Allred v. Exceptional Landscapes, Inc.

• Decision Date: 21 May 2013
• Docket Number: No. COA12–1278.,COA12–1278.
• Court: North Carolina Court of Appeals
• Parties: Danny K. ALLRED, Employee, Plaintiff, v. EXCEPTIONAL LANDSCAPES, INC., Employer, Noninsured, and Ted William Wright, Individually, and John Thompson Summey, Individually, and Joy Wright, Individually; and/or T & J Services, Defendants.

743 S.E.2d 48

Danny K. ALLRED, Employee, Plaintiff,

v.EXCEPTIONAL LANDSCAPES, INC., Employer, Noninsured, and Ted William Wright, Individually, and John Thompson Summey, Individually, and Joy Wright, Individually; and/or T & J Services, Defendants.

No. COA12–1278.

Court of Appeals of North Carolina.

May 21, 2013.

Appeal by defendants from the Opinion and Award entered 30 March 2012 by the North Carolina Industrial Commission. Heard in the Court of Appeals 28 March 2013.

Holt, Longest, Wall, Blaetz & Moseley, PLLC, by W. Phillip Moseley, for plaintiff-appellee.

Cranfill Sumner & Hartzog LLP, by W. Scott Fuller and Jaye E. Bingham–Hinch, for defendant-appellant Exceptional Landscapes, Inc., and/or T & J Services.

McCullers & Whitaker, PLLC, by Christopher Mann, for defendant-appellant Joy Wright.

Ted William Wright, pro se, for defendant-appellant.

John Thompson Summey, pro se, for defendant-appellant.

STEELMAN, Judge.

Where plaintiff filed a claim with the North Carolina Industrial Commission, the Commission retained exclusive and continuing jurisdiction over that claim. Where the parties' settlement agreement did not provide for the reimbursement of unpaid medical bills, the Commission properly determined it was not fair and just. Where defendants were not an “insurer” as defined by statute, the Commission erred in assessing attorney's fees against defendants under N.C. Gen.Stat. § 97–88. Where one defendant did not have dominion or control over business decisions of the corporation, the Commission erred in piercing the corporate veil as to that defendant.

I. Factual and Procedural History

On 17 August 2006, Danny K. Allred (plaintiff) was in a motor vehicle accident while performing duties on behalf of his employer, Exceptional Landscapes (Exceptional Landscapes), and suffered injuries. Exceptional Landscapes did not have workers' compensation insurance, nor was it self-insured at the time of the accident. Ted William Wright (T. Wright) and John Summey (Summey) were the shareholders of Exceptional Landscapes, and Joy Wright (J. Wright) was treasurer of Exceptional Landscapes and the spouse of T. Wright.

In September 2006, plaintiff filed a Form 18 and Form 33 with the Industrial Commission. A mediation conference was held on 27 February 2007. During the conference, the parties could not reach an agreement as to the workers' compensation claim and instead, attempted to reach an agreement as to a liability claim, based upon the assumption that plaintiff was going to withdraw his claim with the Industrial Commission. An agreement was reached under the terms of which Exceptional Landscapes would pay plaintiff a lump sum of $26,000. The agreement made no mention of the payment of plaintiff's outstanding medical bills. Pursuant to this agreement, the sum of $26,000 was paid to plaintiff and his then counsel. Plaintiff never withdrew the Form 33, and the case was scheduled for hearing in front of the Commission.

On 30 March 2012, the Full Commission entered an Opinion and Award. The Opinion and Award found that the Commission had jurisdiction over the matter and that the settlement agreement did not comply with the requirements of N.C. Gen.Stat. § 97–17. The Commission did not approve the settlement because it was not fair and just. Piercing the corporate veil, the Commission held T. Wright, J. Wright, and Summey “individually liable jointly and severally for the indemnity and medical compensation due in this case.” The Commission ordered: (1) T. Wright, Summey, and J. Wright to pay plaintiff temporary total disability compensation at the rate of $211.34 per week and to pay all medical expenses incurred as a result of the accident; (2) an attorney's fee to be paid to plaintiff's counsel; (3) a penalty to be assessed pursuant to N.C. Gen.Stat. § 97–94(b) against T. Wright, Summey, and J. Wright for failing to procure workers' compensation insurance; and (4) T. Wright and J. Wright to pay an additional penalty pursuant to N.C. Gen.Stat. § 97–94(d) for failing to bring Exceptional Landscapes into compliance. The Commission held the imposition of both penalties under N.C. Gen.Stat. § 97–94 in abeyance.

Defendants appeal.

II. Standard of Review

“Appellate review of an order and award of the Industrial Commission is limited to a determination of whether the findings of the Commission are supported by the evidence and whether the findings in turn support the legal conclusions of the Commission.” Simon v. Triangle Materials, Inc., 106 N.C.App. 39, 41, 415 S.E.2d 105, 106 (1992). Unchallenged findings of fact are presumed to be supported by competent evidence and are binding on appeal. Johnson v. Herbie's Place, 157 N.C.App. 168, 180, 579 S.E.2d 110, 118 (2003). The Commission's conclusions of law are reviewable de novo. Id. at 171, 579 S.E.2d at 113.

