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1. Workers' Compensation--approval of agreement--fairness inquiry necessary
Plaintiff-employee's motion to set aside the Form 26 agreement was properly before the
Industrial Commission since the Commission failed to make an entry indicating it had conducted
a fairness inquiry or that it otherwise determined the agreement was fair and just.
2. Workers' Compensation--collateral estoppel--determination of earning capacity
In plaintiff-employee's motion to set aside the Form 26 agreement based on changed
condition requiring additional compensation, the Industrial Commission was collaterally
estopped from determining that plaintiff was incapable of work because the Court of Appeals
already affirmed an earlier decision of the Commission finding plaintiff had earning capacity on
the date of the Form 26 approval. It was necessary for the Commission to establish plaintiff's
earning capacity because it is the primary factor for determining employee's entitlement to
additional compensation.
Judge WYNN dissenting.
Appeal by defendants from Opinion and Award filed 23 June
1998 by the North Carolina Industrial Commission. Heard in the
Court of Appeals 18 May 1999.
Law Offices of George W. Lennon, by George W. Lennon and
Michael W. Ballance, for plaintiff-appellee.
Sumrell, Sugg, Carmichael, Hicks & Hart, P.A., by James R.
Sugg, Scott C. Hart, and Jill Quattlebaum Byrum, for
defendant-appellants.
GREENE, Judge.
Craven Regional Medical Center (Medical Center) and VirginiaInsurance Reciprocal (Carrier) (collectively, Defendants) appeal
from an opinion of the North Carolina Industrial Commission
(Commission) awarding Lionel Lewis (Plaintiff) temporary total
disability compensation, attorney's fees, and medical expenses.
It is undisputed that while working for Medical Center as a
general maintenance worker, Plaintiff suffered a compensable
injury by accident on 23 February 1990, which required surgery.
Following his surgery and on 1 November 1990, he was released to
work with restrictions not to lift over forty pounds and not to
crawl in tight places. Plaintiff did not return to work at that
time because the Medical Center would not allow Plaintiff to work
with his restrictions. On 21 January 1991, Dr. Gerald Pelletier,
Jr. (Pelletier), who performed Plaintiff's surgery, determined
Plaintiff had reached maximum medical improvement. In Form 21
and 26 agreements, which were both approved by the Commission
pursuant to N.C. Gen. Stat. § 97-82, Defendants admitted
liability and paid Plaintiff workers' compensation. The Form 21
agreement, which was approved on 31 October 1991, provided
temporary total disability from 30 March 1990 through 28 January
1991. The Form 26 agreement, approved on 10 October 1991,
provided workers' compensation for a 15 percent permanent partial
disability to Plaintiff's back, beginning 28 January 1991 for
forty-five weeks, pursuant to N.C. Gen. Stat. § 97-31. On 14 May 1992, Plaintiff asserted that his level of pain
had increased, and sought additional compensation from Defendants
pursuant to N.C. Gen. Stat. § 97-47, because of his alleged
changed condition. Defendants denied compensation and Plaintiff
requested a hearing pursuant to N.C. Gen. Stat. § 97-83, seeking
additional medical care and workers' compensation for temporary
total disability.
The deputy commissioner made findings and conclusions, which
the Commission adopted in its own opinion and award. The
Commission found, inter alia, that Plaintiff: (1) "has remained
essentially the same since he reached maximum medical
improvement"; (2) has had wage earning capacity despite his very
limited education, his work history of manual labor, and his work
restrictions not to lift over forty pounds and not to crawl in
tight places; and (3) has alleged "that he has been totally
disabled," but this allegation "is not accepted as credible."
The Commission concluded that "Plaintiff has not sustained a
material change for the worse" in his back condition, and denied
Plaintiff's request for additional compensation.
Plaintiff appealed the Commission's opinion to this Court,
where we: (1) determined the findings of the Commission were
supported by competent evidence in the record; and (2) found "the
Commission correctly concluded that there has been no change in[Plaintiff's] condition." See Lewis v. Craven Regional Medical
Center, 122 N.C. App. 143, 468 S.E.2d 269 (1996). We
specifically stated: "Whether the Form 26 Agreement is 'fair and
just' remains an issue, however, that can be addressed by the
Commission upon the filing of a proper and timely motion." Id.
at 148-49, 468 S.E.2d at 274.
On 6 June 1996, Plaintiff requested a hearing to challenge
the appropriateness of the Form 26 agreement, alleging the
agreement was "improvidently approved" since it was not fair and
just. The Commission found, inter alia, that: (1) had
Plaintiff's medical records "present in the [Commission] file at
the time the Form 26 was approved on 10 October 1991 been fully
investigated" by the Commission at the time the agreement was
approved, "it would have been apparent that the Form 26 was not
fair and just," and thus the "Form 26 agreement was improvidently
approved by the [Commission]"; and (2) medical records before the
Commission at the time the agreement was approved revealed
Plaintiff was "incapable of earning wages with [Medical Center]
or in any other employment from 23 February 1990 through the date
of the hearing and continuing."
