage. Ted owned an encumbered home located on Fairview Drive in Betten-dorf, Iowa. Michelle owned IBM stock and an IBM tax deferred savings plan (TDSP).

Early on, the parties lived in the home on Fairview Drive. In 1993, they moved to a home on Barcelona Terrace in Betten-dorf. The parties kept the Fairview Drive home as rental property. About this time, Ted started his own law firm. In 1994, Michele began working at Lee Enterprises where she currently is the director of technical support.

Michele and Ted have two children: Kevin, born November 25, 1991 and Caroline, born August 9, 1996. The parties utilized day care and baby sitters throughout the children’s lives.

Michele filed for dissolution of marriage in 2001. The parties reconciled and Michele dismissed her petition. Thereafter, Ted began spending more time at home and became more involved in the children’s care. In particular, Ted assumed a greater role in supervising the children after school and preparing meals. Ted also began devoting less time to his law practice.

Michele filed a second petition for dissolution in September 2004. Trial was held in June 2005. Michele was forty-two years old and Ted was forty-four.

At the time of trial, Michele’s annual salary was $101,000 with the potential of earning another $30,000 in bonuses. In 2004, Ted earned $18,454 in net income from his law practice. Ted’s average net income between 2001 and 2004 was just under $25,000 per year.

The district court awarded physical care of the children to Michele. Ted was awarded liberal visitation. The court also divided the parties’ assets and debts. The court set aside for Michele the IBM stock she owned prior to the marriage and the portion of the IBM TDSP traceable to the premarital value of the account along with appreciation. These assets were worth $116,094 on the date of trial. Ted was given a $12,000 credit for the premarital net equity in the Fairview Drive home. Thereafter, the court equally divided the parties’ remaining debts and assets. In all, the net distribution was $446,326 for Michele and $354,244 for Ted.

Ted appealed. He argued the district court erred (1) by not awarding him physical care of the children; (2) by not considering joint physical care in the alternative; and (3) by not treating the parties’ premarital assets similarly.

The court of appeals affirmed the district court’s order in its entirety. On further review, Ted reasserts the arguments he made before the court of appeals. For the reasons that follow, we affirm the district court’s award of primary care to Michele and reverse the district court’s division of property.

II. Scope of Review

We review dissolution cases de novo. In re Marriage of Sullins, 715 N.W.2d 242, 247 (Iowa 2006). “ ‘Although we decide the issues raised on appeal anew, we give weight to the trial court’s factual findings, especially with respect to the credibility of the witnesses.’ ” Id. (quoting In re Marriage of Witten, 672 N.W.2d 768, 773 (Iowa 2003)). “Precedent is of little value as our determination must depend on the facts of the particular case.” In re Marriage of White, 537 N.W.2d 744, 746 (Iowa 1995) (citing In re Marriage of Sparks, 323 N.W.2d 264, 265 (Iowa Ct.App.1982)).

III. Merits

A. Physical Care of the Children

Iowa law distinguishes custody from physical care. Custody concerns the legal rights and responsibilities toward the child, including decisions “affecting the child’s legal status, medical care, education, extracurricular activities, and religious instruction.” Iowa Code § 598.1(5) (2005). Physical care, on the other hand, is “the right and responsibility to maintain a home for the minor child and provide for the routine care of the child.” Id. § 598.1(7). When considering the issue of physical care, the child’s best interest is the overriding consideration. We are guided by the factors set forth in Iowa Code section 598.41(3) as well as those identified in In re Marriage of Winter, 223 N.W.2d 165, 166-67 (Iowa 1974). If joint physical care is not appropriate, “the court must choose one parent to be the primary caretaker, awarding the other parent visitation rights.” In re Marriage of Hynick, 727 N.W.2d 575, 579 (Iowa 2007).

Ted argues the district court should have awarded him physical care so the children may continue to live in the Barcelona Terrace home, which was awarded to him. Additionally, Ted argues he is better suited to be the primary physical caretaker because he spends less time working in comparison to Michele.

The district court found both parents to be suitable caretakers for the children. We agree. The record is replete with evidence of both parties’ love and devotion to their children. At the end of the trial, the court noted the conundrum it faced in deciding who should be awarded physical care because both parties are great parents. The district court had the opportunity to observe the witnesses and concluded primary care should be awarded to Michele. The district court awarded Ted the following visitation schedule: every third weekend (Friday 5 p.m. through Sunday 5 p.m.) and weekly “mid-week” visitation (Sunday 5 p.m. through Tuesday morning while school is in session and 5 p.m. when it is not). We see no reason to disturb the district court’s decision. Ted conceded Michele is a competent caretaker and acknowledged plans to “ramp up” his law practice.

Alternatively, Ted claims the district court erred by not awarding the parties joint physical care of the children. Under Iowa Code section 598.41(5)(a),

the court may award joint physical care ... upon the request of either parent. If the court denies the request for joint physical care, the determination shall be accompanied by specific findings of fact and conclusions of law that the awarding of joint physical care is not in the best interest of the child.

Contrary to Ted’s assertion on appeal, this passage does not create a presumption in favor of joint physical care. In re Marriage of Hansen, 733 N.W.2d 683, 699 (Iowa 2007). Rather, our statutory scheme simply makes joint physical care a viable option if it is in the child’s best interest. We recently said “[t]he critical question in deciding whether joint physical care is ... appropriate is whether the parties can communicate effectively on the myriad of issues that arise daily in the routine care of a child.” Hynick, 727 N.W.2d at 580.

The parties dispute whether Ted requested joint physical care in the original proceedings. Ted’s answer to Michele’s petition sought “the parties’ joint shared physical custody of their children.” In his opening statement at trial, Ted’s attorney stated the court needed to decide “whether shared physical custody is appropriate in this case.” Since the parties previously agreed to joint legal custody, we find it obvious Ted was requesting “joint physical care” even though he did not use those exact words. Moreover, the term “physical” connotes something more tnan tne rignt to maKe legal decisions. We have never held a party must use magic words to convey a desire for “joint physical care.” Nor are we interested in creating a trap for the unwary with respect to something so paramount.

Because the court did not award joint physical care, it normally would be required to specifically explain why joint physical care is not in the children’s best interest. Iowa Code § 598.41(5)(a). However, no specific finding was required in the present case because Ted abandoned his request for joint physical care during the trial. In his testimony, Ted asked for primary physical care of the children. He stated joint physical care was not appropriate due to Michele’s “tremendous amount of unresolved anger towards [him].” Similarly, Michele testified joint physical care was not appropriate because communication with Ted was “nearly impossible.” 2 She also stated she believed joint physical care would be too disruptive and worried Ted would not provide a structured environment for the children. In sum, both parties conceded joint physical care was not preferable. Given the parties’ apparent difficulty in communicating, joint physical care would not have been suitable. See Hynick, 727 N.W.2d at 580 (finding joint physical care inappropriate due to the parties’ lack of mutual respect and inability to communicate).

B. Premarital Property

Under our statutory distribution scheme, the first task in dividing property is to determine the property subject to division. In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005). The second task is to divide this property in an equitable manner according to the enumerated factors in section 598.21 of the Iowa Code. Id. “Although an equal division is not required, it is generally recognized that equality is often most equitable.” In re Marriage of Rhinehart, 704 N.W.2d 677, 683 (Iowa 2005) (citing In re Marriage of Conley, 284 N.W.2d 220, 223 (Iowa 1979)).

Section 598.21(1) requires “all property, except inherited property or gifts received by one party,” to be equitably divided between the parties. We have previously held “[t]his broad declaration means the property included in the divisible estate includes not only property acquired during the marriage by one or both of the parties, but property owned prior to the marriage by a party.” Schriner, 695 N.W.2d at 496 (citing In re Marriage of Brainard, 523 N.W.2d 611, 616 (Iowa Ct.App.1994)). The district court “may not separate [a premarital] asset from the divisible estate and automatically award it to the spouse that owned the property prior to the marriage.” Sullins, 715 N.W.2d at 247. Instead, “property brought to the marriage by each party” is merely one factor among many to be considered under section 598.21. Other factors include the length of the marriage, contributions of each party to the marriage, the age and health of the parties, each party’s earning capacity, and any other factor the court may determine to be relevant to any given case. Iowa Code § 598.21(1).

