Higgins v. Michael Powell Builders

• Decision Date: 06 April 1999
• Docket Number: No. COA98-812.,COA98-812.
• Citation: 132 NC App. 720,515 S.E.2d 17
• Court: North Carolina Court of Appeals
• Parties: Tommy HIGGINS, Employee, Plaintiff, v. MICHAEL POWELL BUILDERS, Employer, and Key Benefit Services, Carrier, Defendants.

515 S.E.2d 17

132 NC App. 720

Tommy HIGGINS, Employee, Plaintiff, v. MICHAEL POWELL BUILDERS, Employer, and Key Benefit Services, Carrier, Defendants.

No. COA98-812.

Court of Appeals of North Carolina.

April 6, 1999.

Michaels Jones Martin Parris & Tessener, PLLC, by James S. Walker, Raleigh, for plaintiff-appellee.

Orbock Bowden Ruark & Dillard, PC, by Barbara E. Ruark, Winston-Salem, for defendant-appellant Key Benefit Services.

MARTIN, Judge.

Defendant Key Benefit Services (Key Benefit), the servicing agent for the North Carolina Mutual Employer Self-Insured Workers' Compensation Fund, appeals from an opinion and award of the Full Commission awarding plaintiff continuing total disability benefits for an injury sustained by plaintiff on 16 September 1996, when plaintiff fell out of a window while working for defendant Michael W. Powell Builders, Inc. (Powell Builders). Powell Builders was self-insured for workers' compensation purposes through the North Carolina Mutual Employer Self-Insured Workers' Compensation Fund.

Powell Builders prepared an I.C. Form 19, Employer's Report of Injury to Employee and forwarded it to Key Benefits. The Form 19 indicated in some places that plaintiff had been employed for 2 and one-half years as a carpenter; in another place the form indicated plaintiff's occupation was "framer-subcontractor." After receiving the report of plaintiff's injury from Powell Builders, Key Benefit initiated compensation payments pursuant to the provisions of G.S. § 97-18(d), without prejudice and without accepting liability, and filed an I.C. Form 63, Notice to Employee of Payment of Compensation Without Prejudice, providing copies to plaintiff and to Powell Builders. The Form 63 indicated that plaintiff was an employee of Powell Builders.

Key Benefits continued to pay compensation to plaintiff until sometime in January when it received information from Powell Builders' attorney that, in his opinion, plaintiff was not an employee of Powell Builders but was, instead, a subcontractor. Key Benefits immediately discontinued payments, and plaintiff filed his claim and requested that it be assigned for hearing. On 24 February 1997, Key Benefit filed an I.C. Form 61, denying plaintiff's claim on the ground plaintiff was not an employee of Powell Builders.

The deputy commissioner awarded plaintiff benefits, determining that defendants' failure to contest the claim within the period for payment without prejudice provided by G.S. § 97-18(d) constituted an award of the Industrial Commission pursuant to G.S. § 97-82(b), that plaintiff's employment status was known or reasonably should have been known prior to the expiration of the statutory period had the servicing agent made any investigation thereof, that there was no excusable neglect on defendants' part, and that the reward was not subject to being set aside as a mutual mistake.

Defendants appealed to the Full Commission, which adopted, with minor modifications, the deputy commissioner's findings and conclusions and affirmed the award.

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By the arguments brought forward in support of its assignments of error, Key Benefit contends the Commission erred when: (1) it determined that plaintiff's employment status could have been reasonably discovered before the expiration of the statutory period for contesting the claim; (2) it refused to grant relief from the binding effect of the Form 63 on the grounds that plaintiff's employment status was newly discovered evidence; (3) it refused to grant such relief on the grounds of excusable neglect; and (4) it refused to set aside the award on the grounds of misrepresentation or mutual mistake. For the following reasons, we affirm the Commission's opinion and award.

I.

