1. Insurance_multiple coverage_credits
The trial court erred by failing to credit defendant_UIM carrier with the amount paid by
the liability carrier in an automobile accident case involving liability insurance, workers'
compensation insurance, and UIM insurance. A UIM carrier is entitled to a credit for payments
made by the liability carrier; the failure to give defendant this credit gave plaintiff a recovery in
excess of his actual damages.
2. Workers' Compensation_rehabilitation costs_lack of evidence
A lack of evidence regarding the rehabilitation services in question meant that the Court
of Appeals was unable to perform a meaningful review of the exclusion of rehabilitation costs
from the total amount of workers' compensation benefits.
3. Workers' Compensation_rehabilitation costs_case-by-case determination
The trial court did not err by excluding the cost of rehabilitation services when it
computed workers' compensation benefits. Rehabilitation services are not a benefit as a matter
of law; they must be subject to a fact-specific determination of whether a benefit was conferred.
4. Insurance_multiple coverages_calculation of amount payable
The Court of Appeals calculated the amount payable to plaintiff by defendant in an
automobile accident case involving liability insurance, UIM insurance, and workers'
compensation as follows: first, the amount paid to plaintiff by the liability carrier was subtracted
from the UIM policy limit to find the UIM coverage limit; second, the amount plaintiff is entitled
to recover from the UIM carrier was determined by subtracting the amount of workers'
compensation benefits (not including the amount of the workers' compensation lien) and the
amount plaintiff received from the liability carrier from plaintiff's total loss. The resulting figure
represents the total amount of plaintiff's uncompensated loss and is the amount payable by the
UIM carrier, plus interest.
Gaskins & Gaskins, P.A., by Herman E. Gaskins, Jr., for
plaintiff-appellee.
McDaniel & Anderson, L.L.P., by William E. Anderson and John
M. Kirby, for defendant-appellant.
McGEE, Judge.
James Carnell Walker, Jr. (plaintiff) was injured in a motor
vehicle collision on 1 August 2000. The accident was caused by the
negligence of Troy Walker. At the time of the accident, plaintiff
was working in the scope and course of his employment and operating
a vehicle owned and insured by his employer, SIA Group-Seashore
(SIA).
Troy Walker had liability insurance coverage with Shelby
National Insurance Company (the liability carrier). The liability
insurance coverage limit was $30,000 per person and $60,000 per
accident. The vehicle in which plaintiff was injured was also
covered by an underinsured motorist (UIM) policy with Penn National
Security Insurance Company (defendant). The UIM policy coverage
limit was $1,000,000.
Plaintiff recovered the full $30,000 allowable from the
liability carrier. The workers' compensation carrier for
plaintiff's employer also paid a total of $81,948.37, as follows:
$24,201.54 for plaintiff's medical expenses, $51,547.88 to
plaintiff as compensation, and $6,198.95 to Hoover Rehabilitation.
Pursuant to a clincher agreement, the workers' compensation carrier
asserted a lien in the amount of $35,000 on any recovery plaintiff
received from third parties.
Plaintiff and defendant submitted the issue of the value of
plaintiff's personal injury claim to arbitration on 2 October 2002.
The arbitrator found that the value of plaintiff's personal injury
claim was $129,524. The parties thereafter agreed that the award
should be modified to $126,874. The arbitrator did not resolvecoverage issues or amounts to be credited.
Following the arbitration, plaintiff and defendant were unable
to agree on the amount payable by defendant under the UIM policy.
Specifically, the parties were unable to resolve how the 1999
amendment to the UIM statute, N.C. Gen. Stat. § 20-279.21(e)
(2003), would affect the relationship between the award amount and
the workers' compensation lien, thereby determining the amount
payable by defendant. Defendant contended that the statute
required that the arbitration award be offset by plaintiff's
recovery from the workers' compensation carrier.
Plaintiff filed a complaint for a declaratory judgment on 2
April 2003, asking the trial court to declare the rights and
liabilities of the parties and to declare that defendant pay
plaintiff $96,874: the difference between the arbitration award and
the $30,000 recovered from the liability carrier. Defendant's
answer asked that the trial court require defendant to pay
plaintiff an amount not greater than $50,874. Defendant calculated
this amount by subtracting the sum of $30,000 recovered from the
liability carrier and $46,000
(See footnote 1)
workers' compensation benefits from
the $126,874 total value of plaintiff's injury.