In the present case, the parties agreed to equally divide all property acquired during the marriage. However, the parties disagreed on how to divide their premarital property. Prior to the marriage, Ted owned the Fairview Drive home and Michele owned 118 shares of IBM stock and an IBM tax deferred savings plan (TDSP).

All of these assets increased in value during the marriage:

PREMARITAL VALUE VALUE AT TRIAL ASSET
$12,000 (equity) ' $29,900 (equity) Fairview Drive home (Ted)
$13,334 $37,894 IBM stock (Michele)
$12,311 $78,200 IBM TDSP (Michele)

Ted approved of the court setting aside the value of the parties’ premarital contributions. However, Ted advocated the equal division of any appreciation that occurred during the marriage. Michele, on the other hand, asked the court to set aside her premarital assets as well as any appreciation in value during the marriage.

The district court found it “equitable that Ted receive credit for the premarital value of the equity in [the Fairview Drive home], and Michele receive the premarital value of the IBM stock and IBM retirement plan and each party should receive the benefit or burden of any change in the respective values over which they had no particular control and to which neither made any particular contributions.” Michele was awarded both her premarital assets and their appreciation (worth $116,094 on the date of trial) while Ted only received $12,000 for the premarital value of the Fairview Drive home. The court found it was justified in dividing the appreciation of the Fairview Drive home because the parties serviced the mortgage and maintained the home during the marriage while Michele’s premarital assets increased “as a result of factors entirely beyond the control of the parties.”

The court of appeals upheld the district court’s disparate treatment of the parties’ premarital assets. It stated:

In this marriage of moderate length, it is Michele who has made the greatest tangible contributions, undertaking primary responsibility for the home, the children, and the parties’ finances. In addition, it appears that, overall, she has made greater financial contributions to the marriage. Moreover, the record is clear that Michele’s IBM stock and IBM TDSP, which have been kept separate from the family finances, appreciated purely due to fortuitous circumstances. In contrast, during the marriage the Fairview Drive home was used as rental property. Unlike a purely financial asset, an encumbered home must be maintained and its mortgage must be serviced.... In light of the foregoing circumstances, we find the property division to be equitable.

We do not find the parties’ respective contributions to the marriage justify treating the parties differently. Michele’s biggest criticism of Ted is his “failure without good cause to contribute financially to the marriage consistent with his earning capacity.” However, we have never held or even insinuated that spouses should maximize their earning potential or risk being punished in the distribution of the parties’ property. Iowa is a no-fault state. In re Marriage of Williams, 199 N.W.2d 339, 345 (Iowa 1972).

It is important to remember marriage does not come with a ledger. See In re Marriage of Miller, 552 N.W.2d 460, 464 (Iowa Ct.App.1996). Spouses agree to accept one another “for better or worse.” Each person’s total contributions to the marriage cannot be reduced to a dollar amount. Many contributions are incapable of calculation, such as love, support, and companionship. “Financial matters ... must not be emphasized over the other contributions made to a marriage in determining an equitable distribution.” Id. at 465.

In the present case, both parties contributed in countless ways to the marriage. Both worked outside the home, cooked, cleaned and looked after the children. We presume they found solace in one another, at least in the earlier years of their marriage. Although each party’s contribution to a marriage is an appropriate factor affecting property division, it is not “useful to analyze the exact duties performed by the marriage partners.” In re Marriage of Grady-Woods, 577 N.W.2d 851, 853 (Iowa Ct.App.1998). Suffice it to say, neither party shirked his or her duties so as to justify disparate treatment.

Nor do we find it appropriate when dividing property to emphasize how each asset appreciated — fortuitously versus laboriously — when the parties have been married for nearly fifteen years. Property may be “marital” or “premarital,” but it is all subject to division except for gifts and inherited property. Iowa Code § 598.21(1).

Considering all of the facts and circumstances of this case, we find it equitable to equally divide the appreciation of the parties’ premarital assets. We need not decide whether it was appropriate to award the parties the value of their premarital contributions because both parties requested at least the value of their respective premarital property to be set aside. See In re Marriage of Wendell, 581 N.W.2d 197, 199 (Iowa Ct.App.1998) (noting some circumstances may justify a full credit for premarital property but such a credit is not required). Thus, $12,000 should be set aside for Ted and $25,645 should be set aside for Michele. These figures represent the value of their premarital property on the date of their marriage.

C. Dissipation of Assets

Michele urges us to take into account Ted’s “unreasonable accumulation of debt.” The district court found Ted’s spending “behavior does not rise to the level of ill will or inappropriate conduct sufficient to justify variance” from an equal property division.

We have previously held dissipation of assets is a proper consideration when dividing property. In re Marriage of Olson, 705 N.W.2d 312, 317 (Iowa 2005) (citing In re Marriage of Goodwin, 606 N.W.2d 315, 321 (Iowa 2000)). In determining whether dissipation has occurred, courts must decide “(1) whether the alleged purpose of the expenditure is supported by the evidence, and if so, (2) whether that purpose amounts to dissipation under the circumstances.” Lee R. Russ, Spouse’s Dissipation of Marital Assets Prior to Divorce as Factor in Divorce Court’s Determination of Property Division, 41 A.L.R.4& 416, 421 (1985). The first issue is an evidentiary matter and may be resolved on the basis of whether the spending spouse can show how the funds were spent or the property disposed of by testifying or producing receipts or similar evidence. See id. The second issue requires the consideration of many factors, including

(1) the proximity of the expenditure to the parties’ separation, (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditure benefited the “joint” marital enterprise or was for the benefit of one spouse to the exclusion of the other, and (4) the need for, and the amount of, the expenditure.

Id.; see In re Marriage of Burgess, 568 N.W.2d 827, 829 (Iowa Ct.App.1997) (stating when one spouse has dissipated marital assets, the critical question is “whether the payment of the obligation was a reasonable and expected aspect of the particular marriage”). Courts may also consider “[w]hether the dissipating party intended to hide, deplete, or divert the marital asset.” Kondamuri v. Kondamuri, 852 N.E.2d 939, 952 (Ind.Ct.App.2006); see In re Marriage of Cerven, 335 N.W.2d 143, 146 (Iowa 1983) (holding property transferred by a spouse to avoid support obligation may be considered on the issue of property distribution as well as alimony).

Michele alleges Ted indirectly dissipated their marital assets — rather than depleting the parties’ assets, Ted accumulated large amounts of debt. Nevertheless, the result is the same. The parties’ assets will eventually be needed to repay Ted’s debt.

The parties kept their respective earnings and debt separate for the last several years of their marriage. Ted maintained a line of credit and several credit cards which were all in his name alone. Michele was not aware of the extent of Ted’s debt until shortly before she filed her second dissolution petition. At trial, Ted owed approximately $85,633. Ted acknowledged his debt had substantially increased since the first time Michele filed for dissolution in 2001. He said his debt was necessitated by his firm’s obligations and household expenses. He attributed the increase to his need to borrow money to service his debt. However, Ted did not provide any evidence concerning his firm’s expenses and obligations, nor did he specify his contributions to the household by way of this debt.

While Ted asserted about half of the debt is related to the family household, the record shows Michele paid the vast majority of those expenses for the last several years. Moreover, Ted’s claim that he “ha[s]n’t been able to make enough money from the course of [his] practice ... to cover current expenses and additionally retire the debt on top of that” is contrary to his assertion that his law firm is profitable.

Nevertheless, it is not unexpected Ted could not account for exactly how this money was spent considering the debt accumulated over several years. Ted, however, should have been able to explain how he spent the $22,000 he took out on his credit cards after Michele filed her second petition for dissolution. Ted offered no explanation why his debt suddenly accelerated at the end of the marriage although he taunted Michele she was going to have to pay it all. Ted’s living expenses did not increase because the parties remained in their home on Barcelona Terrace while the dissolution action was pending. We also know the cash advances were not used to pay Ted’s legal expenses because the district court ordered Michele’s attorney to transfer half of Michele’s $15,000 retainer to Ted’s attorney.

