Workers' Compensation--death benefits--reapportionment
The Industrial Commission did not err as a matter of law in concluding that plaintiff-
widow was not entitled to a reapportionment of death benefits upon her daughter's eighteenth
birthday during the initial 400-week period for payment of death benefits under N.C.G.S. § 97-38
for dependents of an employee whose death proximately results from compensable injury or
occupational disease, because: (1) each recipient's share is fixed at the date of decedent's death
for the initial period of 400 weeks; and (2) there was no decrease in the payor's obligation before
the full 400 weeks payment to the dependent child was complete.
Judge EAGLES concurring.
Robert Winfrey for the plaintiff-appellant.
Brinkley, Walser, McGirt, Miller, Smith & Coles, by G.
Thompson Miller, for the defendant-appellees.
LEWIS, Judge.
Plaintiff Annie Lowery Friday appeals from an opinion and
award of the North Carolina Industrial Commission denying her
request for a reapportionment of death benefits. Plaintiff's
husband, Clark Friday ("decedent"), died on 2 March 1989 as a
result of a compensable injury. On 16 August 1989, the parties
filed a Form 30 in which they stipulated that Annie Friday and
Versie Friday, the spouse and daughter of the decedent, were
dependents entitled to receive death benefit payments from the
defendants. The parties stipulated to death benefit payments forboth dependents in the amount of $328.21 per month for a period of
400 weeks. The Industrial Commission approved the agreement. N.C. Gen. Stat. § 97-38, which provides for payme
nt of death
benefits for dependents of an employee whose death proximately
results from compensable injury or occupational disease, provides
in pertinent part:
If death results proximately from a compens
able
injury . . . the employer shall pay . . . to the
person or persons entitled thereto as follows:
(1) Persons wholly dependent for support upon the
earnings of the deceased employee at the time of
the accident shall be entitled to receive the
entire compensation payable share and share alike
to the exclusion of all other persons . . .
&
nbsp;* * *
Compensation payments due on account of dea
th shall
be paid for a period of 400 weeks from the date of
the death of the employee; provided, however, after
said 400-week period in case of a widow or widower
who is unable to support herself or himself because
of physical or mental disability as of the date of
death of the employee, . . . compensation payments
due a dependent child shall be continued until such
child reaches the age of 18.
(Emphasis added.)
At the time of the decedent's death Versie Friday was
seventeen years old; however, she turned eighteen during the 400-week period. Defendants nonetheless continued to issue Versie
death benefits for the entire 400 weeks. Annie Friday, who is
blind, has continued to receive benefits beyond the 400-week period
as required under G.S. 97-38 for a widow with a physicaldisability. On 6 October 1997, after the 400 weeks expired, Annie
Friday filed a Motion to Set Aside the Form 30. In that motion,
she first alleged defendants were required to stop payment of death
benefits to Versie as of her eighteenth birthday and reapportion
Annie's benefits such that she would receive the defendants' entire
payment obligation for the duration of her entitlement. Plaintiff
also alleged that because defendant Liberty Mutual's insurance
adjuster told plaintiff it was not necessary to hire an attorney in
this matter, the Form 30 was entered as a result of fraud,
misrepresentation or mutual mistake.
Plaintiff's motion was set for hearing on 22 January 1998.
Prior to the hearing, however, the parties agreed to have the issue
in dispute decided by the Deputy Commissioner based upon the
stipulations set forth in the parties' pre-trial agreement, prior
orders of the Industrial Commission and all affidavits filed with
plaintiff's motion. On 17 March 1998, Deputy Commissioner John A.
Hedrick entered an order concluding plaintiff was not entitled to
a reapportionment of benefits as of her daughter's eighteenth
birthday, citing G.S. 97-38, Deese v. Southern Lawn and Tree Expert
Co. and Allen v. Piedmont Transport Services, Inc. (citations
omitted), and that the Form 30 was not entered as a result of
fraud, misrepresentation, undue influence or mutual mistake.
On 23 March 1998, plaintiff filed notice of appeal to the Full
Commission. On 17 March 1999, the Full Commission entered an
Opinion and Award denying plaintiff's claim, also citing Deese and
Allen as supporting authority. Plaintiff appeals from the Opinionand Award of the Full Commission.
On appeal from an order of the Industrial Commission, our
jurisdiction is limited to questions of law, namely, whether there
was competent evidence before the commission to support its
findings of fact and whether those findings justify the legal
conclusions and ultimate decision of the commission. Allen, 116
N.C. App. 234, 236, 447 S.E.2d 835, 836 (1994). On appeal,
plaintiff has only assigned error as to the commission's
conclusions of law, and we review them accordingly.
