Court Opinion

ID: 2726906
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:09:49.318651+00
Date Added: 2024-06-11T10:03:12.412344
License: Public Domain

NO. COA13-1279

                     NORTH CAROLINA COURT OF APPEALS
                          Filed:   5 August 2014

JOHN SALVIE,
     Employee,
     Plaintiff                          North Carolina
                                        Industrial Commission
                                        I.C. Nos. 487070, PH-2835

     v.

MEDICAL CENTER PHARMACY
OF CONCORD, INC.,
     Employer,

AIMCO MUTUAL INSURANCE COMPANY,
     Carrier;

     and/or

ACTION DEVELOPMENT COMPANY, LLC,
     Alleged Employer,
     NONINSURED,

        and

MITCHELL W. WATTS,
    Individually,
    Defendants.

     Appeal   by   defendant   AIMCO   Mutual   Insurance   Company   from

Opinion and Award entered 9 August 2013 by the North Carolina

Industrial Commission.     Heard in the Court of Appeals 6 March

2014.

     Prather Law Firm, P.C., by J.D. Prather, for defendant-
     appellant.
                                       -2-
      Smith Law Firm, P.C., by John Brem Smith, for defendants-
      appellees   Medical   Center Pharmacy,  LLC  and   Action
      Development Company, LLC.

      DAVIS, Judge.

      AIMCO Mutual Insurance Company (“AIMCO”) appeals from the

Opinion and Award of the North Carolina Industrial Commission

dismissing its claims and awarding Action Development Company,

LLC   (“Action    Development”)      and     Mitchell        Watts     (“Mr.     Watts”)

attorneys’ fees.         On appeal, AIMCO contends that the Commission

erred in (1) concluding that it lacked jurisdiction over AIMCO’s

claims; and (2) awarding attorneys’ fees to Action Development

and Mr. Watts pursuant to N.C. Gen. Stat. § 97-88.1.                               After

careful review, we affirm in part and dismiss the appeal in

part.

                               Factual Background

      On 20 January 2004, John Salvie (“Plaintiff”) suffered a

compensable    injury     by   accident      to   his       back   while    delivering

medical equipment.          Medical Center Pharmacy of Concord, Inc.

(“Medical     Center      Pharmacy”)       filed        a     Form     60    admitting

Plaintiff’s      right    to   compensation       and       paid     temporary    total

disability benefits to him.          Plaintiff subsequently settled his

claim with AIMCO, Medical Center Pharmacy‘s insurance carrier,
                                                -3-
in an Agreement of Final Settlement and Release on 5 January

2011.        The    Industrial       Commission         approved          the    settlement      by

order filed 31 January 2012.                          Plaintiff’s right to workers’

compensation benefits is not at issue in this case, and he is

not a party to this appeal.

      AIMCO        initiated      the      present          action       in     the     Industrial

Commission by filing a Form 33 request for a hearing on whether

AIMCO’s       admission        of      liability            for    Plaintiff’s           workers’

compensation        benefits        had    been       caused       by     either       (1)   mutual

mistake of the parties; or (2) fraud or misrepresentation on the

part of Medical Center Pharmacy or its owner, Mr. Watts.                                      AIMCO

also sought a determination as to whether Plaintiff was a joint

or    lent    employee       of      Action       Development1            or     of    Mr.    Watts

individually.          AIMCO alleged that because Plaintiff performed

most of his work for Action Development and was jointly employed

by Action Development and Medical Center Pharmacy at the time of

his   injury,       Action     Development            was    “jointly          liable     for   the

workers’      compensation          benefits      paid       [to    Plaintiff]          under   the

legal theory of ‘lent’ employment.”

      The     matter    came      on      for   hearing       on     25    June       2012   before

Deputy       Commissioner         Adrian        Phillips.               Deputy        Commissioner

1
  Action Development is a real estate holding company and — like
Medical Center Pharmacy — is owned by Mr. Watts.
                                                 -4-
Phillips      filed       an    opinion       and       award      on    17     January       2013

concluding     that       (1)    the    Commission           lacked     jurisdiction       “over

what is now a dispute between an insurer, AIMCO, and its insured

regarding premium fraud”; (2) Action Development was not subject

to the Workers’ Compensation Act because it did not employ the

requisite number of employees; and (3) Action Development and

Mr. Watts were entitled to attorneys’ fees pursuant to N.C. Gen.