It is not appropriate to label all of Ted’s debt as waste because we find Ted’s testimony credible to prove at least some of this debt benefited the family or Ted’s firm. Given the timing of the cash advances and Ted’s vague explanation, we find it equitable to set aside $22,000 of debt for Ted. This amount should not be included in the distribution of the parties’ assets and debts. Ted failed to prove the cash advances were the result of legitimate household and business expenses. Although all debt is not wasteful, we find this amount unreasonable because he failed to adequately explain it. See Goodwin, 606 N.W.2d at 322 (holding $9,000 which the wife spent but could not account for should be included in the division of the parties’ assets); In re Marriage of Hunter, 196 Mont. 235, 639 P.2d 489, 492-93 (1982) (holding $51,000 husband withdrew from joint bank account should be included in the marital estate because he produced no evidence to support his claim that the money was spent on business and living expenses). In other words, Michele made a prima facie case for dissipation and Ted failed to rebut it.

In summary, the value of the parties’ premarital contributions should be set aside. Ted should receive a $12,000 credit and Michele should receive a $25,645 credit. Additionally, $22,000 of debt should be set aside for Ted. That leaves $866,750 worth of marital assets and $81,824 worth of marital debts to be equally divided. All together, Michele should receive $418,108 and Ted should receive $382,463 based on the following calculations:

Michele Ted
Premarital assets $525,645.00 $ 12,000.00
Marital assets $433,375.00 $433,375.00
Marital debt $ (40,912.00) $ (40,912.00)
Dissipation debt $ - $ (22,000.00)
Totals $418,108.00 $382,463.00

The district court shall enter an order in conformance with these findings modifying the original decree as follows: the appreciation of Michele’s premarital assets should be included in the division of marital property and $22,000 of Ted’s debt should be excluded from the division of marital property. These modifications give Michele $28,218 less than the district court’s original decree. The district court shall hold a hearing to determine how the parties’ property should be redistributed in light of our holdings.

IV. Conclusion

We find no reason to disturb the district court’s decision to award primary care of the parties’ children to Michele. We set aside the value of the parties’ premarital contributions because both parties asked for at least that much to be set aside. Because Ted dissipated marital assets through unexplained cash advances on his credit cards at the end of the marriage, we set aside $22,000 worth of debt to Ted. We order the parties’ remaining assets and debts, including appreciation of the parties’ premarital assets, to be divided equally. Costs of this appeal shall be split equally between the parties.

DECISION OF THE COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED IN PART AND REVERSED IN PART; CASE REMANDED.

All justices concur except HECHT, J., who takes no part.

than the right to make legal decisions, W\ have never held a party must use matee words to convey a desire for “joint physical care.” Nor are we interested in ⅞ r creating a trap for the unwary with respect ^something so paramount. J

Because the court did nop award joint physical care, it normally Would be required to', specifically explain/why joint physical care, is not in the children’s best interest. Iowa Code § 598.41/é)(u). However, no specific finding wafe required in the present case because Ted abandoned his request for jqint physical care during the trial. In his testimony, Ted asked for primary physical care of the children. He stated joint physical, care was not appropriate due to Michele’s “tremendous amount of unresqlied anger towards [him].” Similarly,/Michele testified joint physical care was/not appropriate because communication with Ted was “nearly impossible.” She also stated she believed joint physical care would be t<DO disruptive and worriedyAred would not, provide a structured environment for the children. In sum, bo/h parties conceded jdint physical care /ras not preferable. Giyen the parties’ apparent difficulty in communicating, joint physical care would hav^> been suitable. See Hynick, 727 N.W.2d at 580 (finding joint physical care inappropriate due/to the parties’ lack of mutual respect and inability to communicate). v\

      . Although the district court made a specific finding that Ted should receive a $12,000 credit for his premarital equity in the Fair-view Drive home, the court did not implement this finding in the final distribution of property. Thus, in response to a motion to enlarge or amend, the court gave Ted an additional $12,000 from Michele’s Lee Enterprises retirement fund.

      . The total value of Michele's IBM TDSP at trial was $153,084. Michele acknowledged $74,884 was either contributed during the marriage or was appreciation of contributions made during the marriage. Thus, she asked for $78,200 to be set aside for her and agreed to split $74,884 with Ted.

      . At the parties’ request, Michele was awarded the Fairview Drive home and Ted was awarded the Barcelona Terrace home.

      . This does not include a substantial loan which is listed on petitioner’s exhibit 40 (First MW Line of Credit in the amount of $80,100). There is no discussion of this loan in the decree. Since the parties have not addressed it on appeal, we likewise do not address it.

      . Typically, a dissipated asset is included in the marital estate and awarded to the spouse who wasted the asset. See, e.g., Goodwin, 606 N.W.2d at 322. However, where the dissipation is debt, it is appropriate to set aside the debt for the spouse who incurred the debt and not include it in the marital estate.

      than the right to make legal decisions, W\ have never held a party must use matee words to convey a desire for “joint physical care.” Nor are we interested in ⅞ r creating a trap for the unwary with respect ^something so paramount. J

    Because the court did nop award joint physical care, it normally Would be required to', specifically explain/why joint physical care, is not in the children’s best interest. Iowa Code § 598.41/é)(u). However, no specific finding wafe required in the present case because Ted abandoned his request for jqint physical care during the trial. In his testimony, Ted asked for primary physical care of the children. He stated joint physical, care was not appropriate due to Michele’s “tremendous amount of unresqlied anger towards [him].” Similarly,/Michele testified joint physical care was/not appropriate because communication with Ted was “nearly impossible.”  She also stated she believed joint physical care would be t<DO disruptive and worriedyAred would not, provide a structured environment for the children. In sum, bo/h parties conceded jdint physical care /ras not preferable. Giyen the parties’ apparent difficulty in communicating, joint physical care would hav^> been suitable. See Hynick, 727 N.W.2d at 580 (finding joint physical care inappropriate due/to the parties’ lack of mutual respect and inability to communicate). v\


source: Caselaw Access Project

author: TERNUS, Chief Justice.

license: Public Domain

text:
    STATE of Iowa ex rel. Thomas J. MILLER, Attorney General of Iowa, Appellee, v. SMOKERS WAREHOUSE CORP. and Bruce Vogel, Appellants.
    No. 04-1692.
    Supreme Court of Iowa.
    Aug. 3, 2007.

      Daniel B. Shuck and Jeana L. Goosmann of Heidman, Redmond, Fredregill, Patterson, Plaza, Dykstra & Prahl, L.L.P., Sioux City, and Leonard Violi, Mamaroneck, New York, for appellants.
    Thomas J. Miller, Attorney General, and Steve St. Clair, Assistant Attorney General, for appellee.
   TERNUS, Chief Justice.

The appellants, Smokers Warehouse Corp. and its owner/president, Bruce Vo-gel, appeal from a district court order granting the State’s application to enforce civil investigative demands issued by the appellee, Iowa Attorney General Thomas J. Miller, under the authority of the Iowa Consumer Fraud Act, Iowa Code section 714.16 (2003). Smokers Warehouse and Vogel challenge the Attorney General’s authority to issue a civil investigative demand under the Act and assert section 714.16 violates their due process rights. We affirm.

I. Background Facts and Proceedings.

In 2003 the Iowa Attorney General filed a consumer fraud lawsuit against Smokers Warehouse Club, Inc., an Illinois corporation. The State alleged Smokers Warehouse Club had misled Iowa residents by falsely advertising that Iowans could purchase tax-free cigarettes from the defendant through the mail. In addition, the State alleged Smokers Warehouse Club had failed to exercise due care to ensure that minors did not purchase cigarettes from the company. This lawsuit was dismissed without prejudice upon the motion of Smokers Warehouse Corp., a Mississippi corporation, based on the State’s failure to name and serve the proper entity.

