Hieb v. Lowery

• Decision Date: 06 September 1996
• Docket Number: No. 540A95,540A95
• Citation: 344 N.C. 403,474 S.E.2d 323
• Court: North Carolina Supreme Court
• Parties: Gabriella Murray HIEB and Robert Nelson Hieb v. Woodrow LOWERY.

Page 323

474 S.E.2d 323

344 N.C. 403

Gabriella Murray HIEB and Robert Nelson Hieb v. Woodrow LOWERY.

No. 540A95.

Supreme Court of North Carolina.

Sept. 6, 1996.

Appeal by plaintiffs pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 121 N.C.App. 33, 464 S.E.2d 308 (1995), reversing an order entered by Sitton, J., on 28 July 1994 in Superior Court, Mecklenburg County. Heard in the Supreme Court 16 May 1996.

Charles G. Monnett, III & Associates by Charles G. Monnett, III, Charlotte, for plaintiffs-appellants.

Dean & Gibson by Rodney Dean and D. Christopher Osborn, Charlotte, for unnamed defendant-appellee St. Paul Fire and Marine Insurance Company.

LAKE, Justice.

On 20 July 1990, plaintiffs Gabriella Hieb (plaintiff) and her husband, Robert Hieb, filed suit against defendant Woodrow Lowery and unnamed defendant Hartford Accident and Indemnity Company ("Hartford"), plaintiff's underinsured motorist ("UIM") insurance carrier, seeking damages for personal injury and loss of consortium arising from a 17 October 1989 automobile collision. The action was tried to a jury during the 12 October 1992 Civil Session of Superior Court, Mecklenburg County, Judge Robert E. Gaines presiding. The jury returned a verdict against defendants and awarded plaintiff the sum of $1,279,000 and plaintiff's husband the sum of $40,000.

In his 20 November 1992 judgment, Judge Gaines made findings of fact, in part, as follows:

7. The Plaintiffs have instituted a second action against St. Paul Fire and Marine and Hartford Insurance Company ... to determine the respective rights of the parties to the benefits of the Hartford underinsured motorist coverage and to determine the amount of such coverage.

8. That on or about August 28, 1992, an order was entered in that action by the Honorable Robert P. Johnston which holds that the Hartford is allowed to reduce its limits by the amount of worker[s'] compensation paid or to be paid to Plaintiff and further holding that the proceeds of the Hartford underinsured policy are subject to the lien of St. Paul Insurance Company pursuant to North Carolina General Statute Section 97-10.2. That action is now on appeal to the North Carolina Court of Appeals. This Court is bound by the Order of Judge Johnston unless and until said Order is modified by the Court of Appeals or any other Court of competent jurisdiction. This Court has not addressed the issues raised in that action.

(Emphasis added.) Based on these findings of fact, Judge Gaines ordered that St. Paul Fire and Marine Insurance Company ("St. Paul") was entitled to a lien against the proceeds of the Hartford UIM policy for all amounts paid or to be paid to plaintiff as workers' compensation benefits.

As noted in Judge Gaines' judgment, set forth above, plaintiffs filed a second action on 4 March 1991 against Hartford and St. Paul, the workers' compensation carrier for plaintiff's employer, seeking a declaratory judgment to determine the rights of the parties to the benefits of the Hartford UIM coverage. Hartford contended the UIM policy contained language allowing it to reduce its policy limits by the amount of any workers' compensation benefits paid or to be paid to the plaintiff. St. Paul disagreed, contending it was entitled to a lien against the Hartford policy benefits.

The plaintiffs' motion for summary judgment in this second action was heard by Judge Robert P. Johnston, who entered an order on 28 August 1992 granting summary judgment for defendants. This order held that Hartford was allowed to reduce its limits by the amount of workers' compensation paid or to be paid to plaintiff and that proceeds of the Hartford UIM policy were subject to the lien of St. Paul for all amounts paid or to be paid to plaintiff. Plaintiffs appealed to the Court of Appeals, which reversed that portion of the order allowing Hartford to reduce its UIM limits and affirmed the portion of the order allowing St. Paul to assert a workers' compensation lien against the Hartford UIM benefits. Hieb v. St. Paul Fire & Marine Ins. Co., 112 N.C.App. 502, 435 S.E.2d 826 (1993) (Hieb I ). This action was appealed no further.

On or about 20 December 1993, Hartford tendered its UIM policy limit of $475,000 pursuant to the orders of Judges Johnston and Gaines. The plaintiffs and St. Paul were unable to agree as to how the Hartford UIM benefits were to be distributed, and on 7 March 1994, plaintiffs moved for an order modifying and enforcing the judgment entered by Judge Gaines in the first action with respect to the workers' compensation lien. Specifically, plaintiffs requested that the court, in its discretion, determine the amount of St. Paul's workers' compensation lien, approve the disbursement of that amount to St. Paul and approve the disbursement of the balance of any funds remaining from the Hartford UIM proceeds to plaintiffs.

