Johnson County reaches agreement with business over workers’ comp insurance

IOWA CITY — The owner of Hawkeye Waste Systems Inc., purchased workers’ compensation insurance before an injunction hearing last month, preventing a potential court order that could have shut down the business.

Sixth Judicial District Judge Kevin McKeever, in an order filed last Friday, said the Johnson County Attorney’s Office had reached a temporary agreement with Hawkeye Waste in Johnson County as long as the company has “appropriate, adequate, lawful” workers’ compensation insurance in place for all employees working in the county.

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Johnson County Attorney Rachel Zimmermann Smith told The Gazette Wednesday Hawkeye Waste owner, James Watts, provided her office with proof of insurance following the injunction hearing July 16. The business purchased one year of insurance on July 11. If the business maintains insurance going forward, Zimmerman Smith said she won’t ask the court for the injunction, which requested an order to stop Hawkeye Waste from operating in the county without workers’ compensation insurance.

The lack of insurance came to light when 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 conducted an investigation into the accident and found the business was operating without workers’ comp insurance.

Reuwsaat’s widow, Christine Reuwsaat, during the injunction hearing in July, testified she was notified by University of Iowa Health Care emergency services about her husband and what happened that day. She was told by hospital officials that because this was a workplace accident, all the bills would go to Hawkeye Waste.

However, Reuwsaat said she then received a bill for $185,000 that she was required to pay. She tried to access workers’ compensation benefits but wasn’t able to because the company didn’t have insurance.

Judge McKeever, in his order, set another hearing for Jan. 20, 2026 to determine if the business has continued to maintain insurance and whether the owner should be subject to a temporary or permanent injunction if adequate proof of insurance doesn’t exist. If there is proper proof, then the matter could be dismissed at that time.

Watts’ four other businesses in Cedar Rapids, Muscatine, Waterloo and the Quad Cities, which offer similar services, are not in Johnson County, and his lawyer, Alfredo Parrish, filed a motion to dismiss the injunction because they aren’t within Johnson County’s jurisdiction.

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The workers’ compensation insurance, purchased last month, is only for Hawkeye Waste Systems, Inc., at 91 Commercial Dr. in Iowa City. There is no information in court documents about whether the other businesses have workers’ compensation insurance.

The owner and managers of that 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. No trial dates are set at this time.

Trish Mehaffey covers state and federal courts for The Gazette

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