Lanning v. Fieldcrest-Cannon, Inc.

• Decision Date: 16 June 2000
• Docket Number: No. 360PA99.,360PA99.
• Court: North Carolina Supreme Court
• Parties: Kyle J. LANNING, Employee, v. FIELDCREST-CANNON, INC., Self-Insured, Employer.

530 S.E.2d 54

352 N.C. 98

Kyle J. LANNING, Employee, v. FIELDCREST-CANNON, INC., Self-Insured, Employer.

No. 360PA99.

Supreme Court of North Carolina.

June 16, 2000.

Carlton, Rhodes & Carlton, by Gary C. Rhodes, Salisbury, for plaintiff-appellant.

Smith Helms Mulliss & Moore, L.L.P., by Jeri L. Whitfield and Manning A. Connors, Greensboro, for defendant-appellee.

PARKER, Justice.

The issue before this Court is whether the Court of Appeals erred in holding that plaintiff-employee's income from his multilevel marketing distributorship constitutes wages and that the Industrial Commission, therefore, erred in determining that plaintiff is totally disabled under N.C.G.S. § 97-29.

On 11 March 1991 a deputy commissioner awarded plaintiff compensation for total disability in the amount of $256.45 per week "for the remainder of his life, his return to work or a change in his condition, whichever first occurs." On 1 July 1992 the Industrial Commission adopted and affirmed the deputy commissioner's opinion and award. Defendant paid total disability benefits to plaintiff pursuant to the full Commission's opinion and award from 14 December 1988 until 5 October 1994. Plaintiff had returned to full-time employment on or about 5 September 1994.

While working full-time, plaintiff on 10 July 1995 filed with the Commission a motion for modification based on a change of condition, seeking compensation for permanent partial disability pursuant to N.C.G.S. § 97-31. On 21 July 1995 defendant-employer, Fieldcrest-Cannon, Inc., filed a cross-motion seeking an opinion and award reflecting (i) that plaintiff returned to full-time employment at wages greater than he earned at the time of his injury, and (ii) that plaintiff is not entitled to any benefits for permanent partial disability under N.C.G.S. § 97-31.

Defendant requested a hearing to contest plaintiff's motion for modification. A deputy commissioner heard the matter on 5 December 1996, made findings of fact, and concluded that plaintiff, having already received total disability benefits from January 1986 until October 1994,¹ is precluded from electing additional compensation for permanent partial disability. Further, although neither party filed a motion concerning total disability compensation, the deputy commissioner concluded that plaintiff has not experienced a substantial change of condition that entitles him to a reinstatement of total disability benefits. Finally, the deputy commissioner concluded that defendant is entitled to a credit of $894.98 for compensation mistakenly paid to plaintiff while he was employed by Dunning Metal Innovations.

On 14 November 1997 the full Commission reversed the opinion and award "based upon an erroneous interpretation of law and not on any finding of credibility with respect to testimony." The full Commission's findings of fact determined, inter alia, the following: Plaintiff is a 36 year old male. Prior to 30 December 1987 he had been employed as a heavy equipment operator, weaver, dump truck driver, and fork lift operator, all of which jobs required a medium to heavy level of exertion and skills learned on the job. Plaintiff completed eight years of education and obtained his GED certificate after he was injured. On 30 December 1985 plaintiff sustained an injury to his back. Plaintiff underwent two surgeries and undertook physical therapy and work-hardening programs. When plaintiff was discharged from medical treatment, he had a disability rating of 25-30% permanent partial disability to the back.

The Commission further found that in September 1993 plaintiff enrolled in a machinist course at Davidson Community College. After completing this course, plaintiff began working as a machinist with Dunning Metal Innovations on 5 September 1994. The employer's lifting requirements exceeded plaintiff's restrictions, and plaintiff was unable to continue after a month. In October 1994 plaintiff began working full time as a machinist at Everette Machine Company. Plaintiff was able to adapt successfully to this job for over a year because the employer was able to structure plaintiff's job within plaintiff's functional limitations which restricted his ability to sit, stand, and lift. In late 1995 or early 1996, plaintiff's job requirements increased. Plaintiff was promoted to shop foreman; but the growth of Everette's business required plaintiff to perform repetitive lifting in excess of plaintiff's limitations, and the employer was unable to provide plaintiff with the necessary assistance with lifting to assure that plaintiff would be able to perform the job without further injury to his back. Plaintiff's back began bothering him after the job requirements were changed. He lifted seventy-pound sheet metal with a co-employee ten to twenty times a day, and once or twice he lifted the seventy-pound sheet metal by himself. In April 1996 plaintiff suffered a relapse caused by the exertional requirements of the job. The doctor required plaintiff to stay out of work at least temporarily following physical therapy. At this time plaintiff determined that his employer could no longer accommodate the job plaintiff had been performing, and plaintiff did not return to work or seek another machinist job since his restrictions required accommodations that most machinist shops were unlikely to meet. The full Commission made the following further finding of fact:

