Goodson v. P.H. Glatfelter Co.
| Decision Date | 19 July 2005 |
| Docket Number | No. COA04-886.,COA04-886. |
| Citation | 615 S.E.2d 350 |
| Parties | James GOODSON, Employee-Plaintiff and N.C. Department of Insurance, ex rel. James Long, Commissioner, Intervenor v. P.H. GLATFELTER CO., Employer-Defendant Langdon M. Cooper, Trustee in Bankruptcy for RFS Ecusta, Inc., Defendant and North Carolina Self-Insurance Guaranty Association, Defendant. |
| Court | North Carolina Supreme Court |
Young, Moore, and Henderson, P.A., by Robert C. Paschal, John N. Fountain, and Michael W. Ballance, Raleigh, for employer-defendant.
Stuart Law Firm, P.L.L.C., by Catherine R. Stuart and Charles C. Kyles, Raleigh, for the North Carolina Self-Insurance Guaranty Association.
Mullen, Holland, & Cooper, P.A., by Langdon M. Cooper, Jesse V. Bone, Jr., Jason R. Shoemaker, and Nancy B. Paschall, Gastonia, for Langdon M. Cooper, Trustee in Bankruptcy for RFS Ecusta, Inc.
Attorney General Roy Cooper, by Assistant Attorney General E. Clementine Peterson, for intervenor North Carolina Department of Insurance.
P.H. Glatfelter Co. ("Glatfelter") appeals an opinion and award entered by the North Carolina Industrial Commission ("Commission"), in which the Commission found James Goodson ("plaintiff") was entitled to have Glatfelter pay his workers' compensation claim and ordered Glatfelter to (1) pay compensation to plaintiff pending appeal and (2) secure its obligations under the Workers' Compensation Act by either re-qualifying as a self-insurer or posting an appropriate special release bond. We affirm in part and reverse in part.
From 24 June 1987 until 9 August 2001, Glatfelter operated a paper mill, known as the Ecusta Division, where plaintiff was employed. On 17 January 1992, the North Carolina Department of Insurance ("DOI") licensed Glatfelter to self-insure its workers' compensation liabilities, and Glatfelter posted a commercial surety bond issued by Travelers Casualty and Surety Company of America to satisfy certain statutory bond requirements. The bond was originally for $500,000.00 but was increased to $1.6 million as liabilities grew. Glatfelter remained self-insured until 24 August 2001 and was a member of the North Carolina Self-Insurance Guaranty Association ("SIGA"), a statutorily created legal entity created to pay "covered claims" against insolvent member self-insurers. During this period of time, plaintiff sustained a compensable injury by accident and began receiving temporary total disability compensation.
In 2001, Donald Bowman ("Bowman"), Corporate Insurance and Credit Manager for Glatfelter, became aware of efforts by Glatfelter to sell the Ecusta Division, including its liabilities. On 18 June 2001, Bowman wrote Ronald Ennis ("Ennis"), senior financial analyst responsible for supervising the self-insured workers' compensation unit with DOI. In the letter, Bowman explained that Glatfelter was "in the process of selling its Ecusta Division along with the Workers Compensation liabilities[,] ... no longer want[ed] or need[ed] to be Self-Insured[,] ... and [desired] to cancel the [existing] Surety Bond[.]" Bowman requested information on "exactly what ... is needed from [Glatfelter in order] to withdraw from being Self-Insured."
Three days later, Ennis responded to Bowman's letter "notifying [DOI] of [Glatfelter's] voluntary termination of self-insured status ... effective 24 August 2001." Ennis' letter noted that the Ecusta Division was "being acquired by a third party that is assuming all past workers' compensation liabilities accrued during the Company's operation of the division." Ennis informed Bowman that the surety bond could be cancelled "by giving the Commissioner 60 days written notice" but warned that the surety would "remain liable for all obligations and liabilities ... that arose under Chapter 97 of the North Carolina General Statutes." Nonetheless, Ennis went on to state that if "the acquiring company provides a replacement bond, then the Department will release the Surety Company of any past, present or future liabilities."
In August 2001, Glatfelter entered into a written acquisition agreement with, inter alia, RFS Ecusta, Inc. ("RFS") for the sale of the Ecusta Division. The acquisition agreement purportedly transferred certain liabilities, including workers' compensation claims, of the Ecusta Division. RFS deposited a $1.6 million certificate of deposit with DOI, and, on 24 August 2001, Ennis wrote Bowman and informed him that DOI had received confirmation that RFS deposited $1.6 million "to secure the assumption of liabilities of [Glatfelter's] worker's compensation reserve loss claims" thus purportedly "discharg[ing] ... all past, present, existing and potential liability for [Glatfelter's surety company]." Ennis also noted that Glatfelter had voluntarily terminated their status as a self-insured employer in North Carolina. DOI released Glatfelter's bond. In a subsequent memorandum regarding self-insured corporations, Ennis noted Glatfelter sold the Ecusta Division to RFS, who assumed all liabilities and posted a $1.6 million certificate of deposit as a "dollar for dollar exchange with [Glatfelter's] surety bond [and Glatfelter's] surety bond company was granted a full release from liability." A second memorandum by Ennis the following month added that DOI "notified the Industrial Commission of the transfer of the loss claims to [RFS] to ensure the appropriate legal responsibility for their discharge."
