Troxell v Buchanan, (02-643) 04/15/2003

Appeal by intervenors from order entered 14 February 2002 by Judge William Z. Wood, Jr., in Forsyth County Superior Court. Heard in the Court of Appeals 12 February 2003.

Comerford & Britt, L.L.P., by W. Thompson Comerford, Jr. for plaintiff-appellee.

Womble, Carlyle, Sandridge & Rice, P.L.L.C., by Clayton M. Custer and Philip J. Mohr, for intervenors-appellants.

    CALABRIA, Judge.

    On 17 August 2000, Bruce Troxell (“decedent”), while acting within the scope of his employment, was killed in an automobile accident. On 25 April 2001, decedent's wife, Joy Troxell, executrix of the estate (“plaintiff”), filed suit against Buchanan, the driver of the car that rear-ended decedent's car, and Buchanan's rental car company. Buchanan's insurance coverage totaled $400,000.00. On 6 August 2001, pursuant to an agreement between plaintiff and two other claimants, the court entered a judgment awarding plaintiff $133,333.33, which represents one-thirdof Buchanan's insurance coverage. On 13 August 2001, intervenors Troxell Construction Company, decedent's employer,   (See footnote 1) and Key Risk Management Services, Inc. (“Key Risk”), the workers' compensation insurer, filed a notice of appearance and a workers' compensation lien pursuant to N.C. Gen. Stat. § 97-10.2 (2001). Thereafter, plaintiff moved to strike the workers' compensation lien pursuant to N.C. Gen. Stat. § 97-10.2(j). Intervenors filed an affidavit by Lynn Key, a claims representative of Key Risk, opposing the motion. Plaintiff filed affidavits of Joy Troxell and Dr. J. Finley Lee (“Dr. Lee”) in support of the motion. A hearing on the motion was held on 14 February 2002, and the trial court entered an order granting plaintiff's motion to strike the workers' compensation lien. Intervenors appeal.
    Intervenors assert the trial court erred by: (I) improperly considering plaintiff's supporting affidavits; and (II) granting plaintiff's motion to strike the workers' compensation lien.

Intervenors argue the trial court erred in considering the affidavits of Joy Troxell and Dr. Lee, asserting they were filed in violation of N.C. Gen. Stat. § 1A-1, Rule 6(d)(2001). Plaintiff asserts intervenors failed to object to the affidavits at the hearing, and therefore waived appellate review, or, alternatively, intervenors are not entitled to appellate review because they did not assert the issue affects a substantial right. The first question is whether this assignment of error was properly preserved for appellate review. “In order to preserve a question for appellate review, a party must have presented to the trial court a timely request, objection, or motion... [and] obtain a ruling upon the party's request, objection or motion.” N.C. R. App. 10(b)(1) (2001). Moreover, our review is based “solely upon the record on appeal.” N.C. R. App. 9(a) (2001). The burden rests on the appealing party to demonstrate, “by presenting a full and complete record,” that a basis for the appeal exists. Dolbow v. Holland Industrial, 64 N.C. App. 695, 696, 308 S.E.2d 335, 336 (1983). Here, while intervenors assert they orally objected to the consideration of the affidavits, plaintiff asserts no such objection was made. There is no transcript of the proceedings. Without a transcript, this Court has no basis for determining whether intervenors properly preserved this issue for appellate review. Without a proper recording of the objection, this Court cannot read an objection into the record.

    Intervenors argue the trial court abused its discretion by ordering the workers' compensation lien be striken pursuant to N.C. Gen. Stat. § 97-10.2(j). Intervenors first assert the trial court erred because N.C. Gen. Stat. § 20-279.21(e) demonstrates a legislative determination that workers' compensation payments shall be subrogated to the receipt of underinsured motorist insurance benefits. Alternatively, intervenors assert the trial court abused its discretion in striking the lien.     Regarding the first argument, N.C. Gen. Stat. § 20-279.21(e) provides:
        Uninsured or underinsured motorist coverage that is provided as part of a motor vehicle liability policy shall insure that portion of a loss uncompensated by any workers' compensation law and the amount of an employer's lien determined pursuant to G.S. 97-10.2(h) or (j). In no event shall this subsection be construed to require that coverage exceed the applicable uninsured or underinsured coverage limits of the motor vehicle policy or allow a recovery for damages already paid by workers' compensation. The policy need not insure a loss from any liability for damage to property owned by, rented to, in charge of or transported by the insured.