Stat. § 97-88.1.           AIMCO appealed to the Full Commission, and on

9 August      2013, the Commission entered its Opinion and Award

affirming Deputy Commissioner Phillips’ decision.                                 AIMCO gave

timely notice of appeal to this Court.

                                            Analysis

I. Jurisdiction of the Industrial Commission

      AIMCO     argues         that     the      Industrial        Commission         erred     in

determining        that    it    lacked       jurisdiction          over      AIMCO’s     claims

against Action Development and Mr. Watts.                          We disagree.

      The     Industrial         Commission            is    not   a    court     of    general

jurisdiction.         Rather,          it   is    a    quasi-judicial         administrative

board created to administer the Workers’ Compensation Act and

has   no    authority      beyond       that      conferred        upon    it    by    statute.

Cornell v. W. & S. Life Ins. Co., 162 N.C. App. 106, 108, 590

S.E.2d      294,    296        (2004).           The        Workers’     Compensation          Act
                                     -5-
specifically “relates to the rights and liabilities of employee

and employer by reason of injuries and disabilities arising out

of and in the course of the employment relation.                    Where that

relation does not exist the Act has no application.”                   Bryant v.

Dougherty, 267 N.C. 545, 548, 148 S.E.2d 548, 551 (1966).

    When    reviewing    an   Opinion   and   Award,    the    jurisdictional

facts found by the Commission are not conclusive even if there

is evidence in the record to support such findings.                 Terrell v.

Terminix Servs., Inc., 142 N.C. App. 305, 307, 542 S.E.2d 332,

334 (2001).        Instead, “reviewing courts are obliged to make

independent      findings     of   jurisdictional      facts     based        upon

consideration of the entire record.”          Id.

    Here, it is undisputed that — as the Commission determined

in finding of fact 26 — “Plaintiff does not have a stake in the

current   case.”      Therefore,    because    AIMCO’s      claim      does    not

implicate the rights of Plaintiff (the injured employee) and

instead    merely    seeks     a   determination       of     whether     Action

Development or Mr. Watts should be required to reimburse AIMCO

for some portion of the benefits already paid to Plaintiff, we

affirm     the     Commission’s     determination       that      it      lacked

jurisdiction over the matter.
                                         -6-
    In     so    holding,    we    are   guided       by   our    Supreme    Court’s

decision in Clark v. Gastonia Ice Cream Co., 261 N.C. 234, 134

S.E.2d    354    (1964).     In    Clark,      an   employee     filed   a   workers’

compensation      claim    against    his      employer,    Gastonia      Ice    Cream

Company     (“the    Company”),      claiming       that   he     had    suffered    a

compensable injury by accident on 3 May 1960.                     Id. at 234, 134

S.E.2d at 355.        The Company asserted that on the date of the

employee’s injury it was covered by an insurance policy issued

by Lumbermens Mutual Casualty Company (“Lumbermens”) and moved

for Lumbermens to be made a party to the proceeding.                            Id. at

234-35, 134 S.E.2d at 355-56.               The Company introduced evidence

at the hearing before the deputy commissioner tending to show

that Lumbermens had agreed to issue a policy beginning 20 April

1960 despite the fact that the written policy stated that the

policy period was from 9 May 1960 to 1 June 1961.                        Id. at 237,

134 S.E.2d at 357-58.             After concluding that the employee had

suffered a compensable injury, the Commission determined that it

possessed jurisdiction to determine the respective liabilities

of the Company and Lumbermens and concluded that the Company was

not covered by the policy on the date the employee’s injury

occurred.       Id. at 237, 134 S.E.2d at 357.
                                              -7-
      Our      Supreme         Court       held     that     the    Commission          lacked

jurisdiction to determine the rights and liabilities between the

Company and Lumbermens and set aside the Commission’s findings

and conclusions on that issue.                      Id.     The Court explained that

the     Commission        is     an     administrative           board    with        “limited

jurisdiction created by statute and confined to its terms,” and

consequently, whether the Commission had jurisdiction over the

Company’s action to recover from Lumbermens the payments it was

required to make to the employee “depend[ed] solely upon whether

such jurisdiction was conferred by statute.”                             Id. at 238, 134

S.E.2d at 358 (citation and quotation marks omitted).

