Walker v. K&W Cafeterias
| Decision Date | 05 April 2022 |
| Docket Number | COA21-335 |
| Citation | 872 S.E.2d 68 |
| Parties | Gwendolyn Dianette WALKER, Widow of Robert Lee Walker, Deceased Employee, Plaintiff, v. K&W CAFETERIAS, Employer, Liberty Mutual Insurance Company, Carrier, Defendants. |
| Court | North Carolina Court of Appeals |
The Sumwalt Group, by Vernon Sumwalt, Charlotte, and Christa Sumwalt, for plaintiff-appellant/cross-appellee.
Cranfill Sumner LLP, Raleigh, by Steven A. Bader and Roy G. Pettigrew, for defendants-appellees/cross-appellants.
¶ 1 Plaintiff Gwendolyn Dianette Walker appeals, and Defendants K&W Cafeterias and Liberty Mutual Insurance Company cross-appeal, from the Amended Opinion and Award of the Full North Carolina Industrial Commission (the "Commission") ordering that Plaintiff's counsel (1) disburse $900,000.00 in commercial uninsured/underinsured motorist ("UIM") proceeds and $12,500.00 in personal UIM proceeds free and clear of Defendants’ subrogation lien pursuant to N.C. Gen. Stat. § 97-10.2 (2021), and (2) disburse $50,000.00 in liability insurance policy proceeds according to the following distribution:
After careful review, we affirm the Commission's Opinion and Award in part, and we reverse in part and remand to the Commission with instructions to modify its order regarding the distribution of the proceeds.
¶ 2 The full background of this case is set forth in our Supreme Court's opinion in Walker v. K&W Cafeterias (Walker I ), 375 N.C. 254, 846 S.E.2d 679 (2020). We recite here the facts relevant to the appeals currently before us.
¶ 3 On 16 May 2012, Robert Lee Walker ("Decedent") was driving a vehicle owned by his employer, Defendant K&W Cafeterias, when he was involved in a fatal motor vehicle accident in Dillon, South Carolina. Walker I , 375 N.C. at 255, 846 S.E.2d at 680. As our Supreme Court recognized in Walker I , however:
this case is not [P]laintiff's workers’ compensation claim. That claim was fully resolved in 2013 when death benefits were paid to [P]laintiff under the Workers’ Compensation Act due to [Decedent]’s work-related death. Instead, here we review what should happen to over $900,000 that was paid to [P]laintiff in the South Carolina wrongful death settlement with the at-fault driver. That settlement was reached in 2016, and to date, the money remains in the trust account of [P]laintiff's attorneys.
Id. at 258, 846 S.E.2d at 682.
¶ 4 On 21 August 2012, Plaintiff filed a worker's compensation claim for death benefits pursuant to N.C. Gen. Stat. §§ 97-38 to -40. Id. at 256, 846 S.E.2d at 681. On 7 January 2013, a deputy commissioner entered a Consent Opinion and Award ordering Defendants to pay $333,763.00 in workers’ compensation death benefits to Plaintiff. Id.
¶ 5 In 2014, Plaintiff filed a wrongful death action in South Carolina (the "Third-Party Action"), seeking damages from the third-party driver at fault in the accident that resulted in Decedent's death. Id. "In 2016, [P]laintiff and the third-party [driver] reached a settlement agreement, according to which [P]laintiff recovered a total of $962,500[,]" composed of "(1) $50,000 in liability benefits from the [at-fault driver]’s insurer; (2) $12,500 in personal UIM proceeds from [P]laintiff's and [D]ecedent's own personal UIM policy; and (3) $900,000 in UIM proceeds from a commercial UIM policy that K&W purchased with its automobile insurance carrier." Id.
¶ 6 On 21 March 2016, Defendant Liberty Mutual asserted a subrogation claim; it "filed a request for a hearing with the North Carolina Industrial Commission in which it sought repayment of the workers’ compensation death benefits it had paid to [P]laintiff beginning in 2013, claiming a lien under N.C.G.S. § 97-10.2 on the UIM proceeds that [Plaintiff] recovered from the South Carolina wrongful death settlement in 2016." Id. at 256–57, 846 S.E.2d at 681.
