Appeal by defendant from opinion and award entered 4 August
2000 by the North Carolina Industrial Commission. Heard in the
Court of Appeals 23 August 2001.
H. Russell Vick & Associates, by Marty Houglan, for plaintiff-
appellee.
Attorney General Michael F. Easley, by Special Deputy Attorney
General Robert T. Hargett, for the State.
MARTIN, Judge.
Defendant appeals from an opinion and award of the North
Carolina Industrial Commission awarding plaintiff benefits for
total and permanent disability, and denying defendant's request for
credit for a portion of a lump sum payment previously made to
plaintiff for permanent partial disability.
The record shows that plaintiff began employment with the
North Carolina Department of Labor (defendant-employer) as a boiler
inspector in February 1992. Prior to his employment with
defendant-employer, plaintiff had a history of medical problemswith his right hip, and sometime prior to 1973, had undergone
surgery on his right hip. However, the nature of that surgery is
unclear since no medical records with respect thereto were
submitted into evidence. In 1973, plaintiff underwent a cup
arthroplasty to his right hip, which was effective until 1
September 1993, when plaintiff fell while working for defendant-
employer and suffered injury to his right hip. Plaintiff's fall
caused his right hip replacement prosthesis to loosen making it
necessary for plaintiff to undergo a third hip surgery in December
1993 for removal and replacement of loose parts. Pursuant to a
Form 21 Agreement between the parties, approved by the Commission
on 10 November 1993, plaintiff was paid benefits for temporary
total disability from 2 September 1993 until 19 June 1994, when he
returned to work. He was rated with a seventy-five percent
permanent impairment of his right hip and a Form 26 agreement was
executed by the parties and approved by the Industrial Commission
on 28 June 1995. Pursuant to this agreement and G.S. § 97-31,
plaintiff was to be paid compensation for permanent partial
disability from 20 June 1994 for 150 weeks at an average weekly
compensation rate of $442.00. In accordance with plaintiff's
request, the payment was made in a lump sum of $66,300 on or about
1 July 1995.
In August 1995, plaintiff alleged a change in his condition;
defendant-employer began paying plaintiff temporary total
disability benefits on or about 25 October 1995 at the rate of
$442.00 per week. Plaintiff underwent additional surgery in
December 1995, however his condition has continued to deteriorateand he has been unable to return to work. Defendant-employer
accepted liability for plaintiff's additional medical expenses but
denied that plaintiff is entitled to benefits for permanent total
disability under G.S. § 97-29 (Compensation Rates for Total
Incapacity) because plaintiff had already elected and received an
award pursuant to G.S. § 97-31 (Schedule of Injuries).
After a deputy commissioner ordered defendant-employer to pay
plaintiff benefits for permanent total disability and concluded
that it was “not entitled to a credit toward total permanent
disability benefits for the compensation previously paid for
Plaintiff's permanent impairment rating to his right leg,”
defendant-employer appealed to the Full Commission. The Full
Commission issued its opinion and award concluding that plaintiff
was permanently disabled and was entitled to recover permanent
total disability benefits pursuant to G.S. § 97-29. Defendant was
ordered to “pay plaintiff ongoing benefits at the rate of $442.00
per week until further order of the Commission . . . ”, and to
“continue to pay all medical expenses which may be incurred for
reasonably necessary medical treatment of plaintiff's right hip,
including any future surgery which may be necessary.” The
Commission concluded that defendant-employer was not entitled to
any credit toward permanent disability benefits for the
compensation which it had previously paid plaintiff for permanent
partial disability pursuant to G.S. § 97-31. The Full Commission
noted that “[i]f the compensation had been paid on a weekly basis
it would have been superseded by the total disability payments.
However, as paid in a lump sum it was due and payable when paid andN.C. Gen. Stat. § 97-24 [sic] does not provide a credit.”
;
(See footnote 1)
Defendant-employer appeals.
Defendant-employer contends the Full Commission erred in
failing to award it credit for 81 weeks of permanent partial
disability payments which it made to plaintiff pursuant to G.S. §
97-31. Defendant-employer argues the permanent partial disability
payments, though paid in a lump sum, were actually paid for time
periods which overlapped the payments ordered for permanent total
disability, so that the Commission's refusal to grant a credit
resulted in a double recovery by plaintiff.
The North Carolina Workers' Compensation Act provides
compensation to an employee who suffers an injury by accident
arising out of and in the course of his employment. N.C. Gen.
Stat. § 97-2(6) (1999). Plaintiff was compensated under both G.S.
§ 97-31 and G.S. § 97-29. G.S. § 97-31
provides for compensation for temporary
disability during the healing period of the
injury and for permanent disability at the end
of the healing period, when maximum recovery
has been achieved. Disability compensation
under G.S. 97-31 is awarded for physical
impairment irrespective of ability to work or
loss of wage earning power, and is
in lieu of
all other compensation.
Crawley v. Southern Devices, Inc., 31 N.C. App. 284, 288, 229
S.E.2d 325, 328 (1976) (emphasis added),
disc. review denied, 292N.C. 467, 234 S.E.2d 2 (1977).
