1. Workers' Compensation--settlement negotiations--existence of Form 21
admitted--terms not disclosed
The Industrial Commission did not improperly consider evidence of
settlement negotiations in a worker's compensation action where the deputy
commissioner allowed the existence of a Form 21 to be introduced in
rebuttal but did not allow the terms of the form to be disclosed. The
evidence was relevant to an issue raised by plaintiff and there is no
indication it had any bearing on the Full Commission's final decision.
2. Workers' Compensation--attorney fees--failure to stipulate to medical
report
The Industrial Commission did not err in a worker's compensation
action by assessing attorney fees against plaintiff's attorney under Rule
612(2) of the Workers' Compensation Rules for not stipulating to a medical
report . Rule 612(2) is entirely consistent with the Workers' Compensation
Act and aids in carrying out the provisions and manifest purpose of the Act
by allowing the Commission to assess costs against an attorney or party who
slows the litigation process by refusing to stipulate to medical records
where authenticity is not an issue. Stipulating to the record's
authenticity is not the same as stipulating to the accuracy of the
diagnosis or prognosis.
3. Workers' Compensation--attorney fees--failure to stipulate to medical
report--deposition ordered but not taken
Workers' Compensation Rule 612(2) applied where plaintiff did not
stipulate to a medical report, a deposition was ordered, and time and
effort were spent preparing for a deposition. The fact that a deposition
was never taken has no bearing on the applicability of Rule 612(2).
4. Workers' Compensation--attorney fees--failure to stipulate to a
medical report--no abuse of discretion
The Industrial Commission did not abuse its discretion by imposing
costs and attorney fees against plaintiff's attorney in a workers'
compensation action where plaintiff's attorney initially refused to
stipulate to a doctor's report and then failed to notify defense counsel
when he changed his mind; defense counsel continued to try to locate the
doctor in Arizona and spent more time and money scheduling the deposition;
and defense counsel only learned that plaintiff had agreed to the
stipulation when she contacted plaintiff's counsel to arrange a deposition.
The Commission's decision was supported by the facts and is valid under
Rule 612(2).
5. Workers' Compensation--attorney fees--calculation
The Industrial Commission did not err in ordering plaintiff's attorney
to pay $1,000 in costs and attorney fees incurred in scheduling a
deposition after plaintiff's attorney failed to stipulate a medical record
and to timely notify defendant's counsel of his change in psoition when
only $680 in attorney and paralegal fees were billed to defendant forscheduling the deposition. There is no requirement that the amount of
attorney fees set by the Commission in its discretion under Rule 612 equal
any set formula and this $1,000 fee was not unreasonable.
Brenton D. Adams for the plaintiff-appellant.
Young, Moore and Henderson, by Dawn M. Dillon, for
the defendant-appellees.
THOMAS, Judge.
Plaintiff, Bart W. Hawley, appeals from a ruling by the North Carolina
Industrial Commission (Commission) awarding him a 10% permanent impairment
rating and ordering his attorney to pay $1,000 to defense counsel for the
costs and attorney fees incurred in connection with scheduling a deposition.
Plaintiff contends the Commission erred by considering evidence of
settlement negotiations in making its decision as to the impairment rating.
He also contends the Commission erred by imposing costs and attorney fees
where his counsel initially refused to stipulate to a medical report and then
later failed to notify defendants' counsel of his willingness to enter into
the stipulation.
For the reasons discussed herein, we affirm the Commission's opinion and
award.
Plaintiff's injury occurred when he broke his right foot doing carpentry
work in the course and scope of his employment with defendant, Wayne Dale
Construction. He was examined by three orthopaedic surgeons. Dr. Ronald
Levey (Levey) initially assessed no permanent impairment, Dr. Mark Brenner
assessed a 20% impairment rating and Dr. Paul Schricker assessed the
impairment rating at 3%.