8. Since April, 1996, Employee-Plaintiff's sole income has been as a marketing representative or distributor for Market America. This venture is described as a "multi-level marketing" approach in which representatives purchase a distributorship, sell products and recruit other distributors. Employee-Plaintiff has been expending approximately 10-20 hours per week in this venture, earning $300.00— $600.00 per month in commissions. If this venture is successful, Employee-Plaintiff hopes to spend less time actively soliciting accounts, as his compensation is based upon (1) his own sales; [or] (2) commissions based upon sales of [other] distributors he has recruited. The Full Commission takes "judicial" notice that U.S. Chamber of Commerce statistics show that most new small businesses fail within the first five years, and multi-level marketing schemes have a high failure rate. Plaintiff's testimony that he might eventually be able to make a living through this scheme thus is found by the Full Commission to be a triumph of hope over experience and thus not highly credible.

Based on these findings of fact, the Commission made the following conclusions of law among others:

1. NCGS § 97-47 provides in part that, "Upon its own motion or upon the application of any party in interest on the grounds of a change in condition, the Industrial Commission may review any award, and on such review may make an award ending, diminishing, or increasing the compensation previously awarded, subject to the maximum or minimum provided in this Article ... [.]" Plaintiff has undergone substantial, material changes of condition that entitle him to a reinstatement of disability benefits pursuant to NCGS § 97-29, subject to a credit for net earnings from his self-employment enterprise.

While he was able to go back to work for a time after retraining, the job he performed was not ordinarily available in the open market in that machinists are ordinarily required to do lifting beyond plaintiff's lifting restrictions. Additionally, he ultimately was unable to perform the job because of his earlier compensable injury. The substantial and material change of condition is the inability to continue earning wages at the machinist job because the job changed so that he could no longer do it under his physician's work restrictions coupled with the strong inference that similar jobs within his restrictions were unavailable in the economy.

. . . .

3. Employee-Plaintiff originally elected to seek recovery of compensation under N.C.G.S. § 97-29, and successfully prevailed in establishing that he was totally and permanently disabled according to the holdings of the North Carolina Supreme Court in Whitley vs. Columbia Lumber Mfg. Co., 318 N.C. 89, 348 S.E.2d 336 (1986), and Peoples vs. Cone Mills Corp., 316 N.C. 426, [342] S.E.2d 798 (1986). This resulted in the Opinion and Award of the Full Commission on July 1, 1992, affirming the Award and Opinion of the Deputy Commissioner on March 11, 1991, both of which were based in part upon a combination of Employee-Plaintiff's exertional limitations in which the Commission found that Employee-Plaintiff lacked the strength and durability to perform work within his residual functional capacity, and in part upon his non-exertional limitations which included Employee-Plaintiff's limited education and learning disability. The Award and Opinion granted Employee-Plaintiff compensation continuing until his "return to work."

4. Employee-Plaintiff thereafter took affirmative steps to overcome his non-exertional limitations through successful completion of a skilled trade course qualifying him as a machinist. During the same period of time, his strength and durability gradually increased to the degree that he became able to sit and stand for the requisite periods of time necessary to perform full time gainful employment on a sustained basis. Through his own efforts, Employee-Plaintiff thereafter successfully returned to work as defined in the Workers' Compensation Act. This event constituted a change of condition creating the presumption that his disability ended. Tucker vs. Lowde[r]milk, 233 N.C. [185], 63 S.E.2d 109 (1951), and compensation under the Award was properly terminated.

5. It is important to note that, at this point, Employee-Plaintiff's successful adaptation to full time gainful employment did not arise from an amelioration of Employee-Plaintiff's remaining residual functional capacity, nor otherwise reflect an increase in his remaining functional limitations restricting his ability to lift.

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