Opinion
I.C. NO. 119418.
Filed 5 October 2005.
This matter was reviewed by the Full Commission on March 30, 2004 upon the appeal of defendant from an Opinion and Award filed by Deputy Commissioner Kim Ledford on September 10, 2003 who initially heard this matter on January 27, 2003 in Asheville.
Plaintiff: David Gantt, Attorney, Asheville, NC, appearing.
Defendant: Hedrick Eatman Gardner Kincheloe, LLP, Attorneys, Charlotte, NC; Duane Jones, appearing.
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The undersigned have reviewed the prior Opinion and Award based upon the record of the proceedings before Deputy Commissioner Ledford and the briefs and arguments of the parties. The appealing party has shown good ground to reconsider the evidence. Accordingly, the Full Commission reverses the Opinion and Award of the Deputy Commissioner and enters the following Opinion and Award.
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The Full Commission finds as facts and concludes as matters of law the following, which were entered into by the parties through the Pre-trial Agreement or otherwise at the hearing before the deputy commissioner as:
STIPULATIONS
1. At the time of the alleged injury giving rise to this claim, the parties were subject to and bound by the provisions of the North Carolina Workers' Compensation Act.
2. At such time, an employment relationship existed between plaintiff and defendant.
3. The employer was self-insured at all relevant times.
4. Plaintiff's average weekly wage was $417.29 and plaintiff's compensation rate, pursuant to N.C. Gen. Stat. § 97-1 et sec., would be $278.21.
5. Plaintiff injured her back, right arm and shoulder in the course and scope of her employment with Defendant on December 15, 2000.
6. Plaintiff has been paid, pursuant to I.C. Form 60, compensation for temporary total disability for a period beginning January 11, 2001 and ending June 28, 2001, in a lump sum of $6,677.04 by check issued May 8, 2002. In addition, plaintiff has been paid compensation for her 10 percent permanent impairment rating to her back, said compensation totaling $8,346.03, by check issued August 1, 2002.
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Based upon all of the evidence produced at the hearing, the Full Commission makes the following:
FINDINGS OF FACTS
1. Plaintiff is a 52 year old woman with a 10th grade education. She had worked for defendant for 12 years prior to her neck injury on Friday, December 15, 2000. On that date, she felt immediate pain in her neck while stacking pallets of valentine candy at defendant's warehouse. Plaintiff could not find her boss that day to report the accident. On her next work day, Monday, December 18, 2000, plaintiff told her supervisor, Mike Kirkpatrick, about her accident.
2. Due to pain, plaintiff went to the Memorial Mission Emergency Room on Sunday, December 17, 2000. On December 18, 2000, defendant directed plaintiff to see the company doctor, Leslie Cargile, M.D., who then referred her to Dr. Eric Rhoton, a neurosurgeon.
3. Dr. Rhoton assumed plaintiff's care and on January 11, 2001, he performed a cervical diskectomy and fusion at C4-5, C5-6, and C6-7. Dr. Rhoton released plaintiff to return to sedentary work on May 30, 2001. On September 25, 2001 Dr. Rhoton released her to work with no lifting over five pounds and no standing over one hour. At that time he was of the opinion that plaintiff had reached maximum medical improvement, and he discharged her. Thereafter, Dr. Rhoton assigned a permanent disability rating of 10% to her back.
4. Through her employment, plaintiff chose to enroll in a short-term disability plan option that cost her $0.43 of each $100 gross wage earnings. This short-term disability Option #1 paid 60% of her gross pay if she became disabled. Plaintiff paid the required portion of the premium for this coverage and the employer also paid a portion of the premium. Defendant testified that plaintiff would have no short-term disability coverage if she had not paid her requested share of the premium.
5. Plaintiff received short-term disability benefits of $257.00 per week beginning on January 24, 2001 for twenty-three (23) weeks. Total short-term disability benefits received by plaintiff were $6,075.53.
