IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA19-300

Filed: 5 November 2019

Wake County, No. 17 CVS 11899

NORTH CAROLINA INSURANCE GUARANTY ASSOCIATION, Plaintiff,

v.

WEATHERSFIELD MANAGEMENT, LLC, f/k/a ACCUFORCE STAFFING 

SERVICES, LLC, f/k/a ACCUFORCE SMART SOLUTIONS, LLC, Defendant.

Appeal by defendant from order entered 4 January 2019 by Judge G. Bryan 

Collins, Jr. in Wake County Superior Court. Heard in the Court of Appeals 15 

October 2019.

Nelson Mullins Riley & Scarborough LLP, by Christopher J. Blake and Joseph 

W. Eason, for plaintiff-appellee.

Hunter, Smith & Davis, LLP, by Rachel Ralston Mancl, for defendantappellant.

TYSON, Judge.

Weathersfield Management, LLC, f/k/a Accuforce Staffing Services, LLC, f/k/a 

Accuforce Smart Solutions, LLC (“Defendant”) appeals an order granting summary 

judgment for the North Carolina Insurance Guaranty Association (“Plaintiff”). We 

affirm. 

I. Background 
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Defendant is a regional worker staffing company with less than $50,000,000.00 

in market value. Defendant experienced severe financial problems to the extent it 

was forced to file for bankruptcy protection under Chapter 13 of the U.S. Bankruptcy 

Code. 

North Carolina employers, who employ above a threshold number of 

employees, are statutorily required to maintain workers’ compensation insurance 

coverage. Defendant’s bankruptcy filing made it difficult to obtain coverage to meet 

this statutory requirement. Dallas National quoted coverage for Defendant, which 

required a deductible of $800,000.00 per occurrence, but included a duty to defend 

the insured. Defendant was unable to find another insurance carrier and accepted

the policy from Dallas National to meet North Carolina’s workers’ compensation 

insurance coverage requirement beginning 18 August 2009. 

This policy also required Defendant to maintain a collateral deposit of 

$600,000.00. Defendant claims this collateral deposit has not been returned. At some 

point during Defendant’s period of coverage, Dallas National ceased conducting 

business as Dallas National and began using Freestone as its name. 

In June 2012, Defendant’s employee, Tina Huffman (“Ms. Huffman”), asserted

a workplace injury and filed a workers’ compensation claim. Freestone acknowledged

in a Form 60 filing to the North Carolina Industrial Commission (“Commission”): (1) 

coverage under Defendant’s policy; (2) that Ms. Huffman was an employee of 
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Defendant; and, (3) Ms. Huffman was injured during the course and scope of her 

employment. The Commission determined Ms. Huffman was entitled to weekly 

disability benefits totaling $165.40 and Ms. Huffman’s attorney was awarded $55.14 

per week. 

In 2014, Plaintiff’s involvement with Defendant’s policy was activated due to 

the insolvency of Freestone. Plaintiff retained counsel to defend Defendant during 

the pendency of Ms. Huffman’s claim. Plaintiff pursued settling Ms. Huffman’s claim

and a determination from the Commission of whether she can return to work. Ms. 

Huffman’s counsel maintains that she “is completely disabled and unable to return 

to work.” As of 10 August 2018, Plaintiff has paid $134,002.93 in indemnity and 

expense payments on Ms. Huffman’s claim. 

On 28 September 2017 Plaintiff commenced this action for reimbursement 

under N.C. Gen. Stat. § 58-48-1 for payment of Ms. Huffman’s claims asserted under 

coverage for Defendant’s policy with Freestone. Following written discovery, Plaintiff 

moved for summary judgment. The trial court heard and granted Plaintiff’s motion 

for summary judgment. Defendant appeals. 

II. Jurisdiction 

This Court possesses jurisdiction pursuant to N.C. Gen. Stat. § 7A-27(b) (2017). 

III. Issues
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Defendant argues the trial court erred by granting summary judgment for 

Plaintiff under N.C. Gen. Stat. § 58-48-35 (2017) and asserts: (1) Defendant does not 

have a self-insured retention; (2) Defendant is not a high-net-worth employer or 

affiliate; (3) estoppel bars the claim; and, (4) genuine issues of material fact remain

undecided. 

IV. Standard of Review

“Our standard of review of an appeal from summary judgment is de novo; such 

judgment is appropriate only when the record shows that ‘there is no genuine issue 

as to any material fact and that any party is entitled to a judgment as a matter of 

law.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (quoting 

Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)).

V. Analysis

A. Self-Insured Retention 

Defendant argues Plaintiff has no claim under N.C. Gen. Stat. § 58-48-35

because Defendant’s policy does not contain a self-insured retention. We disagree. 

