Johnson County again asks court to stop business from operating without workers’ comp insurance

IOWA CITY — Johnson County is renewing its motion to prevent Hawkeye Waste Systems Inc., from operating its business in the county because the company’s workers’ compensation insurance lapsed in September.

The Johnson County Attorney’s Office reached a temporary agreement with Hawkeye Waste, before an injunction hearing in August, because company owner James Watts provided proof of insurance. The insurance was purchased July 11 for one year. If the business maintained insurance going forward, Johnson County Attorney Rachel Zimmermann Smith said she wouldn’t ask the court for the injunction.

However, Zimmermann Smith, in a renewed motion filed Tuesday, said the online database for the National Council on Compensation Insurance, which verifies an employer’s workers’ compensation insurance coverage, showed Hawkeye Waste had a lapse in coverage, starting Sept. 10, and remains uninsured.

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The county filed the initial temporary injunction when the insurance issue came to light last year after a Hawkeye Waste employee, Matthew Reuwsaat, 61, was crushed by a skid loader Oct. 31, 2024, and died Nov. 9.

The Occupational Safety and Health Administration and the Iowa Division of Workers’ Compensation investigated the accident and found the business was operating without workers’ comp insurance.

The county informed Hawkeye Waste if there was no proof of coverage provided, a motion would be filed.

Hawkeye Waste filed a “Notice to the court” on Oct. 3, acknowledging there had been a lapse from Sept. 10 to Oct. 1, but that it had secured a new policy, which started Oct. 2, according to the notice filing.

Alfredo Parrish, a Des Moines lawyer representing Hawkeye, said in the filing the company was subject to a premium audit, which required it provide Travelers insurance with information about Hawkeye’s payroll and employee rolls to confirm rates were correctly calculated.

Parrish said the notice of the audit was sent to the company’s address in Iowa City, but that address isn’t the primary office, which is located in Rock Island, Ill., so the staff responsible for coordinating compliance with the audit didn’t received the mailing notice and failed to respond about the audit, resulting in the loss of coverage.

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Zimmermann Smith, in her motion, said Hawkeye shouldn’t be allowed to continue operating in the county without proof of workers’ compensation insurance because it’s a violation of Iowa law. Company officials have demonstrated a “lack of regard for the safety and welfare of their workers, the public and the court’s order,” she said.

Hawkeye has a history of non-compliance and has violated the agreement with the county and the court to maintain insurance coverage, the motion noted.

The county asks the court for a temporary injunction to prevent Hawkeye from operating in the county unless the following conditions are met:

If Hawkeye satisfies the conditions, the county requests the court stay the injunction until the date of the next review hearing, unless the court is notified of non-compliance in the interim, according to the motion.

The owner and managers of the business also were charged in April for not having workers’ compensation insurance.

James Watts; Chris Watts, 30, general manager of Hawkeye Waste; Mary Sheen, 59, office manager and controller of Watts Trucking; and Chris Dohrer, 43, a contract laborer; each were charged with failure to maintain workers’ compensation insurance, a Class D felony. All have pleaded not guilty and a trial is set for Jan. 27.

Trish Mehaffey covers state and federal courts for The Gazette

Comments: (319) 398-8318; trish.mehaffey@thegazette.com