The parties were unable to settle on an amount plaintiff was to receive
for his permanent impairment, with plaintiff subsequently filing a requestwith the Commission for his claim to be assigned for hearing. Th
e parties
were then unable to settle on what should constitute the pre-trial agreement.
Defendants insisted Levey's opinions should be included as evidence.
Plaintiff, however, refused to stipulate to Levey's report. Because of that
refusal, Deputy Commissioner Lorrie L. Dollar ordered that Levey be deposed
at plaintiff's expense.
Prior to the deposition, plaintiff's counsel, Brenton D. Adams (Adams),
received a Form 25R from Levey indicating that Levey had modified plaintiff's
permanent impairment rating to 10%. Because of that change, Adams decided he
would stipulate to Levey's evaluation and wrote a letter to that effect to
Deputy Commissioner Dollar. Adams included a “cc” line on the letter
denoting a copy to defendant's counsel, Dawn M. Dillon (Dillon), but then
failed to actually send the copy to Dillon. Unaware of plaintiff's change of
position, Dillon spent attorney and paralegal time locating Levey at his new
home in Arizona, obtaining certified copies of plaintiff's medical records
and scheduling the deposition. In all, 3.3 hours of attorney time billed at
$115 per hour and 4.4 hours of paralegal time billed at $70 per hour were
expended on trying to schedule the deposition.
In a 17 November 1999 opinion and award, Deputy Commissioner Dollar
awarded plaintiff permanent partial disability compensation based on a 10%
permanent impairment rating. In addition, Deputy Commissioner Dollar ordered
Adams to pay “an attorney's fee” of $2,000 to defendants as a sanction for
his failure to stipulate to Levey's evaluation, and his later failure to
timely notify defense counsel of his change of position.
Plaintiff appealed to the Full Commission. The Full Commission, in a 15
May 2000 opinion and award, determined plaintiff was entitled to permanent
partial disability compensation based on a 10% rating to his right foot. As
a result of the failure to “timely notify defendants prior to their efforts
to schedule an out-of-state deposition necessitated by plaintiff's counsel,”
the Commission also ordered Adams to pay $1,000 to Dillon for costs andattorney fees related to the failure to initially stipulate and then
timely
notify defendants' counsel of the change in position. From the Full
Commission's opinion and award the plaintiff appeals.
[1]By his first assignment of error, plaintiff argues the Commission
improperly considered evidence of settlement negotiations. We disagree.
Rule 408 of the North Carolina Rules of Evidence states:
Evidence of (1) furnishing or offering or promising to
furnish, or (2) accepting or offering or promising to
accept, a valuable consideration in compromising or
attempting to compromise a claim which was disputed as to
either validity or amount, is not admissible to prove
liability for or invalidity of the claim or its amount.
Evidence of conduct or evidence of statements made in
compromise negotiations is likewise not admissible. This
rule does not require the exclusion of any evidence
otherwise discoverable merely because it is presented in
the course of compromise negotiations. This rule also
does not require exclusion when the evidence is offered
for another purpose, such as proving bias or prejudice of
a witness, negativing a contention of undue delay, or
proving an effort to obstruct a criminal investigation or
prosecution.
N.C.R. Evid. 408. At the hearing before Deputy Commissioner Dollar, the only
information about compromise negotiations was testimony that plaintiff's
claims adjuster sent a Form 21 (offer to pay compensation) to plaintiff's
counsel, who never responded. Although Deputy Commissioner Dollar did not
allow the terms of the form to be disclosed, she did allow evidence of the
form's existence to be introduced as rebuttal after plaintiff claimed
defendants refused to pay according to the treating physician's evaluation.
Therefore, the evidence was directly relevant to an issue plaintiff himself
raised and was not improperly admitted.
There is no indication, in fact, that this evidence had any bearing on
the Full Commission's decision. The Commission, while noting other refusals
on the part of Adams to respond to defendants' inquiries, found:
plaintiff's counsel's refusal to reply to the
carrier's repeated requests for settlement and
Form 33 demanding settlement were within his
legal rights. However, instead of merely not
replying, a better route would have been for
plaintiff's counsel to communicate to the
carrier the fact that the proffered settlementwas not acceptable to plaintiff.
