Reed v. Carolina Holdings

• Decision Date: 07 February 2017
• Docket Number: No. COA15-1034,COA15-1034
• Citation: 251 N.C.App. 782,796 S.E.2d 102
• Court: North Carolina Court of Appeals
• Parties: Christopher S. REED, Employee, Plaintiff, v. CAROLINA HOLDINGS, Wolseley Management, Employer, ACE USA/ESIS, Carrier, Defendants.

251 N.C.App. 782

796 S.E.2d 102

Christopher S. REED, Employee, Plaintiff,

v.CAROLINA HOLDINGS, Wolseley Management, Employer, ACE USA/ESIS, Carrier, Defendants.

No. COA15-1034

Court of Appeals of North Carolina.

Filed: February 7, 2017

Lennon, Camak & Bertics, PLLC, Raleigh, by George W. Lennon and Michael W. Bertics, for Plaintiff-Appellee.

Hedrick Gardner Kincheloe & Garofalo, LLP, Charlotte, by Paul C. Lawrence and M. Duane Jones, for Defendant-Appellants.

INMAN, Judge.

A defendant may not argue on appeal that the North Carolina Industrial Commission lacks the authority to award fees for attorneys to be paid out of an award of medical compensation without preserving the issue before the Commission. An award of attendant care compensation will be upheld where the Commission's findings of fact are supported by competent evidence and the findings of fact support the Commission's conclusion of law that the attendant care services are reasonable and necessary.

Carolina Holdings, Wolseley Management, and ACE USA/ESIS ("Defendants") appeal from an Opinion and Award of the Full Commission of the North Carolina Industrial Commission (the "Commission"), wherein the Commission awarded retroactive and ongoing medical compensation for attendant care services for Christopher S. Reed ("Mr. Reed" or "Plaintiff"), and twenty-five percent of the retroactive medical compensation to be paid to Mr. Reed's attorney as an attorney's fee.

Defendants contend the Commission erred in awarding attendant care services and exceeded its authority in granting an attorney's fee award to be deducted from the retroactive award of attendant care. Mr. Reed filed a motion to dismiss Defendants’ appeal for failure to properly preserve their challenge to the attorney's fee award below. After careful review, we affirm the Commission's award of attendant care services and grant Mr. Reed's motion to dismiss Defendant's appeal as to the award of attorney's fees.

Factual and Procedural History

Mr. Reed began working with Defendants on 20 May 1998. On 26 June 1998, Mr. Reed sustained a traumatic brain injury

along with injuries to his shoulder, back, and other body parts when a stack of building supplies collapsed on top of him. Defendants accepted liability for Mr. Reed's injuries and provided compensation for Mr. Reed's lost income and medical treatment resulting from the injury. Psychological and psychiatric evaluations over the next decade indicated that Mr. Reed's cognitive and emotional condition continued to deteriorate and that Mr. Reed was not reliably taking prescribed medication. In 2010, a forensic psychiatrist diagnosed Mr. Reed with a cognitive disorder

, obsessive compulsive disorder, and a mood disorder.

On 18 March 2011, Mr. Reed filed a Form 33 requesting that the Commission hear his claim for attendant care compensation. Following a hearing, Deputy Commissioner George R. Hall, III entered an Opinion and Award requiring Defendants to pay Mr. Reed's mother ("Mrs. Reed") ten dollars per hour for twenty-four hours per day, seven days per week from 27 June 1998 through the date of the Opinion and Award and continuing, and allowing Mr. Reed's counsel to deduct twenty-five percent of the back due attendant care owed from the award as a reasonable attorney's fee. The Deputy Commissioner denied Mr. Reed's counsel's request to deduct twenty-five percent of the compensation for future attendant care as an attorney's fee.

Defendants appealed the award to the Full North Carolina Industrial Commission pursuant to N.C. Gen. Stat. § 97–85 and Rule 701 of the North Carolina Industrial Commission. Mr. Reed appealed to the Full Commission pursuant to N.C. Gen Stat. § 97–90(c) that portion of the award denying the claim for attorney's fee to be deducted from future medical compensation.

On appeal from the Deputy Commissioner's decision, the Commission received additional evidence with respect to Mr. Reed's attendant care claim. Defendants offered surveillance evidence conducted from July 2012 through November 2012 in support of their contention that Mr. Reed does not require attendant care. This evidence included testimony by three private investigators regarding Mr. Reed's ability to perform daily activities, his physical limitations, and his regular residence. Mr. Reed introduced additional deposition testimony by himself, his mother, his friend Jessica Lloyd, and two of his doctors.

