Pollard v. Smith

WEBB, Justice. The Department makes two assignments of error. It says first that it was error for the superior court to order the disbursal of the proceeds from the settlement without notice to the Department. In its second assignment of error the Department contends the court erred in ordering the entire amount of the settlement to be given to the plaintiff. As to its contention that it was error not to give the Department notice and a chance to be heard before disbursing the funds the Department argues that the action of the superior court violates the constitutions of the United States and North Carolina. McMillan v. Robeson County, 262 N.C. 413, 137 S.E. 2d 105 (1964). *426 In our view of the case it is not necessary to reach the constitutional question. The rights of an employer who has paid workers’ compensation and an employee in respect to a common law cause of action against a third party are governed by N.C.G.S. § 97-10.2. That section provides in subsections (b), (c), and (d) that in certain circumstances either the employer or the employee may bring the action. Either party who brings the action has the right to settle it subject to the provisions of subsection (h). Subsection (h) provides: “[njeither the employee or his personal representative nor the employer shall make any settlement . . . without the written consent of the other.” In 1983 N.C.G.S. § 97-10.2 was amended by adding subsection (j) which in pertinent part says: [I]n the event that a settlement has been agreed upon by the employee and the third party when said action is pending on a trial calendar and the pretrial conference with the judge has been held, either party may apply to the resident superi- or court judge of the county in which the cause of action arose or the presiding judge before whom the cause of action is pending, for determination as to the amount to be paid to each by such third party tortfeasor. We believe subsection (j) must be read in pari materia with the rest of the section. Walker v. Bakeries Co., 234 N.C. 440, 67 S.E. 2d 459 (1951). Other parts of the section provide a procedure for settling a case. We do not believe the legislature intended this procedure to be ignored when settling a case pursuant to subsection (j). The procedure requires that the Department give a written consent before a settlement may be made. The settlement between plaintiff and the defendants in this case is void because it does not comply with N.C.G.S. § 97-10.2(h) in that the Department did not give its written consent to the settlement. The Department was not prejudiced by not receiving notice of the motion to disburse the funds. In the light of our disposition of this case we do not pass on the Department’s second assignment of error. We reverse the decision of the Court of Appeals and remand for further proceedings consistent with this opinion. Reversed and remanded.