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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
BOBBY L. ROBERTS Employee/Plaintiff, v. CENTURY CONTRACTORS,
INC., Employer, AND ROYAL & SUNALLIANCE INSURANCE COMPANY,
Filed: 17 February 2004
1. Workers' Compensation--mediated settlement agreement--mutual mistake--
maximum medical improvement
The Industrial Commission did not err in a workers' compensation case by voiding the
parties' mediated settlement agreement based on mutual mistake of fact, and the Commission's
opinion and award filed 18 September 2002 is affirmed because: (1) the Commission made
explicit findings that the parties believed that plaintiff had reached maximum medical
improvement and, further, that they materially relied upon this fact in reaching a settlement; and
(2) there was competent record evidence to support the Commission's findings that the parties
were mistaken as to whether plaintiff had reached maximum medical improvement and that this
mistaken fact was material.
2. Workers' Compensation_-jurisdiction--appeal to Court of Appeals
The Industrial Commission's opinion and award in a workers' compensation case issued
on 10 March 2003 must be vacated, because: (1) an appeal to the Court of Appeals divests the
Industrial Commission of jurisdiction to issue opinions and awards; (2) although an appeal is not
perfected until docketed in the Court of Appeals, perfection relates back to the time that notice of
appeal is given; and (3) defendants gave notice of appeal of the Commission's 18 September
2002 award, thus divesting the Commission of jurisdiction to issue its 10 March 2003 award.
Appeal by defendants from Opinions and Awards filed 18
September 2002 and 10 March 2003 by the North Carolina Industrial
Commission. Heard in the Court of Appeals 17 November 2003.
Richard W. Rutherford for plaintiff-appellee.
McAngus, Goudelock & Courie, by Robert B. Starnes, for
Plaintiff (Bobby Roberts) suffered a compensable injury by
accident on 28 July 1993 when he was struck by a pipe while working
for Century Contractors, Incorporated, causing trauma to his neck
and back. Defendants admitted liability, and plaintiff sought
treatment for his injuries with Dr. James Markworth of SoutheasternOrthopaedic Clinic. Dr. Markworth diagnosed plaintiff as having
some narrowing of the cervical spinal canal and some degeneration
of multiple levels of the cervical disks, with bulging of some of
the discs. Dr. Markworth performed an anterior cervical discectomy
infusion at C3-4, C4-5, C5-6, and C6-7 with bone grafts being
placed at each location.
Following this surgery, Dr. Markworth reviewed plaintiff's x-
rays and determined that while the films showed a line at the
inferior margins of the C3-4 graft, C5-6 graft, and maybe the C6-7
graft, these areas appeared to be remolding nicely. Dr. Markworth
subsequently indicated that plaintiff was at maximum medical
improvement and stopped treating plaintiff. A physician's
assistant at Southeastern Orthopaedic Clinic continued to treat
plaintiff. Because he was still experiencing pain, plaintiff
issued a request for a second medical opinion on 3 April 1998.
On 2 June 1998, plaintiff saw Dr. Allen Friedman for a second
medical opinion. Dr. Friedman noted that there was a question of
lucency below the graft at C5-6 and that x-rays needed to be
repeated to be sure that the fusion was stable. Dr. Friedman
indicated his concern to plaintiff that current x-rays needed to be
obtained to be certain as to whether the fusion was solid.
The parties attended a mediation on 13 May 1998. The
negotiation resulted in a settlement amount of $125,000 and payment
of related medical expenses. Following his visit to Dr. Friedman,
plaintiff executed the settlement agreement that had been
negotiated on 13 May 1998. The settlement agreement contained a
waiver of any right to make further claims in regard to plaintiff'sinjury. The settlement agreement was approved by the North
Carolina Industrial Commission on 25 June 1998.
Plaintiff subsequently filed a claim for Workers'
Compensation, seeking compensation and medical benefits for the
same injuries which were addressed in the settlement agreement.
Plaintiff alleged that the Commission should set aside the
settlement agreement pursuant to N.C.G.S. § 97-17 due to mutual
mistake of fact. In support of this allegation, plaintiff offered
Dr. Markworth's deposition testimony that his office's diagnosis of
maximum medical improvement was a mistake.
The Full Commission found that the parties had mistakenly
relied on Dr. Markworth's diagnosis of maximum medical improvement
and that this fact was material to the settlement agreement. The
Full Commission set aside the agreement and awarded plaintiff
compensation and medical benefits in an Opinion and Award filed on
18 September 2002. Defendants gave Notice of Appeal, which was
received by the Industrial Commission on 8 October 2002. While the
appeal was pending, the Full Commission filed another Opinion and
Award on 10 March 2003, which also set aside the settlement
agreement due to mutual mistake.
Defendants appeal from both Opinions and Awards, contending
(1) the first Opinion and Award must be reversed because the Full
Commission erred in setting aside the parties' mediated settlement
agreement on the basis of mutual mistake of fact, and (2) the
second Opinion and Award must be vacated because the Full
Commission lacked jurisdiction to issue it. We affirm the 18September 2002 Opinion and Award, and vacate the 10 March 2003
Opinion and Award.