Rather than re-filing the lawsuit against the proper defendant, the Attorney General employed the investigative tools of the Consumer Fraud Act by sending civil investigative demands (CIDs), which were substantially the same, to Smokers Warehouse Corp. and to its owner/president, Bruce Vogel. These CIDs requested information and records regarding the corporate structure and control of Smokers Warehouse Corp., its advertising and sales to Iowans, and its policies and practices relating to excise tax compliance and the prevention of underage cigarette sales. Smokers Warehouse Corp. and Vogel filed a motion for protective order in the dismissed action, which the court denied on the basis there was no pending lawsuit.

These parties persisted in their refusal to respond to the CIDs, so on June 30, 2004, the State filed an “application to enforce consumer fraud subpoena,” in which the State asked the court to direct the defendants, Smokers Warehouse Corp. and Vogel, to comply with the CIDs. The defendants filed a resistance and a request for a protective order. Thereafter, the district court entered a ruling, concluding the requirements of due process had been satisfied and there was no Fourth Amendment violation. The district court granted the State’s application to enforce, subject to specific limitations, and enjoined the defendants from selling or advertising any merchandise in or from Iowa or to Iowa residents should the defendants fail to comply with the CIDs.

The defendants appeal from this order. They raise two main issues. First, they claim the Attorney General is without authority to issue a CID in a consumer fraud investigation, and consequently, the State has violated the defendants’ Fourth Amendment rights by conducting an impermissible search. Second, the defendants claim Iowa Code section 714.16 violates the Due Process Clause because it does not require reasonable cause as a condition of issuance of a CID.

II. Scope of Review.

We will review the defendants’ first assignment of error, grounded in statutory interpretation, for correction of errors of law. See State v. Wolford Corp., 689 N.W.2d 471, 473 (Iowa 2004). To the extent the defendants’ claims are based upon the Due Process Clause and the Fourth Amendment, our review is de novo. See State ex rel. Miller v. Pace, 677 N.W.2d 761, 767 (Iowa 2004).

III. Authority to Issue CID Under Section 714.16.

Iowa’s Consumer Fraud Act is found in Iowa Code section 714.16. Subsection (3) of this section specifies various actions the Attorney General may take when he believes that a person may be engaging in a practice prohibited by the Act. See Iowa Code § 714.16(3). Such actions include requiring the suspected violator to give a statement or report under oath upon forms prescribed by the Attorney General concerning that person’s sale or advertisement of merchandise; examining under oath any person concerning such sale or advertisement; examining merchandise, records, documents, accounts, or papers; and pursuant to court order, impounding “any record, book, document, account, paper, or sample of merchandise that is produced in accordance with this section.” Id. In addition to these powers, the statute further provides:

To accomplish the objectives and to carry out the duties prescribed by this section, the attorney general, in addition to other powers conferred on the attorney general by this section, may issue subpoenas to any person, administer an oath or affirmation to any person, conduct hearings in aid of any investigation or inquiry, prescribe such forms and promulgate such rules as may be necessary, which rules shall have the force of law.

Id. § 714.16(4)(a) (emphasis added). To aid in the enforcement of these investigative powers, the legislature provided for court assistance in the event “a person fails or refuses to file a statement or report, or obey any subpoena issued by the attorney general.” Id. § 714.16(6).

The defendants claim this statute does not authorize the Attorney General to issue a civil investigative demand because nowhere in section 714.16 is there any mention of “civil investigative demands.” They complain the CIDs are essentially “civil interrogatories and requests for production that are not authorized by the legislature.” We think the defendants’ reading of the statute is too narrow and restrictive.

While it is true section 714.16 does not use the term “civil investigative demand,” the Attorney General is given express authority to issue subpoenas. See id. § 714.16(4)(u). A “civil investigative demand ... is essentially an administrative subpoena.” Office of Attorney Gen. v. M.J.D. (In re Investigation of Highway Constr. Indus.), 396 N.W.2d 757, 758 (S.D.1986). In addition, the following provision in essence gives the Attorney General statutory authority to require the subject of an investigation to answer questions akin to civil interrogatories:

[T]he attorney general may:

a. Require such person to file on such forms as the attorney general may prescribe a statement or report in writing under oath or otherwise, as to all the facts and circumstances concerning the sale or advertisement of merchandise by such person, and such other data and information as the attorney general may deem necessary.

Iowa Code § 714.16(3)(a). The defendants do not dispute that the questions propounded in the CIDs seek information related to the defendants’ sale or advertisement of cigarettes in Iowa.

Finally, we also reject the defendants’ contention that the Attorney General’s investigative powers under the Consumer Fraud Act do not include the authority to request the production of documents. As noted above, section 714.16(3) authorizes the Attorney General to “[ejxamine any ... record, book, document, account or paper” and to obtain a court order impounding “any record, book, document, account, [or] paper ... that is produced in accordance with this section.” Id. § 714.16(3)(c), (d) (emphasis added). Clearly, the legislature contemplated that the Attorney General’s examination of documents would necessitate the production of those documents. Moreover, courts are reluctant to interfere with an agency’s use of its subpoena power other than to preserve due process rights. See Iowa Civil Rights Comm’n v. City of Des Moines/Personnel Dep’t, 313 N.W.2d 491, 495 (Iowa 1981).

In conclusion, to adopt the defendants’ argument would place form over substance, a result inconsistent with the broad interpretation historically given to the investigative powers of administrative agencies in general and to the investigative powers authorized by the Consumer Fraud Act in particular. See State ex rel. Miller v. Publishers Clearing House, Inc., 633 N.W.2d 732, 737, 738 (Iowa 2001) (describing investigative powers under the Consumer Fraud Act as broad and plenary); Iowa Civil Rights Comm’n, 313 N.W.2d at 495 (“Administrative agencies are normally invested with broad investigative powers to enable them to effectively carry out their legislative mandates.”). Consequently, we conclude the Attorney General had the authority to issue civil investigative demands that included interrogatories and requests for production. Because we have concluded that the CIDs issued by the Attorney General were within his statutory authority, we need not address the defendants’ contention that the CIDs constituted an unauthorized search that violated their Fourth Amendment rights.

IV. Due Process.

The defendants also claim section 714.16 violates their due process rights because it fails to require the Attorney General to have “reasonable cause” to initiate an investigation. “We presume statutes are constitutional.” Krull v. Thermogas Co., 522 N.W.2d 607, 614 (Iowa 1994). Consequently, “[t]he challenger must show beyond a reasonable doubt that a statute violates the constitution.” Bowers v. Polk County Bd. of Supervisors, 638 N.W.2d 682, 688 (Iowa 2002).

The Due Process Clause has been interpreted to have both substantive and procedural components, with different analytic frameworks applied depending upon whether a substantive or procedural violation is alleged. The defendants do not clearly identify the nature of their claim, but we assume it is a substantive due process argument because they do not discuss any notice or hearing deficiencies in section 714.16. See generally id. at 690-91 (noting procedural due process requires notice and an opportunity to be heard).

“[The] substantive due process doctrine ‘does not protect individuals from all governmental actions that infringe liberty or injure property in violation of some law.’ Rather, substantive due process is reserved for the most egregious governmental abuses against liberty or property rights, abuses that ‘shock the conscience or otherwise offend ... judicial notions of fairness ... [and that are] offensive to human dignity.’ With the exception of certain intrusions on an individual’s privacy and bodily integrity, the collective conscience of the United States Supreme Court is not easily shocked.”

Blumenthal Inv. Trusts v. City of W. Des Moines, 636 N.W.2d 255, 265 (Iowa 2001) (quoting Rivkin v. Dover Twp. Rent Leveling Bd., 143 N.J. 352, 671 A.2d 567, 575 (1996)).

A substantive due process analysis begins with an identification of the nature of the right at issue, as that determines the test to be applied. Bowers, 638 N.W.2d at 694. Here, the right at stake is the corporation’s right of privacy. When, as in this case, a fundamental right is not involved, the Due Process Clause “demands no more than a ‘reasonable fit’ between government purpose ... and the means chosen to advance that purpose.” Reno v. Flores, 507 U.S. 292, 302, 305, 113 S.Ct. 1439, 1447-49, 123 L.Ed.2d 1, 18 (1993).