N.C. Gen. Stat. § 58-48-35, articulates Plaintiff’s statutory authority: 

(a) The Association Shall: 

(1) Be obligated to the extent of the covered claims existing 

prior to the determination of insolvency and arising within 

30 days after the determination of insolvency, or before the 

policy expiration date if less than 30 days after the 

determination, or before the insured replaces the policy or 

causes its cancellation, if he does so within 30 days of the 
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determination. This obligation includes only the amount of 

each covered claim that is in excess of fifty dollars ($50.00) 

and is less than three hundred thousand dollars 

($300,000). However, the Association shall pay the full 

amount of a covered claim for benefits under a workers’ 

compensation insurance coverage, and shall pay an 

amount not exceeding ten thousand dollars ($10,000) per 

policy for a covered claim for the return of unearned 

premium. The Association has no obligation to pay a 

claimant’s covered claim, except a claimant’s workers’ 

compensation claim if: 

a. The insured had primary coverage at the time of the loss 

with a solvent insurer equal to or in excess of three 

hundred thousand dollars ($300,000) and is applicable to 

the claimant’s loss; or 

b. The insured’s coverage is written subject to a self-insured 

retention equal to or in excess of three hundred thousand 

dollars ($300,000). 

If the primary coverage or the self-insured retention is less 

than three hundred thousand dollars ($300,000), the 

Association’s obligation to the claimant is reduced by the 

coverage and the retention. The Association shall pay the 

full amount of a covered claim for benefits under a workers’ 

compensation insurance coverage to a claimant 

notwithstanding any self-insured retention, but the 

Association has the right to recover the amount of the selfinsured retention from the employer. 

In no event shall the Association be obligated to a 

policyholder or claimant in an amount in excess of the 

obligation of the insolvent insurer under the policy from 

which the claim arises. Notwithstanding any other 

provision of this Article, a covered claim shall not include 

any claim filed with the Association after the final date set 

by the court for the filing of claims against the liquidator 

or receiver of an insolvent insurer. 
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(2) Be deemed the insurer to the extent of the Association’s 

obligation on the covered claims and to such extent shall 

have all rights, duties, and obligations of the insolvent 

insurer had not become insolvent. However, the Association 

has the right but not the obligation to defend the insured 

who is not a resident of this State at the time of the insured

event unless the property from which the claim arises is 

permanently located in this State in which instance the 

Association does not have the obligation to defend the 

matter in accordance with policy. 

N.C. Gen. Stat. § 58-48-35 (emphasis supplied). 

The highlighted provisions in the statute refer to a “self-insured retention.” 

Defendants argue the statute is inapplicable to them because their policy had a 

deductible. N.C. Gen. Stat. § 58-48-20 (2017) does not define either “self-insured 

retention” or “deductible.” 

B. Rules of Statutory Interpretation 

When interpreting the parties’ arguments, we must first determine the 

meaning of the terms in N.C. Gen. Stat. § 58-48-35. In reviewing the definitions of 

self-insured retention and deductible we are guided by several well-established 

principles of statutory construction. 

“The principal goal of statutory construction is to accomplish the legislative 

intent.” Lenox, Inc. v. Tolson, 353 N.C. 659, 664, 548 S.E.2d 513, 517 (2001) (citations 

omitted). “The best indicia of that intent are the [plain] language of the statute . . . , 

the spirit of the act and what the act seeks to accomplish.” Coastal Ready-Mix 
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Concrete Co. v. Bd. of Comm’rs, 299 N.C. 620, 629, 265 S.E.2d 379, 385 (1980) 

(citations omitted).

“When construing legislative provisions, this Court looks first to the plain 

meaning of the words of the statute itself[.]” State v. Ward, 364 N.C. 157, 160, 694 

S.E.2d 729, 731 (2010). Additionally, when dealing with insurance policies “[a]ny 

doubt as to coverage is to be resolved in favor of the insured.” Waste Mgmt. of 

Carolinas, Inc. v. Peerless Ins. Co., 315 N.C. 688, 693, 340 S.E.2d 374, 378 (1986). 

“Interpretations that would create a conflict between two or more statutes are 

to be avoided, and statutes should be reconciled with each other whenever possible.” 

Taylor v. Robinson, 131 N.C. App. 337, 338, 508 S.E.2d 289, 291 (1998) (internal 

quotation marks, citations, and ellipses omitted). “Statutes in pari materia must be 

read in context with each other.” Cedar Creek Enters. v. Dep’t of Motor Vehicles, 290 

N.C. 450, 454, 226 S.E.2d 336, 338 (1976). 

