Smith v. Ncci, Inc.

Decision Date22 May 2006
Docket NumberNo. 4115.,4115.
PartiesTom SMITH, Claimant/Respondent, v. NCCI, INC. as Employer, and Liberty Insurance Corporation, as Carrier, Defendants/Appellants.
CourtSouth Carolina Court of Appeals

Vernon F. Dunbar, of Greenville, for Appellants.

Preston F. McDaniel, of Columbia, for Respondent.

ANDERSON, J.:

NCCI appeals the trial court's order affirming the decision of the appellate panel of the workers' compensation commission (appellate panel). NCCI argues the trial court erred in finding (1) Tom Smith's mental injury was caused by unusual and extraordinary conditions of employment with NCCI; (2) Smith's physical injury to his back arose out of and in the course of employment with NCCI; (3) Smith's injuries were aggravated by his employment with NCCI; (4) Smith was entitled to disability benefits beginning March 19, 1999; (5) NCCI was not entitled to credit for short- and long-term disability benefits received by Smith; and (6) Smith's claim was not barred by the statute of limitations. We affirm.

FACTUAL/PROCEDURAL BACKGROUND

In April 1991, Smith began working with NCCI as a supervisor for the Test Audit Department of NCCI's Atlantic Division. Before working with NCCI, Smith worked as auditor with two other companies for a total of thirteen years. Smith commuted from Tampa to Boca Raton during his time as a supervisor. In 1993, Smith voluntarily stepped down from his supervisor position and became a senior auditor in Tampa.

As an auditor in Florida, Smith conducted test audits of insurance policies from both the voluntary market and the assigned risk market. A test audit is a process in which an insurance company's audits are checked to determine whether the premiums being charged are sufficient for the coverage being provided. Smith primarily worked in the area around Tampa and generally worked between forty and fifty hours a week. Smith usually met NCCI's weekly production requirements of nine audits. During this time, NCCI recognized Smith as one of its best test auditors in Tampa. In fact, Smith received a couple of awards in recognition of his production and work quality.

At some point, NCCI made various operational changes. First, NCCI changed its fee structure. NCCI changed from an assessment-based system, wherein NCCI would simply assess the insurance companies for all of the services the company requested and the various insurance commissions required, to a fee-for-services-based system, wherein NCCI charged an individual fee for the services performed. In addition, NCCI had a change in management. The new management heavily focused on production and meeting production goals. As part of the change in management, NCCI placed a new vice-president, Steve Axleray, in charge of its auditing divisions. In the summer of 1995, Axleray met with NCCI's auditors, chastised them for their lack of production, and informed them the new management expected increased production. Axleray informed the auditors that a voluntary severance package could be taken by anyone that did not wish to continue working with the newly-structured NCCI.

In June 1995, shortly after NCCI's operational changes went into effect, NCCI asked Smith to move to South Carolina and continue working as a test auditor. Smith had extensive knowledge of the South Carolina Test Audit Program because he authored the program. Based on this knowledge and his understanding that the program focused on quality audits as opposed to production, Smith decided to stay with NCCI and turn down the severance package. Smith replaced NCCI's sole auditor in South Carolina, Elizabeth Crosby, whom he had hired to start the program.

The South Carolina test audit program was unique. The program focused specifically on the assigned risk market. Test audits on the assigned risk market are generally more time consuming and difficult than audits on the voluntary market. The assigned risk market, unlike the voluntary market, typically consists of smaller and newer companies that have disorganized or incomplete records. In addition, companies in the assigned risk market are usually in hard-to-find locations.

When Smith arrived in South Carolina, his job as a test auditor was very different from both his Florida job and from what he had envisioned and designed. First, Smith's work was dispersed across the entire state and consisted of very few local assignments. As a result, Smith was consistently driving six hundred miles or greater every week even though the job description called for driving only two to three hundred miles per week. Second, despite the program's design, Smith discovered NCCI management was more concerned with the quantity of the audits conducted than quality of the audits. Throughout Smith's time in South Carolina, NCCI constantly pressured Smith about meeting production goals. Third, although the job description provided for a forty-hour work week, Smith routinely worked over seventy hours per week and habitually worked on weekends. Further, Smith regularly stayed in hotels two to four nights a week when the job description provided that overnight stays should average one to two nights per week.