Turning to the Iowa statute, we note it employs a subjective standard for the commencement of an inquiry, allowing the Attorney General to investigate

[w]hen it appears to the attorney general that a person has engaged in, is engaging in, or is about to engage in any practice declared to be unlawful by this section or when the attorney general believes it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in, is engaging in or is about to engage in, any such practice^]

Iowa Code § 714.16(3) (emphasis added). While the defendants have cited to several consumer fraud statutes from other states that require the attorney general in those states to have reasonable cause to believe a violation has occurred, they have pointed to no case that holds the Due Process Clause mandates this standard. In fact, the United States Supreme Court appears to have rejected a similar argument in United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950).

In Morton Salt, the corporate defendants challenged the authority of the Federal Trade Commission to issue an order requiring them to make “highly particularized reports to show continuing compliance with [a consent] decree.” 338 U.S. at 636, 70 S.Ct. at 361, 94 L.Ed. at 407. In con-eluding the order did not exceed the agency’s authority, the Supreme Court stated that “an administrative agency charged with seeing that the laws are enforced ... is more analogous to the Grand Jury, which ... can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.” Id. at 642-43, 70 S.Ct. at 364, 94 L.Ed. at 411. The Court went on to reject a due process challenge made to the Commission’s order, stating:

Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest.

Id. at 652, 70 S.Ct. at 369, 94 L.Ed. at 416.

We conclude there is a reasonable fit between the legislative purpose to eliminate consumer fraud and the authorization of the Attorney General to investigate a person when he “believes” that person has violated the law. The defendants have failed to establish beyond a reasonable doubt that section 714.16(3) violates their substantive due process rights by failing to impose an objective, reasonable-cause standard for the initiation of an investigation.

V. Conclusion.

The Attorney General has authority under the Consumer Fraud Act, Iowa Code section 714.16, to issue a civil investigative demand that includes questions in the nature of civil interrogatories and requests for production. The State’s ability to undertake an investigation of possible consumer fraud upon the Attorney General’s belief that a violation has occurred, as opposed to the existence of reasonable cause to believe a violation has occurred, does not violate substantive due process. The district court did not err in ordering the defendants to comply with the CIDs issued by the Attorney General, subject to the limitations imposed by that court.

AFFIRMED.

All justices concur except APPEL, J., who takes no part.


author: APPEL, Justice.

text:
    Ranee GREENFIELD and Stuart Greenfield, Appellants, v. The CINCINNATI INSURANCE COMPANY, Appellee.
    No. 06-0032.
    Supreme Court of Iowa.
    Aug. 3, 2007.

      R. Ronald Pogge, David S. Gorham, and Barrie J. Terrones of Hopkins & Heubner, P.C., Des Moines, for appellants.
    Patrick J. McNulty and Lisa R. Perdue of Grefe & Sidney, P.L.C., Des Moines, for appellee.
   APPEL, Justice.

In this case, the proceedings take us to an intersection of insurance and workers’ compensation law. Specifically, we must decide whether an injured employee’s recovery under the underinsured motorist provision of her employer’s automobile policy is reduced in whole or in part by workers’ compensation benefits she received for injuries arising out of the same accident. The district court offset the workers’ compensation recovery against jury awards for medical expenses, lost wages, and past and future loss of function, but refused to allow an offset against jury verdicts for past and future pain and suffering and loss of spousal consortium. For the reasons set forth below, we affirm in part, reverse in part, and remand the matter to the district court for further proceedings.

I. FACTUAL BACKGROUND AND PRIOR PROCEEDINGS.

Ranee Greenfield and other passengers traveled by van to Des Moines in order to testify at a hearing regarding the operations of East Lane Care Center (East Lane), Ranee’s employer. A motor vehicle driven by Zachary Hedgecock ran a red light and struck the van, causing it to roll at least once. Although Ranee was wearing her seat belt, another unbelted passenger was thrown into her upon impact.

Ranee was transported to Iowa Methodist Medical Center, where she complained of head, neck, and chest pain. She was treated with ibuprofen and released. While the majority of her symptoms dissipated or disappeared during her recovery, her chest pain continued. Ranee eventually was diagnosed as suffering from fractures in the costochondral cartilage in her chest. In order to combat her pain, she was twice treated at the Mayo Clinic Pain Center in Rochester, Minnesota.

Ranee filed a workers’ compensation claim against her employer and its workers’ compensation carrier, Cincinnati Insurance Company (Cincinnati). The parties settled the claim in a “Compromise Special Case Settlement Agreement” pursuant to Iowa Code section 85.35 (2005). The total amount of the settlement was $154,404.28, which consisted of a $17,109.61 payment for medical expenses, $37,294.67 in indemnity payments, and a $100,000 lump sum payment.

Ranee and her husband, Stuart Greenfield, also settled their personal injury claims against the tortfeasor for his liability insurance coverage limit of $30,000. This settlement, however, was subrogated to the interest of Cincinnati, as Ranee’s workers’ compensation insurer, pursuant to Iowa Code section 85.22(1). As a result, Cincinnati received $19,728.00.

The Greenfields further pursued a claim against East Lane’s underinsured motorist carrier (UIM), which also happened to be Cincinnati. This claim was not resolved, and the matter proceeded to trial.

The jury returned a verdict in favor of the Greenfields, awarding Ranee $123,000 and Stuart $50,000 in damages. The special jury verdict in favor of Ranee allocated $10,000 for medical expenses, $25,000 for past pain and suffering, $30,000 for future pain and suffering, $20,000 for past loss of function, $30,000 for future loss of function, $8,000 for lost wages, and $0 for future loss of earning capacity. The special jury verdict in favor of Stuart allocated $20,000 for past loss of consortium and $30,000 for future loss of consortium.

After trial, the district court filed a judgment entry and order in the case. The order applied a provision in Cincinnati’s UIM policy with East Lane which allowed a credit/offset for benefits received by Ranee from her workers’ compensation settlement and tortfeasor recovery. In applying the offset provision, the district court determined that the offset was limited by the policy language to duplicative “elements of loss.” The district court determined that jury awards for medical expenses, lost wages, and past and future loss of function were “elements of loss” covered by the workers’ compensation settlement. The district court also determined that the verdict must be further offset by the Greenfields’ recovery from Hedgecock. The Greenfields’ settlement with Hedgecock, however, did not allocate the proceeds between them or their injuries. Nevertheless, the district court decided to allocate the $30,000 offset equally between the Greenfields. After removing duplicative “elements of loss” from the jury verdict and applying the $30,000 offset, the district court reduced the award to Ranee to $40,000 and the award to Stuart to $35,000.

Both parties filed motions to reconsider. The district court sustained its prior ruling except with respect to the allocation of the tortfeasor recovery, which was reallocated entirely against Ranee’s recovery. Ranee’s award was, therefore, reduced to $25,000, with Stuart’s award increased to $50,000.

Ranee and Stuart filed a timely notice of appeal. On appeal, the Greenfields argue that the district court erred in allowing the workers’ compensation benefits to be offset against the jury awards for past and future loss of function and in allowing Cincinnati to receive “a double credit” by not reducing the amount of the workers’ compensation offset by the funds reimbursed to Cincinnati under Iowa Code section 85.22(1).

Cincinnati filed a timely notice of cross appeal. In its cross appeal, Cincinnati asserted that the district court erred in not applying an offset of the total workers’ compensation recovery against the total jury award. Cincinnati also maintained that the district court erroneously refused to apply an offset against the jury’s special verdicts for past and future pain and suffering.

II. STANDARD OF REVIEW.

The interpretation of an insurance policy is a matter of law. A.Y. McDonald Indus., Inc. v. Ins. Co. of N. Am., 475 N.W.2d 607, 618 (Iowa 1991). This court’s review, therefore, is for errors at law. Iowa R.App. P. 6.4.

