Evans v. AT & T Technologies, Inc.

• Decision Date: 17 July 1992
• Docket Number: No. 294PA91,294PA91
• Citation: 418 S.E.2d 503,332 N.C. 78
• Court: North Carolina Supreme Court
• Parties: Anner F. EVANS, Employee, Plaintiff, v. AT&T TECHNOLOGIES, INC., Self-Insured, Employer, Defendant.

Page 503

418 S.E.2d 503

332 N.C. 78

Anner F. EVANS, Employee, Plaintiff, v. AT&T TECHNOLOGIES, INC., Self-Insured, Employer, Defendant.

No. 294PA91.

Supreme Court of North Carolina.

July 17, 1992.

Walden & Walden by Margaret D. Walden and Daniel S. Walden, Winston-Salem, for plaintiff-appellee.

Womble Carlyle Sandridge & Rice by Richard T. Rice and Clayton M. Custer, Winston-Salem, for defendant-appellant.

MITCHELL, Justice.

The defendant AT & T Technologies, Inc. ("AT & T") has brought forward only two issues for review by this Court. The first is whether the deduction allowed by N.C.G.S. § 97-42 from amounts to be paid as workers' compensation entitles the defendant-employer AT & T to full credit for all disability benefits paid to the plaintiff-employee under AT & T's Sickness and Accident Disability Plan. A second issue--properly raised in, but not addressed by, the Court of Appeals--is whether the amount of any deduction under N.C.G.S. § 97-42 is to be based on the gross before-tax amount paid by the defendant's disability plan or the net after-tax amount received by the employee. We conclude that AT & T must receive full credit under N.C.G.S. § 97-42 for the disability benefits paid by its disability plan and that the amount of such credit must be based on the gross before-tax amount of disability benefits paid under its disability plan for the benefit of the plaintiff-employee.

Certain relevant facts are not disputed before this Court. On 20 February 1986 the plaintiff Anner F. Evans was injured while she was working for AT & T at its plant in Winston-Salem. The defendant AT & T provides a Sickness and Accident Disability Plan ("Plan") which compensates its employees when they are absent from work due to injury or disability, regardless of the cause. Under that Plan, the plaintiff was paid $474.25 per week during her first two-week period of temporary total disability in 1986 and $495.88 per week during a second period of temporary total disability from 8 February 1987 to 2 August 1987. The plaintiff received no benefits under the defendant's Plan after 2 August 1987. The plaintiff received a total of $13,290.50 in benefits under the Plan. All payments to the plaintiff under the Plan were made during a time when the defendant-employer had not accepted the plaintiff's injuries as compensable by workers' compensation benefits and when no determination of compensability had been made by the Industrial Commission.

On 3 April 1986 the plaintiff filed a claim with the North Carolina Industrial Commission seeking workers' compensation benefits. A deputy commissioner entered an Opinion and Award on 23 June 1988 finding and concluding that the plaintiff had been temporarily totally disabled during two different periods. First, the plaintiff was disabled from 21 February 1986 to 3 March 1986. Later, she was disabled from 6 February 1987 through 23 November 1987 (approximately forty weeks) at which time she returned to work part-time. The deputy commissioner held that the plaintiff was entitled to workers' compensation benefits of $294 per week for both of her periods of temporary total disability, less a deduction under N.C.G.S. § 97-42 for some, but not all, of the payments she had received under the defendant's Plan.

The deputy commissioner also ordered that the defendant pay the plaintiff weekly benefits for permanent partial disability at a weekly rate of $294 for seventy weeks commencing 24 November 1987. Neither party before this Court disputes the award to the plaintiff on account of her permanent partial disability, and the defendant seeks no deduction from the payment of those benefits.

In an Order and Award filed 14 March 1989, the Industrial Commission, relying on Foster v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d 670 (1987), amended the deputy commissioner's award and granted the defendant AT & T full credit for all payments made to the plaintiff under AT & T's Plan. The Commission otherwise adopted as its own the Opinion and Award of the deputy commissioner. Upon a motion to clarify filed by the defendant, the Commission entered an Order on 30 March 1989 amending its Opinion and Award of 14 March 1989 by inserting therein a directive that the credit the defendant was to receive "shall be based on net after-tax wages paid plaintiff."