In October 1995 Smith took medical leave from work. Smith testified he took leave because the demands of the South Carolina job were "just nothing close to what [Smith] was told it was going to be." During this period, Smith was treated by Dr. Roger Deal. Deal's records indicate Smith had been demonstrating symptoms of depression, bi-polar disorder, and obsessive compulsive disorder (OCD) in the year preceding July 1995, and Smith was still dealing with OCD and depression at the time of their initial visit. Deal's notes indicate Smith was taking assorted prescription drugs when they first met. Deal prescribed various medicines to assist Smith in his recovery. In March 1996, Smith was able to return to work.

In February 1999, NCCI changed Smith's company car from a full-size Ford Taurus to a smaller, subcompact Saturn. Smith began complaining of back pains immediately thereafter. Within a couple of months NCCI provided Smith with a raise to allow him to purchase a new, bigger car.

Smith visited Dr. Eleanay Ogburu-Ognonnaya for treatment of his back pain in March 1999. Ogburu-Ognonnaya's records from March 1999 indicate Smith specifically noted his new company car had no lumbar support, was very uncomfortable, and limited leg movement. Smith averred Ogburu-Ognonnaya advised him to reduce his driving and that the kind of driving required for Smith's work would make Smith's back worse.

In May 1999, Smith took leave from work and filed for short-term disability benefits. In his request for short-term disability, Smith stated his last day of work was May 26, 1999. Smith noted the symptoms that led him to cease working were (1) excessive stress and fatigue, which he listed as an illness, and (2) an injury to his lower back. Smith provided March 8, 1999 as the date of onset of the symptoms for excessive fatigue, and the week of February 15-19, 1999 as the first onset of symptoms for the back injury.

On June 1, 2000, Smith filed a workers' compensation claim alleging injuries to the "back, legs, psychological/whole person" culminating on May 27, 1999. Hearings were conducted in this matter on August 23, 2001; February 28, 2002; and March 11, 2002. NCCI alleges Smith withdrew his original claim after NCCI filed a Form 51 and filed another claim raising the same allegations on November 11, 2000, which was again withdrawn without prejudice by consent on March 13, 2001. NCCI asserts Smith refiled his claim on March 19, 2001, making identical assertions. The record evidences neither Smith's withdrawal of the original claim nor the filing of subsequent claims. Nevertheless, whether Smith filed in June 2000 or in March 2001 is irrelevant because the allegations and issues are the same.

The hearing commissioner found Smith suffered a compensable mental or psychological injury due to unusual and extraordinary conditions of his employment. The commissioner further found Smith sustained a compensable back injury as a result of his work activity requiring Smith to drive extremely long distances in a subcompact vehicle. The commissioner awarded Smith temporary total disability compensation benefits and medical benefits. The commissioner denied NCCI credit for short- and long-term disability benefits paid to Smith.

NCCI appealed the commissioner's decision to the appellate panel. The appellate panel determined that all of the commissioner's findings of fact and rulings of law were correct and adopted the commissioner's order in its entirety. NCCI appealed to the circuit court, and the circuit court affirmed the appellate panel.

STANDARD OF REVIEW

"The South Carolina Administrative Procedures Act governs judicial review of a decision of an administrative agency." Clark v. Aiken County Gov't, 366 S.C. 102, 107, 620 S.E.2d 99, 101 (Ct.App.2005). Section 1-23-380(A)(6) of the South Carolina Code (2005) establishes the substantial evidence rule as the standard of review. See also Lark v. Bi-Lo, Inc., 276 S.C. 130, 133, 276 S.E.2d 304, 305 (1981). Under this standard, a reviewing court may reverse or modify an agency decision based on errors of law, but may only reverse or modify an agency's findings of fact if they are clearly erroneous. See S.C.Code Ann. § 1-23-380(A)(6)(d) and (e) (2005).

"On appeal, this court must affirm an award of the Workers Compensation Commission in which the circuit court concurred if substantial evidence supports its findings." Peoples v. Henry Co., 364 S.C. 123, 127, 611 S.E.2d 527, 528-29 (Ct.App. 2005); see also Frame v. Resort Servs. Inc., 357 S.C. 520, 528, 593 S.E.2d 491, 495 (Ct. App.2004) ("It is not within our province to reverse findings of the Commission which are supported by substantial evidence.")....

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