1. Workers' Compensation--employer credit--private disability insura
nce policy--
reduction for attorney fees
The Industrial Commission did not abuse its discretion in a workers' compensation case
by reducing defendant-employer's credit by twenty-five percent for payments made under a
private disability insurance policy fully funded by defendant Triangle Brick in order to provide
plaintiff an award of attorney fees because a previous panel of the Court of Appeals has already
upheld this same issue in a different case and subsequent panels are bound by that precedent
since it has not been overturned by a higher court.
2. Workers' Compensation--attorney fees--amount--discretion of Commi
ssion
The Industrial Commission did not abuse its discretion by modifying the deputy
commissioner's original award of attorney fees based on only part of plaintiff's total workers'
compensation award, while the Full Commission granted plaintiff's request that attorney fees be
calculated on the total award, because the award was within the Full Commission's authority to
approve fee payments pursuant to N.C.G.S. § 97-90(c).
Lore & McClearen, by R. Edwin McClearen, for plaintiff-
appellee.
Yates, McLamb & Weyher, L.L.P., by Virginia G. Adams, for
defendants-appellants.
JOHN, Judge.
Defendants appeal an Opinion and Award of the North Carolina
Industrial Commission (the Commission) reducing by twenty-five
percent defendants' credit for payments made under a disability
insurance policy fully funded by defendant Triangle Brick
(Triangle). We affirm the Commission.
Pertinent facts and procedural history include the following: Plaintiff Bruce Cole's “history of intermittent
lower back
problems” was aggravated by the demands of his position with
Triangle. While working, plaintiff reinjured his lower back 25
November 1994 and 31 March 1995, and subsequently filed a workers'
compensation claim. During pendency of the claim, plaintiff
received long-term disability payments from Paul Revere Insurance
Company (the Revere payments) under a policy fully funded by
Triangle (the Revere policy) from 31 March 1995 until 1 April 1997.
Plaintiff's claim was disputed by defendant Aetna Insurance
Company, Triangle's insurer. Following a 25 September 1996
hearing , the Deputy Commissioner issued an Opinion and Award
generally favorable to plaintiff on 22 April 1997. The case was
subsequently reviewed on appeal by the Full Commission which
entered a modified Opinion and Award 20 April 1998. The Commission
in the main affirmed the Deputy Commissioner's earlier decision,
but modified portions thereof related to awarding of a credit to
defendants and of counsel fees to plaintiff.
[1]/A HREF>In its Opinion and Award, the Commission concluded as a
matter of law that:
3. Defendant-employer shall receive a credit
for the private, fully employer-funded
benefits paid to plaintiff through Paul Revere
Insurance Company, less twenty-five percent
attorneys fees to be paid to the [plaintiff's
counsel] for collecting reimbursement of the
same from the worker's compensation carrier.
The Commission thereupon ordered:
2. Plaintiff's request that attorneys fees
be calculated on the total award and allowing
the defendants a credit for payments made
after March 31, 1995 through a fully employer-
funded private disability policy, less a
twenty-five percent attorney's fee to be paidto [plaintiff's counsel] . . . is HEREBY
ALLOWED.
3. Defendant-employer shall receive a credit
for the fully employer-funded private
disability benefits paid to plaintiff, less a
twenty-five percent attorney's fee to be paid
to [plaintiff's counsel] . . . . The weekly
difference between what was paid to plaintiff
and what was owed to plaintiff of $84.00 a
week shall be paid to plaintiff in a lump sum
subject to the attorneys fees approved below.
4. A reasonable attorney's fee of twenty-
five percent of the total compensation awarded
to plaintiff after March 31, 1995 . . . is
approved for plaintiff's counsel and shall be
paid as follows: twenty-five percent of the
dollar for dollar credit allowed the defendant
from and after March 31, 1995 shall be paid to
the plaintiff's counsel for so long as the
defendants claim a credit for benefits paid
the plaintiff from a fully employer-funded
private disability insurance policy;
thereafter, twenty-five percent of any
compensation paid by the workers' compensation
carrier to the plaintiff shall be deducted and
paid directly to counsel for the plaintiff.