      The Supreme Court then determined that N.C. Gen. Stat. §

97-91    —    which    gives         the    Commission       jurisdiction        to     decide

questions arising under the Workers’ Compensation Act — did not

confer       upon   the     Commission        jurisdiction         over    an     indemnity

dispute      that     was      not     germane      to     the   employee’s      right     to

compensation.         The Court reasoned that questions arising under

the Act “would seem to consist primarily, if not exclusively, of

questions for decision in the determination of rights asserted

by or on behalf of an injured employee or his dependents.”                                 Id.

at 240-41, 134 S.E.2d at 360.                     The Court explained that, as a

general rule,
                                     -8-
            when it is ancillary to the determination of
            the   employee’s    rights,  the   .   .   .
            [C]ommission has authority to pass upon a
            question relating to the insurance policy,
            including fraud in procurement, mistake of
            the parties, reformation of the policy,
            cancellation, and construction of extent of
            coverage. . . . On the other hand, when the
            rights of the employee in a pending claim
            are not at stake, many commissions disavow
            jurisdiction and send the parties to the
            courts for relief. This may occur when the
            question is purely one between two insurers,
            one of whom alleges that he has been made to
            pay an undue share of an award to a
            claimant, the award itself not being under
            attack.   Or it may occur when the insured
            and insurer have some dispute entirely
            between themselves about the validity or
            coverage of the policy or the sharing of the
            admitted liability.

Id. at 239-40, 134 S.E.2d at 359 (citation and quotation marks

omitted).       The   Supreme    Court     concluded    that       the    Workers’

Compensation    Act   neither    expressly     nor     impliedly         gives    the

Commission     jurisdiction     to   decide   matters       that    are     purely

between an employer and its insurer and that do not impact the

rights of the injured employee.          Id. at 240, 134 S.E.2d at 359.

    This     principle   was    further    applied     in   TIG    Ins.     Co.   v.

Deaton, Inc., 932 F.Supp. 132 (W.D.N.C. 1996).2                   In that case,

2
  “With regard to matters of North Carolina state law, neither
this Court nor our Supreme Court is bound by the decisions of
federal courts, including the Supreme Court of the United
States, although in our discretion we may conclude that the
reasoning of such decisions is persuasive.”  Davis v. Urquiza,
                                           -9-
TIG Insurance Company (“TIG”), one of the insurance carriers for

an    injured    employee’s      employer,       filed     an    action   against        the

employer seeking the recovery of benefits that TIG had paid to

the    injured      employee.      Id.   at      135.      The    employer       moved    to

dismiss the claim, arguing that the North Carolina Industrial

Commission had exclusive jurisdiction to hear the case.                            Id. at

136.        Citing Clark, the federal district court rejected                            the

employer’s argument, stating that

              [i]n the case at bar, the dispute is
              essentially   over   who   must    pay   [the
              employee’s] claim, not whether or how much
              [the employee] will be paid.       Therefore,
              this dispute is not “ancillary to the
              determination of the employee’s right” but
              wholly distinct from it.        There is no
              indication in the record that a decision in
              this case will in any way effect whether or
              how much [the employee] will receive on his
              claim. Thus it appears to this Court that,
              under the previous rulings of the North
              Carolina   Supreme  Court,   the   Industrial
              Commission does not have any jurisdiction to
              hear   this   case,   let  alone    exclusive
              jurisdiction.

Id. at 137.