The medical records in the Commission file on 10 October
1991 included various medical reports from physicians treating
Plaintiff. One of these reports was from Pelletier, whoindicated that Plaintiff had a 15 percent permanent impairment of
his spine on 30 October 1990, and he was free to return to work
with limited duty. On 4 April 1991, Pelletier's notes include
the following notation, "I placed him back on Prednisone,
Flexeril, Lorcet, light activity, no work. He will return here
in 11 days." On 16 April 1991, the following notation is
included, "He is doing better on the Prednisone. I am shifting
him now to Feldene and will have him return here in one month.
No work." The last notation on the notes was entered on 1 August
1991, stating, "His straight leg raise is negative. I see no
evidence of muscle spasm. He has various complaints probably
related to degenerative disk disease. RECOMMENDATIONS: I placed
him on Lodine and advised him to lose weight, continue
exercising. He has reached maximum improvement."
From the findings of fact, the Commission concluded: (1) the
Form 26 agreement was "improvidently approved" since it "was not
fair and just"; (2) Plaintiff has been "incapable of work in his
former position with [Medical Center] or any other employment"
since 23 February 1990; and (3) Plaintiff was entitled to
temporary total disability compensation from 27 April 1992.
[1]The dispositive issue is whether the Form 26 agreement
between Plaintiff and Defendants gave Plaintiff the mostfavorable disability benefits to which he was entitled at the
time the agreement was approved by the Commission.
Every compensation and compromise agreement between an
employer and an injured employee must be determined by the
Commission to be fair and just prior to its approval. Vernon v.
Steven L. Mabe Builders, 336 N.C. 425, 432-33, 444 S.E.2d 191,
195 (1994). The conclusion the agreement is fair and just must
be indicated in the approval order of the Commission and must
come after a full review of the medical records filed with the
agreement submitted to the Commission. Id. at 434, 444 S.E.2d at
195-96; see N.C.G.S. § 97-82(a) (Supp. 1998) (agreement tendered
to Commission must be "accompanied by a full and complete medical
report"). The agreement is fair and just only if it allows the
injured employee to receive the most favorable disability
benefits to which he is entitled. Vernon, 336 N.C. at 432, 444
S.E.2d at 195; see also 8 Arthur Larson, Larson's Workers'
Compensation Law § 82.41, at 15-1208 (1999) (employee and
employer not entitled to agree to disposition of claim that gives
employee less than the maximum amount to which she is entitled).
If the Commission approves an agreement without conducting
the required inquiry and concluding the agreement is fair and
just, the agreement is subject to being set aside. Vernon, 336
N.C. at 434-35, 444 S.E.2d at 96. At the hearing on a motion toset aside the agreement, the Commission must determine the
fairness and justness of the agreement from the medical evidence
filed with the agreement at the time it was originally submitted
to the Commission for approval.
(See footnote 1)
In this case, the Commission, in approving the Form 26
agreement, made no entry indicating it had conducted a fairness
inquiry or otherwise determined the agreement to be fair and
just. Thus Plaintiff's motion to set aside the Form 26 agreement
was properly before the Commission.
[2]In reviewing the fairness of the Form 26 Agreement
pursuant to Plaintiff's motion, the Commission appears to have
appropriately limited its consideration to the medical records
present in the Commission file at the time the Form 26 was
approved on 10 October 1991. From those records, the Commission
concluded the Form 26 agreement was not fair and just. This
conclusion was based on the finding that at the time the Form 26
was approved, Plaintiff was incapable of earning wages with
Medical Center or in any other employment. Although this finding
supports the conclusion that the Form 26 agreement is not fairand just,
(See footnote 2)
Defendants argue there is not competent evidence in
the record to support this finding. We agree. Plaintiff relies
on the two references in Pelletier's notes of "no work" to
support the finding that Plaintiff was incapable of earning any
wages on 10 October 1991. These references, taken in context,
simply do not support the finding. See Franklin v. Broyhill
Furniture Industries, 123 N.C. App. 200, 204, 472 S.E.2d 382, 385
(Commission's findings are binding on appeal only when supported
by competent evidence), cert. denied, 344 N.C. 629, 477 S.E.2d 39
(1996). Indeed, the last entry by Pelletier makes no mention of
any work prohibition, instead it emphasized Plaintiff's need to
take Lodine, lose weight, and continue exercising.
In any event, the Commission was collaterally estopped from
finding Plaintiff to be incapable of work on 10 October 1991.
See Thomas M. McInnis & Assoc., Inc. v. Hall, 318 N.C. 421, 428,
349 S.E.2d 552, 557 (1986) (collateral estoppel prevents re-
litigation of issues actually litigated and necessary to the
outcome of the prior action, where new action is between the same
parties or their privies). This Court previously affirmed an
earlier decision of the Commission finding Plaintiff had earningcapacity on the date of the Form 26 approval, a determination
necessary for resolution of the matter before the Commission.
