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NO. COA01-1179
NORTH CAROLINA COURT OF APPEALS
Filed: 6 August 2002
NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION,
Plaintiff
v.
INTERNATIONAL PAPER COMPANY, f/k/a FEDERAL PAPER BOARD COMPANY,
INC., JOHNS MANVILLE INTERNATIONAL, INC., CAROLINA STALITE
COMPANY, LIMITED PARTNERSHIP, PIEDMONT INSULATION, INC., TEXFI
INDUSTRIES, INC., GENE'S ELECTRIC, INC., BENJAMIN F. SHAW
COMPANY, ROHN INDUSTRIES, INC., T.C. HENDRIX, d/b/a HENDRIX
GARBAGE DISPOSAL, D. & B. INSULATION COMPANY, INC., MILLER
BREWING COMPANY, PI MECHANICAL, INC., BROYHILL INDUSTRIES, INC.,
RHYNE MILLS, INC. AND B & G HEATING & AIR CONDITIONING, INC.,
Defendants
Appeal by plaintiff from order entered 12 June 2001 by Judge
Howard E. Manning, Jr., in Wake County Superior Court. Heard in
the Court of Appeals 22 May 2002.
Moore & Van Allen, PLLC, by Joseph W. Eason and Christopher J.
Blake, for plaintiff-appellant.
Battle, Winslow, Scott & Wiley, PA, by Marshall A. Gallop,
Jr., for defendant-appellee International Paper Company f/k/a
Federal Paper Board Company, Inc.
Parker, Poe, Adams & Bernstein LLP, by James C. Thornton and
Kevin L. Chignell, for defendant-appellee Gamewell Mechanical,
Inc.
Cranfill, Sumner & Hartzog, LLP, by Anthony T. Lathrop and
Erin Fleming Taylor, for defendant Miller Brewing Company.
Wallace & Graham, PA, by Edward L. Pauley, Amanda Kims, and
Jean Martin; Donaldson & Black, PA, by Todd Cline; Martin &
Jones, by H. Forest Horne, Jr., for intervenors Lawrence
Grace, et al.
BRYANT, Judge.
On 7 July 2000, the North Carolina Insurance Guaranty
Association (Association) commenced this action seeking adeclaratory judgment as to its responsibilities pursuant to certain
1992 amendments to N.C.G.S. § 58-48-1 to -130 (Insurance Guaranty
Association Act) and N.C.G.S. § 97-1 to -200 (North Carolina
Workers' Compensation Act). The 1992 amendments in question,
assigned to the Association certain responsibilities for claims
made against insurers which had issued policies of workers'
compensation insurance and became insolvent prior to 1 January
1993.
In the original complaint, the Association brought suit
against sixteen employers to whom policies of insurance had been
issued by insurers that had become insolvent prior to 1993, and
against whom certain workers' compensation claims had been filed
several years after 1993. After the dismissal of several of the
original named employer defendants, the Association filed an
amended complaint again naming sixteen employers as defendants and
seeking the same relief. Sometime between the filing of the
original and amended complaint, a number of employees or their
representatives, filed motions to intervene in this proceeding.
The motions to intervene were allowed.
Several employers and intervenors filed motions to dismiss the
complaint. Following a hearing held on 17 November 2000, in an
order filed on 12 June 2001, the motions to dismiss this action
were allowed pursuant to N.C.R. Civ. P. 12(b)(1) (lack of subject
matter jurisdiction). The Association gave its notice of appeal on
9 July 2001.
1992 Amendments
Prior to 1992, the Commissioner of Insurance administered
security funds, established in Article 3 of Chapter 97, to pay
workers' compensation claims against employers whose insurance
carriers had become insolvent. In 1992, the General Assembly
enacted legislation amending the Insurance Guaranty Association Act
(IGAA) and the Workers' Compensation Act, to bring these claims
within the scope of the IGAA and under the administration of the
Association.
See 1991 N.C. Sess. Laws 802, § 6. The balances of
the security funds previously created pursuant to Chapter 97, were
transferred to two new separate accounts created within the IGAA.
(See footnote 1)
The Association assumed responsibility for administering the
accounts in accordance with the provisions of Article 48.
The 1992 amendments provided that the Association, in
administering the funds, is to "[p]ay stock or mutual carrier
claims made against the security funds . . . but only for claims
existing before January 1, 1993." 1991 N.C. Sess. Laws 802, § 7.
