1. Workers' Compensation_claim by deputy_authority to extinguish county's
lien_sovereign immunity
There is specific statutory authority in the Workers' Compensation Act authorizing a
deputy sheriff who received both workers' compensation insurance and a third-party settlement to
seek a determination of Durham County's authority to file a lien against his settlement proceeds.
The trial court did not err by not dismissing the matter under sovereign immunity.
2. Workers' Compensation_subrogation_statute not unconstitutional
The workers' compensation statute which provides subrogation for a third-party
settlement, N.C.G.S. § 97-10.2(j), is not unconstitutionally vague and does not violate due
process. Neither does it violate the Exclusive Emoluments prohibition of the N.C. Constitution as
to benefits received by deputy sheriffs or in the possibility of a double recovery.
3. Workers' Compensation_third-party settlement_subrogation denied
There was competent evidence supporting findings which themselves supported
extinguishing Durham County's subrogation lien on a deputy's workers' compensation benefits,
including the finding that petitioner's net recovery would otherwise be zero. The trial court did
not abuse its discretion.
Clayton, Myrick, McClanahan & Coulter, PLLC, by Robert D.
McClanahan, for petitioner-appellee.
Office of the County Attorney, by Assistant County Attorney
Curtis Massey, for County of Durham respondent-appellant.
JACKSON, Judge.
On 14 July 2003, Jonathon Helsius (“petitioner”) was injured
in the course and scope of his employment with the Durham County
Sheriff's Office. While escorting a funeral procession,petitioner's motorcycle was struck by a vehicle driven by Elwanda
Robertson.
(See footnote 1)
As a result of the collision, petitioner sustained
serious injuries including a severe concussion, pinpoint bleeding
in his brain, a broken wrist, punctured lung, broken ribs, and
compression fractures in his spine. Petitioner was admitted to the
hospital following the accident, and was discharged a few days
later. Petitioner was permitted to return to work full-time, but
on light/desk duty on 1 September 2003, and he returned to full
duty on 8 October 2003.
The County of Durham (“respondent”) paid petitioner a total of
$53,128.40 in workers' compensation benefits, representing medical
expenses, temporary total disability, and permanent partial
disability compensation.
Petitioner applied to the trial court, pursuant to North
Carolina General Statutes, section 97-10.2(j), for a determination
of the amount of the County of Durham's subrogation lien and to
distribute the settlement amount. Petitioner presented extensive
testimony at the hearing. Respondent did not present any evidence,
but did present arguments in support of its various motions to
dismiss based on sovereign immunity and violation of its rights
under the North Carolina Constitution. On 6 July 2004, the trial court entered an order denying all
of respondent's motions and extinguishing respondent's subrogation
lien. From this order the County of Durham appeals.
[1] Respondent first contends the trial court committed
reversible error when it failed to dismiss the matter, as the
County's sovereign immunity had not been waived and thus barred the
proceedings. We do not find this argument to be credible, and thus
hold the trial court did not err.
In this State it is well established that counties are a part
of the State government, and thus are entitled to sovereign
immunity. Dawes v. Nash County, 357 N.C. 442, 445, 584 S.E.2d 760,
762, reh'g denied, 357 N.C. 511, 587 S.E.2d 417 (2003); White v.
Commissioners of Chowan County, 90 N.C. 437 (1884); Archer v.
Rockingham County, 144 N.C. App. 550, 548 S.E.2d 788 (2001), disc.
review denied, 355 N.C. 210, 559 S.E.2d 796 (2002). A county may
not be sued unless there is a specific statute authorizing the
suit, or the county has consented to being sued or has waived its
immunity. Id.
Respondent contends the county neither waived its sovereign
immunity nor did petitioner allege a waiver of the immunity, and
therefore petitioner's petition for a determination on respondent's
lien should have been dismissed. However, respondent also argues
that although petitioner's action should be dismissed based on
sovereign immunity, respondent still should be permitted to
maintain a lien on petitioner's settlement proceeds pursuant to
North Carolina General Statutes, section 97-10.2(j). Respondenteffectively is asking this Court to permit it to maintain a lien on
petitioner's settlement proceeds, while at the same time giving
petitioner no means by which to challenge to the lien.
North Carolina General Statutes, section 97-10.2(j) (2004)
provides in pertinent part:
[I]n the event that a settlement has been
agreed upon by the employee and the third
party, either party may apply to the resident
superior court judge of the county in which
the cause of action arose . . . 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 . . . .