¶ 7 On 10 July 2017, a deputy commissioner concluded that Defendants "were entitled to subrogation under N.C.G.S. § 97-10.2(f)(1)(c), (h), and ordered that [D]efendants be reimbursed out of the third-party recovery [from the settlement in the Third-Party Action] for the $333,763 in workers’ compensation benefits that they had paid to [Plaintiff] under the 7 January 2013 Consent Opinion and Award." Id. at 257, 846 S.E.2d at 681. Both the Commission and this Court affirmed the 10 July 2017 Opinion and Award. Id. Our Supreme Court, however, "conclude[d] that [D]efendants may not satisfy their workers’ compensation lien by collecting from [P]laintiff's recovery of UIM proceeds in her South Carolina wrongful death settlement[,]" and reversed and remanded the case. Id. at 257–58, 846 S.E.2d at 682.
¶ 8 On remand following Walker I , the Commission entered an Amended Opinion and Award on 15 April 2021. The Commission concluded that, pursuant to Walker I , the "proceeds recovered in the third-party action from the two UIM policies are governed by South Carolina law and may not be used to satisfy Defendants’ workers’ compensation lien under N.C. Gen. Stat. § 97-10.2." The Commission further concluded that "Defendants’ lien attaches to the entire $50,000.00 in liability insurance proceeds and not just Plaintiff's share of those proceeds" pursuant to this Court's opinion in In re Estate of Bullock , 188 N.C. App. 518, 655 S.E.2d 869 (2008).
¶ 9 The Commission then ordered that Plaintiff's counsel disburse both the $900,000.00 in commercial UIM proceeds and $12,500.00 in personal UIM proceeds "free and clear of Defendants’ subrogation interests under N.C. Gen. Stat. § 97-10.2 [,]" and further ordered that:
¶ 10 On 15 April 2021, Plaintiff filed her notice of appeal. On 11 May 2021, Defendants filed their notice of appeal.
¶ 11 "The standard of review in workers’ compensation cases has been firmly established by the General Assembly and by numerous decisions of" our Supreme Court. Richardson v. Maxim Healthcare/Allegis Grp. , 362 N.C. 657, 660, 669 S.E.2d 582, 584 (2008), reh'g denied , 363 N.C. 260, 676 S.E.2d 472 (2009).
Under the Workers’ Compensation Act, the Commission is the sole judge of the credibility of the witnesses and the weight to be given their testimony. Therefore, on appeal from an award of the Industrial Commission, review is limited to consideration of whether competent evidence supports the Commission's findings of fact and whether the findings support the Commission's conclusions of law.
Id. (citations and internal quotation marks omitted). The Commission's conclusions of law, however, are reviewed de novo. Walker I , 375 N.C. at 258, 846 S.E.2d at 682.
¶ 12 On appeal, Plaintiff argues that the Commission erred by imposing a workers’ compensation lien against that portion of a wrongful death recovery that would have been distributed to heirs who did not receive any part of the workers’ compensation award for the Decedent's death. Our Supreme Court declined to reach this issue in Walker I . Id. at 255 n.1, 846 S.E.2d at 680 n.1. In the present appeal, we are bound by controlling precedent to reject Plaintiff's argument.
188 N.C. App. at 524, 655 S.E.2d at 873 (citations and internal quotation marks omitted).
¶ 14 Further, we found "no language in [the Workers’ Compensation Act] subrogating the rights of an employer to that of the beneficiaries of the workers’ compensation award." Id. Accordingly, we determined that "[i]t was improper for the trial court to conclude that [the] respondents’ rights were subrogated to those of the minor nephews where the General Assembly has not expressed, implied, or intended any such limit." Id. at 525, 655 S.E.2d at 873.
¶ 15 "Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court." In re Civil Penalty , 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989). Indeed, Plaintiff acknowledges that her arguments in favor of overturning Bullock are properly addressed to our Supreme Court and that "the current appeal is her next step" toward that goal. Thus, Plaintiff's argument is overruled.
¶ 16 On cross-appeal, Defendants argue that the Commission erred (1) by concluding that the proceeds recovered from the personal UIM policy were exempt from subrogation pursuant to N.C. Gen. Stat. § 97-10.2, and (2) by failing to distribute the costs and attorneys’ fees pro rata pursuant to N.C. Gen. Stat. § 97-10.2(f)(2).
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