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1. Workers' Compensation--injured professional football player--bonuses and fees-- due and payable--no workers' compensation credit for paying
Payments received by a professional football player for a game in which he played, for signing and roster bonuses, and for making public appearances and attending team mini-camps and workouts were due and payable when made under N.C.G.S. § 97-42 and were properly classified as plaintiff's earnings, for which defendants were not entitled to a workers' compensation credit.
2. Workers' Compensation--professional football player--injury protection plan
The evidence did not support an Industrial Commission workers' compensation determination that payments from an injury protection plan to a professional football player were from an employee-funded plan (which affects the way credits are given to defendants).
3. Workers' Compensation--professional football player--payments from injury
A workers' compensation case involving a professional football player was remanded for a finding as to whether defendants would be allowed a credit for payments made pursuant to a Skill and Injury Guarantee Clause.
4. Workers' Compensation--professional football player--injured reserve payments--
A workers' compensation award to a professional football player was remanded where the Industrial Commission did not render any findings of fact or conclusions of law as to whether injured reserve pay agreements modified N.C.G.S. § 97-42 so that defendants would be entitled to a dollar-for-dollar workers' compensation credit for those payments.
5. Workers' Compensation--professional football player--post-injury earnings
potential--findings supported by evidence
There was competent evidence in a workers' compensation case supporting the Industrial Commission's finding about plaintiff's post-injury wage earning capacity.
Richardson Sports Ltd. Partners, d/b/a The Carolina Panthers, et al. (defendants) present the following issues for our consideration: whether the North Carolina Industrial Commission (Commission) erred in (I) only allowing defendants a fourteen- week credit, with an approximately $8,000.00 value, for approximately six million dollars in post-injury payments to plaintiff and not allowing a dollar-for-dollar credit for the total amount paid to plaintiff post-injury, (See footnote 1) (II) awarding plaintiff an automatic right to receive 300 weeks of partial disability benefits, and (III) finding that the $225,000.00 paid to plaintiff pursuant to a contractual injury protection plan represents payments made from revenue designated as employee revenue and not funded by the defendants. We affirm the opinion and award in part and remand this case to the Commission for the reasons stated herein. This is a rare case in which a highly paid individual suffered a compensable injury and occupational disease and received several million dollars after his injury pursuant to his employment contract. In order to determine whether the Panthers were entitled to a credit for the monies paid to plaintiff post-injury requires this Court to interpret and apply N.C. Gen. Stat. § 97-42. The application of this statutory provision in the context of a highly paid professional athlete presents an issue of first impression. Unlike the typical workers' compensation cases, cases such as this usually involve complex collective bargaining agreements and individualized player contracts. Thus, the credit issues arising in this context are complicated, and unlike some other states with professional teams, North Carolina does not have a statute specifically addressing highly paid professional athletes and workers' compensation.
Charles H. Smith, III (plaintiff), entered into a contract with defendants on 1 March 2000 to play professional football for the Carolina Panthers (Panthers) of the National Football League (NFL). The contract was scheduled to end on 28 or 29 February 2005, unless the contract was terminated, extended, or renewed as specified by the contract. The contract provided that defendants would pay plaintiff (1) $800,000.00 for the 2000 season, (2) $1,500,000.00 for the 2001 season, (3) $2,700,000.00 for the 2002 season, (4) $3,500,000.00 for the 2003 season, and (5) $4,000,000.00 for the 2004 season. In addition to the salary, plaintiff would receive financial bonuses such as a $4,500,000.00signing bonus, a $1,000,000.00 roster bonus for each season he was placed on the team's roster starting in 2001, and payments for making public appearances and attending the team mini-camps and workouts. A one-year skill and injury guarantee addendum to the contract provided plaintiff would receive $750,000.00 in 2002 if the team determined plaintiff's skill for performance was unsatisfactory when compared with other players competing for positions on the roster or if plaintiff was unable to pass the team's 2002 preseason physical due to a football-related injury occurring prior to the 2002 season. The Collective Bargaining Agreement (CBA) between the NFL clubs and the NFL Players Association was also a part of plaintiff's contract, and it contained several benefits, including an injury protection provision. Under certain conditions, this provision provides a one-time benefit to injured players during the season after a player's injury. Plaintiff received $225,000.00 under this provision.