N.C. Gen. Stat. § 97-10.2(j) (2004) (emphasis added). This statute
is included in our State's workers' compensation laws, which
specifically provide that the State of North Carolina, along with
its political subdivisions (i.e. counties) are subject to the
Workers' Compensation Act found in Chapter 97 of our General
Statutes. N.C. Gen. Stat. § 97-7 (2004). Employees covered by the
Workers' Compensation Act include “deputy sheriffs and all persons
acting in the capacity of deputy sheriffs.” N.C. Gen. Stat. § 97-
2(2) (2004). The Act further provides that employers who must
abide by the Act include
[t]he board of commissioners of each county of
the State, . . . all deputy sheriffs serving
within such county, or persons serving or
performing the duties of a deputy sheriff,
whether such persons are appointed by the
sheriff or by the board of commissioners and
whether serving on a fee basis or salary
basis.
N.C. Gen. Stat. § 97-2(3) (2004). Based upon the fact that county
governments are subject to the Workers' Compensation Act and its
provisions regarding payment and compensation under the Act, we
hold there is specific statutory authority authorizing petitioner
to seek a determination of the County of Durham's authority to file
a lien against petitioner's settlement proceeds.
[2] Respondent next contends that North Carolina General
Statutes, section 97-10.2(j) is unconstitutional under the North
Carolina Constitution, for being vague and violative of its due
process rights, and for violating the Exclusive Emoluments Clause.
We have previously rejected the argument that North Carolina
General Statutes, section 97-10.2(j) is unconstitutionally vague
and violative of due process, and therefore need not address this
issue. See In re Biddix, 138 N.C. App. 500, 530 S.E.2d 70, disc.
review denied, 352 N.C. 674, 545 S.E.2d 418 (2000); Allen v.
Rupard, 100 N.C. App. 490, 397 S.E.2d 330 (1990). Therefore we
only address respondent's contention that North Carolina General
Statutes, section 97-10.2(j) violates the Exclusive Emoluments
Clause of the North Carolina Constitution.
The Exclusive Emoluments Clause of the North Carolina
Constitution provides that “[n]o person or set of persons is
entitled to exclusive or separate emoluments or privileges from the
community but in consideration of public services.” N.C. Const.
art. I, § 32 (2004). Our Supreme Court has interpreted this Clause
to provide that our
Legislature has no power to compel or even to
authorize a municipal corporation to pay agratuity to an individual to adjust a claim
which the municipality is under no legal
obligation to pay. Nor may it lawfully
authorize a municipal corporation to pay gifts
or gratuities out of public funds.
Brown v. Comrs. of Richmond County, 223 N.C. 744, 746, 28 S.E.2d
104, 105-06 (1943) (internal citations omitted); Leete v. County of
Warren, 341 N.C. 116, 120, 462 S.E.2d 476, 479 (1995). In Leete,
our Supreme Court recognized that “[s]alary, pension, insurance and
similar benefits received by public employees are generally not
unconstitutional exclusive emoluments and privileges. They
constitute compensation in consideration of services rendered.”
Leete, 341 N.C. at 121, 462 S.E.2d at 479. Our Supreme Court
further has stated that the benefits that deputy sheriffs receive
pursuant to the Workers' Compensation Act are “conferred by reason
of public service,” and are not violative of the Exclusive
Emoluments Clause of the North Carolina Constitution. Towe v.
Yancey County, 224 N.C. 579, 580, 31 S.E.2d 754, 755 (1944).
Respondent argues that North Carolina General Statutes,
section 97-10.2(j) allows for petitioner to have a double recovery,
in that he is permitted to retain both the settlement proceeds, and
the workers' compensation benefits paid by respondent, thereby
creating a windfall for petitioner. Respondent contends that this
windfall, permitted by the extinguishment of respondent's lien, is
the aspect of the statute that violates the Exclusive Emoluments
Clause. We do not agree.
Our courts repeatedly have held that North Carolina General
Statutes, section 97-10.2(j) “allows plaintiff a double recovery atthe expense of the employer or carrier, in the discretion of the
Superior Court judge. . . . [S]ince the language is clear and
unambiguous, we must hold that the Legislature intended this
possible result.” Pollard v. Smith, 90 N.C. App. 585, 588, 369
S.E.2d 84, 86 (1988), rev'd on other grounds, 324 N.C. 424, 378
S.E.2d 771 (1989); see also Wiggins v. Bushranger Fence Co., 126
N.C. App. 74, 77-78, 483 S.E.2d 450, 452, disc. review denied, 346
N.C. 556, 488 S.E.2d 825 (1997); Allen, 100 N.C. App. at 493-94,
397 S.E.2d at 332-33. Given that our legislature and courts allow
for the possibility of double recovery by injured employees, and
the fact that workers' compensation benefits provided to sheriff's
deputies pursuant to the Workers' Compensation Act are
constitutional, we hold that North Carolina General Statutes,
section 97-10.2(j) does not violate the Exclusive Emoluments Clause
of the North Carolina Constitution.
