Hansen v. Crystal Ford-Mercury, Inc., COA99-574.

• Decision Date: 20 June 2000
• Docket Number: No. COA99-574.,COA99-574.
• Parties: April HANSEN, Employee, Plaintiff, v. CRYSTAL FORD-MERCURY, INC., Employer; Pennsylvania National Insurance Company, Carrier, Defendants, and Blue Cross and Blue Shield of North Carolina, Medical Reimbursement Claimant.
• Court: North Carolina Court of Appeals

531 S.E.2d 867

138 NC App. 369

April HANSEN, Employee, Plaintiff, v. CRYSTAL FORD-MERCURY, INC., Employer; Pennsylvania National Insurance Company, Carrier, Defendants, and Blue Cross and Blue Shield of North Carolina, Medical Reimbursement Claimant.

No. COA99-574.

Court of Appeals of North Carolina.

June 20, 2000.

Taft, Taft and Haigler, P.A., by Alden B. Cole, Greenville, for plaintiff-appellee.

Young Moore and Henderson, P.A., by Joe E. Austin, Jr. and Dawn M. Dillon, Raleigh, for defendant-appellees Crystal Ford-Mercury, Inc. and Pennsylvania National Insurance Company.

J. Randolph Ward, Cary and Maupin Taylor & Ellis, P.A., by M. Keith Kapp and Kevin W. Benedict, Raleigh, for appellant Blue Cross and Blue Shield of North Carolina.

HUNTER, Judge.

Appellant Blue Cross and Blue Shield of North Carolina ("BCBS") appeals orders of the North Carolina Industrial Commission ("Industrial Commission") wherein it approved a compromise settlement agreement between April Hansen ("plaintiff") her employer, Crystal Ford-Mercury, Inc. ("employer"), and its workers' compensation carrier, Pennsylvania National Insurance Company ("carrier"), without addressing whether or not plaintiff's injury was compensable under the North Carolina Workers' Compensation Act ("Act"). BCBS had filed a claim in the matter, contending that it was entitled to reimbursement for medical costs it paid due to plaintiff's alleged compensable injury. The Full Industrial Commission ("Full Commission") did not rule on BCBS's claim, inferring that it did not have jurisdiction to do so. We reverse on the basis that the Industrial Commission has jurisdiction over BCBS's claim, and therefore the subject compromise settlement is void because all interested parties did not consent to it.

The record indicates that plaintiff filed a workers' compensation claim alleging a workplace injury on 24 July 1996, when plaintiff allegedly came down a ladder and twisted her right knee as she stepped on the floor. On 7 August 1996, carrier denied plaintiff's claim for "fail[ing] to cooperate" with their requests for medical records. On 26 August 1996, carrier sent plaintiff a letter denying that her injury was compensable due to carrier's review of plaintiff's medical records and the revelation that plaintiff had suffered prior problems with the injured knee. Carrier recommended that plaintiff submit her claim to BCBS, plaintiff's health insurer through her employer's group health insurance plan. BCBS subsequently paid $12,229.78 for treatment of plaintiff's injured knee from 26 July 1996 to 30 October 1996. BCBS's coverage of plaintiff apparently ended with her departure from employment with employer in the fall of 1996. BCBS learned of plaintiff's workers' compensation claim as to the injury in September 1997. On 29 September 1997, BCBS entered a Form 33 "Request that Claim be Assigned for Hearing" in plaintiff's case, requesting that it be reimbursed for its costs because employer and carrier (collectively "defendants") were liable for plaintiff's alleged compensable injury. On 24 November 1997, on Industrial Commission Form 33R, "Response to Request that Claim be Assigned for Hearing," defendants stated that "compensability has been denied," and made the following notations under "Defendant Agrees to the Following," in pertinent part:

Subject to Act Admitted

Employment Relationship Admitted

Insurance Coverage Admitted

Date of Injury 7/24/96 alleged

Injury by accident Denied Arising out of and in the course of employment Denied

Industrial Commission Deputy Commissioner Mary Moore Hoag entered an order on 10 December 1997 allowing BCBS to serve requests for admissions to defendants, and ordering defendants to serve responses on or before 15 December 1997. Those requests asked for carrier's admission that the medical services for plaintiff in question were necessary due to the condition of plaintiff's right knee on and/or after 24 July 1996, the date of the accident. Defendants never answered the requests, and carrier defended on the grounds that plaintiff's injury was not an "injury by accident" as contemplated by the Act.

A "compromise settlement agreement" or "clincher" per Industrial Commission Rule 502, and a proposed order, were submitted to the Industrial Commission on 18 December 1997. They provided that without admitting liability, but upon payment of $15,000.00 and certain medical expenses to plaintiff, the Industrial Commission would discharge defendants from further liability under the Act. On 30 March 1998, the deputy commissioner denied defendants' and plaintiff's 18 December 1997 joint motion to strike the discovery orders and approve a compromise settlement agreement releasing defendants from all liability without reimbursing BCBS, stating: "I can not [sic], in good conscience, approve a Compromise Settlement Agreement in this action which does not provide for reimbursement to [BCBS]." Defendants and plaintiff appealed to the Full Commission.

