Dion v. BattenÂ
248 N.C. App. 476
| N.C. Ct. App. | 2016Background
- On March 20, 2008, Dion (employee) was injured in a car crash caused by Batten (third-party). Dion was acting in scope of employment for Neuwirth; Brentwood was Neuwirth’s workers’ compensation servicing agent.
- Dion, Neuwirth, and Brentwood agreed Industrial Commission-approved workers’ compensation benefits totaling $528,665.61; Neuwirth/Brentwood asserted a § 97-10.2 lien on any third-party recovery.
- Dion sued Batten (negligence). Nationwide (Batten’s carrier) tendered policy limits totaling $100,000; Foremost and GEICO (Dion’s UIM insurers) joined as unnamed defendants and arbitration was invoked.
- An arbitration panel awarded Dion $285,000; the trial court entered judgment and reduced the judgment by Nationwide’s $100,000 payment for calculation purposes.
- Foremost moved under N.C.G.S. § 97-10.2(j) for the court to determine the workers’ compensation subrogation lien amount. The superior court concluded the lien could not exceed the third-party recovery and set the lien at $190,000 after excluding attorney’s fees, interest, and costs.
- Dion, Neuwirth, and Brentwood appealed, challenging Foremost’s standing, the trial court’s subject-matter jurisdiction, statutory interpretation of § 97-10.2, alleged abuse of discretion, and adequacy of findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to move under § 97-10.2(j) | Foremost (third-party UIM carrier) lacked standing because § 97-10.2(j) authorizes only employer or employee to move | Foremost argued § 97-10.2(j) allows “either party” (employee or third party) to apply; UIM carrier is a third party under § 97-10.2(a) | Court: Foremost has standing as a “third party” under § 97-10.2(a) and § 97-10.2(j) permits either party to apply |
| Subject-matter jurisdiction to determine/reduce lien | Trial court lacked jurisdiction to alter statutory lien amount; lien amount is fixed by statute | Foremost argued § 97-10.2(j) expressly grants the superior court discretion to determine the subrogation amount after notice/hearing | Court: Superior court had subject-matter jurisdiction under § 97-10.2(j) to determine (and, if appropriate, adjust) the lien |
| Proper interpretation of § 97-10.2 when employer’s WC payments exceed third-party recovery | Appellants: lien may exceed third-party proceeds and employer/insurer can assert lien for amounts paid ($528,665.61) | Foremost: lien is limited to amounts recovered from the third party; disbursement and lien attach only to third-party funds | Court: Statutory text and structure limit the lien to the amount actually obtained from the third party (here $285,000) |
| Trial court’s exercise of discretion and sufficiency of findings | Appellants: court abused discretion in setting lien at $190,000 (argues this effectively frees UIM carriers) and failed to make required findings about costs to be shared | Foremost: court properly excluded attorney’s fees, interest, and costs and considered statutorily listed factors; findings show consideration of costs-sharing factor | Court: No abuse of discretion; record and findings adequately reflect consideration of statutory factors (including costs-sharing) and lien properly calculated after excluding fees, costs, interest |
Key Cases Cited
- Lee Ray Bergman Real Estate Rentals v. N.C. Fair Housing Ctr., 153 N.C. App. 176 (2002) (standing is prerequisite to subject-matter jurisdiction)
- Sierra Club v. Morton, 405 U.S. 727 (1972) (standing principles)
- Correll v. Division of Social Services, 332 N.C. 141 (1992) (statutory interpretation starts with plain meaning)
- In re Estate of Bullock, 188 N.C. App. 518 (2008) (trial court must consider statutory factors, including costs shared between employee and employer)
- Bartell v. Sawyer, 132 N.C. App. 484 (1999) (workers’ compensation lienholder is not entitled to pre-judgment interest from third-party recovery)
- Johnson v. Southern Industrial Constructors, 347 N.C. 530 (1998) (uses statutory term “determine” for court’s role under § 97-10.2)
- Hieb v. Lowery, 344 N.C. 403 (1996) (discussing employer lien principles under the workers’ compensation statute)