 We first address defendants' argument that the Commission
committed reversible error when it voided the parties' settlement
agreement due to mutual mistake of fact.
On appeal from an opinion and award of the North Carolina
Industrial Commission, the standard of review is limited to
reviewing whether any competent evidence supports the Commission's
findings of fact and whether the findings of fact support the
Commission's conclusions of law. Deese v. Champion Int'l Corp.,
352 N.C. 109, 116, 530 S.E.2d 549, 553 (2000). The Industrial
Commission's findings of fact are conclusive on appeal if
supported by competent evidence even though there is evidence to
support a contrary finding. Murray v. Associated Insurers, Inc.,
341 N.C. 712, 714, 462 S.E.2d 490, 491 (1995).
Commission is the sole judge of the weight and credibility of the
evidence. . . . Deese, 352 N.C. at 116, 530 S.E.2d at 553.
[T]his Court is not at liberty to reweigh the evidence and to set
aside the findings . . . simply because other . . . conclusions
might have been reached. Baker v. City of Sanford, 120 N.C. App.
783, 787, 463 S.E.2d 559, 562 (1995) (citation and quotation marks
omitted). This Court reviews the Commission's conclusions of law
de novo. Griggs v. E. Omni Constructors, 158 N.C. App. 480, 483,
581 S.E.2d 138, 141 (2003).
The North Carolina Workers' Compensation Act permits parties
to enter into settlement agreements, subject to approval by theCommission, so long as the amount of compensation and the time and
manner of payment are in accordance with the provisions of [the
Act]. N.C.G.S. § 97-17(a) (2003).
No party to any agreement for compensation
approved by the Commission shall deny the
truth of the matters contained in the
settlement agreement, unless the party is able
to show to the satisfaction of the Commission
that there has been error due to fraud,
misrepresentation, undue influence or mutual
mistake, in which event the Commission may set
aside the agreement.
Id. (emphasis added). Compromise settlement agreements, including
mediated settlement agreements [in Workers' Compensation cases],
are governed by general principles of contract law. Lemly v.
Colvard Oil Co., 157 N.C. App. 99, 103, 577 S.E.2d 712, 715 (2003)
(citation and internal quotation marks omitted).
It is a well-settled principle of contract law that a valid
contract exists only where there has been a meeting of the minds as
to all essential terms of the agreement. Northington v.
Michelotti, 121 N.C. App. 180, 184, 464 S.E.2d 711, 714 (1995).
Therefore, where a mistake is common to both parties and concerns
a material past or presently existing fact, such that there is no
meeting of the minds, a contract may be avoided. Howell v. Waters,
82 N.C. App. 481, 486, 347 S.E.2d 65, 69 (1986).
To afford relief, the mistake must be of a certain nature.
The fact about which the parties are mistaken must be an existing
or past fact. Id. (citation omitted). The mistaken fact must
also be material, which has been described to mean the following:
[I]t must be as to a fact which enters into
and forms the basis of the contract, or in
other words it must be of the essence of the
agreement, the sine qua non, or, as issometimes said, the efficient cause of the
agreement, and must be such that it animates
and controls the conduct of the parties.
Id. (quoting MacKay v. McIntosh, 270 N.C. 69, 73-74, 153 S.E.2d
800, 804 (1967)). See also Caudill v. Chatham Mfg. Co., 258 N.C.
99, 128 S.E.2d 128 (1962) (discussing, but not applying, the
doctrine of mutual mistake of fact in a Workers' Compensation case
one year before the General Assembly amended the Act to include
mutual mistake as a ground for avoiding a settlement agreement).
Additionally, relief from a contract due to mistake of fact
will be had only where both parties to an agreement are mistaken.
Thompson-Arthur Paving Co. v. Lincoln Battleground Assocs., Ltd.,
95 N.C. App. 270, 278, 382 S.E.2d 817, 822 (1989). Thus, as a
general rule relief will be denied where the party against whom it
is sought was ignorant that the other party was acting under a
mistake and the former's conduct in no way contributed thereto.
Id. (citation and quotation marks omitted). Likewise, a party who
assumed the risk of a mistaken fact cannot avoid a contract. Id.
A party bears the risk of a mistake when
(a) the risk is allocated to him by agreement
of the parties, or
(b) he is aware, at the time the contract is
made that he has only limited knowledge with
respect to the facts to which the mistake
relates but treats his limited knowledge as
(c) the risk is allocated to him by the court
on the ground that it is reasonable in the
circumstances to do so.
Restatement (Second) Contracts, § 154 (1979) (quoted and applied in
Howell, 82 N.C. App. at 488, 347 S.E.2d at 70). What a party believes the facts and circumstances to be and
whether those beliefs induce a party to act are questions
concerning that party's mental state. Such questions about the
operation of a party's mind have been held to be questions of fact.
See Farmers Bank v. Michael T. Brown Distribs., Inc., 307 N.C. 342,
348, 298 S.E.2d 357, 360 (1983). Likewise, [w]hether [a party]
has assumed the risk of mistake is a question of fact . . ..