III. DISCUSSION.

A. Offsets of Workers’ Compensation Recoveries Under Reduction-of-Benefits Provisions of Underin-sured Motorist Policies.

1.Statutory Authorization of Reduction-of-Benefits Provisions.

Iowa Code section 516A.1 requires all automobile insurance policies, absent a written rejection by the insured, to include coverage for uninsured and underin-sured motorist claims. Iowa Code section 516A.2(1) further provides that “... forms of coverage may include terms, exclusions, limitations, conditions, and offsets which are designed to avoid duplication of insurance or other benefits.” When such language is included in policies covering underinsured motorists, it is referred to generically as a reduction-of-benefits provision.

In Gentry v. Wise, 537 N.W.2d 732 (Iowa 1995), this court emphasized that reduction-of-benefits provisions were permissible under Iowa Code section 516A.2 (1) so long as their design is to avoid duplication of coverage. Gentry, 537 N.W.2d at 735. Where an insurance contract does not contain a reduction-of-benefits provision authorized by statute, however, reduction of benefits may be denied. Detroit Auto Inter-Ins. Exch. v. Ayvazian, 62 Mich.App. 94, 233 N.W.2d 200 (1975); Progressive Am. Ins. Co. v. Vasquez, 129 N.C.App. 742, 502 S.E.2d 10, aff'd in part, rev’d in part, 350 N.C. 386, 515 S.E.2d 8 (1998).

2. Offsets of Recoveries from Workers’ Compensation.

In McClure v. Employers Mutual Casualty Co., 238 N.W.2d 321 (Iowa 1976) [hereinafter McClure I ], this court considered whether the Iowa legislature, in enacting Iowa Code section 516A.2(1), authorized offsets of workers’ compensation benefits. The question was not free from doubt as Iowa Code section 516A.2(1) does not expressly authorize offsets of workers’ compensation benefits, but only offsets to avoid duplication of “insurance or other benefits.”

The McClure I court concluded that notwithstanding the failure to specifically authorize reduction of coverage as a result of workers’ compensation payments, the Iowa legislature intended to allow insurance companies to offset workers’ compensation benefits against uninsured and underinsured motorist claims. While offsets are permissive under Iowa Code section 516A.2(1), they are not mandatory. The particular policy language at issue is controlling. Cincinnati, therefore, is entitled to an offset of workers’ compensation benefits to avoid duplication only to the extent that its reduction-of-benefits provision authorizes such offsets.

B. Meaning of Language in Cincinnati’s Reduction-of-Benefits Provision in its Underinsured Motorist Policy.

1. Overview of Reduction-of-Benef%ts Provisions.

In light of McClure I, a central question in this case is the meaning of Cincinnati’s policy language as it relates to underin-sured motorist claims. The applicable language is as follows:

3. No one will be entitled to receive duplicate payments for the same el ements of “loss” under this Coverage and any Liability Coverage Form.
We will not make a duplicative payment under this Coverage for any element of “loss” for which payment has been made-by or for anyone who is legally responsible.
We will not pay for any element of “loss” if a person is entitled to receive payment for the same element of “loss” under any workers’ compensation, disability benefits or similar law.

(Emphasis added.) The Cincinnati policy further contains language defining “loss.” According to the policy, “loss” means “direct or accidental loss or damage.”

The reduction-of-benefits language in Cincinnati’s policy relating to underin-sured motorist claims differs significantly from that relating to claims involving uninsured motorists (UM). The reduction-of-benefits provision related to uninsured motorists is as follows:

2. With respect to damages resulting from an “accident” with an “uninsured motor vehicle” ... the Limit of Insurance shall be reduced by:
a. All sums paid or payable under any workers’ compensation, disability benefits or similar law, and
b. All sums paid by or for anyone who is legally responsible, including all sums paid under this Coverage Form’s Liability Coverage.

(Emphasis added).

The difference between these reduction-of-benefits provisions is not happenstance. These provisions recognized the fundamental distinction in the policy goals of uninsured and underinsured motorist coverage. The purpose of uninsured motorist coverage is to make certain that an injured party receives minimum compensation for his or her injuries. Uninsured motorist protection thus provides a safety net of coverage. In contrast, the purpose of underinsured motorist coverage is not to provide a minimum safety net, but to enhance the ability of a claimant in an automobile accident to be made whole for his or her losses. Veach v. Farmers Ins. Co., 460 N.W.2d 845, 848 (Iowa 1990); McClure v. Northland Ins. Co., 424 N.W.2d 448, 449-50 (Iowa 1988) [hereinafter McClure II ].

Because of these differences, we have adopted a “broad coverage view” of under-insured motorist coverage, while recognizing a “narrow coverage view” of uninsured motorist coverage. Benefits that are du-plicative in the context of uninsured motorist coverage, therefore, may not necessarily be so in the underinsured motorist context. Veach, 460 N.W.2d at 848.

Cincinnati’s two different reduction-of-benefits provisions are consistent with the approach taken in McClure II and Veach. Any recovery from a third party is “dupli-cative” in the context of uninsured motorist coverage, while only payments that cover the same type of injury are “duplica-tive” of underinsured motorist coverage.

2. Meaning of Reduction-of-Benefits Provision Related to Underinsured Motorist Coverage.

The basic rules for determining the meaning of provisions in an insurance policy are well established. Ultimately, the intent of the parties must control the outcome. Ordinarily, this is determined by the language of the policy. See A.Y. McDonald Indus., Inc., 475 N.W.2d at 618. The insurance policy must be construed as a whole, with the words “given their ordinary, not technical, meaning [in order] to achieve a practical and fair interpretation.” West Bend Mut. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 624 N.W.2d 422, 424 (Iowa Ct.App.2001). Where the meaning of the terms is susceptible to two interpretations, however, the one favoring the insured is adopted. Id.; see also Wildman v. Nat’l Fire & Marine Ins. Co., 703 N.E.2d 683, 687 (Ind.Ct.App.1998) (contract provision related to reduction of benefits construed in favor of insured); Sisco v. Am. Family Mut. Ins. Co., 806 S.W.2d 409, 411 (Mo.1991) (same).

The plaintiffs claim that Cincinnati’s reduction-of-benefits provision relating to underinsured motorist coverage limits any reduction to “those ‘elements of loss’ which are compensable under the workers’ compensation statute.” Plaintiffs argue that the “elements of loss” language in the underinsured reduction-of-benefits provision requires that each claim for recovery must be separately analyzed to determine whether it amounts to an identical claim for which payment has already been made. Under plaintiffs’ theory, the beginning point of analysis is not the total recovery of $123,000 obtained from the cumulation of special jury verdicts, but instead commences with an analysis of each separate jury award. Each separate award must then be evaluated to determine if they are the same “element of loss,” or “duplica-tive,” of recovery that plaintiff obtained pursuant to the workers’ compensation settlement.

Cincinnati asserts, however, that the un-derinsured policy language means that the entirety of the workers’ compensation settlement must be offset against the cumulative jury verdict. According to Cincinnati, under its policy a plaintiff cannot recover more than the entire amount of the jury’s verdict in an underinsured motorist case. In other words, Cincinnati claims that if a workers’ compensation settlement exceeds the total amount awarded against the un-derinsured motorist insurer, nothing is owed to its insured as a result of its reduction-of-benefits provision. Cincinnati advances a dollar-for-dollar theory, under which each dollar of recovery from workers’ compensation must be offset against any dollar of recovery awarded by the jury.

We believe that the reduction-of-benefits language in Cincinnati’s policy supports the plaintiffs’ position. With respect to underinsured motorist coverage, the Cincinnati policy expressly limits offsets to payments for “elements of loss” that are “duplicative.” While “elements of loss” is not defined in the policy, ordinary usage of the term “element” or “elements” establishes that the word connotes a part of a larger whole and not the larger whole itself. See Webster’s Third New International Dictionary 734 (2002) (definitions of element or elements include “one of the constituent parts” and “one of a number of distinct or disparate units, parts,” etc.); The American Heritage Dictionary: College Edition 444-45 (2d ed.1985) (definition of element or elements includes “a fundamental, essential, or irreducible constituent of a composite entity” and a “member of a set”). Cincinnati’s policy language for underinsured motorist coverage clearly suggests the need to break down the total loss or recovery awarded by the jury into “elements of loss” and then analyze each “element of loss” separately to determine whether the recovery for that “element” is “duplicative” or amounts to “the same element of loss” recovered under a workers’ compensation settlement.