While the declaratory judgment action was pending in the trial
court, this Court, in Austin v. Midgett (Austin I), 159 N.C. App.416, 583 S.E.2d 405 (2003), resolved the confusion surrounding the
1999 amendment to the UIM statute. We held that the 1999 amendment
"requires UIM carriers to insure the amount of the employer's
workers' compensation lien on UIM proceeds received by the employee
in addition to the damages uncompensated by workers' compensation
benefits." Id. at 421, 583 S.E.2d at 409. As a result, a UIM
carrier is entitled to a credit for the amount of workers'
compensation benefits that are not subject to a workers'
compensation lien. Id. at 421, 583 S.E.2d at 409. However, our
Court did not consider the amount paid by the liability carrier and
did not credit the UIM carrier with this amount.
In accordance with our holding in Austin I, the trial court
credited defendant with the amount paid by the workers'
compensation carrier, less the amount of the workers' compensation
lien. However, the trial court reduced the amount of workers'
compensation benefits by $6,198.95, the amount paid to Hoover
Rehabilitation. In addition, under the guidance from Austin I, the
trial court did not credit defendant with the $30,000 plaintiff
received from the liability carrier. The resulting judgment
ordered defendant to pay plaintiff $86,124.58, plus interest.
Following the trial court's declaratory judgment, this Court
granted a petition for rehearing in Austin I. We subsequently
clarified the Austin I holding in Austin v. Midgett (Austin II),
166 N.C. App. 740, 603 S.E.2d 855 (2004). In Austin II, we held
that Austin I resulted in an incorrect computation of the amount
the UIM carrier owed to the plaintiff. Austin II, 166 N.C. App. at
741, 603 S.E.2d at 856. Our Court determined that, in order toavoid a windfall to the plaintiff, the UIM carrier was entitled to
a credit for payments made by the liability carrier. Id. at 742,
603 S.E.2d at 856-57.
Our Court also outlined a two-step process for determining the
amount due to a plaintiff from an UIM carrier. Id. at 741-42, 603
S.E.2d at 856. First, the limit of the UIM coverage is determined
by subtracting the amount paid by the liability carrier from the
UIM policy limit. Id. at 741, 603 S.E.2d at 856; see also N.C.
Gen. Stat. § 20-279.21(b)(4) (2003). Second, the amount a
plaintiff is entitled to recover from the UIM carrier must be
determined. Austin II, 166 N.C. App. at 742, 603 S.E.2d at 856.
This figure is calculated by subtracting from the total value of
the plaintiff's loss, the amount of workers' compensation benefits
(not including the amount of the workers' compensation lien) and
the amount received from the liability carrier. Id. at 743, 603
S.E.2d at 857.
[1] Defendant first assigns error to the trial court's failure
to credit defendant with the amount plaintiff received from the
liability carrier. Defendant argues that by failing to credit
defendant with this amount, plaintiff has received a windfall and
a net recovery in excess of his actual damages. We agree. Under
Austin II, a UIM carrier is entitled to a credit for payments made
by the liability carrier. Austin II, 166 N.C. App. at 742, 603
S.E.2d at 856. Therefore, we hold that the trial court erred in
failing to credit defendant with the $30,000 paid by the liability
carrier.
[2] Defendant next assigns error to the trial court'scalculation of the amount of benefits plaintiff received from the
workers' compensation carrier. Defendant argues that the trial
court erred by excluding the costs for Hoover Rehabilitation's
services from the total amount of workers' compensation benefits
plaintiff received.
The trial court's order contains the following finding of
fact:
7. The sum paid to Hoover Rehabilitation was
for a nurse to accompany plaintiff to his
doctor visits and plaintiff received no
benefit from this service. The sum paid
to Hoover Rehabilitation was not
compensation to plaintiff.
Our standard of review of a declaratory judgment is the same
as in other cases. N.C. Gen. Stat. § 1-258 (2003); Integon Indem.
Corp. v. Universal Underwriters Ins. Co., 131 N.C. App. 267, 270,
507 S.E.2d 66, 68 (1998). Therefore, in an action for a
declaratory judgment where the trial court decides questions of
fact, our standard of review is whether the trial court's findings
of fact are supported by competent evidence.
Insurance Co. v.
Allison, 51 N.C. App. 654, 657, 277 S.E.2d 473, 475, disc. review
denied, 303 N.C. 315, 281 S.E.2d 652 (1981). If supported by
competent evidence, the trial court's findings of fact are
conclusive on appeal. Finch v. Wachovia Bank & Tr. Co., 156 N.C.
App. 343, 346-47, 577 S.E.2d 306, 308-09 (2003) (citing Miesch v.
Ocean Dunes Homeowners Assn., 120 N.C. App. 559, 562, 464 S.E.2d
64, 67 (1995), disc. review denied, 342 N.C. 657, 467 S.E.2d 717
(1996)).
