Court Opinion

ID: 9348739
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:13:59.640195+00
Date Added: 2024-06-11T16:42:31.106727
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                     2022-NCCOA-219

                                      No. COA21-335

                                     Filed 5 April 2022

     North Carolina Industrial Commission, I.C. No. Y18900

     GWENDOLYN DIANETTE WALKER, Widow of ROBERT LEE WALKER, Deceased
     Employee, Plaintiff,

                 v.

     K&W CAFETERIAS, Employer, LIBERTY MUTUAL INSURANCE COMPANY,
     Carrier, Defendants.

           Appeal by plaintiff, and cross-appeal by defendants, from amended opinion and

     award entered 15 April 2021 by the North Carolina Industrial Commission. Heard in

     the Court of Appeals 14 December 2021.

           The Sumwalt Group, by Vernon Sumwalt and Christa Sumwalt, for plaintiff-
           appellant/cross-appellee.

           Cranfill Sumner LLP, by Steven A. Bader and Roy G. Pettigrew, for defendants-
           appellees/cross-appellants.

           ZACHARY, Judge.

¶1         Plaintiff Gwendolyn Dianette Walker appeals, and Defendants K&W

     Cafeterias and Liberty Mutual Insurance Company cross-appeal, from the Amended

     Opinion and Award of the Full North Carolina Industrial Commission (the

     “Commission”) ordering that Plaintiff’s counsel (1) disburse $900,000.00 in

     commercial uninsured/underinsured motorist (“UIM”) proceeds and $12,500.00 in
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                                        Opinion of the Court

     personal UIM proceeds free and clear of Defendants’ subrogation lien pursuant to

     N.C. Gen. Stat. § 97-10.2 (2021), and (2) disburse $50,000.00 in liability insurance

     policy proceeds according to the following distribution:

                        $5,921.91 to Plaintiff’s counsel for costs and
                         expenses incurred in the litigation of the Third-
                         Party Action,

                        $16,666.67 to Plaintiff’s counsel for attorneys’ fees in
                         the Third-Party Action, and

                        $27,411.42 to Defendants towards Defendants’
                         subrogation lien.

     After careful review, we affirm the Commission’s Opinion and Award in part, and we

     reverse in part and remand to the Commission with instructions to modify its order

     regarding the distribution of the proceeds.

                                          Background

¶2         The full background of this case is set forth in our Supreme Court’s opinion in

     Walker v. K&W Cafeterias (Walker I), 375 N.C. 254, 846 S.E.2d 679 (2020). We recite

     here the facts relevant to the appeals currently before us.

¶3         On 16 May 2012, Robert Lee Walker (“Decedent”) was driving a vehicle owned

     by his employer, Defendant K&W Cafeterias, when he was involved in a fatal motor

     vehicle accident in Dillon, South Carolina. Walker I, 375 N.C. at 255, 846 S.E.2d at

     680. As our Supreme Court recognized in Walker I, however:

                  this case is not [P]laintiff’s workers’ compensation claim.
                  That claim was fully resolved in 2013 when death benefits
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                                          Opinion of the Court

                      were paid to [P]laintiff under the Workers’ Compensation
                      Act due to [Decedent]’s work-related death. Instead, here
                      we review what should happen to over $900,000 that was
                      paid to [P]laintiff in the South Carolina wrongful death
                      settlement with the at-fault driver. That settlement was
                      reached in 2016, and to date, the money remains in the
                      trust account of [P]laintiff’s attorneys.

     Id. at 258, 846 S.E.2d at 682.

¶4          On 21 August 2012, Plaintiff filed a worker’s compensation claim for death

     benefits pursuant to N.C. Gen. Stat. §§ 97-38 to -40. Id. at 256, 846 S.E.2d at 681. On

     7 January 2013, a deputy commissioner entered a Consent Opinion and Award

     ordering Defendants to pay $333,763.00 in workers’ compensation death benefits to

     Plaintiff. Id.

¶5          In 2014, Plaintiff filed a wrongful death action in South Carolina (the “Third-

     Party Action”), seeking damages from the third-party driver at fault in the accident

     that resulted in Decedent’s death. Id. “In 2016, [P]laintiff and the third-party [driver]

     reached a settlement agreement, according to which [P]laintiff recovered a total of

     $962,500[,]” composed of “(1) $50,000 in liability benefits from the [at-fault driver]’s

     insurer; (2) $12,500 in personal UIM proceeds from [P]laintiff’s and [D]ecedent’s own

     personal UIM policy; and (3) $900,000 in UIM proceeds from a commercial UIM policy

     that K&W purchased with its automobile insurance carrier.” Id.