Our common sense interpretation of the reduction-of-benefits language for under-insured motorist claims is supported by Cincinnati’s use of substantially different reduction-of-benefits language in the policy for uninsured motorists. For uninsured motorists, the Cincinnati policy provides that insurance coverage is reduced by “[a]ll sums paid or payable under any workers’ compensation, disability benefits or other similar law....” Indeed, if the language applicable for uninsured motorist coverage applied to underinsured motorist claims, Cincinnati would be in a comparatively stronger position.

A cardinal rule of contract interpretation is that the use of substantially different language in provisions of a contract must have been intentional and must be recognized by a reviewing court. See Restatement (Second) of Contracts: Rules in Aid of Interpretation § 202(2) (1981) (“A writing is interpreted as a whole ....”); Bowers Hydraulic Dredging Co. v. United States, 211 U.S. 176, 188, 44 Ct.Cl. 592, 29 S.Ct. 77, 80, 53 L.Ed. 136, 141 (1908) (“To separate the words [of that provision] from all the other provisions of the contract, in order to give them an assumed ... meaning, repugnant to their significance in the contract, would be to destroy, and not to sustain and enforce, the contract requirements.”). The policy language chosen by Cincinnati for offsetting workers’ compensation recoveries in the context of an un-derinsured claim must be regarded as narrower than in cases involving uninsured motorist claims.

Case law from other jurisdictions which supports our interpretation is overwhelming. Where reduction-of-benefits provisions state that “all sums paid or payable” under workers’ compensation are subject to offsets, the total amount of the workers’ compensation award is offset against either the total recovery or, in some jurisdictions, the policy limit. See, e.g., State Farm Mut. Auto. Ins. Co. v. Coe, 367 Ill.App.3d 604, 305 Ill.Dec. 282, 855 N.E.2d 173 (2006) (total offset of “any amount paid or payable” provision); Park v. Am. Cas. Ins. Co., 219 Mich.App. 62, 555 N.W.2d 720 (1996) (total offset under “all sums paid or payable” provision).

In contrast where the policy language allows for offsets only where elements of loss are duplicative, or involve “the same element of loss,” courts routinely break down the total recovery into its separate claims and determine whether a reduction of benefits is appropriate for each individual element. See, e.g., Nat’l Ins. Ass’n v. Sockwell, 829 So.2d 111, 132 (Ala.2002) (upholding jury award, in part, on bad faith claim as a result of the insurer’s failure to segregate out elements of loss that were duplicated by the workers’ compensation recovery); Vitanza v. Amica Mut. Ins. Co., 76 Conn.App. 570, 820 A.2d 324, 331 (2003) (provision allowing reduction for “duplicate payments for same elements of loss” does not mean reduced liability, as costs of medical services are not plausibly the same as losses attributable to lost wages or to pain and suffering); St. Paul Fire & Marine Ins. Co. v. Employers Ins. Co. of Nevada, 146 P.3d 258, 263 (Nev.2006) (distinguishing dollar-for-dollar reduction of benefits under “any amount payable” reduction-of-benefits provision with more restrictive “elements of loss” language).

Cincinnati relies on our decision in Matthess v. State Farm Mutual Automobile Insurance Co., 548 N.W.2d 562 (Iowa 1996). In Matthess, we held that an un-derinsured insurance carrier was’ entitled to an offset of funds received through workers’ compensation. Unlike the policy language here, the insurer’s underinsurance reduction-of-benefits provision in Matthess provided that “all sums paid or payable” under workers’ compensation should be deducted under its coverage. The contractual issue of whether the jury recovery was “duplicative” of the same “element of loss” covered by workers’ compensation was not presented in the case. Further, the statutory issue in the case was whether Iowa Code section 516A.4, which limits an underinsured carrier’s right of reimbursement to persons or organizations “legally responsible for the bodily injury,” prevented any offset for workers’ compensation benefits under section 516A.2 (1). The only holding of the court in Matthess is that an offset for duplicate payments under section 516A.2 (1) did not conflict with section 516A.4.

Cincinnati also relies on Imre v. Lake States Insurance Co., 803 N.E.2d 1126 (Ind.Ct.App.2004). In Imre, the plaintiff was injured by the negligence of both an uninsured tortfeasor and an underinsured tortfeasor. The case did not involve a determination of the degree to which a workers’ compensation settlement was du-plicative of a jury award for underinsured coverage, but rather whether the claimant could recover under both the UM and UIM coverage of the same policy. The issue presented in Imre was thus entirely different from that presented in this case. Further, the Imre court emphasized the case’s unique policy language which distinguished “loss” from “damages.” In the matter before us, however, the Cincinnati policy defines “loss” as “direct or accidental loss or damage.” We thus find Imre unpersuasive on the issues presented here.

The bottom line is that Cincinnati asks us to alter its reduction-of-benefits provision related to underinsured motorist claims to make it identical with the reduction provision related to uninsured motorist claims. We decline the invitation to rewrite Cincinnati’s own contract. As a result, we agree with plaintiffs that it is necessary to determine which elements of loss awarded by the jury are, in fact, dupli-cative or the same as payments made under the workers’ compensation settlement. As the proponent of the offset, Cincinnati has the burden of proving that without an offset, plaintiffs would receive duplicative payment for the same element of loss. Williams v. Am. States Ins. Co., 163 Or. App. 179, 986 P.2d 1260, 1262 (1999).

C. Cincinnati’s Contractual Entitlement to Offset for Duplicative “Elements of Loss.”

1. Offset Against Jury Award for Past and Future Pain and Suffering.

The jury awarded Ranee $25,000 for past pain and suffering and $30,000 for future pain and suffering. The district court did not allow Cincinnati to offset amounts recovered in the workers’ compensation settlement against these amounts, holding that pain and suffering would not be part of any benefits awarded under workers’ compensation.

We agree with the district court’s resolution. Nothing in the workers’ compensation statute authorizes recovery for pain and suffering not related to an industrial disability. Black v. Chicago Great W. Ry., 187 Iowa 904, 917, 174 N.W. 774, 778-79 (1919) (“The amount of the recovery for tort might be in a greater amount than the compensation fixed by the [workers’ compensation] statute, since there may be other elements of damage allowed in an action for tort, as, for instance, pain and suffering, etc.”); see also Reliance Ins. Co. v. Blackford, 100 P.3d 578, 580 (Colo.Ct.App.2004) (pain and suffering not recoverable under workers’ compensation statute); Brooks v. Chicola, 514 So.2d 7, 13 (La. 1987), superseded by statute, La.Rev.Stat. Ann. § 23:1103, as recognized in Harris v. Ballanshaw, 576 So.2d 602 (La.Ct.App.1991) (no double recovery with workers’ compensation where employee retains one hundred percent of pain and suffering award); Shutter v. Philips Display Components Co., 90 N.Y.2d 703, 665 N.Y.S.2d 379, 688 N.E.2d 235, 238 (1997) (workers’ compensation award not duplicative of pain and suffering under reduction-of-benefits provision); Fanning v. Davne, 795 A.2d 388, 397 (Pa.Super.Ct.2002) (workers’ compensation payment for lost wages and medical bills does not entitle UIM insurer to offset for pain and suffering).

In this case, the special verdict form segregated loss of past and future earnings from past and future pain and suffering. Cincinnati does not claim that the jury did not properly segregate these elements of loss. See, e.g., Thompson v. Nat’l R.R. Passenger Corp., 621 F.2d 814, 823 (6th Cir.1980) (“Damage awards by a trial court without a jury are findings of fact, which must stand unless they are clearly erroneous.”). As a result, the jury’s award of $55,000 is not duplicative of payments for the same element of loss received by Ranee in the workers’ compensation settlement. Cincinnati is not entitled to an offset regarding this element under its reduction-of-benefits provision for underinsured motorist coverage.