       We    find    the   reasoning     in   TIG       persuasive   and     a    correct

application of our Supreme Court’s decision in Clark.                               As in

TIG,    the     insurance       provider      here,      AIMCO,    is     seeking        the

___ N.C. App. ___, ___, n. 1, 757 S.E.2d 327, 331, n. 1 (2014)
(citation and quotation marks omitted).
                                        -10-
reimbursement of benefits that it paid to an injured employee,

Plaintiff.     Plaintiff’s right to workers’ compensation benefits

(and the amount of benefits to which he is entitled) has already

been    decided    and    the      dispute   now    is    “over          who   must   pay

[Plaintiff’s] claim.”        Id.      As such, we hold that the Commission

properly concluded that it did not possess jurisdiction over

this dispute.3

II. Attorneys’ Fees

       AIMCO next argues that the Commission erred in concluding

that it brought the present claim without reasonable grounds in

violation     of   N.C.     Gen.     Stat.     §   97-88.1        such     that   Action

Development    and    Mr.    Watts    were     entitled      to    the     recovery    of

attorneys’    fees.       However,     although     the   Commission           concluded

that an award of attorneys’ fees was appropriate, it has not yet

ordered the specific amount to be awarded.                    In its Opinion and

Award, the Commission stated as follows:

            AIMCO Mutual Insurance Company shall pay
            attorney’s  fees   to  counsel   for   Action
            Development Company, LLC and Mitchell Watts.
            Counsel for Action Development Company, LLC
            and Mitchell Watts shall submit to the Full
            Commission   an   Affidavit   and    itemized

3
  Because we conclude that the Commission lacked jurisdiction
based on the fact that Plaintiff’s rights under the Workers’
Compensation Act were not at stake, we do not reach the issue of
whether Action Development employed the requisite number of
employees to be subject to the Act.
                                         -11-
              statement of time expended defending AIMCO’s
              claim   for   assessment  of  a   reasonable
              attorney’s fee.

Consequently, this portion of the appeal is interlocutory.                      See

Medlin v. N.C. Specialty Hosp., LLC, ___ N.C. App. ___, ___, 756

S.E.2d 812, 821 (2014) (dismissing portion of appeal concerning

award   of    attorneys’    fees    as    interlocutory       where    trial   court

reserved ruling on amount of award and appellant failed to argue

that award of attorneys’ fees affected substantial right).

    We note that the unresolved issue of the specific amount of

attorneys’ fees to be awarded does not render AIMCO’s entire

appeal interlocutory.        See Duncan v. Duncan, 366 N.C. 544, 546,

742 S.E.2d 799, 801 (2013) (holding that order may be final for

purposes of appeal “even when the trial court reserves for later

determination     collateral       issues       such   as   attorney’s   fees   and

costs”).      However, we have previously held that this Court will

not consider an appeal of an attorneys’ fees award until the

specific amount of the award has been determined by the trial

tribunal.      See Triad Women’s Center, P.A. v. Rogers, 207 N.C.

App. 353, 358, 699 S.E.2d 657, 660 (2010) (“[A]n appeal from an

award of attorneys’ fees may not be brought until the trial

court   has    finally     determined       the    amount    to   be   awarded.”).

Otherwise, as we explained in Triad,
                                     -12-
            we would be required to visit the attorneys’
            fees issue twice: one appeal addressing, in
            the   abstract,  whether  [the   party]  may
            recover attorneys’ fees at all and, if we
            upheld the first order, a second appeal
            addressing the appropriateness of the actual
            monetary award.

Id.    Accordingly, while we possess jurisdiction over the first

issue raised by AIMCO in this appeal, we must dismiss for lack

of    appellate     jurisdiction     the    portion     of    AIMCO’s     appeal

challenging the Industrial Commission’s determination that an

award of attorney’s fees was appropriate.             Id.

                                  Conclusion

      For the reasons stated above, we (1) affirm the Industrial

Commission’s      Opinion   and    Award     concluding      that   it    lacked

jurisdiction over AIMCO’s claims; and (2) dismiss the portion of

AIMCO’s    appeal    challenging     the    Commission’s     conclusion     that

Action    Development    and   Mr.   Watts     were   entitled      to   recover

attorneys’ fees.

      AFFIRMED IN PART; DISMISSED IN PART.

      Judges CALABRIA and STROUD concur.