Owner of Iowa City waste business pleads to workers’ comp insurance charge

IOWA CITY — The owner of Hawkeye Waste Systems Inc., who was operating the business without worker’s compensation insurance when an employer was crushed by a skid loader in 2024, was convicted Friday and faces up to five years in prison.

James Watts, 82, filed a written plea of guilty of failure to maintain workers’ compensation insurance. Watts also pleaded on behalf of Hawkeye in a plea agreement in which prosecutors have agreed to dismiss related charges against Chris Watts, 30, general manager of Hawkeye; Mary Sheen, 59, officer manager and controller of Watts Trucking; and Chris Dohrer, 43, a contract laborer.

According to the plea agreement, Watts will argue for a deferred judgment at sentencing and the state will not recommend a prison sentence. The judge will have discretion at sentencing.

Watts, in the plea, admits, personally and as the owner, he willfully and knowingly operated the business without obtaining workers’ compensation insurance, as required by Iowa law.

Johnson County Attorney Rachel Zimmermann Smith asked the court last year for a temporary injunction to stop operations of the waste company when the insurance issue came to light after Hawkeye 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’ compensation insurance.

The county attorney’s office then reached an agreement with the company before an injunction hearing in August because Watts provided proof of insurance. The insurance was purchased July 11 for one year. If the business maintained insurance going forward, Zimmermann Smith said she wouldn’t ask the court for the temporary injunction.

However, the county renewed its motion when 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 remained uninsured.

Sixth Judicial District Judge Kevin McKeever granted a temporary injunction to the county in October, ordering Hawkeye Waste to stop operating or employing anyone in Johnson County because it didn’t have workers’ compensation insurance.

Alfredo Parrish, Watts’ lawyer, then filed a copy of the company’s workers’ compensation coverage, valid through Jan. 20, 2026, and verification of the insurance payments for all premiums through that date and asked the court to suspend the injunction.

McKeever granted a stay of the temporary injunction after receiving proof of insurance and paid premiums. The court will review this case before Jan. 20 to ensure compliance continues, according the judge’s order.

Trish Mehaffey covers state and federal courts for The Gazette.

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