6. On March 23, 2001, defendant denied plaintiff's workers' compensation claim for her December 15, 2000 injury.
7. Plaintiff returned to work on July 9, 2001 at the same rate of pay she earned at the time of her December 15, 2000 accident. Plaintiff has continued to work for defendant-employer since her recovery.
8. The parties participated in a mediated settlement conference on April 24, 2002. They entered into a mediation settlement agreement, which was signed by both parties, including counsel for both parties and fully executed. Pursuant to the terms of the mediation agreement:
A. Defendant agreed to accept liability for the claim;
B. Defendant agreed to pay accrued temporary total disability benefits due to plaintiff in a lump sum of $6,677.04;
C. Defendant agreed to pay a lump sum for 10 percent permanent partial impairment of the back in the amount of $8,346.30;
D. Defendant agreed to pay the mediator's fee;
E. Both parties agreed to resolve issues relating to short-term disability benefits pursuant to the short-term disability policy.
9. The issues agreed upon from the mediated settlement agreement under the jurisdiction of the Industrial Commission were submitted on a fully executed Form 21 agreement for the Commission to review. The Form 21 agreement was approved on July 11, 2002.
10. The parties contracted in the fully executed mediated settlement agreement to resolve short-term disability benefit issues according to the provisions in the short-term disability policy. The agreement regarding short-term disability benefits paid to plaintiff included in the mediated settlement agreement was correctly not included on the Form 21 agreement because it is not subject to the Industrial Commission jurisdiction.
11. Plaintiff filed a Form 33 Request for Hearing seeking determination of defendants' right to a credit. However, defendants are not seeking a credit against compensation benefits owed plaintiff for short-term disability benefits paid. Defendants already have paid all temporary total disability benefits and permanent partial disability benefits to which plaintiff is entitled. Therefore, the only issue before the Full Commission is whether the mediated settlement agreement was a valid and enforceable agreement that was properly executed.
12. The mediated settlement agreement was a valid and enforceable fully executed agreement. Plaintiff has been paid all workers' compensation benefits due to her pursuant to the mediated settlement agreement and the resultant Form 21 agreement. The Industrial Commission does not have jurisdiction over the issues raised regarding plaintiff's repayment to defendant-employer of the short-term disability payments.
13. This workers' compensation action involved substantial questions of both fact and law, and the prosecution of the action was not stubborn, unfounded or litigious.
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Based upon the foregoing Stipulations and Findings of Fact, the Full Commission makes the following:
CONCLUSION OF LAW
1. A mediated settlement agreement is governed by general principles of contract law. Chappel v. Roth, 353 N.C. 690,692, 548 S.E.2d 499, 500, rehearing denied, 354 N.C. 75, 553 S.E.2d 36 (2001).
2. A fully executed mediated settlement agreement is an enforceable contract and parties are required to abide by its terms. The Industrial Commission's approval of a Form 21 agreement or a compromise settlement agreement, had there been one filed in this matter, is limited to the matters over which the Industrial Commission has jurisdiction. Thus the Industrial Commission has no jurisdiction over the issue raised concerning plaintiff's repayment to defendant-employer of short-term disability payments made by defendant to plaintiff. Chappell v. Roth, 353 N.C. 690, 548 S.E.2d 499 (2001); Lemly v. Colvard Oil Co., 157 N.C. App. 99 (2003), 577 S.E.2d 712, Lee v. Wake County, 165 N.C. App. 154, 598 S.E.2d 427(2004).
3. The prosecution of this claim was reasonable and not based on stubborn unfounded litigiousness, and therefore defendants are not entitled to attorney's fees pursuant to N.C. Gen. Stat. § 97-88.1.
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Based upon the foregoing Stipulations, Findings of Fact and Conclusions of Law, the Full Commission enters the following:
ORDER
1. The Industrial Commission has no subject matter jurisdiction regarding plaintiff's obligation to repay defendant-employer the benefits received for short-term disability; therefore, this matter is dismissed with prejudice.
2. Each side shall bear its own costs.
This the 7th day of July 2005.