Prior to entering into a five-year contract with defendants, plaintiff played football for four years in college and played with the Atlanta Falcons (Falcons) of the NFL from 1992 until 2000. With the Falcons, plaintiff received awards, including being voted greatest defensive lineman in Falcon history, being selected to the All-Pro Bowl NFL team, and being chosen as co-captain in Super Bowl XXXIII. While playing for the Falcons, plaintiff sustained a knee injury and had knee reconstruction surgery in 1994. He only missed one game with the Falcons related to that injury. After joining the Panthers in 2000, plaintiff passed the pre- employment physical examination performed by defendants' physician, which made him eligible to play football. After passing the physical examination, defendants allowed plaintiff to undergo another surgical procedure to get his knee cleaned out. Plaintiff continued rehabilitation treatment and attended practices sporadically. After playing the first two games of the season, plaintiff sustained another knee injury during the third game on 17 September 2000, and plaintiff was placed on injured reserve. While on injured reserve, plaintiff continued to receive his salary. During the 2000 season, plaintiff was paid $800,000.00 in installments of $47,059.00 for seventeen weeks. Three of these installment payments were for the three games in which plaintiff played, including the third game in which he was injured. The remaining fourteen installment payments, totaling $658,826.00, were injured reserve pay.
Plaintiff had knee surgery towards the end of the 2000 regular football season. Defendants decided to place plaintiff on their 2001 roster. As a result, plaintiff received a $1,000,000.00 roster bonus in April 2001. From 2 April 2001 to 21 May 2001 plaintiff participated in mini-camps, workouts, and training camps, for which plaintiff was paid $1,985.72. Plaintiff also made appearances during this time period, for which defendants paid him $2,500.00. According to defendants, on 23 July 2001, plaintiff's contract was terminated due to unsatisfactory skill or performance as compared with that of other players competing for positions onthe club's roster. Defendants paid plaintiff $87,500.00 in severance pay, an amount based on his years of service with the NFL. As the conditions of the contractual injury protection provision were met, plaintiff also received $225,000.00 in installments during the 2001 regular season. In 2002, plaintiff received $750,000.00 pursuant to the one year skill and injury guarantee addendum to his contract.
At the time of the Commission's review, plaintiff earned $40,000.00 per year as a radio announcer for 790 Zone Radio in Atlanta, Georgia. The Commission determined that if it were not for plaintiff's compensable injury, he would have likely made the Panthers's roster and would have had the capacity to earn at least $20,000,000.00 under the contract. (See footnote 2) This figure included his signing bonus of $4,500,000.00, his salary each year, and his projected roster bonus each year. In the Pre-trial Agreement, defendants agreed to pay $588.00 per week, the maximum workers' compensation rate in effect for 2000, until the hearing.
Defendants denied plaintiff's injury was compensable by filing a Form 61 with the Commission on 11 October 2001. Thereafter, on 5 March 2002, defendants filed a Form 60 admitting compensability. The parties then proceeded before the deputy commissioner regarding the amount of workers' compensation, if any, to which plaintiff was entitled. Defendants argued they were entitled to credits forpost-injury payments made to plaintiff. In a 1 July 2002 opinion and award, Deputy Commissioner Phillip A. Holmes determined plaintiff was entitled to 300 weeks of compensation at a rate of $588.00 per week. Defendants were awarded a fourteen week credit. Thus, plaintiff was awarded compensation at the rate of $588.00 per week for 286 weeks and medical expenses. On appeal, the Commission affirmed the opinion and award with some modifications. The Commission concluded [p]laintiff sustained a compensable injury by accident and developed compensable occupational disease(s) as a result of an admittedly compensable event arising out of and in the course of his employment with defendants on September 17, 2000. In the award, plaintiff was awarded partial disability compensation of $588.00 for 300 weeks with a fourteen-week credit to defendants. This would result in a total award of $168,168.00. Plaintiff was also awarded payment for past and future medical coverage for injuries, diseases, and conditions resulting from the injury. Defendants appeal.
 Defendants assert that they are entitled to a greater credit than that awarded by the Commission. Specifically, defendants contend they should have been awarded either a period credit or dollar-for-dollar credit for the following payments:
1 * fifteen payments of $47,059.00 totaling $705,885.00 paid during the 2000 season post-injury,
2 * $1,000,000.00 roster bonus paid on 3 April 2001,
3 * $1,985.72 paid in 2001 for workouts and mini-camps,
4 * a $2,500.00 appearance fee paid on 7 March 2001, 5 * $225,000.00 in injury protection payments for the 2001 season,
6 * $750,000.00 paid during the 2002 season pursuant to the One-Year Skill and Injury Guarantee which is Addendum C to the 2001 contract, and the
7 * $4,500,000.00 signing bonus.
Whether an employer is awarded a credit for payments made to an employee post-injury is governed by N.C. Gen. Stat. § 97-42 (2003), which states:
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. Unless otherwise provided by the plan, when payments are made to an injured employee pursuant to an employer-funded salary continuation, disability or other income replacement plan, the deduction shall be calculated from payments made by the employer in each week during which compensation was due and payable, without any carry-forward or carry-back of credit for amounts paid in excess of the compensation rate in any given week.
