Myres v. Strom Aviation, Inc.
255 N.C. App. 309
| N.C. Ct. App. | 2017Background
- Jeff Myres, an experienced airplane mechanic, injured his ankle on April 22, 2012 while working through Strom Aviation, a staffing agency that places mechanics at third‑party sites (e.g., Timco).
- Strom paid taxable straight time and overtime wages (reported on W‑2s) plus a non‑taxable, locale‑adjusted per diem (capped weekly, prorated if <40 hours) intended to reimburse living expenses while away from home.
- Myres received per diem (not reported as taxable income) and later filed a workers’ compensation claim; the deputy commissioner and Full Commission found the per diem was reimbursement, not wages, and calculated Myres’s average weekly wage as $340.62 (excluding per diem).
- Myres appealed only the Commission’s ultimate finding (Finding No. 14) that per diem payments were not made “in lieu of wages” under N.C. Gen. Stat. § 97‑2(5).
- The Full Commission relied on evidence that Strom set per diem using GSA federal rates (adjusted downward), followed IRS substantiation rules, and treated the per diem as non‑taxable business expense reimbursement.
- The Court of Appeals affirmed, holding the Commission’s factual finding was supported by competent evidence and consistent with precedent (notably Thompson v. STS Holdings).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether per diem payments are "in lieu of wages" for computing average weekly wage under G.S. § 97‑2(5) | Myres: Per diem functionally replaces higher wage — should be included in earnings (would raise hourly from $7.25 to $20.50) | Strom: Per diem reimburses business‑related living expenses, is non‑taxable and set per federal/IRS guidelines, so not wages | Held: Per diem not in lieu of wages; Commission’s factual finding supported by competent evidence and affirmed |
| Whether Commission erred by relying on IRS/federal per diem rules | Myres: IRS rules shouldn't determine state compensation earnings; per diem actually replaces wages | Strom: Federal rules are relevant evidence showing per diem was intended as reimbursement | Held: Court may consider IRS guidance as evidence but is bound by state precedent; findings supported and affirmed |
| Standard of review for whether an allowance is "in lieu of wages" | Myres: implied request for de novo review of legal characterization | Strom: Characterization is factual; review limited to whether competent evidence supports findings | Held: Issue is factual; findings reviewed for competent evidence and were binding |
| Whether Thompson and related precedent control outcome | Myres: distinguished or urged different result | Strom: Thompson is directly on point (same payment structure, same worksite), supports exclusion of per diem | Held: Thompson and other NC precedents control; Court followed that line and affirmed |
Key Cases Cited
- Woodard v. Mordecai, 234 N.C. 463 (discusses ultimate facts and appellate review)
- Allred v. Exceptional Landscapes, Inc., 227 N.C. App. 229 (unchallenged findings of fact binding on appeal)
- Moore v. City of Raleigh, 135 N.C. App. 332 (standard of review for Industrial Commission awards)
- Greene v. Conlon Constr. Co., 184 N.C. App. 364 (definition and treatment of allowances made "in lieu of wages")
- Jones v. Candler Mobile Village, 118 N.C. App. 719 (findings of fact set aside only for lack of competent evidence)
- Larramore v. Richardson Sports, Ltd. Partners, 141 N.C. App. 250 (G.S. § 97‑2(5) intent to be fair and just; findings of fact control)
- Thompson v. STS Holdings, Inc., 213 N.C. App. 26 (nearly identical facts: per diem excluded from average weekly wage; controlling precedent)
- People v. Cone Mills Corp., 316 N.C. 426 (advice on drafting findings: prefer declarations of facts over recitations of testimony)