Lewis, 122 N.C. App. at 146, 149, 468 S.E.2d at 272, 274 (issue
was raised and determined in change of condition hearing). It
was necessary for the Commission to establish Plaintiff's earning
capacity on 10 October 1991 in order to determine whether there
had been a subsequent change in that earning capacity. See Lucas
v. Bunn Manuf. Co., 90 N.C. App. 401, 404, 368 S.E.2d 386, 388
(1988) (change in earning capacity is primary factor for
determining employee's entitlement to additional compensation
under section 97-47). Accordingly, because Plaintiff's earning
capacity was actually litigated and necessary to the outcome of
his section 97-47 hearing, the Commission is bound by that
finding when determining if the Form 26 agreement was fair and
just.
It follows that the opinion of the Commission that the Form
26 agreement was "improvidently approved" on the grounds
Plaintiff had no earning capacity on 10 October 1991, thus
qualifying him for benefits under section 97-29, must be
reversed. Whether Plaintiff, on 10 October 1991, would have been
entitled to some other benefit more generous than that provided
in the Form 26 agreement is a matter not addressed by theCommission and requires remand.
(See footnote 3)
If it is determined on remand
that Plaintiff would have been entitled to receive a greater
benefit under section 97-30 than he received under the Form 26
agreement, the agreement must be set aside. See Franklin, 123
N.C. App. at 205, 472 S.E.2d at 385-86 (employee has option of
choosing the most favorable remedy of those offered in sections
97-29, 97-30, or 97-31).
We have considered the cross-assignments of error tendered
by Plaintiff and overrule them without discussion.
Reversed and remanded.
Judge MARTIN concurs.
Judge WYNN dissents.
WYNN, Judge dissenting.
I disagree with the majority's characterization of the issue in this case as,
whether the Form 26 agreement between Plaintiff and Defendants gave Plaintiff the most favorable disability benefits to which he was entitled at the time the agreement was approved by the Commission.
The determination of that issue is the function of the Industrial
Commission, not this Court. Rather, the proper inquiry for thisCourt to determine on appeal is whether there is any competent evidence in the record to support the Commission's finding that the claimant was incapable of earning wages with Craven Regional Medical Center or in any other employment at the time the Form 26 agreement was approved. I further disagree with the majority's finding that, even if there was competent evidence to support the Commission's finding, the Commission was barred by the principles of collateral estoppel and res judicata from determining that the claimant was unable to work.
It is well settled that the Industrial Commission's findings of fact are conclusive on appeal if supported by any competent evidence, even though there may be evidence that would support findings to the contrary. See Adams v. AVX Corp., 349 N.C. 676, 681, 509 S.E.2d 411, 414 (1998). Competent evidence is evidence “that a reasonable mind might accept as adequate to support the finding[s].” Andrews v. Fulcher Tire Sales and Serv., 120 N.C. App. 602, 605, 463 S.E.2d 425, 427 (1995).
Here, the Commission found that:
[a]s a result of plaintiff's injury by accident, he has been incapable of earning wages with defendant-employer or in any other employment from 23 February 1990 through the date of the hearing and continuing.
The majority asserts that Dr. Pelletier's notations--“I placed him back on Prednisone, Flexeril, Lorcet, light activity, nowork” on 4 April 1991 and “[n]o work” on 16 April 1991--are not competent evidence to support this finding. I, however, believe the physician's orders are adequate to support the aforementioned finding that the claimant was unable to work, even if there was evidence to support a different finding. Therefore, the Commission's finding on the claimant's inability to work is conclusive on appeal. See Adams, 349 N.C. at 681, 509 S.E.2d at 414.
Moreover, contrary to the majority's position, the doctrines of collateral estoppel and res judicata do not apply to the case sub judice. Although our Court in Lewis I affirmed the Commission's finding that the claimant “had wage earning capacity” for a claim of a change in condition pursuant to N.C. Gen. Stat. § 97-47, we did not litigate the claimant's earning capacity as it relates to the issue of whether the Form 26 agreement was improvidently approved by the Commission. See Lewis v. Craven Regional Medical Center, 122 N.C. App. 143, 468 S.E.2d 269 (1996); Brooks v. Stroh Brewery Co., 95 N.C. App. 226, 382 S.E.2d 874 (1989) (holding that the doctrine of collateral estoppel bars re-adjudication of issues when (1) the prior suit resulted in judgment on the merits; (2) identical issues are involved; (3) the issue was actually litigated; (4) the issue was actually determined; and (5) the determination was necessary tothe resulting judgment); King v. Grindstaff, 284 N.C. 348, 200 S.E.2d 799 (1973) (stating that where the second action between the same parties is upon a different claim or demand, the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted, upon determination of which finding or verdict was rendered).
In fact, this Court in Lewis I refused to determine the issue at bar and stated that:
We do not, however, address [the claimant's argument that the Form 26 Agreement was improvidently improved by the Commission and must therefore be set aside as not being 'fair and just'] because there has been no motion to set aside the Form 26 agreement before the Commission.
Id. at 148, 468 S.E.2d at 274. Instead, this Court left that particular issue to the Commission “upon the filing of a proper and timely motion.” Id. at 149, 468 S.E.2d at 274. Thus, Lewis I and the instant case involve the adjudication of different issues.
Respectfully, I dissent.
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