¶6          On 21 March 2016, Defendant Liberty Mutual asserted a subrogation claim; it

     “filed a request for a hearing with the North Carolina Industrial Commission in which
                                WALKER V. K&W CAFETERIAS

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                                      Opinion of the Court

     it sought repayment of the workers’ compensation death benefits it had paid to

     [P]laintiff beginning in 2013, claiming a lien under N.C.G.S. § 97-10.2 on the UIM

     proceeds that [Plaintiff] recovered from the South Carolina wrongful death

     settlement in 2016.” Id. at 256–57, 846 S.E.2d at 681.

¶7         On 10 July 2017, a deputy commissioner concluded that Defendants “were

     entitled to subrogation under N.C.G.S. § 97-10.2(f)(1)(c), (h), and ordered that

     [D]efendants be reimbursed out of the third-party recovery [from the settlement in

     the Third-Party Action] for the $333,763 in workers’ compensation benefits that they

     had paid to [Plaintiff] under the 7 January 2013 Consent Opinion and Award.” Id. at

     257, 846 S.E.2d at 681. Both the Commission and this Court affirmed the 10 July

     2017 Opinion and Award. Id. Our Supreme Court, however, “conclude[d] that

     [D]efendants may not satisfy their workers’ compensation lien by collecting from

     [P]laintiff's recovery of UIM proceeds in her South Carolina wrongful death

     settlement[,]” and reversed and remanded the case. Id. at 257–58, 846 S.E.2d at 682.

¶8         On remand following Walker I, the Commission entered an Amended Opinion

     and Award on 15 April 2021. The Commission concluded that, pursuant to Walker I,

     the “proceeds recovered in the third-party action from the two UIM policies are

     governed by South Carolina law and may not be used to satisfy Defendants’ workers’

     compensation lien under N.C. Gen. Stat. § 97-10.2.” The Commission further

     concluded that “Defendants’ lien attaches to the entire $50,000.00 in liability
                                   WALKER V. K&W CAFETERIAS

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                                            Opinion of the Court

       insurance proceeds and not just Plaintiff’s share of those proceeds” pursuant to this

       Court’s opinion in In re Estate of Bullock, 188 N.C. App. 518, 655 S.E.2d 869 (2008).

¶9           The Commission then ordered that Plaintiff’s counsel disburse both the

       $900,000.00 in commercial UIM proceeds and $12,500.00 in personal UIM proceeds

       “free and clear of Defendants’ subrogation interests under N.C. Gen. Stat. § 97-

       10.2[,]” and further ordered that:

                    Plaintiff’s counsel shall disburse the $50,000.00 in liability
                    policy proceeds as follows:

                           a. $5,921.91 to Plaintiff’s counsel for costs and
                           expenses incurred in the litigation of the [Third-
                           Party Action],

                           b. $16,666.67 to Plaintiff’s counsel [for] attorney’s
                           fees in the [Third-Party Action],

                           c. $27,411.42 to Defendants towards Defendants’
                           subrogation lien.

¶ 10         On 15 April 2021, Plaintiff filed her notice of appeal. On 11 May 2021,

       Defendants filed their notice of appeal.

                                       Standard of Review

¶ 11         “The standard of review in workers’ compensation cases has been firmly

       established by the General Assembly and by numerous decisions of” our Supreme

       Court. Richardson v. Maxim Healthcare/Allegis Grp., 362 N.C. 657, 660, 669 S.E.2d

       582, 584 (2008), reh’g denied, 363 N.C. 260, 676 S.E.2d 472 (2009).

                    Under the Workers’ Compensation Act, the Commission is
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                                         Opinion of the Court

                    the sole judge of the credibility of the witnesses and the
                    weight to be given their testimony. Therefore, on appeal
                    from an award of the Industrial Commission, review is
                    limited to consideration of whether competent evidence
                    supports the Commission’s findings of fact and whether the
                    findings support the Commission’s conclusions of law.

       Id. (citations and internal quotation marks omitted). The Commission’s conclusions

       of law, however, are reviewed de novo. Walker I, 375 N.C. at 258, 846 S.E.2d at 682.