Additionally, according to G
.S. §
97-31, “a disability is deemed to continue after the employee's
healing period, and the employee is entitled to compensation for
the number of weeks specified in the statute.”
Gray v. Carolina
Freight Carriers,
Inc., 105 N.C. App. 480, 484, 414 S.E.2d 102, 104
(1992). G.S. § 97-29, on the other hand, provides for compensation
when an employee's injury is total and permanent causing the
employee to be incapable of working. Under G.S. § 97-29, the
employer must pay compensation to the injured employee during the
employee's lifetime.
Gray, 105 N.C. App. at 484, 414 S.E.2d at
104. An employee may not receive compensation under G.S. § 97-31
and G.S. § 97-29 at the same time. N.C. Gen. Stat. § 97-34.
However, the employee may choose the more favorable remedy.
Whitley v. Columbia Lumber Mfg. Co., 318 N.C. 89, 348 S.E.2d 336
(1986). According to G.S. § 97-34:
If an employee receives an injury for
which compensation is payable, while he is
still receiving or entitled to compensation
for a previous injury in the same employment,
he shall not at the same time be entitled to
compensation for both injuries, unless the
later injury be a permanent injury such as
specified in G.S. 97-31; but he shall be
entitled to compensation for that injury and
from the time of that injury which will cover
the longest period and the largest amount
payable under this Article.
Our Court has concluded that the legislature intended this Act to
prevent “the stacking of total benefits on top of partial benefits,
for the same time period . . . .”
Smith v. American and Efird
Mills, 51 N.C. App. 480, 490, 277 S.E.2d 83, 89 (1981),
modified by305 N.C. 507, 290 S.E.2d 634 (1982).
Defendant-employer contends that it is entitled to a partial
credit for payments made to plaintiff pursuant to G.S. § 97-31 for
the permanent partial disability rating of his right hip.
Plaintiff was paid a lump sum payment of $66,300 pursuant to G.S.
§ 97-31 for the permanent partial disability rating of seventy-five
percent of his right hip, covering a period of 150 weeks from 20
June 1994 at a weekly compensation rate of $442. Plaintiff was
also paid total disability benefits pursuant to G.S. § 97-29
beginning 25 October 1995 and continuing to the present.
Therefore, the payment periods of permanent partial disability
benefits and permanent total disability benefits overlap for 81
weeks, and defendant-employer argues that it is entitled to a
credit for those weeks.
It is clear from G.S. § 97-34 that the General Assembly
intended to prevent double recovery of workers' compensation
benefits when an employee is entitled to disability benefits under
both G.S. § 97-29 and G.S. § 97-31. Therefore, we believe the
correct interpretation of G.S. § 97-34 is that the payment periods
may not overlap regardless of whether the employee is “still
receiving” compensation or currently “entitled to compensation.”
Surely the legislature's intention could not have been to allow
employees who received a lump sum instead of weekly payments to
receive double recovery for the overlap of time periods. Thus, a
lump sum payment should be treated as if the employee had received
weekly payments for the applicable payment period under G.S. § 97-
31 in order to prevent double recovery. The Industrial Commission noted in its opinion and award that
it was unable to credit defendant-employer for the overlapping 81
weeks because G.S. § 97-42 (the statute providing credit for
employers) did not cover this case. We acknowledge that this Court
has stated in several cases that G.S. § 97-42 is the only statutory
authority for allowing an employer in North Carolina any credit
against workers' compensation payments due an injured employee.
Gray, 105 N.C. App. at 484, 414 S.E.2d at 104;
Johnson v. IBM, 97
N.C. App. 493, 389 S.E.2d 121 (1990). G.S. § 97-42 provides:
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
when made, may, subject to the approval of the
Commission be deducted from the amount to be
paid as compensation. Provided, that in the
case of disability such deductions shall be
made by shortening the period during which
compensation must be paid, and not by reducing
the amount of the weekly payment (emphasis
added).
As applied to these facts, the Commission reasoned that the
lump sum payment for which defendant is requesting partial credit,
was “due and payable when made” and therefore, G.S. § 97-42 would
not allow defendant to receive credit for it. We agree that the
lump sum payment was “due and payable when made” since defendant-
employer had accepted plaintiff's injury as compensable under
workers' compensation at the time the payment was made.
See Foster
v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d 670 (1987).
However, this is not a “credit” case and therefore, G.S. § 97-42 is
not applicable. This case involves the Commission's duty to adjust
plaintiff's compensation to comply with G.S. § 97-34 so that theG.S. § 97-29 award does not overlap with the G.S. § 97-31 aw
ard.
The lump sum payment should have been treated as if plaintiff had
been paid each week for 150 weeks. Therefore, in the case
sub
judice, the Commission had a duty to order that defendant begin
paying the total disability payments after the 150 weeks (period of
time that the permanent partial disability lump sum payment was to
cover) had expired. Thus, defendant should not have been required
to pay plaintiff permanent total disability payments for 81 weeks
after the Commission's opinion and award. Since the Commission
failed to so order, we must now hold that defendant-employer is
entitled to refrain from making permanent total disability payments
to plaintiff for 81 weeks in order to prevent double recovery.
Reversed.
Judges McCULLOUGH and BIGGS concur.
Footnote: 1