In addition, the amendments provided that funds "shall be used to
pay the claims against insolvent stock workers' compensation
insurers and insolvent mutual workers' compensation insurers,
respectively, . . . where the insolvency occurred prior to January
1, 1993 . . . ." 1991 N.C. Sess. Laws 802, § 10.
___________________________________
Issue
The issue presented is whether the trial court had subjectmatter jurisdiction to interpret the scope of the Association's
statutory responsibilities under the 1992 amendments.
Specifically, the Association seeks a declaratory judgment as to
whether it is obligated to defend and indemnify workers'
compensation claims against insolvent insurers that arose prior to
1 January 1993, but which were not filed until after that date.
For the following reasons, we hold that the trial court lacked
subject matter jurisdiction to adjudicate the issue presented. The
decision of the trial court is therefore affirmed.
Analysis
The Industrial Commission is vested with jurisdiction to hear
"[a]ll questions arising under" the Workers' Compensation Act.
N.C.G.S. § 97-91 (2001). By statute, the Industrial Commission is
charged with the duty of administering provisions of the Act such
as to provide speedy, substantial and complete relief to all
parties bound by the Act.
Greene v. Spivey, 236 N.C. 435, 445-46,
73 S.E.2d 488, 496 (1952);
see N.C.G.S. § 97-77 (2001). In
addition to jurisdiction conferred by statute, our Supreme Court
has stated that the Industrial Commission "possesses such judicial
power as is necessary to administer the Workers' Compensation Act."
Hogan v. Cone Mills Corp., 315 N.C. 127, 138, 337 S.E.2d 477, 483
(1985),
appeal after remand, 94 N.C. App. 640, 381 S.E.2d 151
(1989),
reversed on other grounds, 326 N.C. 476, 390 S.E.2d 136
(1990).
The workers' compensation claims referenced in the
Association's complaint involve alleged occupational diseasessuffered by employees and allegedly caused by exposure to hazardous
materials found in the employees' workplaces. The Association's
action seeks,
inter alia, to determine whether these employees (and
similarly situated employees) are entitled to receive workers'
compensation benefits out of the Stock Fund and/or Mutual Accounts
Fund.
In making such a determination, certain issues of material
fact arise, including: "1) how long was [the] employee exposed to
the hazards of the occupational disease; 2) in whose employment was
employee last injuriously exposed to the hazards of the
occupational disease; and 3) who was the insurance carrier, if any,
on the risk when [the] employee was last exposed."
These factual
determinations are within the exclusive jurisdiction of the
Industrial Commission. In fact, these exact issues are pending
before the Industrial Commission in the workers' compensation
claims referenced in the Association's complaint.
The Industrial Commission has jurisdiction to interpret laws
bearing on the claims before it.
Pearson v. C.P. Buckner Steel
Erection Co., 348 N.C. 239, 498 S.E.2d 818 (1998),
appeal after
remand, 139 N.C. App. 394, 533 S.E.2d 532 (2000),
review denied,
353 N.C. 379, 547 S.E.2d 434 (2001). Its jurisdiction also
includes the right and duty to decide questions of fact and law
regarding the liability of an insurance carrier.
Spivey v. General
Contractors, 32 N.C. App. 488, 232 S.E.2d 454 (1977);
see also,
Greene v. Spivey, 236 N.C. 435, 73 S.E.2d 488 (1952) (holding that
questions of insurance coverage are within the jurisdictionalparameters of the Industrial Commission). Pursuant to N.C.G.S. §
58-48-35(a)(2) (2001), the Association is deemed an insurer for the
purposes of rendering payment for workers' compensation claims of
insolvent insurers.
In the case at bar, the relief sought by the Association would
directly impact upon the Industrial Commission's duty to determine
whether indemnification and defense benefits are entitled to be
granted in cases pending before the Industrial Commission. The
Industrial Commission is empowered by statute and precedent to
adjudicate the issue presented by the Association. We therefore
affirm the decision of the trial court and hold that the trial
court lacked subject matter jurisdiction regarding the issue
involved.
AFFIRMED.
Judges WALKER and McCULLOUGH concur.
Footnote: 1 The legislation created a new Stock Fund Account and
Mutual Fund Account.
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