As noted previously, RFS assumed control of the operations of the Ecusta Division. Besides the certificate of deposit with DOI, RFS was insured at all times from 8 August 2002 to 23 September 2003 for claims arising during that period but not for prior pending claims. DOI did not require RFS to become self-insured when it posted the bond. In October 2002, RFS filed petitions in bankruptcy. RFS made no payments for plaintiff's admittedly compensable claim after 30 September 2002 yet failed to follow statutory procedures to terminate compensation.
Glatfelter and SIGA denied liability for payments on plaintiff's claim. North Carolina Chief Deputy Commissioner Stephen Gheen initiated a proceeding ex mero motu concerning continued payments of workers' compensation benefits from RFS and/or Glatfelter, and in an order entered 3 December 2002, the deputy commissioner added Glatfelter, SIGA, and DOI as parties. After a hearing on the matter and completion of the record, Deputy Commissioner George R. Hall, III, entered an opinion and award providing, in relevant part, as follows: (1) there were no additional necessary parties; (2) the acquisition agreement did not effectuate a valid transfer of Glatfelter's workers' compensation liabilities to RFS by virtue of N.C. Gen.Stat. § 97-6 (2003) and the lack of a statutory scheme permitting a self-insured employer to transfer liabilities for workers' compensation claims by private contractual agreement; (3) Glatfelter, as plaintiff's self-insured employer at the time of the injury, was responsible for paying the compensable claim; (4) DOI erroneously released Glatfelter's bond because no "special release bond" as required by N.C. Gen.Stat. § 97-185(g) (2003) had been posted and Glatfelter had not fully discharged its obligations under the Workers' Compensation Act; (5) the certificate of deposit posted by RFS did not qualify as a "special release bond" because RFS was not a corporate surety as defined by N.C. Gen.Stat. § 97-165(5) (2003); and (6) SIGA's liability was not at issue since RFS' certificate of deposit was not implicated.
The Commission affirmed the opinion and award on appeal but modified certain provisions, in relevant part, as follows: (1) the agreements between Glatfelter and RFS, to the extent they purported to transfer workers' compensation liabilities, were void ab initio as a matter of law and public policy; (2) Glatfelter negotiated its workers' compensation liabilities into the sales price of the Ecusta Division, and the purpose of the certificate of deposit posted by RFS was "to secure ... the self-insurer's claims liability to insure that injured workers' injuries on the job will be properly compensated, irrespective of the employer's financial condition"; and (3) Glatfelter erroneously relied on the posting of the certificate of deposit by RFS to bring Glatfelter into compliance with the "special release bond" provisions. In its award, the Commission ordered the use of the certificate of deposit posted by RFS based on the purpose stated in the award and opinion. The Commission further ordered Glatfelter to secure its obligations under the Act by either re-qualifying as a self-insurer or posting an appropriate special release bond as well as to make appropriate workers' compensation payments to plaintiff. Finally, the Commission ordered Glatfelter to pay compensation to plaintiff pending appeal pursuant to N.C. Gen.Stat. § 97-86.1 (2003) and dismissed SIGA as a party in the action. Both Glatfelter and RFS gave notice of appeal to this Court.
Our Supreme Court has recently re-iterated that the Workers' Compensation Act is designed "`to provide compensation for injured employees'"; therefore, its provisions should be "`liberally construed'" and "`its benefits should not be denied by a technical, narrow, and strict construction.'" McRae v. Toastmaster, Inc., 358 N.C. 488, 496, 597 S.E.2d 695, 701 (2004) (quoting Hollman v. City of Raleigh, 273 N.C. 240, 252, 159 S.E.2d 874, 882 (1968)). In reviewing an opinion and award by the Commission, we must determine "whether any competent evidence supports the Commission's findings of fact and whether [...
To continue reading
Request your trial
-
Moody v. Sears Roebuck and Co.
...(2005). A question of statutory construction is also a question of law that we review de novo. See, e.g., Goodson v. P.H. Glatfelter Co., 171 N.C.App. 596, 605, 615 S.E.2d 350, 357, disc. review denied, 360 N.C. 63, 623 S.E.2d 582 N.C.G.S. § 1A-1, Rule 23(c) provides: Dismissal or compromis......
-
Barrett v. All Payment Services, Inc.
...S.E.2d 549 (2000). We review matters of statutory interpretation of the Workers' Compensation Act de novo. Goodson v. P.H. Glatfelter Co., 171 N.C.App. 596, 605, 615 S.E.2d 350, 357, disc. review denied, 360 N.C. 63, 623 S.E.2d 582 Defendants' Arguments I Defendants first argue that the Com......
-
Andrea Morrell, G. Pony Morrell, & the Pasta Wench, Inc. v. Hardin Creek, Inc.
...not contained therein." Eaton v. Campbell , 220 N.C. App. 521, 522, 725 S.E.2d 893, 894 (2012) (quoting Goodson v. P.H. Glatfelter Co., 171 N.C. App. 596, 606, 615 S.E.2d 350, 358 (2005) ). "Issues not presented and discussed in a party's brief are deemed abandoned." N.C. R. App. P. 28(a) (......
-
State v. Pabon
...Court to supplement an appellant's brief with legal authority or arguments not contained therein." Goodson v. P.H. Glatfelter Co. , 171 N.C. App. 596, 606, 615 S.E.2d 350, 358 (2005) ; N.C. R. App. P. 28. Defendant has abandoned this argument.Conclusion For the foregoing reasons, we find th......