Plaintiff first contends the Commission erred as a matter of
law in concluding she was not entitled to a reapportionment of
death benefits upon her daughter's eighteenth birthday.
Specifically, plaintiff contends that when Versie turned eighteen,
the pool of dependent beneficiaries decreased during the 400-week
period, entitling plaintiff to a reapportionment of death benefits
under Deese. We disagree.
Addressing this contention necessarily involves our
determination of whether defendants properly paid Versie after her
eighteenth birthday for the full 400 weeks, or whether they were
required to stop payment upon her eighteenth birthday and issue
benefits for less than 400 weeks. For this analysis, we turn first
to G.S. 97-38. This Court has noted "the General Assembly intended
to fix each recipient's share at the date of the decedent's death,"
Chinault v. Pike Electrical Contractors, 53 N.C. App. 604, 606, 281
S.E.2d 460, 462 (1981), aff'd, 306 N.C. 286, 293 S.E.2d 147 (1982),
and indeed, the express language of G.S. 97-38 supports thisinterpretation. The statute provides that a dependent beneficiary
has a vested right to payment of death benefits "for a period of
400 weeks" upon the decedent's death. N.C. Gen. Stat. § 97-38.
Although G.S. 97-38 specifically addresses the situation where
payments will be extended beyond 400 weeks, the express language
does not indicate any situation in which the vested right to a 400-
week payment period may be shortened. Absent such language in the
statute, it is clear that Versie was entitled to payment for a full
400 weeks and defendants were not required to stop payment upon her
eighteenth birthday.
Plaintiff, however, contends that Deese, 306 N.C. 275, 293
S.E.2d 140 (1982), and Allen, 116 N.C. App. 234, 447 S.E.2d 835
(1994), support the alternate conclusion that the beneficiary pool
did in fact decrease when Versie turned eighteen, thus entitling
plaintiff to a reapportionment of benefits.
Indeed, Deese contains the following language: "[I]f there is
a decrease in the dependent beneficiary pool during the 400 weeks
following the employee's death, there must be a corresponding
reapportionment of the full award payable for that set period among
the remaining eligible members of the pool." Deese, 306 N.C. at
279-80, 293 S.E.2d at 144. We have already concluded that Versie
was entitled to a full 400 weeks' payment under the statute, and
thus, the pool of dependent beneficiaries did not decrease.
Furthermore, unlike this case, Deese dealt with the specific issue
of whether G.S. 97-38 permits a reapportionment of benefits among
eligible dependents after the initial 400 weeks. Id. at 277, 293S.E.2d at 142. The beneficiary pool in Deese consist
ed of the
decedent's wife and three minor children. Id. The issue for
review was whether G.S. 97-38 required a reapportionment of the
entire amount of payable death benefits among the remaining
dependent children in equal shares as each child reached the age of
eighteen, after the expiration of the initial 400 weeks. Id. The
remaining minor beneficiaries argued that each time a child turned
eighteen during the post-400 week period and was no longer entitled
to receive benefits, his share must be put back into the
"compensation pot" and the entire award redistributed equally to
the remaining eligible beneficiaries. Id. at 279, 293 S.E.2d at
144.
The court held "G.S. 97-38 does not permit a reapportionment
of the entire compensation award among eligible dependents after
400 weeks have elapsed," noting that were such a reapportionment
allowed the payor's obligation beyond the 400 weeks would be
effectively increased. Id. at 281, 293 S.E.2d at 145. In
explanation, the court made the following distinction:
[I]f there is a decrease in the dependent
beneficiary pool during the 400 weeks
following the employee's death, there must be
a corresponding reapportionment of the full
award payable for that set period among the
remaining eligible members of the pool. That,
we hold, is the only situation in which there
will be an increase in the amount of the
individual shares paid to the dependents still
partaking of the compensation fund.
Id. at 279-80, 293 S.E.2d at 144 (citations omitted.) The court
noted its concern that the payor of death benefits would be able to
avoid its obligation for less than 400 weeks, in abrogation of G.S.97-38:
[T]he underlying logic of the statute evinces
no reason for decreasing the [payor's] 400
week obligation based merely upon a decrease
in the number of persons to whom such payments
must be made . . . [since] the rights and
liabilities arising under G.S. 97-38 attach in
a final sense at the time of the employee's
death so that the award then determined is not
thereafter extinguished on the payor's end
until it has been paid in full.
Id. at 280, 293 S.E.2d at 144.
The facts of this case neither violate the specific holding in
Deese nor the concerns mentioned in conjunction with that holding.
