Williams v. Insurance Repair Specialists of North Carolina, Inc.

BROCK, Chief Judge. The following comment appended to the order of the Industrial Commission pretty well sums up the jurisdiction of the Commission to act in this case: “Comment “The Full Commission notes at the outset that this is not a case where the third party tort feasor was not aware of the subrogation claim of the compensation carrier. It is clear from the evidence that Estes Express Company, through its liability carrier, Liberty Mutual Insurance Company, was put on notice of the lien Reliance had on the settlement funds for any compensation benefits paid or to be paid by Reliance under a valid compensation award. “A settlement having been reached between the representative of the deceased employee and the third party tort feasor, the correct procedure, under the statutes of our state, was for the parties thereto to petition the Industrial Commission for an Order distributing such funds. Though [240] somewhat belatedly, such a request was made by the compensation carrier, Reliance Insurance Company, on June 20, 1974. At such time the Industrial Commission acquired in this case the limited jurisdiction it has in third party recovery cases, pursuant to G.S. 97-10.2. Under the provisions of that statute, the Commission is directed to order distribution of the third party recovery for certain specified purposes, in a certain specified order of priorities, both clearly spelled out in the provisions of G.S. 97-10.2 (f) (1). This the Full Commission has done in this case by virtue of the above stated Order. “The Full Commission can find nothing in G.S. 97-10.2, or in any other provision of the General Statutes of North Carolina, which would take away its authority, and its Duty, under G.S. 97-10.2 to order distribution of third party recoveries as specified in that statute. The Full Commission is not blind to the fact that in the present case, Liberty Mutual took it upon itself to make a $55,000 payment to the estate of the deceased employee prior to the time of this Order. While it takes note of this payment, the Full Commission is unable to understand how the mere fact of such payment can in any way bear on its authority and duty to order the distribution noted in the above Order. It is the considered opinion of the undersigned that such payment in no way prejudices or otherwise affects the rights and duties of all the parties to this Order. “The Full Commission is of the opinion that the parties hereto are legally bound to proceed as directed in the above Order. Certainly, this would in no way prejudice their rights, if any, to recoup, in ordinary civil actions elsewhere, payments erroneously made under what may have been a mistaken impression as to the proper distribution of this third party recovery. Be that as it may, the substantive merits of such matters are not properly before the Commission, and the fact of such payments is therefore irrelevant to the Commission’s determination, under G.S. 97-10.2, of the proper distribution of the third party recovery now before this body. The parties to this action are bound by the provisions of G.S. 97-10.2, and are hereby ordered to proceed as directed above.” It is strongly suggested by the evidence and argument of counsel that the widow has spent her entire distributive share [241] of the $55,000.00 wrongful death settlement and has spent the entire $3,060.00 paid to her to date under the Workmen’s Compensation Act. It is urged that the widow is insolvent and none of the payments to her can be recouped. These may well be the facts, but they do not alter the proper resolution of this controversy under G.S. 97-10.2. Liberty Mutual argues that it should not be required to pay $28,500.00 to Reliance because that would cause Liberty Mutual to pay $83,500.00 for wrongful death instead of the $55,000.00 it negotiated with the estate of the deceased employee. Liberty Mutual negotiated the $55,000.00 wrongful death settlement with full knowledge of the fact that Reliance was negotiating a compensation award and with full knowledge of the following provisions of G.S. 97-10.2 (f) (1) : “If the employer has filed a written admission of liability for benefits under this Chapter with . . . the Industrial Commission, then any amount obtained by any person by settlement with . . . the third party by reason of such injury or death shall be disbursed by order of the Industrial Commission for the following purposes and in the following order of priority:” * * * “c. Third to the reimbursement of the employer for all benefits by way of compensation or medical treatment expense paid or to be paid by the employer under award of the Industrial Commission.” A simple inquiry by Liberty Mutual would have disclosed that the employer filed written admission of liability with the Industrial Commission on 18 September 1973, some three months prior to Liberty’s settlement agreement with the estate of the deceased employee. Even absent such a simple inquiry, because of the October 1973 telephone and letter notice from Reliance to Liberty Mutual, it seems that ordinary business precaution would have prompted Liberty Mutual to contact Reliance before consummating the December settlement. Liberty Mutual argues that the Industrial Commission was without jurisdiction to enter the distribution order. Its rationale for this argument is that no admission of liability for benefits was filed by the employer until 8 February 1974 because the 18 September 1973 filing was disapproved. This argument is not convincing. The 18 September 1973 filing was disapproved only to the extent [242] that the widow was a minor and to the extent that the death benefits had been miscalculated. The admission of liability was not disapproved. The Commission’s jurisdiction under G.S. 97-10.2 is clear. With the full knowledge of the law and the circumstances, Liberty Mutual consummated its settlement of the wrongful death claim in December 1973. It may be, as the widow argues, that the settlement offer by Liberty Mutual was substantially lowered because of Liberty’s possible responsibility for additional disbursement under the Workmen’s Compensation Act. In any event, the statute is unmistakably clear in mandating the distribution of the settlement in this case in the manner ordered by the Commission. Whether Liberty Mutual, after distributing the $28,500.00 to Reliance under the Commission’s order, can then recoup from Southern National or from Southern National and the widow cannot be resolved in this proceeding. That is a matter for another forum. It appears that the claim of the compensation carrier (Reliance) against the liability carrier (Liberty Mutual) must first be pursued under the Commission’s distribution order and G.S. 97-87. Secondary relief is provided by the Workmen’s Compensation Act. General Statute 97-10.2(h) provides: “In any proceeding against or settlement with the third party, every party to the claim for compensation shall have a lien to the extent of his interest under (f) hereof upon any payment made by the third party by reason of such injury or death, whether paid in settlement, in satisfaction of judgment, as consideration for covenant not to sue, or otherwise and such lien may be enforced against any person receiving such funds. ...” The compensation carrier (Reliance) is a party to the claim for compensation. Its interest under subsection (f) is reimbursement for all benefits by way of compensation paid or to be paid under the award of the Industrial Commission. Whether the compensation carrier can successfully pursue its lien claim against Southern National or against Southern National and the widow is a matter of conjecture and beyond the jurisdiction of the Commission. Failing in the pursuit of its statutory lien, whether the compensation carrier could recover damages from Liberty Mutual or whether the compensation carrier could recover damages from Southern National are also matters of con [243] jecture. In any event these matters are beyond the jurisdiction of the Industrial Commission. There are no grounds upon which the Industrial Commission could vacate and set aside the award of compensation for the death of the employee. The award made was in compliance with G.S. 97-38 (where death results proximately from the accident), G.S. 97-17 (settlements allowed in accordance with article), and G.S. 97-82 (approval of settlement by the Commission). The order appealed from was entered in conformity with G.S. 97-10.2. The order of the Industrial Commission is Affirmed. Judges Parker and Arnold concur.