Defendants timely appealed, assigning error to the
Full Commission's Conclusions of Law 3 and
Awards 2, 3, and 4 on the grounds that the
reduction of defendants' credit by 25% to
provide plaintiff's counsel additional fees is
not supported by law.
N.C.G.S. § 97-42 (Supp. 1998)
(See footnote 1)
governs allocation of credit
for payments made under private disability plans such as the Revere
policy.
Payments made by the employer to the injured
employee during the period of his disability,
or to his dependents, which by the terms of
this Article were not due and payable whenmade, may, subject to the
approval of the Commission be deducted from the amount
to be paid as compensation. . . .
G.S. § 97-42.
Defendants cite Evans v. AT&T Technologies, 332 N.C. 78, 418 S.E.2d
503 (1992) as precluding reduction by the Commission of defendants' credit
for the Revere payments. However, we believe the instant case is
controlled by our decision in Church v. Baxter Travenol Laboratories, 104N.C. App. 411, 409 S.E.2d 715 (1991).
As in the case sub judice, the Commission in Church credited the
employer for amounts paid the employee under a disability insurance
plan, but reduced that credit by twenty-five percent “to fund
[plaintiff's] attorney's fees.” Id. at 416, 409 S.E.2d at 718. In
upholding the Commission, the Court noted that G.S. § 97-42
dictates that any payments made by an employer
to the injured employee during the period of
her disability which were not due and payable
when made, may, subject to the approval of the
Industrial Commission, be deducted from the
amount to be paid as workers' compensation. .
. .
. . . .
The Commission's award in its discretion
of a 75% credit to defendant for payments made
through its private insurer and the award of
the remaining 25% to plaintiff to fund
attorney's fees based upon the full workers'
compensation award is well within the
Commission's discretionary authority. . . .
Id. at 416, 409 S.E.2d at 717-18.
Where a panel of this Court “has decided the same issue,
albeit in a different case, a subsequent panel is bound by that
precedent, unless it has been overturned by a higher court.” In
the Matter of Appeal from Civil Penalty, 324 N.C. 373, 384, 379S.E.2d 30, 37 (1989). Since the identical issue, i.e., reduction
of defendants' credit by 25% to provide counsel fees, is presented
herein, we are bound by Church unless that decision has been
overruled.
In that regard, defendants maintain that the decision of our
Supreme Court in Evans implicitly overruled Church. We conclude
otherwise.
At issue, inter alia, in Evans was the method of calculating
an employer's credit for payments made to an employee under a
disability plan, the employer claiming “dollar-for-dollar credit”
and the employee a “week-for-week credit.” Evans, 332 N.C. at 81-
83, 418 S.E.2d at 506. The Court adopted the former approach,
holding that “all payments made by an employer on account of its
employee's disability,” not due and payable within the meaning of
G.S. § 97-42 when made, “may be deducted from the employee's
workers' compensation award.” Id. at 83, 418 S.E.2d at 507 (second
emphasis added).
The discretionary nature of the credit was highlighted
throughout the opinion: “subject to approval by the Industrial
Commission,” payments “not due and payable when made may be
deducted from the employee's workers' compensation award.” Id.
(emphasis added); see also id. at 86, 418 S.E.2d at 509 (“[w]e
conclude that the ordinary meaning of the language of [G.S. § 97-
42] allows an employer, subject to Commission approval, to receive
a full dollar-for-dollar credit”) (emphasis added); id. at 88, 418
S.E.2d at 509-10 (“the statute must be interpreted to mean that theamount of the deduction to which an employer, subject to the
approval of the Commission, is entitled under [G.S. § 97-42] is the
amount of the gross before-tax payments”) (emphasis added).
Accordingly, Evans stands for the proposition that all
payments by employers to employees under a disability insurance
policy, not due and payable when made, qualify for credit to the
employer under G.S. § 97-42; however, the full amount of credit may
be reduced in the discretion of the Commission. See id. at 85, 418
S.E.2d at 508 (“subject to the Commission's approval, employers
[must receive full] credit under [G.S. § 97-42] for all payments
made under a voluntary sickness and accident disability plan . . .
so long as such payments were not 'due and payable when made'”);
see also Foster v. Western-Electric Co., 320 N.C. 113, 116, 357
S.E.2d 670, 672 (1987) (payments not due and payable when made
“remain within the purview of [G.S. § 97-42, which section] . . .
cannot be read to exclude deduction of the payments” made pursuant
to a proper disability insurance plan); and Church, 104 N.C. App.
at 416, 409 S.E.2d at 717 (“Foster recognized that the Commission
must not make a complete denial of the credit to the employer”).
