Lovette v. Lloyd

• Decision Date: 06 January 1953
• Docket Number: No. 742,742
• Parties: LOVETTE, v. LLOYD et al.
• Court: North Carolina Supreme Court

Page 886

73 S.E.2d 886

236 N.C. 663

LOVETTE, v. LLOYD et al.

No. 742

Supreme Court of North Carolina.

Jan. 6, 1953

Albert W. Kennon, Durham, for plaintiff-appellant.

Victor S. Bryant, Raiph N. Strayhorn, Durham, and Ruark, Ruark & Moore, Raleigh, for original defendants, G. D. Lloyd and M. G. Copelan, individually and trading as Lloyd & Copelan Plumbing Company, appellees.

Fuller, Reade, Umstead & Fuller, Durham, for additional defendants, Claiborne Byrd and F. L. Byrd, copartners, trading as Consolidated Painters, and U. S. Fidelity & Guaranty Co., appellants.

ERVIN, Justice.

This case is governed by the North Carolina Workmen's Compensation Act, and not by the Code of Civil Procedure. In consequence, Burgess v. Trevathan, 236 N.C. 157, 72 S.E.2d 231, has no application to it.

The controlling provisions of the Workmen's Compensation Act appear in the statute codified as G.S. § 97-10. This somewhat prolix enactment establishes the rules enunciated below to govern the conduct of civil actions against third persons who negligently inflict personal injuries upon workmen subject to the Workmen's Compensation Act, G.S. § 97-1 et seq.

1. G.S. § 97-10 prescribes in express terms that compensation shall be paid in accordance with the provisions of the Workmen's Compensation Act in any case where the injured employee may have a right to recover damages for his injury from any person other than his employer. Under this provision, the right to maintain a common law action still exists in behalf of an employee against a third party through whose negligence he is injured, even though the injury is compensable under the Act, and even though the employee actually receives compensation for it under the Act.

2. G.S. § 97-10 specifies how the liability of the negligent third party to the injured employee is to be enforced. The employer or the insurance carrier, who has paid or become obligated to pay compensation to the employee injured by the negligent third party, has the exclusive right in the first instance to commence an action 'in his own name and/or in the name of the injured employee' against the third party for the damages suffered by the employee on account of the injury. If neither the employer nor the insurance carrier commences the action against the negligent third party within six months from the date of the injury, the right of action passes to the injured employee, and the injured employee thereafter has the right to bring the action in his own name against the third party for the damages suffered by him on account of his injury. These statutory provisions plainly imply that the employer, or the insurance carrier, or the employee who brings the original action against the third party is to have the exclusive privilege to prosecute his action to a final determination, and that the court is not to interfere with the exercise of this exclusive privilege by making additional parties unless extraordinary circumstances compel it to do so. Another necessary implication of the statutory provision specifying how the liability of the third party to the injured employee is to be enforced is that a judgment in an action prosecuted by either the employer, or the insurance carrier, or the employee in conformity with the statute is a bar to a subsequent action on the same cause of action by any other person. 71 C.J., Workmen's Compensation Acts, § 1602.

3. G.S. § 97-10 clearly contemplates that the action against the third party is to be tried on its merits as an action in tort, and that any verdict of the jury adverse to the third party is to declare the full amount of damages suffered by the employee on account of his injury, notwithstanding any award or payment of compensation to him under the provisions of the Workmen's Compensation Act. Rogers v. Southeastern Construction Co., 214 N.C. 269, 199 S.E. 41. To this end, it enacts that 'The amount of compensation paid by the employer, or the amount of compensation to which the injured employee or his dependents are entitled, shall not be admissible as evidence in any action against a third party. ' A necessary implication of this provision of the statute is that in the event of a verdict for the plaintiff in the action against the third party, the trial court, sitting without a jury, is to determine the amount of compensation paid or payable to the injured employee under the Workmen's Compensation Act on the basis either of a stipulation of the interested persons or of evidence submitted to it, and after so doing enter a judgment safeguarding the rights of any person entitled to share in the recovery, regardless of whether or not such person is a party to the action. Mickel v. New England Coal & Coke Co., 132 Conn. 671, 47 A.2d 181, 171 A.L.R. 1001.

4. G.S. § 97-10 requires the recovery in the action against the third party to be disbursed in a specific manner, irrespective of whether the plaintiff in the action is the employer, or the insurance carrier, or the employee. It directs that the recovery be applied to these objects in this order: (1) To pay court costs; (2) to pay attorney fees approved by the Industrial Commission; and (3) to reimburse or indemnify the employer or the insurance carrier for all compensation paid or payable by him. Any excess of the recovery then remaining is to be paid to the injured employee. A necessary implication of the statutory requirement respecting the disbursement of the recovery is that the action against the third party is prosecuted in behalf of any person entitled to claim a share in the recovery, regardless of whether he is a party to the action.

5. The contributory negligence of the injured employee constitutes a complete defense to the action against the third party, and in consequence may be pleaded and proved by the third party as such, irrespective of whether the action is prosecuted by the employer, or the insurance carrier, or the employee. Poindexter v. Johnson Motor Lines, 235 N.C. 286, 69 S.E.2d 495; Brown v. Southern R. R., 204 N.C. 668, 169 S.E. 419; 71 C.J., Workmen's Compensation Acts, section 1610.

6. It is contrary to the policy of the law for the employer, or his subrogee the insurance carrier, to profit by the wrong of the employer. Brown v. Southern R. R., supra. For this reason, where the negligence of the third party and independent negligence on the part of the employer concur and proximately cause the injury to the employee, the third party may plead and prove the independent concurring negligence of the employer as a bar, pro tanto, to the recovery of the compensation paid or payable by the employer or the insurance carrier. Poindexter v. Johnson Motor Lines, supra; Essick v. City of Lexington, 233 N.C. 600, 65 S.E.2d 220; Eledge v. Carolina Power & Light Co., 230 N.C. 584, 55 S.E.2d 179; Brown v. Southern R. R., supra. The third party may interpose this plea even though the plaintiff in the action against him is the injured employee rather than the employer or the insurance carrier. This is true because the action is prosecuted for the benefit of the employer or the insurance carrier as well as for the benefit of the employee. The term 'independent negligence' denotes negligence of the employer other than that imputable to him under the doctrine of respondeat superior on account of the acts or omissions of the injured employee. Poindexter v. Johnson Motor Lines, supra.

7. The Workmen's Compensation Act is designed to secure to the employee at the hand of his employer a certain compensation against loss of earning power through injury by accident arising out of and in the course of his employment, irrespective of how such injury occurs or what brings it about. As a recompense for his acceptance of the new and comprehensive liability to pay his employee compensation on account of injury by accident, G.S. § 97-10 grants to the employer in express terms complete relief from any and all other liability to his employee 'at common law, or otherwise, on account of such injury '. This statutory provision abrogates all liability of the employer to the employee as a tort-feasor under the law of negligence for an injury by accident in the employment. In consequence, the third party, who is sued for damages for negligently inflicting a compensable injury upon the employee, cannot hold the employer liable for...