Dion v. Batten

• Decision Date: 02 August 2016
• Docket Number: No. COA16–63.,COA16–63.
• Citation: 248 N.C.App. 476,790 S.E.2d 844
• Parties: Thomas David DION, Plaintiff, v. William Robert BATTEN, Sr., Defendant.
• Court: North Carolina Court of Appeals

248 N.C.App. 476

790 S.E.2d 844

Thomas David DION, Plaintiff,

v.William Robert BATTEN, Sr., Defendant.

No. COA16–63.

Court of Appeals of North Carolina.

Aug. 2, 2016.

Baker & Slaughter, by H. Mitchell Baker, for Plaintiff.

Teague Campbell Dennis & Gorham, LLP, Raleigh, by Bruce A. Hamilton, Matthew W. Skidmore, and Justin G. May, for Unnamed Defendants Neuwirth Motors and Brentwood Services, Inc.

Hoof & Hughes, PLLC, Durham, by J. Bruce Hoof, for Unnamed Defendant Foremost Insurance Company.

Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., Wilmington, by Ellen P. Wortman, for Unnamed Defendant Government Employees Insurance Company.

McGEE, Chief Judge.

Thomas David Dion ("Plaintiff"), Neuwirth Motors ("Neuwirth"), and Brentwood Services, Inc. ("Brentwood") appeal from an order determining the amount of a workers' compensation subrogation lien on a judgment obtained by Plaintiff against William Robert Batten, Sr. ("Defendant"). We affirm.

I. Background

Plaintiff was employed by Neuwirth as a servicing agent. In the course and scope of his employment with Neuwirth, Plaintiff was driving on Oriole Drive in Wilmington, North Carolina on 20 March 2008, when the vehicle he was driving was struck by a vehicle driven by Defendant, who had failed to stop at a red light. As a result of the crash, Plaintiff sustained multiple injuries. Because the crash occurred during the course and scope of Plaintiff's employment with Neuwirth, Plaintiff was entitled to, and filed a claim for, workers' compensation benefits pursuant to Chapter 97 of the North Carolina General Statutes. Plaintiff, Neuwirth, and Neuwirth's workers' compensation servicing agent, Brentwood, agreed that Plaintiff was entitled to $528,665.61 for injuries sustained in the crash. The agreement between Plaintiff, Neuwirth, and Brentwood was approved by the Industrial Commission by order entered 14 November 2012.¹ Pursuant to N.C. Gen.Stat. § 97–10.2(f), Neuwirth and Brentwood asserted a lien against any third party recovery.

In addition to the workers' compensation claim, Plaintiff filed the present lawsuit against Defendant on 16 November 2010, asserting a claim of negligence. After the complaint was filed, and as permitted by N.C. Gen.Stat. § 20–279.21(b)(4), a trio of interested insurance companies entered the lawsuit by filing answers as unnamed defendants: Nationwide Mutual Insurance Company ("Nationwide"); Foremost Insurance Company ("Foremost"); and Government Employees Insurance Company ("GEICO"). Defendant maintained a policy with Nationwide that provided liability insurance coverage in the amount of $30,000.00, and underinsured motorist coverage ("UIM coverage") in the amount of $100,000.00. Plaintiff maintained insurance policies with Foremost and GEICO that provided UIM coverage for damages Defendant was entitled to in excess of the limits of Defendant's Nationwide policy.

Sometime after filing an answer to Plaintiff's complaint, Nationwide tendered its policy limits of $100,000.00.² Disbursement of the funds was approved by the Industrial Commission by order entered 9 December 2011, and provided that the $100,000.00 would be dispersed in equal shares to: (1) Plaintiff; (2) Plaintiff's counsel, for attorney's fees; and (3) Neuwirth and Brentwood. The order also stated that "[n]othing contained in this Order shall be construed as a waiver of ... defendant/workers' compensation carrier's lien. Plaintiff and defendant/workers' compensation carrier explicitly acknowledge the defendant/workers' compensation carrier's right to assert a lien against the proceeds of any additional third-party funds paid to [P]laintiff." Plaintiff's insurance policies with Foremost and GEICO each provided that either party had the option to require arbitration. Plaintiff, Foremost, and GEICO decided to exercise that option, and the matter was referred to arbitration. Arbitration began on 8 April 2015 and, on 13 April 2015, the arbitration panel decided Plaintiff was entitled to recover $285,000.00 from Defendant for personal injuries sustained in the 20 March 2008 crash.

The trial court entered the arbitration award as a judgment on 12 May 2015. R p 36. In entering the judgment, the trial court determined that the arbitration award "should be reduced by the amount of $100,000.00 which had previously been paid to Plaintiff" by Nationwide. The trial court awarded interest on the full amount, $285,000.00, from 16 November 2010, when the lawsuit was filed, to 9 December 2011, when Nationwide tendered its policy limits. The trial court also awarded interest on the reduced amount, $185,000.00, from 10 December 2011 through 1 May 2015.