Defendant argues that there was no evidence on which the trial
court could base its finding that plaintiff received no benefitfrom Hoover Rehabilitation. However, defendant has failed to
present any evidence in the record tending to show that plaintiff
received any benefit from Hoover. "'The burden is on an appealing
party to show, by presenting a full and complete record, that the
record is lacking in evidence to support the [trial court's]
findings of fact.'" Davis v. Durham Mental Health/Development, 165
N.C. App. 100, 112, 598 S.E.2d 237, 245 (2004) (alteration in
original) (quoting Dolbow v. Holland Industrial, 64 N.C. App. 695,
696, 308 S.E.2d 335, 336 (1983), disc. review denied, 310 N.C. 308,
312 S.E.2d 651 (1984)). Our Rules of Appellate Procedure state:
"The record on appeal in civil actions . . . shall contain . . . so
much of the evidence . . . as is necessary for an understanding of
all errors assigned[.]" N.C.R. App. 9(a)(1)(e). Furthermore,
"[w]here the evidence is not in the record, it will be assumed that
there was sufficient evidence to support the findings. In other
words, when the evidence is not in the record the matter is not
reviewable." 1 Strong's North Carolina Index 4th Appeal and Error
§ 489 (1990) (footnotes omitted) (citing Leasing, Inc. v. Dan-Cleve
Corp., 31 N.C. App. 634, 638, 230 S.E.2d 559, 562 (1976), disc.
review denied, 292 N.C. 265, 233 S.E.2d 393 (1977) ("The rule is
well established that when the evidence is not included in the
record, it will be assumed that there was sufficient evidence to
support the findings by the trial court.")); see also Forrest v.
Pitt County Bd. of Education, 100 N.C. App. 119, 123, 394 S.E.2d
659, 662 (1990), aff'd, 328 N.C. 327, 401 S.E.2d 366 (1991)
(holding that, without transcripts, depositions, or other necessary
documents "it is presumed that the findings of fact are supportedby competent evidence, and [the findings of fact] are therefore
conclusive on appeal"). Since the record on appeal is devoid of
evidence regarding the services provided by Hoover Rehabilitation,
we are unable to determine what evidence was before the trial court
and are unable to perform a meaningful review of this assignment of
error.
[3] In the alternative, defendant argues that, as a matter of
law, rehabilitation costs are a part of the workers' compensation
benefits received by an injured worker. In support of its
argument, defendant cites Roberts v. ABR Associates, Inc., 101 N.C.
App. 135, 398 S.E.2d 917 (1990), superseded by statute on other
grounds as stated in Franklin v. Broyhill Furniture Industries, 123
N.C. App. 200, 472 S.E.2d 382, cert. denied, 344 N.C. 629, 477
S.E.2d 39 (1996). We disagree with defendant's interpretation of
Roberts. In Roberts, the workers' compensation carrier claimed
that it was entitled to a lien in the amount that it paid for
rehabilitation services. Id. at 137, 398 S.E.2d at 918. We held
that before the Industrial Commission (the Commission) can
determine that a workers' compensation carrier is entitled to a
lien, "the Commission must first find as fact . . . that the
services were rehabilitative in nature . . . and reasonably
'required to effect a cure or give relief' to the plaintiff." Id.
at 140-41, 398 S.E.2d at 920 (citing N.C. Gen. Stat. § 97-25
(1985)). Contrary to defendant's contention, Roberts states that
rehabilitation services are not a benefit to a plaintiff as a
matter of law, but rather must be subject to a fact-specific
determination as to whether the services conferred a benefit to aplaintiff. We hold that the trial court did not err in excluding
the cost of Hoover Rehabilitation's services when it computed the
amount of workers' compensation benefits received by plaintiff.
[4] Having determined the foregoing, we proceed to the two-
step inquiry outlined in Austin II to calculate the amount payable
to plaintiff by defendant. See Austin II, 166 N.C. App. at 743,
603 S.E.2d at 856. We first subtract the amount paid to plaintiff
by the liability carrier ($30,000) from the UIM policy limit
($1,000,000) and find that the UIM coverage limit is $970,000. We
next determine the amount plaintiff is entitled to recover from the
UIM carrier. Plaintiff's total loss was valued at $126,874. From
this amount we subtract the amount of workers' compensation
benefits, not including the amount of the workers' compensation
lien, ($40,749.42
(See footnote 2)
) and the amount plaintiff received from the
liability carrier ($30,000). The resulting figure representing the
total amount of plaintiff's uncompensated loss is $56,789.68.
Thus, we hold that the amount payable by the UIM carrier to
plaintiff is $56,789.68, plus interest.
Since we have held that, under Austin II, defendant is
entitled to a credit for the amount plaintiff received from the
liability carrier, we need not consider defendant's remaining
assignments of error regarding this issue.
We remand this matter for entry of judgment in the above
calculated amount. Reversed and remanded.
Judges McCULLOUGH and ELMORE concur.
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