[3] We next turn our attention to respondent's final
assignment of error that the trial court's extinguishment of its
lien was not supported by sufficient findings of fact and
conclusions of law. This Court has held that although North
Carolina General Statutes, section 97-10.2(j) does grant the trial
court “discretion” in deciding to reduce or extinguish an
employer's lien on the employee's settlement with a third party,
this discretion “is not unlimited.” In re Biddix, 138 N.C. App. at
504, 530 S.E.2d at 72 (citing Allen, 100 N.C. App. at 495, 397
S.E.2d at 333). In exercising its discretion, the trial court must
“make a reasoned choice, a judicial value
judgment, which is factually supported . . .[by] findings of fact and conclusions of law
sufficient to provide for meaningful appellate
review.” Where the trial court makes
sufficient findings of fact and conclusions of
law, the due process rights of the employer
have been protected.
Id. (quoting Allen, 100 N.C. App. at 495, 397 S.E.2d at 333).
North Carolina General Statutes, section 97-10.2(j) provides that
in exercising its discretion, the trial judge
shall consider the anticipated amount of
prospective compensation the employer or
workers' compensation carrier is likely to pay
to the employee in the future, the net
recovery to plaintiff, the likelihood of the
plaintiff prevailing at trial or on appeal,
the need for finality in the litigation, and
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) (2004).
In the instant case, the trial court made the following
specific findings of fact:
3. The liability insurance carrier for
respondent Robertson, GMAC Insurance
Company, has tendered to petitioner an
offer of the limits of its policy of
liability insurance coverage applicable
to this incident, $30,000.00.
4. Petitioner has purchased a policy of
underinsured motorist coverage through
State Farm Insurance Company in the
amount of $50,000.00. State Farm
Insurance Company has tendered the limits
of its coverage applicable to this
incident, $20,000.00 . . . .
5. The County of Durham, as employer of
petitioner, has provided workers'
compensation benefits in the form of
payment of medical expenses which have
been incurred for the treatment of
petitioner's injuries and forcompensation in the total amount of
$53,128.40.
. . . .
7. The third party liability claim arising
from the above-described vehicular
collision has been resolved by settlement
and the total amount of payment to be
paid pursuant to said settlement is
$50,000.00
8. As a result of said collision, the
petitioner suffered numerous serious and
painful injuries . . . . The petitioner
remained hospitalized for four days . . .
and suffered a great deal of pain and
disability for several weeks and months
following this collision.
9. Although the petitioner returned to full
duty in his capacity as a deputy sheriff
with the respondent on October 8, 2003,
he has continued to experience pain,
weakness and other difficulties with the
injuries which he has sustained. His
orthopaedic surgeon has rendered opinions
that the petitioner is permanently
injured in the amount of five percent
permanent partial impairment to his left
wrist and twenty percent permanent
impairment to his back.
. . . .
11. The petitioner has suffered further items
of damage to which he is entitled to
recover against the negligent party who
has caused his injury, including payment
of chiropractic expenses, payment of the
remainder of his lost income from the
County of Durham, payment of his second
employment income, calculated in the
amount of $3,996.00, and payment for pain
and suffering already endured and pain
and suffering to be endured in the
future.
12. The negligent respondent, Elwanda S.
Robertson, does not have sufficient
assets to pay further towards her
liability to the petitioner for furtherdamages suffered by the petitioner which
remain uncompensated.
13. That $50,000.00 is an inadequate sum to
compensate the petitioner, for said pain,
suffering and past, present and future
interference of his life as result of
said injuries.
. . . .
15. The court has further considered the fact
that, without reduction of the
compensation lien of the employer, the
net recovery to the petitioner would be
zero. The court has also considered the
likelihood that the petitioner . . .
would prevail at a trial against the
negligent respondent and would recover a
sum far in excess of the funds which are
available to pay for his damages.
16. The court has also considered that there
is now a need for finality in this
litigation, in that the petitioner has
completed his active medical care and has
returned to full duty to [sic] employment
with the respondent, and that all sums
which are available to pay for his
damages have been received.