Foremost filed a motion on 4 May 2015 to determine the subrogation amount pursuant to N.C.G.S. § 97–10.2(j), and the trial court held a hearing on Foremost's motion three days later. Following the hearing, the trial court entered a written order on 4 June 2015 "determin[ing]" the appropriate amount of Neuwirth's and Brentwood's workers' compensation subrogation lien. The trial court concluded as a matter of law that the

rights to, and the amount of the employers and workers['] compensation carrier's lien under [N.C.G.S. § ] 97–10.2 were created by, and set forth and defined in, and are limited by [N.C.G.S. § ] 97–10.2 and specifically sub-sections (f)(1)c. and (j)[.] ... As that lien is a creature of statute, employers and workers['] compensation carriers necessarily have no right to recover any amount of money by reason of such lien which is greater than, or other than such amount as provided by [N.C.G.S.] § 97–10.2(f)(1) c. and (h).

The trial court further concluded that although Neuwirth and Brentwood paid workers' compensation benefits to Plaintiff totaling $528,665.61, "their workers['] compensation subrogation lien [could not] exceed $285,000.00, that being the total amount of the [j]udgment obtained by [Plaintiff] in this lawsuit in compensation for his injuries." Accordingly, the trial court found the amount of the workers' compensation subrogation lien to be "$190,000.000, which is calculated by subtracting attorney's fees ($95,000.00), interest ($74,291.50) and court costs ($160.00) from the judgment amount obtained by Plaintiff [ ] by [j]udgment in this lawsuit ($359,451.50)." Plaintiff, Brentwood, and Neuwirth appeal.

II. Analysis

Plaintiff, Brentwood, and Neuwirth (collectively, "Appellants") present two jurisdictional arguments: (1) Foremost—as a "third party," and not an "employer" or "employee"—lacked standing to apply for a determination of the subrogation amount; and (2) even if Foremost did have standing, the trial court nevertheless acted outside of its subject matter jurisdiction when ruling on Foremost's motion. In the alternative, Appellants contend the trial court: (1) misinterpreted N.C. Gen.Stat. § 97–10.2(j) ; (2) abused its discretion by reducing the amount of the workers' compensation lien from the "statutory amount;" and (3) erred by failing to make findings of fact that adequately evidenced the trial court's consideration of a statutorily required factor.

(A) Standing

Appellants contest Foremost's standing to apply for a determination of the subrogation amount. Standing "refers to whether a party has a sufficient stake in an otherwise justiciable controversy that he or she may properly seek adjudication of the matter." Lee Ray Bergman Real Estate Rentals v. N.C. Fair Housing Ctr., 153 N.C.App. 176, 179, 568 S.E.2d 883, 886 (2002) (citing Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972) ).³ "Standing is a necessary prerequisite to the court's proper exercise of subject matter jurisdiction." Creek Pointe Homeowner's Ass'n v. Happ, 146 N.C.App. 159, 164, 552 S.E.2d 220, 225 (2001), disc. review denied, 356 N.C. 161, 568 S.E.2d 191 (2002). "If a party does not have standing to bring a claim, a court has no subject matter jurisdiction to hear the claim." Coker v. DaimlerChrysler Corp., 172 N.C.App. 386, 391, 617 S.E.2d 306, 310 (2005) (citation omitted). Whether a party has standing is a question of law that this Court reviews de novo. Indian Rock Ass'n v. Ball, 167 N.C.App. 648, 650, 606 S.E.2d 179, 180 (2004). "Under a de novo review, the [C]ourt considers the matter anew and freely substitutes its own judgment for that" of the trial court. Craig v. New Hanover Cty. Bd. of Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (citation and internal quotation marks omitted).

In determining whether N.C.G.S. § 97–10.2(j) confers standing upon Foremost to apply for a determination of the subrogation amount, we begin with the text of the statute. See Correll v. Division of Social Services, 332 N.C. 141, 144, 418 S.E.2d 232, 235 (1992) ("Statutory interpretation properly begins with an examination of the plain words of the statute." (citation omitted)). "When the language of a statute is clear and unambiguous, there is no room for judicial construction, and the courts must give it its plain and definite meaning." Lemons v. Old Hickory Council, 322 N.C. 271, 276, 367 S.E.2d 655, 658 (1988) (citations omitted); see also State v. Wiggins, 272 N.C. 147, 153, 158 S.E.2d 37, 42 (1967) ("It is elementary that in the construction of a statute words are to be given their plain and ordinary meaning unless the context, or the history of the statute, requires otherwise." (citation omitted)).

The statute at issue in this case, N.C.G.S. § 97–10.2(j), provides in relevant part:

Notwithstanding any other subsection in this section, in the event that a judgment is obtained by the employee in an action against a third party, or in the event that a settlement has been agreed upon by the employee and the third party, either party may apply to the resident superior court judge of the county in which the cause of action arose or where the injured employee resides, or to a presiding judge of either district, to determine the subrogation amount.

N.C. Gen.Stat. § 97–10.2(j) (2015) (emphasis added). Considering the words as they appear in ...