N.C. Gen. Stat. § 20-279.21(e) (2001) (emphasis added). While this provision demonstrates the legislative determination that the coverage shall insure the portion of the workers' compensation lien, we do not find support for intervenors' assertion that the provision prevents the trial court from properly determining the amount of the lien was zero. In fact, N.C. Gen. Stat. § 20- 279.21(e) expressly references N.C. Gen. Stat. § 97-10.2(j), which provides:
        in the event that a judgment is obtained by the employee in an action against a third party . . . either party may apply to . . . the presiding judge before whom the cause of action is pending, to determine the subrogation amount. After notice to the employer and the insurance carrier, after an opportunity to be heard by all interested parties, and with or without the consent of the employer, the judge shall determine, in his discretion, the amount, if any, of the employer's lien, whether based on accrued or prospective workers' compensation benefits, and the amount of cost of the third-partylitigation to be shared between the employee and employer.

N.C. Gen. Stat. § 97-10.2(j) (emphasis added). This statute plainly grants the trial court discretion in determining “the amount, if any” of the workers' compensation lien referenced in N.C. Gen. Stat. § 20-279-21(e). Accordingly, we overrule this assignment of error.
    Intervenors also assert the trial court abused its discretion by misapplying factors in determining the amount of the lien pursuant to N.C. Gen. Stat. § 97-10.2(j). The statute provides:
        The judge shall consider [1.] the anticipated amount of prospective compensation the employer or workers' compensation carrier is likely to pay to the employee in the future, [2.] the net recovery to plaintiff, [3.] the likelihood of the plaintiff prevailing at trial or on appeal, [4.] the need for finality in the litigation, and [5.] any other factors the court deems just and reasonable, in determining the appropriate amount of the employer's lien.

N.C. Gen. Stat. § 97-10.2(j). In determining the amount of a lien, if any, “the law requires that a reasoned choice be made.” U.S. Fidelity and Guaranty Co. v. Johnson, 128 N.C. App. 520, 523, 495 S.E.2d 388, 391 (1998) (holding the trial court did not abuse its discretion in reducing a lien to nothing because “[t]he trial court could have reasonably concluded the funds obtained from the settlement inadequately compensated Mr. Johnson's family for his death and that equity called for reduction of the lien.”).
    The trial court found, per factors (1) and (2), that the present value of the anticipated amount of workers' compensation payments was $270,000.00 and plaintiff's net recovery isanticipated to be $1,050,000.00. Regarding factors (3) and (4), plaintiff was likely to prevail on the issues, and a settlement was being negotiated. The lien amount needed to be established before the settlement could be finalized. Therefore, both the likelihood of plaintiff prevailing and the finality of the matter depended upon the court's action on the motion. Finally, the court, in its discretion also found that: the settlement is inadequate to fully compensate decedent's family; intervenors did not begin paying death benefits for nearly fifteen months following decedent's death; intervenors did not participate in the litigation against the tortfeasors, nor did they advance costs or expenses to assist plaintiff in the litigation. The court determined, in its discretion, “it is fair, equitable and just in this cause that the subrogation lien in favor of the employer and carrier should be reduced in its entirety and that the employer and carrier recover nothing from plaintiff by way of subrogation.”
    Given the court's consideration of the statutory factors, and that its determination is supported by reason, we cannot find the trial court abused its discretion. Accordingly, the order of the trial court is affirmed.
    Affirmed.
    Judges McCULLOUGH and TYSON concur.
    Report per 30(e).

Footnote: 1