Under G.S. 97-38, there was no decrease in the payor's obligation
before the full 400 weeks payment to Versie was complete. See also
Commissioner J. Randolph Ward, Primary Issues in Compensation
Litigation, 17 Campbell L. Rev. 443, 480 (1995) ("Despite dicta to
the contrary in [Deese], it appears to be settled that the class of
beneficiaries becomes fixed according to their status 'at the time
of the accident' or at the date of the decedent-employee's death.
All qualifying beneficiaries obtain a vested right to the death
benefit, or their share of it, for a period of four hundred weeks
following the death . . . .") Having completed their obligation,
defendants were not then required to effectively increase their
obligation beyond the 400-week period -- which would be the result
were plaintiff's argument in this respect followed.
Here, Versie was properly paid benefits for the entire 400
weeks under G.S. 97-38 and as such, the pool of dependent
beneficiaries did not decrease and no corresponding reapportionment
of benefits was required under Deese. Accordingly, the Commissiondid not err as a matter of law in concluding plaintiff was not
entitled to a reapportionment of benefits.
In addition, we note the holding in Allen, 116 N.C. App. at
239, 447 S.E.2d at 838, no more compels the conclusion that
defendants were required to stop payment to Versie on her
eighteenth birthday and reapportion plaintiff's benefits than the
court's specific holding in Deese itself. In Allen, the decedent
died with two children, a fourteen-year-old son and a twenty-five-
year-old daughter. Id. at 235, 447 S.E.2d at 836. The son was
declared the sole dependent beneficiary entitled to receive death
benefits but turned eighteen during the 400-week period. Id.
Citing Deese, the daughter claimed when her brother turned eighteen
the beneficiary pool decreased from one to zero entitling her to
share in the benefits. Id. at 239, 447 S.E.2d at 838. The Allen
Court concluded the son was entitled to receive the entire
compensation payable under G.S. 97-38(1), and thus, the dependent
beneficiary pool did not decrease and the daughter was not entitled
to share in the benefits. Id.
Because we find no error as to the Commission's first
conclusion of law, we find it unnecessary to address plaintiff's
contention regarding the presence of fraud, misrepresentation and
mutual mistake in entering the Form 30.
Affirmed.
Judge EDMUNDS concurs.
Chief Judge EAGLES concurs with separate opinion.
EAGLES, Chief Judge, concurring.
I concur. I agree with the majority that the pool of
beneficiaries did not decrease on Versie Friday's (Versie) 18th
birthday. I write separately to emphasize my separate basis for
that conclusion. The majority reasons that Versie was entitled to
the full 400 weeks of benefits because G.S. § 97-38 does not denote
any situation where the vested right to a 400 week payment may be
shortened. I agree that the act does not speak of shortening
benefits. However, the answer to this question lies in a separate
part of Chapter 97.
Under G.S. § 97-38,
[i]f death results proximately from a
compensable injury . . . the employer shall
pay . . . to the person or persons entitled
thereto as follows:
(1) Persons wholly dependent for support upon
the earnings of the deceased employee at the
time of the accident shall be entitled to
receive the entire compensation payable share
and share alike to the exclusion of all other
persons.
G.S. § 97-39 (1999) states “[t]he widow, or widower and all
children of deceased employees shall be conclusively presumed to be
dependents of deceased and shall be entitled to receive the
benefits of this Article for the full periods specified
herein.”(Emphasis added). These statutes make clear that a child of
a deceased employee is a dependent who shares benefits with other
dependents for the full 400 weeks. Therefore, since Versie remained
a “child” under Chapter 97, she was entitled to the full 400 weeks
of benefits. Under G.S. § 97-2(12)(1999), a “'[c]hild' . . . include[s]
only persons who at the time of the death of the deceased employee
are under 18 years of age.” (Emphasis added). Therefore, if an
individual is under 18 at the time of the employee's death then
that individual is a “child” under the act. The implication from
this definition is that an individual remains a “child” for
purposes of Chapter 97 even if that individual turns 18 before the
400 weeks has elapsed. The end result is that the “child's”
interest vested at the time of the employee's death. Though
arguably dicta, this Court has implied that a child does not lose
his or her right to payment by turning 18 during the 400 weeks.
“Scott will continue receiving payments after he reaches age 18
because he will turn 18 before the 400-week period expires.” Allen
v. Piedmont Transport Services, 116 N.C. App. 234, 237, 447 S.E.2d
835, 837 (1994).
All parties acknowledge that Versie was a “child” under § 97-2
at the date of death. Therefore, Versie did not and could not exit
the class of beneficiaries by simply turning 18 during the 400
weeks. Accordingly, she was entitled to payment for the full 400
weeks and defendants were not required to cease payments. Since the
beneficiary class did not decrease, plaintiff was not entitled to
any reapportionment of benefits.
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