This provision expressly provides that payments made by the employer which were 'due and payable' when made are not deductible. Moretz v. Richards & Associates, 316 N.C. 539, 541, 342 S.E.2d 844, 846 (1986); see also Thomas v. B.F. Goodrich, 144 N.C. App. 312, 318-19, 550 S.E.2d 193, 197 (2001) (stating [i]f payments made by an employer are due and payable, the employer may not be awarded a credit for the payments under section 97-42). Our appellate courts have determined there are at least three instances where a payment is due and payable.
First, a payment is due and payable when the Commission has entered an opinion awarding benefits to a claimant. See Foster v. Western-Electric Co., 320 N.C. 113, 115, 357 S.E.2d 670, 672 (1987).
Second, a payment is due and payable after the employer has admitted the worker's injury is compensable and therefore entitled to workers' compensation benefits. (See footnote 3) Moretz, 316 N.C. at 541-42, 342 S.E.2d at 846. As explained by our Supreme Court in Moretz,
[t]he Workers' Compensation Act provides that a policy insuring an employer against liability arising under that Act must contain an agreement by the insurer to pay promptly all benefits conferred by its provisions, and that such agreement is to be construed as a direct promise to the person entitled to compensation. N.C.G.S. § 97-98 (1985). By virtue of this promise, once the employer has accepted an injury as compensable, benefits are due and payable. See also N.C.G.S. § 97-18(b) (1985). Because defendants accepted plaintiff's injury as compensable, then initiated the payment of benefits, those payments were due and payable and were not deductible under the provisions of section 97- 42, so long as the payments did not exceed the amount determined by statute or by the Commission to compensate plaintiff for his injuries.
Id. In Moretz, the Commission determined the plaintiff was entitled to 180 weeks of disability payments. Id. at 542, 342 S.E.2d at 847. However, the employer had admitted compensability and had already paid the plaintiff nearly 255 weeks of disability payments. Id. Thus, our Supreme Court held that [p]laintiff has therefore already received more than he was entitled by statute to receive. . . . Plaintiff has already been fully compensated for his injury, and we hold that defendants owe plaintiff no additional compensation. Id. Thus, if the payments exceed the amount to which the plaintiff is entitled, the employer will not have to pay any additional compensation. See id. at 542, 342 S.E.2d at 847 (stating the employer did not have to pay any additional compensation because the plaintiff had already been fully compensated for his injury).
Third, a payment is due and payable when made if the employee has earned the compensation or benefit. In Christopher v. Cherry Hosp., 145 N.C. App. 427, 550 S.E.2d 256 (2001), the employer denied the employee's workers' compensation claim and the injured employee used fifty-two days of accrued sick leave and vacation leave while she was out of work. Christopher, 145 N.C. App. at 427, 550 S.E.2d at 257. This Court explained that an employee's accumulated vacation and sick leave could be used by the plaintiff for purposes other than those served by the [Workers' Compensation] Act, [and] were not tantamount to workers' compensation benefits. Id. at 430, 550 S.E.2d at 258. We further explained that:
Such benefits have nothing to do with the Workers' Compensation Act . . . .[P]laintiff in the instant case cannot be held to have received duplicative payments for his injury or to have received more than he was entitled by the Workers' Compensation Act to receive.
Id. (citation omitted). Based upon our analysis, we held in Christopher that payments for such vacation and sick leave are 'due and payable' when made because they have been earned by the employee and are not solely under the control of the employer. Id. at 432, 550 S.E.2d at 260.
When, however, an employer makes payments that are not due and payable, the Commission may in its discretion award the employer a credit for the payments pursuant to section 97-42. . . . Thus, this Court's review of the Commission's decision to grant or deny a credit for payments made by an employer that were not due and payable is strictly limited to a determination of whether the record affirmatively demonstrates a manifest abuse of discretion by the Commission.
Thomas, 144 N.C. App. at 319, 550 S.E.2d at 197 (footnote omitted).
Unless otherwise provided by an employer funded salary continuation, wage replacement, or disability plan, when a credit is awarded, the deduction shall be made by shortening the period during which compensation must be paid, and not by reducing the amount of the weekly payment. N.C. Gen. Stat. § 97-42. If the payment was made pursuant to an employer-funded salary continuation, disability, or other income replacement plan, different rules apply.