In both Church and the case sub judice, the Commission
acknowledged the full extent of the employer's payments under a
disability insurance plan, but elected, in its discretion, to
reduce the allowable credit in order to provide plaintiff an award
of counsel fees. By contrast, in Evans and Foster, also relied
upon by defendants, awards were reversed which failed to recognize
the full extent of payments made under a disability plan. SeeEvans, 332 N.C. at 83, 418 S.E.2d at 506 (Court of Appeals credit
on “week-for-week” basis failed to take into account full measure
of payments made to employee); Foster, 320 N.C. at 116-17, 357
S.E.2d at 672 (Commission and Court of Appeals misinterpreted law
by excluding payments not due and payable when made from
eligibility for credit under G.S. § 97-42). Church therefore has
not been overruled by Evans and this Court is bound by its
precedent. Civil Penalty, 324 N.C. at 384, 379 S.E.2d at 37.
[2]However, defendants contend that “[e]ven if Church is
controlling . . . the Full Commission abused its discretion” by
modifying the Deputy Commissioner's original award, thereby further
“reducing the defendants' credit.” The Deputy Commissioner based
his award of attorney's fees on only part of plaintiff's total
workers' compensation award, while the Full Commission granted
“[p]laintiff's request that attorneys fees be calculated on the
total award.” We perceive no abuse of discretion by the
Commission.
In Church, this Court observed that
[t]he Commission's award in its discretion of
a 75% credit to defendant for payments made
through its private insurer and the award of
the remaining 25% to plaintiff to fund
attorney's fees based upon the full workers'
compensation award is well within the
Commission's discretionary authority . . . and
the award was within the Commission's
authority to approve fee payments pursuant to
[N.C.G.S. § 97-90(c) (Supp. 1998)
(See footnote 2)
].Church, 104 N.C. App. at 416-17, 409 S.E.2d at 718 (emphasis
added).
G.S. § 97-90(c) states that
[i]f an attorney has an agreement for fee or
compensation under this Article, he shall file
a copy or memorandum thereof with the . . .
Commission prior to the conclusion of the
hearing. If the agreement is not considered
unreasonable, the . . . Commission shall
approve it at the time of rendering decision.
The record on appeal in the instant case contains no copy of
a fee award filed with the Commission. However, the Commission's
Opinion and Award provides that “[p]laintiff's request that
attorneys fees be calculated [as twenty-five percent of] the total
award . . . is HEREBY ALLOWED” (emphasis added), thus suggesting
approval of a fee agreement was indeed sought from the Commission.
Further, the Opinion and Award also directs that a “reasonable
attorney's fee of twenty-five percent of the total compensation
awarded to plaintiff . . . is approved” (emphasis added),
indicating the Commission determined a fee agreement for twenty-
five percent of the total award was “not . . . unreasonable”
pursuant to G.S. § 97-90(c). As in Church, “the award was within
the Commission's authority to approve fee payments pursuant to G.S.
[§] 97-90(c),” Church, 104 N.C. App. at 416-17, 409 S.E.2d at 718,
and did not constitute an abuse of discretion.
Finally, we decline to address several issues raised by the
plaintiff in his appellate brief that were neither assigned as
cross-assignments of error nor raised in the proceedings below.
See N.C.R. App. P. 10(a),(d) and 28(c) (scope of appellate reviewlimited “to a consideration of those assignments of error set
out
in the record on appeal;” without taking an appeal, “appellee may
cross-assign as error any action or omission of the trial court .
. . properly preserved for appellate review;” without taking an
appeal, “appellee may present for review, by stating them in his
brief, any questions raised by cross-assignments of error under
Rule 10(d)”).
Affirmed.
Judges WYNN and EDMUNDS concur.
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