The plaintiff-employee Evans appealed to the Court of Appeals and assigned as error the Commission's holding that AT & T was entitled to full credit for all payments made to her under its Plan. The defendant AT & T cross-assigned as error, inter alia, (1) the conclusion by the Industrial Commission that the plaintiff's injury was a compensable injury under Article I of Chapter 97 of the General Statutes of North Carolina, our Worker's Compensation Act, and (2) the Commission's conclusion that the credit the defendant received for payments under its Plan should be based on net after-tax wages paid to the plaintiff.

Although the Court of Appeals did not expressly affirm or reverse that part of the Commission's Award holding that the plaintiff was entitled to workers' compensation benefits for her injury, it seems to have agreed with the Commission's ruling in that regard. The defendant has not brought the issue forward on appeal to this Court, and that part of the Commission's Award must be and is left in full effect. The Court of Appeals concluded that the defendant AT & T was only entitled to partial credit under N.C.G.S. § 97-42 for the payments made under its Plan to the plaintiff, not full credit as ordered by the Commission. For that reason, the Court of Appeals reversed that part of the Opinion and Award of the Commission.

The defendant AT & T petitioned this Court seeking our discretionary review of the Court of Appeals' conclusion that for purposes of the deduction authorized by N.C.G.S. § 97-42, AT & T could only receive credit for part of the payments made under its Plan. AT & T contended that the Court of Appeals had erred in its resulting holding reversing in part the Commission's Award. AT & T also requested that this Court resolve one of the issues properly presented to, but not resolved by, the Court of Appeals--whether the amount AT & T is entitled to deduct from the plaintiff's workers' compensation benefits is the gross before--tax payment made under AT & T's Plan or the net after-tax payment received by the plaintiff. The defendant AT & T did not seek our review of any other issues. We allowed AT & T's petition, thereby granting review limited to the two issues it sought to raise.

In the present appeal, the plaintiff-employee argues that the defendant AT & T should only receive what the parties and the Court of Appeals have denominated as a "week-for-week credit" for payments made on her behalf under AT & T's Plan. She specifically argues that under such a "week-for-week credit" AT & T may only receive credit for--and, thus, deduct from the plaintiff's workers' compensation benefits for temporary total disability--an amount calculated by subtracting "from the total number of weeks during which [workers'] compensation was found otherwise due, the total number of weeks during which the Defendant [AT & T] had made wage continuation payments of at least the compensation rate." Specifically, to apply the "week-for-week credit" advocated by the plaintiff-employee, one would first calculate the total number of weeks in which an employer had paid its employee as much or more than the weekly rate the employee was awarded as workers' compensation benefits. The employer would then be entitled to deduct only an amount equal to the weekly workers' compensation benefits the employee was awarded for each such week. An employer would receive no credit whatsoever for any amounts it paid during weeks in which it paid the employee less than the weekly workers' compensation rate. Nor would an employer receive credit for any amounts it paid during any week in excess of the weekly rate of workers' compensation benefits awarded to the employee.

Applying a "week-for-week credit," according to the plaintiff, the defendant AT & T should receive a credit in the present case only for an amount equal to the weekly benefits the Commission awarded her for the weeks between 21 February 1986 and 3 March 1986 and for the weeks between 6 February 1987 and 2 August 1987. The plaintiff says AT & T is entitled to such credit because the plaintiff received benefits under AT & T's Plan for each of those weeks in excess of the $294 weekly amount later awarded by the Industrial Commission for the plaintiff's temporary total disability. The AT & T Plan did not pay the plaintiff any benefits after 2 August 1987; therefore, the plaintiff argues AT & T should receive no deduction from the workers' compensation benefits awarded the plaintiff for the weeks after 2 August 1987. The plaintiff argues the defendant AT & T must pay her full workers' compensation benefits of $294 per week for the weeks beginning 2 August 1987 through 23 November 1987 when, under the Award of the Industrial Commission, the plaintiff was still entitled to temporary total disability benefits but received no payments under AT & T's Plan.

The defendant AT & T on the other hand argues, relying on N.C.G.S. § 97-42 and Foster v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d 670 (1987), that it should receive what the parties and the Court of Appeals denominated as a "full dollar-for-dollar" credit for all payments made under its Plan to the plaintiff, including all payments made in any weeks in excess of the weekly workers' compensation award. In other words, the defendant AT & T argues that it is entitled to deduct from the amounts to be paid the plaintiff as workers' compensation all dollars paid to the plaintiff under the AT & T Plan which were not "due and payable" within the meaning of N.C.G.S. § 97-42 when payment was made. Like the Industrial Commission, we conclude that the defendant's...