S/_______________ DIANNE C. SELLERS COMMISSIONER
CONCURRING:
S/____________ BUCK LATTIMORE CHAIRMAN
DISSENTING:
S/_____________ THOMAS J. BOLCH COMMISSIONER
The majority in the present case erred in finding that the Commission lacks subject matter jurisdiction regarding the issue of a short-term disability credit in this matter. The evidence of record shows that the parties participated in a mediated settlement conference on April 24, 2002. Thereafter, the parties entered into a mediation agreement, which was signed by both parties, including counsel for both parties. Pursuant to the terms of the mediation agreement, both parties agreed to resolve issues relating to short-term disability benefits pursuant to the short-term disability plan.
Following the mediation, plaintiff and her employer discussed, but never clearly resolved, the issue of repayment of benefits paid to plaintiff under the disability plan. Plaintiff made payments of $25.00 per week to defendant toward this debt from August 19, 2002, to October 1, 2002. These repayment checks were returned untendered to plaintiff on December 27, 2002. Without notice or permission, defendant deducted from plaintiff's payroll checks $50.00 per week on July 20 and July 27, 2002. Unauthorized payroll check deductions for "comp loans" in the amount of $150.00 per week began on September 28, 2002, and were continuing through the date of hearing before the Deputy Commissioner. Due to these deductions in her payroll checks, plaintiff asked the Commission to determine the status of credit on her short-term disability benefits, which were not deducted from the payment of temporary total disability benefits received in May 2002 pursuant to a Form 60, or from the permanent partial disability benefits received in July 2002 upon approval of a Form 21.
The majority's finding that the Commission has no jurisdiction to consider this matter and that it is a question of private contract between the parties is in error. The Workers' Compensation Act specifically provides that no contract can operate to relieve an employer of any obligation created by the Act. N.C. Gen. Stat. § 97-6; see also Estes v. North Carolina State University, 89 N.C. App. 55, 365 S.E.2d 160 (1988).
The North Carolina Supreme Court has acknowledged the Commission's statutory authority under N.C. Gen. Stat. § 97-42 to set the amount of credit, if any, for short-term disability benefits paid when the worker's compensation claim was not accepted at the time of the short-term disability payments under the "due and payable" clause of the statute. Foster v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d 670 (1987). While granting a full credit due to the payment of all short-term disability premiums by defendant, Foster specifically limited the holding to no employee contribution claims. As a practice, the Commission has generally limited or disallowed credits where an employee pays a portion of the premium for a short-term disability plan. The North Carolina Court of Appeals has recognized that the Commission may grant only a partial credit to defendant for disability payments made under a fully employer-funded policy. Church v. Baxter Travenol Laboratories, Inc., 104 N.C. App. 411, 409 S.E.2d 715 (1991); see also Cole v. Triangle Brick, 136 N.C. App. 401, 524 S.E.2d 79 (2000) (both allowing credit for 75% of the short-term disability benefits paid).
N.C. Gen. Stat. § 97-42 specifically provides that the Commission may allow a credit for payments made to an employee, and it is clear that the same is not mandatory. Although the Commission has the authority and discretion to determine whether to allow any credit for the short-term disability benefits paid to plaintiff, the undersigned finds that defendant-employer acted unilaterally and without the permission of the Commission in withholding funds from the plaintiff's paycheck to repay short-term disability. Where the parties could not reach agreement on this issue, the proper procedure would be for defendant to request a hearing on this issue. Defendant failed to follow this procedure. Allowing defendant even a partial credit under these circumstances would encourage such behavior on the part of employers in the future, in violation of the spirit and directives of the Act. N.C. Gen. Stat. § 97-42.
The majority erred in failing to find that the Full Commission lacks subject matter jurisdiction to address the issues contained herein. The undersigned finds that defendant's request for a credit for short-term disability benefits paid to plaintiff should be denied, and defendants should be ordered to reimburse plaintiff for all amounts which were previously deducted from her paycheck as repayment for short-term disability benefits, as the same were not approved in advance by the Commission. For these reasons, I respectfully dissent.
This 4th day of October 2005.
S/_____________ THOMAS J. BOLCH COMMISSIONER