Further, “where a literal interpretation of the language of a statute will lead 

to absurd results, or contravene the manifest purpose of the Legislature, as otherwise 

expressed, the reason and purpose of the law shall control.” State v. Beck, 359 N.C. 

611, 614, 614 S.E.2d 274, 277 (2005) (quoting Mazda Motors of Am., Inc. v. Sw. 

Motors, Inc., 296 N.C. 357, 361, 250 S.E.2d 250, 253 (1979)). 

C. Persuasive Authority 

The use and application of the terms “self-insured retention” or “deductible” in 
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our statutes is an issue of first impression. In reconciling the uses and application of

“self-insured retention” or “deductible,” it is helpful to review definitions in

persuasive authorities and how other courts have addressed this issue. When this 

Court reviews an issue of first impression, it is appropriate to look to decisions from 

other jurisdictions for persuasive guidance. See Skinner v. Preferred Credit, 172 N.C. 

App. 407, 413, 616 S.E.2d 676, 680 (2005) (“Because this case presents an issue of 

first impression in our courts, we look to other jurisdictions to review persuasive 

authority that coincides with North Carolina’s law.”), aff’d, 361 N.C. 114, 638 S.E.2d 

203 (2006). Our review has revealed the following:

The United States District Court for the Central District of California reviewed 

an analogous issue in Gen. Star. Nat’l Ins. Corp. v. World Oil Co., 973 F. Supp. 943, 

948-49 (C.D. Cal. 1997). In Gen. Star, an oil company insured its company 

automobiles using a policy with a deductible. Additionally, the oil company 

purchased a second policy to cover the deductible on the first policy. Id. at 945. The 

federal district court found a deductible 

is a portion of an insured loss for which the insured is 

responsible. The deductible is generally a specific sum that 

the insured must pay before the insurer owes its duty to 

indemnify the insured for a loss. A deductible usually 

relates only to the damages sustained by the insured, not 

to defense costs. 

Id. at 948 (citation omitted). 
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The federal district court further found a self-insured retention is “a specific 

amount of loss that is not covered by the policy but instead must be borne by the 

insured . . . . [The policy] may provide that the insurer shall have the right, but not 

the duty, to assume charge of the defense and settlement of any claim, including those 

below the [self-insured retention].” Id. 

The courts in Wisconsin agree with the federal district court’s holding. See 

Burgraff v. Menard, Inc., 853 N.W.2d 574, 581 (Wis. Ct. App. 2014) (“When an insured 

has a deductible, the insurance company is typically required to provide a defense 

from dollar one, in contrast, the insured whose coverage is subject to a self-insured 

retention is usually obligated to retain its own defense counsel.” (citations omitted)). 

Also, when considering the plain meaning and text of a statute, it is 

appropriate to review dictionary definitions and meanings of undefined terms in the 

statute. A “self-insured retention” is defined: 

The amount of an otherwise-covered loss that is not 

covered by an insurance policy and that usu. must be paid 

before the insurer will pay benefits the defendant had a 

$1 million CGL policy to cover the loss, but had to pay a 

self-insured retention of $100,000, which it had agreed to 

do so that the policy premium would be lower. Abbr. SIR. 

Cf. Deductible, n.

Self-Insured Retention, BLACK’S LAW DICTIONARY (11 ed. 2019). A “deductible” is 

defined as “Under an insurance policy, the portion of the loss to be borne by the 

insured before the insurer becomes liable for payment. Cf. Self-Insured Retention.” 
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Deductible, BLACK’S LAW DICTIONARY (11 ed. 2019). The reasoning of these decisions 

and the differences in the definitions are instructive. A self-insured retention is 

clearly treated differently under the policy and in the law from a deductible. 

D. N.C. Gen. Stat. § 58-48-35(a)(2) 

However, these differences do not end the analysis on this issue. N.C. Gen. 

Stat. §§ 58-48-35(a)(1) and 58-48-35(a)(2) must be read together. It would create an 

absurd result and violate § 58-48-35(a)(2) to strictly limit coverage of the statute to 

policies simply with a self-insured retention. First, a self-insured retention does not 

provide for the defense of the claim, unless otherwise provided for in the policy. A 

self-insured retention serves as a “first insurance” by the insured up to the dollar 

limit of the retained risk, when coverage available under the policy is then activated. 

A deductible with a duty to defend, as in this policy and the facts before us,

requires more involvement from an insurance carrier from the initiation of the claim. 

Plaintiff’s involvement in the reduced insurer responsibilities of self-insured 

retention contravenes the purpose of the statute “to avoid financial loss to claimants 

or policyholders because of the insolvency of an insurer.” N.C. Gen. Stat. § 58-48-5 

(2017). Additionally, § 58-48-35(a)(2) provides Plaintiff shall have “rights, duties, and 

obligations of the insolvent insurer as if the insurer had not become insolvent.”

