It is well established that the doctrine of equitable estoppel may be applied in workers' compensation cases. Aldridge v. Motor Co., 262 N.C. 248, 136 S.E.2d 591 (1964); Britt v. Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978). According to Bourne v. Lay Co., 264 N.C. 33, 37, 140 S.E.2d 769, 772 (1965), "[i]t is essential to an equitable estoppel that the person asserting the estoppel shall have done or omitted some act or changed his position in reliance upon the representations or conduct of the person sought to be estopped."
Since the Commission made no findings of fact regarding the carrier's acceptance of premiums for "subcontractor" coverage deducted from plaintiff's pay or acceptance of deducted premiums from other "subcontractors" in the past, the Court of Appeals erred when it assumed such facts. See Britt v. Construction Co., 35 N.C. App. 23, 33, 240 S.E.2d 479, 485 (1978) (There was no finding that the premiums had been accepted by the insurer and the Court of Appeals remanded to the Commission, stating that "the Commission should have made a finding as to [insurer's] acceptance or non-acceptance of Compensation insurance premiums"). Finally, the carrier contends that Daniels had no authority to bind the carrier.
An estoppel can arise in any legal setting, and our appellate courts have prudently and repeatedly applied the doctrine in workers' compensation cases to thwart an insurance carrier's subsequent attempt to avoid coverage of a work-related injury, howbeit upon a legitimate ground, when the carrier has previously and routinely accepted the payment of insurance premiums pertaining to the injured individual. Aldridge v. Motor Co., 262 N.C. 248, 136 S.E.2d 591 (1964); Pearson v. Pearson, Inc., 222 N.C. 69, 21 S.E.2d 879 (1942); Garrett v. Garrett Garrett Farms, 39 N.C. App. 210, 249 S.E.2d 808 (1978), discretionary review denied, 296 N.C. 736, 254 S.E.2d 178 (1979); see Moore v. Electric Co., 264 N.C. 667, 142 S.E.2d 659 (1965); Greene v. Spivey, 236 N.C. 435, 73 S.E.2d 488 (1952); Britt v. Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978); Allred v. Woodyards, Inc., 32 N.C. App. 516, 232 S.E.2d 879 (1977). This rule is plainly consistent with the overall rationale of the remedial doctrine of estoppel, and it is so well established in our jurisdiction that it requires no explanation or elaboration here. Yet the Court of Appeals declined to hold in the instant case that Pitt County and U.S. Fire Insurance, the undisputed payor and payee of the compensation premiums for the injured employee, were estopped to deny coverage due to its belief that estoppel in workers' compensation cases is of the classic form, that is, "equitable" estoppel, which would require a showing of detrimental reliance by the Town of Winterville and Great American Insurance before the doctrine could operate in their favor.
Godley v. County of Pitt, 306 N.C. 357, 360, 293 S.E.2d 167, 169 (1982). See also, Moore v. Electric Co., 264 N.C. 667, 142 S.E.2d 659 (1965); Aldridge, supra; Greene v. Spivey, 236 N.C. 435, 73 S.E.2d 488 (1952); Pearson v. Pearson, Inc., 222 N.C. 69, 21 S.E.2d 879 (1942); Garrett v. Garrett Garrett Farms, 39 N.C. App. 210, 249 S.E.2d 808 (1978), disc. rev. denied, 296 N.C. 736, 254 S.E.2d 178 (1979); Britt v. Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978); Allred v. Woodyards, Inc., 32 N.C. App. 516, 232 S.E.2d 879 (1977). "In order to estop a party from asserting a defense, the party who desires to take advantage of the estoppel must show that in reliance on the other party's action, he changed his position to his detriment."
The principle of estoppel may apply in workers' compensation cases and was properly employed in this case by the Industrial Commission. See Aldridge v. Foil Motor Co., 262 N.C. 248, 136 S.E.2d 591 (1964); Britt v. Colony Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978). The Workers' Compensation Act is to be liberally construed to effectuate its purpose to provide compensation for injured workers and its benefits should not be denied by a technical, narrow or strict construction.
Aldridge v. Motor Co., 262 N.C. 248, 251, 136 S.E.2d 591, 594 (1964). See also Britt v. Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978); Allred v. Woodyards, Inc., 32 N.C. App. 516, 232 S.E.2d 879 (1977). And, where estoppel applies, it is not necessary that the Commission find that the relationship of employer-employee exists.
Furthermore, as the defendant Town correctly points out, acceptance of premium payments by a compensation insurer has been held sufficient to subject the insurer to liability on equitable grounds even where the claimant was not properly includable under the terms of the policy. Aldridge v. Motor Co., supra, Britt v. Colony Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978). However, in each case cited by the Town, an element essential to equitable estoppel, that of detrimental reliance by the party seeking estoppel, has been met.
The worker's compensation act should be liberally construed to effectuate its purpose to provide compensation for injured employees or their dependents; and its benefits should not be denied by a technical, narrow, and strict construction. Hinson v. Creech, 286 N.C. 156, 209 S.E.2d 471 (1974); Stevenson v. City of Durham, 281 N.C. 300, 188 S.E.2d 281 (1972); Britt v. Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978). "The primary consideration is compensation for injured employees."
The status of claimant as an employee may be established by way of estoppel. Allred v. Woodyards, Inc., 32 N.C. App. 516, 232 S.E.2d 879 (1977); Britt v. Construction Co., 35 N.C. App. 23, 240 S.E.2d 479 (1978); 8 Strong's N.C. Index 3d, Master and Servant 81, p. 649. As in Pearson, supra, the Commission was not required to decide the precise question of whether plaintiff could be classified as an employee.
It is well settled that the Workers' Compensation Act is to be construed liberally and in favor of the injured employee, and its benefits are not to be denied upon technical, narrow, or strict interpretation of its provisions. See Matthews v. Charlotte-Mecklenburg Hosp. Authority, 510 S.E.2d 388 (1999); Dayal v. Provident Life and Acc. Ins. Co., 321 S.E.2d 452 (1984); and Britt v. Colony Const. Co., 240 S.E.2d 479 (1978). The majority should have given greater weight to plaintiff's assertion that he did not understand what his actions were to be pursuant to Dr. Dalldorf's release.