"The standard of appellate review of an opinion and award of the Industrial Commission is limited to whether there was any competent evidence before the Commission to support its findings of fact and whether the findings of fact justify the Commission's legal conclusions and decision." Harris v. North American Products, 125 N.C.App. 349, 352, 481 S.E.2d 321, 323 (1997); Pittman v. Thomas & Howard, 122 N.C.App. 124, 129, 468 S.E.2d 283, 285-86, disc. review denied, 343 N.C. 513, 472 S.E.2d 18 (1996) (citations omitted). "The Commission's findings `will not be disturbed on appeal if supported by any competent evidence even if there is evidence in the record which would support a contrary finding.' " Harris at 352, 481 S.E.2d at 323 (quoting Peoples v. Cone Mills Corp., 316 N.C. 426, 432, 342 S.E.2d 798, 803 (1986)). The Commission, and not this Court, is "the sole judge of the credibility of witnesses" and the weight given to their testimony. Pittman at 129, 468 S.E.2d at 286 (quoting Russell v. Lowes Product Distribution, 108 N.C.App. 762, 765, 425 S.E.2d 454, 457 (1993)).

II.

First, Key Benefit argues the Commission erred in its determination that defendants are not entitled to contest the compensability of plaintiff's claim after the expiration of the statutory period provided by G.S. § 97-18(d). Key Benefit takes issue with the Commission's findings and conclusion that plaintiff's employment status was known to Powell Builders, and could have been reasonably discovered by Key Benefit had it conducted a diligent investigation, within the time period for contesting the claim.

Under the statutory scheme provided by G.S. § 97-18(d), in those cases in which an employer or insurer is uncertain about the compensability of a claim, the employer or insurer may commence payment of compensation without admitting liability and without prejudice to its rights to contest the claim. The employer or insurer is required to file the prescribed form, I.C. Form 63, stating that the payments are made without prejudice, and that such payments continue until the claim is either accepted or contested or until 90 days from the date upon which the employer first obtains written or actual notice of the injury. If, during the 90 day period, which may be extended by the Commission for an additional 30 days upon application, the employer or insurer contests compensability, it may cease payment upon giving the proper notice specifying the grounds upon which liability is contested. However, if the employer or insurer does not contest compensability of the claim or its liability therefor within the statutory period, it waives its right to do so and the entitlement to compensation becomes an award of the Commission pursuant to G.S. § 97-82(b). In such event, after the expiration of the 90 day period, the employer or insurer may cease payments and contest compensability only upon showing that material evidence became available after the expiration of the statutory period which could not have reasonably been discovered earlier. N.C.Gen. Stat. § 97-18(d) (1997).

Here, defendant employer, Powell Builders, had actual notice of plaintiff's injury on the date it occurred; the statutory period for contesting the claim expired 16 December 1996, no application for an extension having been made, and neither Powell Builders nor Key Benefit gave notice that the compensability of plaintiff's claim was being contested. Key Benefit argues, however, that it is still entitled to contest the compensability of plaintiff's claim because material information concerning plaintiff's employment status was not discovered, and was not reasonably discoverable, until after the expiration of the statutory period.

We hold there is competent evidence in the record to support the Commission's finding that plaintiff's employment status was "at all times reasonably discoverable" by both the employer and the carrier. The testimony of Powell Builders' owner, Michael Powell, showed that Powell Builders became aware of plaintiff's injury on the day it occurred and filed I.C. Form 19, the employer's report of the injury. Line 28 of the injury report listed plaintiff as a "framer-subcontractor." Mr. Powell testified that he spoke with Key Benefit's claims director, Jeff Millett, and that Powell Builders' other employees were available to provide information concerning plaintiff's injury and employment status. Mr. Millett never inquired about plaintiff's status as a "framer-subcontractor," even though he discussed plaintiff's medical bills with Powell Builders' office manager. Mr. Millett also testified, admitting that he did not inquire whether plaintiff was an employee or whether plaintiff was paid via an independent contractor Form 1099. When asked whether the information was reasonably available, Mr. Millett replied "I don't know if it was reasonably available because I didn't ask, so how would I know."

Noting that "defendant-employer had actual knowledge of the plaintiff's employment status equal to that of the plaintiff," the Commission correctly concluded that Key Benefit could have discovered plaintiff's employment status "had it made a reasonable investigation of the claim." Having failed to reasonably investigate the claim, Key Benefit cannot now assert that the information was not reasonably available. Pursuant to the provisions of G.S. § 97-18(d), defendants have waived their right to contest the compensability of plaintiff...