A right of Dallas National and later Freestone under the policy was to seek 

reimbursement of the deductible amount from Defendant, if advanced, and be 
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provided the safeguard of the collateral deposit in the event the financially struggling 

company faced further financial difficulties. Defendant’s assignment of error is 

overruled. 

E. High-Net-Worth Employer 

Defendant asserts the trial court improperly granted Plaintiff’s summary 

judgment motion because Plaintiff is not a high-net-worth employer without

derivative rights to reimbursement. We disagree.

Defendant’s policy provides in its Benefits Deductible Endorsement: 

4. We will pay the deductible amount for you, but you must 

reimburse us within 30 days after we send you notice that 

payment is due. If you fail to fully reimburse us, we may 

cancel the policy as provided in Part Six (Conditions), 

Section D. Cancelation, of the policy. We may keep the 

amount of unearned premium that will reimburse us for 

the payments we made. These rights are in addition to 

other rights we have to be reimbursed. 

N.C. Gen. Stat. § 58-48-50(a) (2017) provides: 

Any person recovering under this Article shall be deemed 

to have assigned his rights under the policy or at law to the 

Association to the extent of his recovery from the 

Association. Every insured or claimant seeking the 

protection of this Article shall cooperate with the 

Association to the same extent as such person would have 

been required to cooperate with the insolvent insurer. The 

Association shall have no cause of action against the 

insured of the insolvent insurer for any sums it has paid 

out except such causes of action as the insolvent insurer 

would have had if such sums had been paid by the insolvent 

insurer. In the case of an insolvent insurer operating on a 

plan with assessment liability, payments of claims of the 
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Association shall not operate to reduce the liability of 

insureds to the receiver, liquidator, or statutory successor 

for unpaid assessments.

Additionally, N.C. Gen. Stat. § 58-48-35(a)(2) provides Plaintiff: “[b]e deemed the 

insurer to the extent of the Association’s obligation on the covered claims and to such 

extent shall have all rights, duties, and obligations of the insolvent insurer had not 

become insolvent. 

Plaintiff’s statutory grant of authority transfers all rights retained or assigned 

to the insolvent insurer under the Defendant’s policy. The policy specifically retains 

and provides the insurer the right to seek indemnification for deductible payments it 

advanced and paid. 

Defendant’s assertion they are not covered under Plaintiff’s statutory 

authority due to their net worth is misplaced. The section of § 58-48-50(a) containing

the language of “net worth in excess of $50,000,000” pertains to Plaintiff’s seeking 

reimbursement for the entire claim. See N.C. Ins. Guar. Ass’n v. Bd. of Tr. of Guilford 

Tech. Cmty. Coll., 364 N.C. 102, 691 S.E.2d 694 (2010). 

Plaintiff is not pursuing reimbursement for the entire claim in this matter, 

simply the deductible as defined in the insurance contract. This claim is allowed by 

statute and this Court’s binding precedent. Id. Defendant’s argument is overruled.

F. Handling of the Claim
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Defendant asserts the trial court improperly granted Plaintiff’s summary 

judgment when Plaintiff had failed in its obligation to Defendant in the handing of 

this claim. We disagree. 

Defendant argues Plaintiff’s purportedly mishandled the claim, which bars 

their recovery. Nowhere in the statutes nor the insurance policy do we find a clause 

barring the insurer’s or Plaintiff’s recovery for reimbursement of the deductible for

purported mismanagement of a claim. Defendant does not cite any case or authority 

to relieve them from this contractual obligation. Defendant’s argument is dismissed. 

E. Material Facts 

Defendant asserts genuine issues of material fact remain and argues the trial 

court erred by granting summary judgment for Plaintiff. Defendant does not 

highlight or argue any issue of fact that remains undecided. Where a party “does not 

set forth any legal argument or citation to authority to support the contention, [it is] 

deemed abandoned.” State v. Evans 251 N.C. App. 610, 625, 725 S.E.2d 444, 45 (2017). 

This issue is abandoned and dismissed.

VI. Conclusion 

Viewed in the light most favorable to Defendants and giving them the benefit 

of any disputed inferences, no genuine issues of material fact exist. Plaintiff had 

statutory authority to step into the shoes of the insolvent insurer and be subrogated
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to seek reimbursement for amounts advanced toward the stated deductible as

provided and determined by Defendant’s insurance policy and contract. 

Plaintiff was entitled to summary judgment as a matter of law. The trial 

court’s order is affirmed. It is so ordered. 

AFFIRMED.

Judges BRYANT and BROOK concur.