17. That justice would be served in this case
by extinguishing the employer's
compensation lien so that the petitioner
can be justly compensated for the damages
which he has suffered, for which he has
received no compensation, for the
injuries which he sustained while in the
course and scope of his employment . . .
[with] the County of Durham in his role
as a deputy sheriff.
In its brief, respondent assigns error to almost all of the
trial court's findings of fact and conclusions of law, however
respondent failed to offer any argument in support of many of these
assignments of error, therefore those not addressed below are
deemed abandoned. N.C. R. App. P. 28(b)(6) (2005). In its brief,respondent specifically assigns error to, and properly preserves
these for appellate review: the trial court's findings of fact
numbers 8, 9, 11, 12, 13, 15, 17, and conclusions of law numbers 1,
2, and 3. We therefore limit our review to these specific portions
of the trial court's order.
Respondent argues the trial court's findings of fact are not
supported by competent evidence, and the court's conclusions of law
are thus not supported by competent findings of fact. When
reviewing a trial court's findings of fact, our role is to
determine “whether there was competent evidence to support the
trial court's findings of fact and whether its conclusions of law
were proper in light of such facts.” Shear v. Stevens Bldg. Co.,
107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992). “Findings of
fact by the trial court in a non-jury trial have the force and
effect of a jury verdict and are conclusive on appeal if there is
evidence to support those findings.” Id. (citing Hunt v. Hunt, 85
N.C. App. 484, 355 S.E.2d 519 (1987)). However, we review the
trial court's conclusions of law de novo. Id.
At the hearing, petitioner testified concerning the details of
the collision, the injuries he suffered, and his recovery following
the collision. He stated that he had been diagnosed as having a
five percent permanent partial disability in his left wrist , and a
twenty percent permanent partial disability in his back . He
testified, without objection, that he continues to experience pain
in his wrist, shoulder, neck and back, and continues to be limited
in the activities in which he can participate. Petitioner furthertestified regarding visits to a chiropractor for treatment of
continuing stiffness in his neck and back, which he began to
experience once he returned to full duty. Petitioner also
testified about his secondary employment and the fact that he was
unable to perform any secondary employment while not on full duty
after the accident. He testified about the income he lost during
this period, and submitted documents he prepared showing his lost
income as determined using his prior years' taxes, all of which was
admitted into evidence without objection. On cross-examination,
petitioner testified that he and his retained counsel considered
pursuing a third-party claim against Elwanda Robertson, however she
did not have any assets beyond her insurance coverage. Petitioner
stated that although respondent has paid most of his medical bills
and two-thirds of his gross salary while he was out of work, he has
not been compensated for the remaining one-third of his salary, his
lost wages from his secondary employment, his expenses incurred in
seeing the chiropractor, or for the pain and suffering he has
already experienced and continues to experience. All of
petitioner's testimony was admitted without objection by
respondent.
Based on the evidence presented at the hearing, along with
petitioner's responses to respondent's requests for admissions, we
hold that there is competent evidence in the record to support the
trial court's findings of facts 8, 9, 11, 12, and 13. With respect
to finding of fact 15, the trial court was presented with evidence
showing that petitioner had received $50,000.00 in settlementproceeds, and that respondent claimed a lien in the amount of
$53,128.40. We therefore hold there was competent evidence to
support the finding that petitioner's net recovery would be reduced
to zero without the extinguishment of respondent's lien. Finding
of fact 17 addresses the factors listed in North Carolina General
Statutes, section 97-10.2(j), and we hold there is sufficient
evidence to support the trial court's finding.
Based on the foregoing discussion concerning sovereign
immunity and the constitutionality of North Carolina General
Statutes, section 97-10.2(j), we hold the trial court's conclusions
of law regarding these issues are supported by our State's case
law. We further hold that based on the findings of fact, the trial
court's conclusion of law stating that “justice requires that the
workers' compensation lien of the County of Durham be extinguished”
is supported by competent findings of fact. We recognize that the
Workers' Compensation Act creates a system in which an employee may
receive a “windfall,” however the trial court has made specific
findings of fact showing that this did not occur in the instant
case.
We therefore hold the trial court did not abuse its discretion
in extinguishing respondent's lien, and that the trial court
properly considered the relevant factors in applying the provisions
of North Carolina General Statutes, section 97-10.2(j) to
petitioner's case.
Affirm.
Judges McGEE and McCULLOUGH concur.
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