Judge Claude S. Sitton allowed plaintiffs' motion by order signed 14 July 1994 and entered 28 July 1994. Exercising his discretion under N.C.G.S. § 97-10.2, Judge Sitton held that St. Paul was entitled to recover $241,677.77, as full satisfaction of any workers' compensation lien it may have on benefits paid or to be paid to plaintiff, and that the remainder of the Hartford UIM proceeds be paid to plaintiffs.

Defendant St. Paul appealed to the Court of Appeals. In a divided opinion, the Court of Appeals reversed, holding that the trial judge was without authority, under N.C.G.S. § 97-10.2, to modify another superior court judge's order because the "judgment" exceeded the amount necessary to reimburse the workers' compensation insurance carrier. Hieb v. Lowery, 121 N.C.App. 33, 464 S.E.2d 308 (1995) (Hieb II ). Plaintiffs appeal to this Court based upon the dissent below. For the reasons which follow, we affirm the Court of Appeals.

Ordinarily, one superior court judge may not modify or overrule the judgment of another superior court judge in the same case on the same issue. Calloway v. Ford Motor Co., 281 N.C. 496, 189 S.E.2d 484 (1972); see also Able Outdoor, Inc. v. Harrelson, 341 N.C. 167, 459 S.E.2d 626 (1995). Plaintiffs assert that the Court of Appeals erred by applying this general rule to the facts of the present case.

First, plaintiffs argue that the Court of Appeals erred by holding that the trial judge did not act under the authority of Rule 60(b) of the North Carolina Rules of Civil Procedure. Plaintiffs' motion to modify and enforce the judgment setting the workers' compensation lien begins: "Plaintiffs ... respectfully move this Court pursuant to Rule 60(b)(5) and (6) of the North Carolina Rules of Civil Procedure...." Plaintiffs argue that their motion was filed pursuant to Rule 60(b), and therefore the trial court acted pursuant to Rule 60(b).

However, notwithstanding plaintiffs' reference to Rule 60(b) in their motion, we agree with the Court of Appeals' conclusion that "plaintiff made no Rule 60(b) motion, nor did Judge Sitton purport to act pursuant to Rule 60(b)." Hieb II, 121 N.C.App. at 38, 464 S.E.2d at 312. Judge Sitton's order is devoid of any mention of Rule 60(b) considerations. The order neither mentions Rule 60(b) nor contains language that Judge Sitton ruled as he did because "justice demands it" or any other language showing the order was based on Rule 60(b). Rather, the order specifically states that Judge Sitton's exclusive basis for granting the motion was N.C.G.S. § 97-10.2:

4. That the Court should exercise its discretion under the provisions North Carolina General Statute Section 97-10.2 to determine the amount of St. Paul's workers' compensation lien.

Accordingly, we find no error with the Court of Appeals' holding that Judge Sitton acted solely under the provisions of N.C.G.S. § 97-10.2.

Next, plaintiffs contend that Judge Sitton's order did not modify or overrule an issue that was previously considered and thus does not offend the general rule. Plaintiffs argue that the issue previously decided by Judges Gaines and Johnston was whether a workers' compensation carrier could assert a lien, pursuant to N.C.G.S. § 97-10.2, against the proceeds of UIM insurance purchased by someone other than the insured party's employer, while the issue before Judge Sitton was the amount of such workers' compensation lien that should be allowed. We disagree.

In the original judgment, Judge Gaines' conclusions of law explicitly state in accordance with Judge Johnston's order that "St. Paul Fire and Marine Insurance Company is entitled to a lien against the proceeds of the Hartford underinsured motorist policy for all amounts paid, or to be paid, to Plaintiff Gabriella Murray Hieb as worker[s'] compensation benefits." (Emphasis added.) From the plain language of this judgment, it is clear that the amount of the lien is to be the total of all amounts paid or to be paid to plaintiff as workers' compensation benefits. Additionally, the Court of Appeals issued a unanimous opinion affirming that portion of Judge Johnston's order relating to the workers' compensation lien of St. Paul. The Court of Appeals stated:

Plaintiffs argue in their second assignment of error that the trial court erred when it determined that St. Paul was entitled to a workers' compensation lien against all amounts paid or to be paid to Mrs. Hieb by Hartford pursuant to its UIM coverage. We cannot agree.

... St. Paul is entitled to a workers' compensation lien against all amounts paid or to be paid to Mrs. Hieb by Hartford pursuant to its UIM coverage.

Hieb I, 112 N.C.App. at 506-07, 435 S.E.2d at 828. Thus, the issue of amount was dealt with and decided three times prior to plaintiffs presenting the matter to Judge Sitton. Judge Sitton's order, setting a...