In judicially reviewing the opinion and award of the Commission, this
Court determines as a matter of law whether the finding of facts support
the Commission's conclusions, and whether they justify the awards.
McRae v. Wall, 260 N.C. 576, 578, 133 S.E.2d 220, 222 (1963). The
Commission's findings will not be disturbed on appeal if they are
supported by competent evidence even if there is contrary evidence in
the record. Deese v. Champion Int'l Corp., 352 N.C. 109, 530 S.E.2d 549
(2000); Peoples v. Cone Mills Corp., 316 N.C. 426, 432, 342 S.E.2d 798,
803 (1986). However, the Commission's conclusions of law are reviewable
de novo by this Court. See Grantham v. R.G. Barry Corp., 127 N.C.App.
529, 491 S.E.2d 678 (1997), rev. denied, 347 N.C. 671, 500 S.E.2d 659
(1998).
In the case at bar, three orthopaedic surgeons examined plaintiff
in an attempt to determine the degree of permanent impairment. The
three permanent impairment ratings were: (1) plaintiff's primary
treating physician, Levey, assigned a 10% rating; (2) Dr. Mark Brenner
assessed a 20% impairment rating; and (3) Dr. Paul Schricker assessed
the impairment rating at 3%. The Commission may weigh the evidence and
believe all, none or some of the evidence. Adams v. AVX Corp., 349
N.C. 676, 509 S.E.2d 411 (1998), reh'g denied, 350 N.C. 108, 532 S.E.2d
522 (1999). The Commission thus had the authority to primarily believe
Levey without stating a reason, as long as it considered all of the
evidence. The competent evidence clearly supports the finding that
plaintiff sustained a 10% impairment. Accordingly, we reject
plaintiff's first assignment of error.
[2]By his second assignment of error, plaintiff argues the
Commission committed error as a matter of law in assessing fees based on
Adams' refusal to stipulate to a medical report. His contentions are
that: (1) Rule 612(2) is invalid as a matter of law because it iscontrary to North Carolina law; (2) Rule 612(2) does not apply here; and
(3) the Commission abused its discretion. We disagree as to all three.
We first address plaintiff's contention that Rule 612(2) of the
Workers' Compensation Rules is invalid as a matter of law. The
Commission “may make rules, not inconsistent with this Article [the
North Carolina Workers' Compensation Act (Act)], for carrying out the
provisions of this Article.” N.C. Gen. Stat. § 97-80(a) (1999).
Pursuant to this authority granted by the North Carolina Legislature,
the Commission promulgated Rule 612(2), which states:
In cases where a party, or an attorney for either
party, refuses to stipulate medical reports and the
case must be reset or depositions ordered for
testimony of medical witnesses, a Commissioner or
Deputy Commissioner may in his discretion assess
the costs of such hearing or depositions, including
reasonable attorney fees, against the attorney or
his client who refused the stipulation.
Workers' Comp. R. of N.C. Indus. Comm'n 612(2).
We therefore must review whether Rule 612(2) is inconsistent with
the Act, and then whether it aids in carrying out the provisions of the
Act. There is nothing in the Act that prohibits a Commissioner or
Deputy Commissioner from assessing attorney fees against a party when a
deposition might be scheduled after that party refuses to stipulate to
medical records. In fact, there is support for Rule 612(2) in the Act:
The Commission or any member thereof, or any person
deputized by it, shall have the power, for the
purpose of this Article, to tax costs against the
parties, to administer or cause to have
administered oaths, to preserve order at hearings,
to compel the attendance and testimony of
witnesses, and to compel the production of books,
papers, records, and other tangible things.
N.C. Gen. Stat. § 97-80(b) (1999). In light of the foregoing Act
provision, Rule 612(2) is entirely consistent with the Act.