Thompson-Arthur Paving Co., 95 N.C. App. at 278, 382 S.E.2d at 822.
In the instant case, the Commission made the following
findings of fact:
10. The x-rays taken in April 1998, six months
after Dr. Markworth or Southern Orthopaedic
Clinic had last treated plaintiff, indicated
Dr. Markworth's diagnosis of maximum medical
improvement . . . was a mistake. Dr.
Markworth testified, and the Full Commission
finds as fact, that advising plaintiff that he
was at maximum medical improvement at that
time was a mistake.
. . .
13. The Full Commission finds as fact, based
on reasonable inference drawn from the
evidence before it, that the finding of
maximum medical improvement and the impairment
rating given by Dr. Markworth were material to
the settlement of this claim and that both
parties relied on this information in entering
into settlement negotiations.
14. Plaintiff testified, and the Full
Commission finds as fact, that being told he
was at maximum medical improvement was
material to his decision to settle his case
and that he would not have settled his case
had he known there was a non-union of his
cervical spine and that he was not at maximum
15. On April 3, 1998, plaintiff had requested
a second opinion from Alan Friedman, M.D.
During mediation, the parties agreed to
plaintiff getting the second opinion.
16. Dr. Friedman saw plaintiff on June 2,
1998. This appointment was eight days prior
to the signing of the settlement agreement.
Plaintiff did not provide Dr. Friedman with
his past medical records. Dr. Friedman
reviewed x-rays from October but was not
certain as to the date of the x-rays. Dr.
Friedman indicated x-rays needed to be
repeated and [sic] to be sure the fusion was
stable. Dr. Friedman indicated his concern to
plaintiff that current x-rays needed to be
obtained to be sure the fusion was solid or
not; however, the carrier would not authorize
the taking of new x-rays. Dr. Friedman
testified, and the Full Commission finds as
fact, that plaintiff was not at maximum
medical improvement with regard to his
cervical spine when he examined plaintiff on
June 2, 1998.
. . . .
20. The greater weight of the evidence
indicates there was a mutual mistake with
regard to plaintiff's medical condition at the
time of the signing of the settlement
Thus, the Commission made explicit findings that the parties
believed that plaintiff had reached maximum medical improvement
and, further, that they materially relied upon this fact in
reaching a settlement. Defendants' essential argument on appeal is
that because plaintiff either knew that there was a possibility
that his fusion was not solid or was negligent in not declining to
sign the settlement agreement, mutual mistake is a legal
impossibility in this case. As the facts also support a contrary
conclusion, we do not agree.
In making its findings, the Commission necessarily had to
consider the issue of whether plaintiff assumed the risk that he
may not have reached MMI and/or that he may have had an
Plaintiff's primary physician advised himthat he had reached maximum medical improvement, and another
physician expressed possible doubt about that conclusion.
doubt expressed by the second physician was never confirmed or
investigated due to circumstances which may not necessarily be
attributed to the plaintiff. The plaintiff testified that he based
his decision to sign the settlement agreement on Dr. Markworth's
diagnosis and that he would not have settled his case if Dr.
Friedman had told him that there was no fusion in the back of his
neck. Thus, there is competent record evidence to support the
Commission's findings that the parties were mistaken as to whether
plaintiff had reached maximum medical improvement and that this
mistaken fact was material. These findings are, therefore, binding
Murray, 341 N.C. at 714, 462 S.E.2d at 491.
We note that when a party asserts assumption of risk as a
defense to recision of a compromise settlement on the grounds of
mutual mistake under G.S. § 97-17(a), it is the better practice for
the Industrial Commission to make a specific finding detailing the
reason(s) the Commission rejects or accepts this contention.
This assignment of error is overruled. We affirm the
Commission's Opinion and Award filed 18 September 2002.
 We next address defendants' contention that the
Commission's Opinion and Award issued 10 March 2003 must be vacated
because the Commission was without authority to issue it.
An appeal to this Court divests the Industrial Commission of
jurisdiction to issue opinions and awards. N.C.G.S. § 1-294
(2003); Andrews v. Fulcher Tire Sales & Serv.
, 120 N.C. App. 602,606-07, 463 S.E.2d 425, 428 (1995). Though an appeal is not
perfected until docketed in this Court, perfection relates back to
the time that Notice of Appeal is given. Woodard v. North Carolina
Local Governmental Employees' Retirement Sys
., 110 N.C. App. 83,
87, 428 S.E.2d 849, 851 (1993).
In the instant case, the Commission filed an Opinion and Award
on 18 September 2002. Defendants gave Notice of Appeal of that
Opinion and Award, which was received by the Commission on 8
October 2002. At this point, the Commission was divested of
jurisdiction in the matter. Nevertheless, on 10 March 2003, the
Commission filed another Opinion and Award even though the appeal
of the first order was still pending. Therefore, the second
Opinion and Award was issued without jurisdiction, and is hereby
The Opinion and Award filed 18 September 2002 is affirmed; the
Opinion and Award filed 10 March 2003 is vacated.
Chief Judge EAGLES concurred prior to 31 January 2004.
Chief Judge MARTIN concurs.
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