After reviewing the additional evidence, the Commission entered its Opinion and Award on 17 April 2015. The Commission made extensive findings of fact and conclusions of law and issued the following award:

1. Plaintiff's request for compensation for attendant care services provided to him from March 18, 2007 to March 17, 2011 is DENIED. Plaintiff's request for attendant care services provided to him beginning March 18, 2011 to the present and continuing is GRANTED. From March 18, 2011, through the present and continuing, Defendants shall pay Plaintiff's mother, Mrs. Reed, for 8 hours per day, 7 days per week of attendant care services she has provided and continues to provide to Plaintiff at a reasonable rate agreed upon by the parties. The amounts awarded are subject to the attorneys’ fee set forth below.

2. As a reasonable attorney's fee, Plaintiff's counsel is entitled to be paid 25% of all accrued retroactive attendant care compensation herein. Defendants shall deduct 25% from the accrued amount and pay it directly to Plaintiff's counsel as a reasonable attorney's fee. Plaintiff's counsel request for 25% of future attendant care payments is DENIED. However, Plaintiff's counsel may seek additional compensation if future attendant care issues arise.

Following the Commission's Opinion and Award, the parties respectively filed a series of pleadings in three forums:

• On 30 April 2015, Mr. Reed filed with the Wake County Superior Court a notice of appeal from the Opinion and Award pursuant N.C. Gen. Stat. § 97–90(c) regarding the Commission's denial of his request for attorney's fees to be deducted from future attendant care compensation.

• On 5 May 2015, Defendants filed with the Commission a Motion for Reconsideration arguing—apparently for the first time—that the Commission had erred in awarding any attorney's fees from medical compensation awarded to Mr. Reed. The Motion cited the same legal authorities that would later be raised in Defendants’ appeal to this Court. The record does not reflect that Defendants raised this issue or presented these legal arguments previously before either Deputy Commissioner Hall or the Commission.¹

• On 13 May 2015, Defendants filed with this Court a notice of appeal from the Commission's Opinion and Award.

• Two days later, on 15 May 2015, Defendants filed with the Wake County Superior Court a pleading captioned "Defendants’ Response to Plaintiff's Notice of Appeal of Award of Attorney's Fees," asserting the same argument Defendants presented to the Commission in their Motion for Reconsideration. Defendants asked the Wake County Superior Court to reverse the Commission's award of attorney's fees to Mr. Reed "or at the very least allow for this matter to be decided by the Full Commission" based on Defendants’ then pending Motion for Reconsideration.²

• On 2 June 2015, the Commission filed an Order concluding that Defendants’ appeal to the Wake County Superior Court deprived the Commission of jurisdiction to reconsider its Opinion and Award.

• On 10 June 2015, Defendants filed a Motion to Intervene in the Wake County Superior Court proceeding initiated by Mr. Reed.

• On 23 June 2015, the Superior Court entered an order allowing Defendants to intervene in that proceeding, but holding the case in abeyance pending the outcome of Defendants’ appeal to this Court.

On appeal before this Court, Defendants challenge the Commission's findings of fact related to Mr. Reed's ability to function independently, his need for around the clock monitoring, the medical necessity of his attendant care services, and the weight given to Defendants’ surveillance evidence. Defendants also challenge the Commission's authority to award attorney's fees pursuant N.C. Gen. Stat. § 97–90(c) to be deducted from an award of attendant care compensation. Mr. Reed has filed a motion to dismiss Defendants’ appeal as to the issue of attorney's fees.

Plaintiff's Motion to Dismiss Defendants’ Appeal

Mr. Reed's motion to dismiss asserts (1) that Defendants lack standing to challenge an award of attorney's fees; (2) that our Court lacks subject matter jurisdiction regarding attorney's fees because the Superior Court has exclusive jurisdiction regarding such fees; and (3) that our Court lacks subject matter jurisdiction because Defendants failed to preserve their argument regarding the Commission's authority to grant attorney's fee awards from medical compensation. After careful review, we agree that Defendants failed to preserve their argument regarding the Commission's authority to award attorney's fees to be deducted from attendant care compensation. We therefore dismiss Defendants’ appeal with respect to that issue.

Rule 701 of the North Carolina Industrial Commission states:

(2) After receipt of notice of appeal, the Industrial Commission will supply to the appellant a Form 44 Application for Review upon which appellant must state the grounds for appeal. The grounds must be stated with particularity, including the specific errors allegedly committed by the Commissioner or Deputy Commissioner and, when applicable, the pages in the transcript on which the alleged errors are recorded.

(3) Particular grounds for appeal not set forth in the application for review shall be deemed abandoned, and argument thereon shall not be heard before the Full Commission.

Workers’ Comp. R. of N.C. Indus. Comm'n 701, 2011 Ann. R. (N.C.) 1070-71. It is well established that "the portion of Rule 701 requiring appellant to state with particularity the grounds for appeal may not be waived by the Full Commission."...