Additionally, we hold that Rule 612(2) does aid in carrying out the
provisions of the Act. The manifest purpose of the Act is to provide a
swift and certain remedy to an injured worker. See Radzidz v. HarleyDavidson of Metrolina, Inc., 346 N.C. 84, 484 S.E.2d 566
(1997). Rule
612(2) allows the Commission to assess costs against an attorney or
party who slows the litigation process by refusing to stipulate to
medical records, thus requiring the added expense and time of a
deposition. Thus, where the authenticity itself is not at issue, Rule
612(2) aids in carrying out the provisions and manifest purpose of the
Act. Therefore, it is not inconsistent with North Carolina law.
We note that stipulating to the record's authenticity is not the
same as stipulating to the accuracy of the diagnosis or prognosis. A
stipulation under these circumstances does not preclude taking a
deposition, calling the author as a witness or introducing contrary
evidence. Unlike the cases cited by plaintiff, there is no denial of
the constitutional right to cross-examine witnesses or other deprivation
of plaintiff's right to have his case fully determined. We accordingly
hold Rule 612(2) is valid as a matter of law.
[3]Plaintiff next argues Rule 612(2) does not apply here because
the initial refusal to stipulate did not require the hearing to be reset
or depositions to be taken. We reject plaintiff's argument, however,
because under the plain language of Rule 612(2), attorney fees may be
awarded when depositions are “ordered.” At the 8 July 1999 hearing,
Deputy Commissioner Dollar “ordered” Levey's deposition be taken.
Dillon thereafter expended time and effort. The fact the deposition was
never taken has no bearing on the applicability of Rule 612(2).
[4]Lastly, plaintiff contends the Full Commission abused its
discretion in imposing costs and attorney fees. The standard of review
for an award of attorney fees by the Commission is abuse of discretion.
Hauser v. Advanced Plastiform, Inc., 133 N.C. App. 378, 385, 514 S.E.2d
545, 550 (1999) (citing Childress v. Trion, Inc., 125 N.C. App. 588,
590, 481 S.E.2d 697, 698, disc. review denied, 346 N.C. 276, 487 S.E.2d
541 (1997)). The Commission had the authority under Rule 612(2) toassess attorney fees against plaintiff's counsel for failing to
stipulate to Levey's evaluation. Additionally, the Commission has
authority, generally, to assess sanctions, including reasonable attorney
fees, under Rule 802(1), which states:
Upon failure to comply with any of the
aforementioned rules, the Industrial Commission may
subject the violator to any of the sanctions
outlined in Rule 37 of the North Carolina Rules of
Civil Procedure, including reasonable attorney fees
to be taxed against the party or his counsel whose
conduct necessitates the order.
Workers' Comp. R. of N.C. Indus. Comm'n 802.
In the instant case, Adams initially refused to stipulate to
Levey's report. When counsel did change his mind, he failed to notify
Dillon. Defense counsel therefore continued to try to locate Levey in
Arizona and then spent even more time and money scheduling the
deposition. Only when defense counsel contacted plaintiff's counsel to
arrange a deposition time did defense counsel learn that he had agreed
to stipulate. The Commission did not abuse its discretion in assessing
attorney fees. Its decision is supported by the facts and is valid
under Rule 612(2), although we note Rule 802(1) is not directly
applicable because the action taken by the Commission is fully within
the scope of Rule 612(2). We therefore reject this argument.
[5]Plaintiff also argues that the time and fee calculation (3.3
hours at $115 per hour and 4.4 hours at $70 per hour) only equals $680,
not the $1,000 awarded. Although his mathematical total is
approximately correct, there is no requirement that the amount of
attorney fees set by the Commission in its discretion under Rule 612
equal any set formula of time or expenditure. We hold the $1,000
attorney fee is not unreasonable and reject plaintiff's second
assignment of error.
Accordingly, we affirm the decision of the Commission.
AFFIRMED. Judges WALKER and MCCULLOUGH concur.
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