The Full Commission entered an order on 22 January 1999 approving the compromise settlement agreement and releasing defendants from liability for plaintiff's injuries. The Full Commission vacated all prior discovery orders, and approved the compromise settlement agreement, stating in pertinent part:

Because it appears to the Commission that the liability of defendants for the unpaid medical expenses is legitimately in dispute, an injustice would result if defendants must undertake to pay these expenses prior to approval of this agreement as the case would not then reach a settlement. Therefore, the Commission exercises its discretion pursuant to Industrial Commission Rules 502(2)(b) and 801 to waive the obligation, if any, of defendants to pay all unpaid medical expenses as a part of this agreement.

Industrial Commission Rule 502, which the Full Commission cites for authority, states in pertinent part:

(2) No compromise agreement will be approved unless it contains the following language or its equivalent:

(a) Where liability is admitted, that the employer or carrier/administrator undertakes to pay all medical expenses to the date of the agreement.

(b) Where liability is denied, that the employer or carrier/administrator undertakes to pay all unpaid medical expenses to the date of the agreement. However, where application of this Rule shall work an injustice, it may be waived in the discretion of the Industrial Commission.

Workers' Comp. R. of N.C. Indus. Comm'n 502(2), (a), (b), 2000 Ann. R. 723 (Lexis) (emphasis added). Likewise, Rule 801 provides that the Industrial Commission Rules may be waived in the "interest of justice." Workers' Comp. R. of N.C. Indus. Comm'n 801, 2000 Ann. R. 733 (Lexis). The 22 January 1999 order was amended by order of 3 February 1999 to correct a clerical error. BCBS made a motion for reconsideration, asking that the order be amended by discharging defendants' liability only as to plaintiff's claims, not those of BCBS. This motion was denied by order of 16 February 1999. BCBS appeals.

First, BCBS contends that the Full Commission erred by failing to hear and determine its claim for reimbursement because the Industrial Commission is the only body with jurisdiction to hear and determine issues regarding the compensability of allegedly work-related injuries.

First, we note that our review of claims under the Act is limited. The North Carolina Supreme Court has stated that "`the findings of fact made by the Commission are conclusive on appeal, ... when supported by competent evidence[ ] ... even though the record may support a contrary finding of fact.'" Inscoe v. Industries, Inc., 292 N.C. 210, 215, 232 S.E.2d 449, 452 (1977) (quoting Rice v. Chair Co., 238 N.C. 121, 124, 76 S.E.2d 311, 313 (1953)). When the Court of Appeals reviews a decision of the full Commission, its inquiry is limited to: (1) whether there is competent evidence to support the Commission's findings of fact; and, (2) whether the findings of fact support the conclusions of law and decision of the Commission. Hansel v. Sherman Textiles, 304 N.C. 44, 49, 283 S.E.2d 101, 104 (1981). Conclusions of law by the Industrial Commission are reviewable de novo by this Court. Grantham v. R.G. Barry Corp., 127 N.C.App. 529, 491 S.E.2d 678 (1997),disc. rev. denied, 347 N.C. 671, 500 S.E.2d 86 (1998).

While we normally review findings of fact and conclusions of law by the Full Commission based on the foregoing precedent, the order which has been appealed in the present case is a "clincher," or compromise settlement agreement, and as such, contained neither. Pursuant to N.C. Gen.Stat. §§ 97-17 and 97-82, "[t]he Commission recognizes,... two forms of voluntary settlements, namely, the compensation agreement in uncontested cases, and the compromise or `clincher' agreement in contested or disputed cases." Vernon v. Steven L. Mabe Builders, 336 N.C. 425, 430, 444 S.E.2d 191, 193 (1994)

(emphasis added). The Full Commission did not consider BCBS's claim for reimbursement due to a compensable injury, but stated:

[T]his Order does not purport to approve, resolve or address any issue or matter over which the Industrial Commission has no jurisdiction, whether or not such issue or matter is raised in the compromise settlement agreement executed by the parties in this action.

The Full Commission made no findings of fact or conclusions of law to support the inference that it did not have jurisdiction over BCBS's claim, and this was error. As we have noted, our review is usually limited to whether their findings are supported by competent evidence. However, jurisdictional facts found by the Industrial "... `Commission, though supported by competent evidence, are not binding on this Court.'" Williams v. ARL, Inc., 133 N.C.App. 625, 628, 516 S.E.2d 187, 190 (1999) (emphasis added) (quoting Cook v. Norvell-Mackorell Real Estate Co., 99 N.C.App. 307, 309, 392 S.E.2d 758, 759 (1990)). Because this Court may make independent...