III. Jurisdiction

In its first argument, Exceptional Landscapes contends that the Commission did not have jurisdiction over plaintiff's claim when there was a settlement agreement as to plaintiff's claim. We disagree.

“The jurisdiction of the Commission is limited and conferred by statute.” Pearson v. C.P. Buckner Steel Erection Co., 348 N.C. 239, 241, 498 S.E.2d 818, 819 (1998). Under N.C. Gen.Stat. § 97–91, the Commission has the power to administrate the Workers' Compensation Act and to hear “all questions arising under the Article if not settled by agreements of the parties interested therein, with the approval of the Commission....” N.C. Gen.Stat. § 97–91 (2011). The exclusive venue for a claim by an employee against an employer for injuries arisingin the course of employment is the Commission when the employer has “complied with provisions of the [Workers' Compensation Act].” N.C. Gen.Stat. § 97–10.1 (2011); see also Seigel v. Patel, 132 N.C.App. 783, 785–86, 513 S.E.2d 602, 604 (1999). In order to invoke such jurisdiction, an employee must either file a claim for compensation or submit a voluntary settlement for approval. Tabron v. Gold Leaf Farms, Inc., 269 N.C. 393, 396, 152 S.E.2d 533, 535 (1967). Once jurisdiction is invoked, the Commission retains continuing jurisdiction of all proceedings begun before it. See Pearson, 348 N.C. at 241–42, 498 S.E.2d at 820. (“This Court has recognized that the General Assembly intended the Commission to have continuing jurisdiction of proceedings begun before it.”).

Exceptional Landscapes contends that plaintiff elected a remedy “at law” and that the Commission thereby lost its jurisdiction. N.C. Gen.Stat. § 97–94(b) states:

(b) Any employer required to secure the payment of compensation under this Article who refuses or neglects to secure such compensation shall be punished by a penalty ... and the employer shall be liable during continuance of such refusal or neglect to an employee either for compensation under this Article or at law at the election of the injured employee.

N.C. Gen.Stat. § 97–94(b) (2011) (emphasis added). While this section “may arguably permit plaintiff to bring her claim at law,” the Commission is not precluded from hearing claims against noncompliant employers. Seigel, 132 N.C.App. at 786, 513 S.E.2d at 604. In fact, when a claim is filed with the Commission and jurisdiction is invoked, the Commission will retain “exclusive jurisdiction over workers' compensation claims and all related matters....” Johnson v. First Union Corp., 131 N.C.App. 142, 143–44, 504 S.E.2d 808, 809 (1998). In Johnson, a plaintiff-employee filed suit in superior court alleging various claims against the defendant-employer, including that the employer had committed fraud in submitting certain forms to the Industrial Commission. Id. We held that the Industrial Commission retained exclusive jurisdiction over that matter, including the claims for fraud and all related matters. Id.

In the instant case, Exceptional Landscapes does not challenge any of the findings of fact of the Industrial Commission and they are therefore binding on appeal. Johnson, 157 N.C.App. at 180, 579 S.E.2d at 118. When plaintiff filed Form 18 and Form 33 with the Commission regarding plaintiff's 17 August 2006 work-related injury, plaintiff invoked the jurisdiction of the Commission. Once filed, the Commission retained “exclusive jurisdiction over workers' compensation claims and all related matters....” Johnson, 131 N.C.App. at 143–44, 504 S.E.2d at 809. The parties negotiated an agreement at the mediation conference for what they believed to be a liability claim “at law.” While the language of N.C. Gen.Stat. § 97–94(b) “may arguably permit plaintiff to bring [his] claim at law,” Seigel, 132 N.C.App. at 786, 513 S.E.2d at 604, plaintiff did not bring his claim at law. Instead, plaintiff initiated a workers' compensation claim before the Commission when he filed his Form 33. Once filed, the Commission retained continuing and exclusive jurisdiction over that claim and all related matters. See Pearson, 348 N.C. at 241–42, 498 S.E.2d at 820;Johnson, 131 N.C.App. at 143–44, 504 S.E.2d at 809. While nothing in the Workers' Compensation Act “prevent[s] settlements made by and between the employee and employer[,]” the Act requires “[a] copy of a settlement agreement [to] be filed by the employer with and approved by the Commission.” N.C. Gen.Stat. § 97–17 (2011). The settlement agreement in this case was not filed with nor approved by the Industrial Commission. The Commission's findings of fact therefore support its conclusion that the Industrial Commission had jurisdiction over the claim and the subject matter of this case.

This argument is without merit.

IV. Fair and Just Settlement

In its second argument, Exceptional Landscapes contends that if this Court holds that the Commission had jurisdiction over plaintiff's claim, then the Commission erred in ruling that the parties' settlement was not fair and just. We disagree.

“The Industrial Commission must review all compromise settlement agreements to make sure they comply with the Workers' Compensation Act...