In Foster v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d 670, our Supreme Court indicated that if an employer pays an employee wage-replacement benefits at a time when workers'compensation benefits are not due and payable, the employer is entitled to a credit. Allowing a credit for these payments is in accord with the public policies behind our Workers' Compensation Act, i.e., to relieve against hardship, to provide payments based upon the actual loss of wages[,] and the avoidance of duplicative payments. Id. at 116-17, 357 S.E.2d at 673.
In Evans v. AT&T Technologies, 332 N.C. 78, 418 S.E.2d 503 (1992), our Supreme Court indicated that the credit for payments made pursuant to an employer-funded wage replacement plan should be a dollar-for-dollar credit. In response to this holding, the General Assembly amended N.C. Gen. Stat. § 97-42 in 1994 to add the following provision:
Unless otherwise provided by the plan, when payments are made to an injured employee pursuant to an employer-funded salary continuation, disability or other income replacement plan, the deduction shall be calculated from payments made by the employer in each week during which compensation was due and payable, without any carry-forward or carry-back of credit for amounts paid in excess of the compensation rate in any given week.
N.C. Gen. Stat. § 97-42 (emphasis added). The statute was amended to modify the decision of the Supreme Court [of North Carolina] in Evans v. AT&T Technologies, 332 N.C. 78, 418 S.E.2d 503 (1992), which provided a dollar-for-dollar credit against workers' compensation due for payments received under an employer-funded disability program. Henry N. Patterson, Jr. and Maxine Eichner, 1994 Workers' Compensation Reform Act, pp. 27-28.
Under the new language, unless otherwise provided by the plan, payments made under anemployer-funded salary continuation, disability or other income replacement plan will be deducted from payments due from the employer in each week during which compensation is payable without any carry- forward or carry-back for credit for amounts paid in excess of the compensation rate in any given week. The employer, therefore, is now entitled only to a credit against compensation payable for weeks during which the employer- funded disability benefits were paid unless otherwise provided in the employer's disability plan.
Id. Therefore, unless otherwise provided by a plan, under N.C. Gen. Stat. § 97-42, any credit an employer receives for payments made pursuant to an employer-funded salary continuation, disability, or other income replacement plan is awarded by reducing the number of weeks of workers' compensation awarded to the claimant by the number of weeks in which an employer made payments under the plan. (See footnote 4) If the payment made by the employer was more than what the employee was to receive under the Workers' Compensation Act, the excess cannot be used towards an additional week of credit. However, the language [u]nless otherwise provided by the plan indicates an employer may include language in the wage- replacement plan which modifies the application of this amendment to N.C. Gen. Stat. § 97-42.
In this case, the Commission granted defendants a credit for fourteen weeks of compensation payments at the weekly rate of $588.00, to be deducted from the end of the 300-week period. Aspreviously stated, defendants contend they should have been awarded a credit for the following payments:
8 * fifteen payments of $47,059.00 totaling $705,885.00 paid during the 2000 season post-injury,
9 * $1,000,000.00 roster bonus paid on 3 April 2001,
10 * $1,985.72 paid in 2001 for workouts and mini-camps,
11 * a $2,500.00 appearance fee paid on 7 March 2001,
12 * $225,000.00 in injury protection payments for the 2001 season,
13 * $750,000.00 paid during the 2002 season pursuant to the One-Year Skill and Injury Guarantee which is Addendum C to the 2001 contract, and the
14 * $4,500,000.00 signing bonus.
In this case, our review of the record indicates that five of the payments received by plaintiff post-injury had been earned by the plaintiff, and were due and payable when made. Thus, defendants cannot seek a credit for these five payments: (1) one of the fifteen payments of $47,059.00 paid during the 2000 season, (2) the $1,000,000.00 roster bonus paid on 3 April 2001, (3) $1,985.72 paid in 2001 for workouts and mini-camps, (4) a $2,500.00 appearance fee paid on 7 March 2001, and (5) the $4,500,000.00 signing bonus.
In finding of fact 15, the Commission found:
Post injury payments in the sum of $4,805.72 were made to plaintiff during the period of April 2, 2001, to May 21, 2001, for plaintiff's participation in the Workout, MiniCamp and Training Camps, as well as an Appearance Fee pursuant to his contract. These payments constitute post-injury earnings.
Plaintiff's payment history indicates he received six $320.00 payments between 2 April 2001 and 21 May 2001 for workouts, one payment of $385.72 for mini-camp, and $2,500.00 on 7 May 2001 foran appearance. According to plaintiff's contract, he was obligated to participate in mini-camps, workouts, and to make appearances on behalf of the team. As plaintiff's payment history indicates these payments between 2 April and 21 May 2001 were for participating in these activities, the Commission's conclusion that these were post- injury earnings is supported by competent evidence. As such, defendants cannot seek a credit for these payments because they were due and payable when made.
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