2. Offset Against Jury Award for Past and Future Loss of Function.

The jury awarded Ranee $20,000 for past loss of function and $30,000 for future loss of function. The district court’s ruling allowed an offset of these amounts as a result of the workers’ compensation settlement.

We disagree with the district court’s reduction of Ranee’s jury award on this issue. It was undisputed that Ranee obtained a workers’ compensation settlement for an unscheduled injury. Industrial disability payments made as a result of unscheduled injuries are designed to compensate an employee for lost earning capacity. Second Injury Fund v. Nelson, 544 N.W.2d 258, 265 (Iowa 1995). The focus is not solely on what the worker can and cannot do, but is instead on the ability of the worker to be gainfully employed. Keystone Nursing Care Ctr. v. Craddock, 705 N.W.2d 299, 306 (Iowa 2005); Second Injury Fund, 544 N.W.2d at 265-66.

Recovery for loss of bodily function in tort is a different concept. At trial, Ranee presented evidence regarding her inability to engage in hobbies, such as gardening, riding in a car, and even eating. Under Iowa law, tort recovery for loss of function is allowed “for the full deprivation of full mind and body, separate and apart from impairment of earning capacity.” Schnebly v. Baker, 217 N.W.2d 708, 726 (Iowa 1974), abrogated on other grounds by Franke v. Junko, 366 N.W.2d 536, 539 (Iowa 1985); see also Iowa Practice: Civil Litigation Handbook § 18:10, at 195 (2006) (loss of bodily function is element of damage separate and apart from impairment of earning capacity).

Cincinnati simply cannot successfully argue that the tortious recovery for loss of function, which is “separate and apart” from recovery for impairment of earning capacity under our workers’ compensation statute, is “duplicative” or represents the same “element of loss” under its underin-sured motorist reduction-of-benefits provision. The lack of duplication or sameness is underscored in this case by the jury verdicts for past and future loss of earning capacity, which the jury awarded separate and apart from the loss of bodily function. In light of this analysis, the district court erred in allowing an offset with respect to these recoveries.

3. Offset Against Award for Medical Expenses and Lost Wages.

The jury awarded Ranee $10,000 for medical expenses and $8,000 for lost wages. Plaintiffs concede that these recoveries are duplicative of payments made as part of the workers’ compensation settlement.

Plaintiffs argue, however, that Cincinnati is not entitled to an offset against these duplicative elements of loss because Cincinnati has already been reimbursed for these amounts as a result of plaintiffs’ settlement with the tortfeasor. Plaintiffs point out that the entire $80,000 recovered from the tortfeasor was assigned to Cincinnati. Although the plaintiffs and the tortfeasor did not allocate the settlement amount obtained from the tortfeasor, plaintiffs claim that $18,000 of the $30,000 settlement amount should be attributable to medical care and lost wages.

While not expressly stated in this fashion, the thrust of the plaintiffs’ argument is that there has not simply been two payments for medical expenses and lost wages, but in fact three payments: (1) through the workers’ compensation settlement; (2) as a result of the jury verdict; and (3) as a result of the settlement with the tortfeasor. Because the insurer has already been reimbursed for the jury’s award of medical care and lost wages through the settlement with the tortfeasor, the plaintiffs seek to keep the jury award on the ground that Cincinnati is not entitled to be reimbursed twice for medical expenses and lost wages. Plaintiffs dub it a “double credit.”

Cincinnati responds that under plaintiffs’ scenario, Ranee would receive double compensation for medical expenses and lost wages. Cincinnati further counters that under its reduction-of-benefits provision for underinsured motorist claims, it is entitled to a pro tanto offset of the entire amount of settlement funds paid by a co-defendant. Cincinnati argues that plaintiffs impermissibly seek to force Cincinnati to pay plaintiffs’ attorneys’ fees and costs.

The question of whether a payment of funds received by a claimant from a tort-feasor to a workers’ compensation carrier defeats a claim for reduction of underin-sured policy benefits has been considered by a number of courts. An appellate court in Illinois over forty years ago held that such payments have no effect on the insurer’s right to offset. Niekamp v. Allstate Ins. Co., 52 Ill.App.2d 364, 202 N.E.2d 126, 128 (1964). A more recent decision from an appellate court in North Carolina held that such payments reduce or eliminate the right of offset, as claimed by the plaintiffs in this case. Manning v. Fletcher, 102 N.C.App. 392, 402 S.E.2d 648, 652 (1991), aff'd, 331 N.C. 114, 413 S.E.2d 798 (1992).

We find that the issue here is controlled by the policy language in Cincinnati’s un-derinsured reduction-of-benefits provision. This provision unconditionally states that Cincinnati will not make “duplicative” payments for the same “element of loss” covered by workers’ compensation benefits. The plaintiffs candidly concede that the special jury verdicts for medical expenses and past wages are, in fact, duplicative of workers’ compensation payments.

As a result, any payment by Cincinnati for lost wages or medical expenses is du-plicative and therefore subject to offset under the reduction-of-benefits provision for underinsured motorist claims. We enforce the contract as written.

k. Offset of Settlement Proceeds from Tortfeasor.

The district court reduced the jury award to Ranee by the entire $30,000 settlement with the tortfeasor. The plaintiffs do riot challenge the district court’s allocation of the entire $30,000 in settlement proceeds received from the tortfea-sor to Ranee, nor do the plaintiffs challenge the trial court’s reduction of Ranee’s jury’s award by $30,000 as a result of this payment.

Cincinnati asserts that Stuart’s recovery must be offset by the recovery from the tortfeasor. Stuart’s award of consortium, however, is not duplicative of any “element of loss” recovered in the workers’ compensation settlement. Consortium is “the separate property right of each spouse; it is an independent, nonderivative claim.” In re Estate of Sylvester, 559 N.W.2d 285, 288 (Iowa 1997) (quoting Huber v. Hovey, 501 N.W.2d 53, 57 (Iowa 1993)). Therefore, Cincinnati is not entitled to an offset as a result of Stuart’s recovery.

IV. CONCLUSION.

The ruling of the district court is affirmed in part and reversed in part. The judgment in favor of Ranee totaling $123,000 is offset by $18,000 because the jury’s special verdicts for lost wages and medical expenses are duplicative of elements of loss covered by Ranee’s workers’ compensation benefits. The district court’s further reduction of Ranee’s total jury award by $30,000 as a result of the settlement with the tortfeasor has not been appealed and, as a result, Ranee’s recovery should also be reduced by that amount. The jury’s special verdicts with respect to pain and suffering and loss of function, however, are not subject to offset because they are not “duplicative” of “elements of loss” recovered in the workers’ compensation settlement.

As a result of the permissible offsets, Ranee is entitled to judgment in the amount of $75,000, plus interest at the rate of 6.18% from December 1, 2005. Stuart is entitled to the award of $50,000, plus interest at the same rate. Judgment should be entered accordingly.

AFFIRMED IN PART AND REVERSED IN PART; CASE REMANDED WITH INSTRUCTIONS.

      . Although Stuart as well as Ranee filed a notice of appeal, the district court left the special jury verdicts awarding Stuart damages for lost consortium intact. While a cross appeal was filed, the defendant does not challenge the jury's awards to the defendant. As a result, Stuart no longer has a stake in the outcome of this appeal.

      . We note that Iowa Code section 516A.2(1) requires that any reduction or offset be designed to avoid ''duplication” of insurance or other benefits. There is authority for the proposition that under such statutory provisions, "total damages must be divided into each component loss.” 12 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 171:38 (2007). As a result, there is a substantial question as to whether the dollar-for-dollar reduction advocated by Cincinnati as a result of the workers’ compensation settlement would comply with this statute. Because we interpret Cincinnati’s reduction-of-benefits provision for underinsured motorists not to authorize a dollar-for-dollar reduction, but instead allows reduction only for duplica-tive or the same elements of loss, it is not necessary to reach the statutory issue.