                                        Plaintiff’s Appeal

¶ 12         On appeal, Plaintiff argues that the Commission erred by imposing a workers’

       compensation lien against that portion of a wrongful death recovery that would have

       been distributed to heirs who did not receive any part of the workers’ compensation

       award for the Decedent’s death. Our Supreme Court declined to reach this issue in

       Walker I. Id. at 255 n.1, 846 S.E.2d at 680 n.1. In the present appeal, we are bound

       by controlling precedent to reject Plaintiff’s argument.

¶ 13         Plaintiff concedes that this Court has already decided this issue in Bullock, in

       which this Court analyzed the plain language of N.C. Gen. Stat. § 97-10.2(f) and (h)

       and concluded that an employer and its insurer

                    have a statutory lien against any payment made by a third-
                    party tortfeasor arising out of an injury or death of an
                    employee subject to the [Workers’ Compensation] Act. This
                    lien may be enforced against any person receiving such
                    funds. It is a lien for all amounts paid or to be paid to the
                    employee, and it is mandatory in nature.

       188 N.C. App. at 524, 655 S.E.2d at 873 (citations and internal quotation marks
                                   WALKER V. K&W CAFETERIAS

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                                          Opinion of the Court

       omitted).

¶ 14         Further, we found “no language in [the Workers’ Compensation Act]

       subrogating the rights of an employer to that of the beneficiaries of the workers’

       compensation award.” Id. Accordingly, we determined that “[i]t was improper for the

       trial court to conclude that [the] respondents’ rights were subrogated to those of the

       minor nephews where the General Assembly has not expressed, implied, or intended

       any such limit.” Id. at 525, 655 S.E.2d at 873.

¶ 15         “Where a panel of the Court of Appeals has decided the same issue, albeit in a

       different case, a subsequent panel of the same court is bound by that precedent,

       unless it has been overturned by a higher court.” In re Civil Penalty, 324 N.C. 373,

       384, 379 S.E.2d 30, 37 (1989). Indeed, Plaintiff acknowledges that her arguments in

       favor of overturning Bullock are properly addressed to our Supreme Court and that

       “the current appeal is her next step” toward that goal. Thus, Plaintiff’s argument is

       overruled.

                                    Defendants’ Cross-Appeal

¶ 16         On cross-appeal, Defendants argue that the Commission erred (1) by

       concluding that the proceeds recovered from the personal UIM policy were exempt

       from subrogation pursuant to N.C. Gen. Stat. § 97-10.2, and (2) by failing to distribute

       the costs and attorneys’ fees pro rata pursuant to N.C. Gen. Stat. § 97-10.2(f)(2).

       A. Subrogation of Personal UIM Policy Proceeds
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                                          Opinion of the Court

¶ 17         Defendants first argue that the Commission’s Amended Opinion and Award

       “is in conflict with” our Supreme Court’s opinion in Walker I because the Commission

       determined that the personal UIM policy proceeds were exempt from subrogation.

       We agree.

¶ 18         “Under N.C. Gen. Stat. § 97-10.2, a subrogation lien for the benefit of the

       workers’ compensation carrier automatically attaches to the third[-]party proceeds

       received by a plaintiff for whom the carrier has paid medical expenses arising from

       the injury by accident.” Anglin v. Dunbar Armored, Inc., 226 N.C. App. 203, 206, 742

       S.E.2d 205, 207 (2013). Section 97-10.2(f)(1) provides that

                    [i]f the employer has filed a written admission of liability
                    for benefits under this Chapter with, or if an award final in
                    nature in favor of the employee has been entered by the
                    Industrial Commission, then any amount obtained by any
                    person by settlement with, judgment against, or otherwise
                    from the third party by reason of such injury or death shall
                    be disbursed by order of the Industrial Commission . . . .

       N.C. Gen. Stat. § 97-10.2(f)(1).

¶ 19         In Walker I, our Supreme Court was presented with the issue of “whether to

       apply North Carolina or South Carolina law to the attempted subrogation of

       [P]laintiff’s wrongful death settlement UIM proceeds.” 375 N.C. at 258, 846 S.E.2d at

       682. The applicable choice of law was crucial to determining the outcome of the

       subrogation issue, because “[u]nder South Carolina UIM law, an insurer is barred,

       without exception, from seeking to be reimbursed with UIM proceeds for benefits it
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                                          Opinion of the Court

       has previously paid.” Id.

¶ 20         Choice-of-law issues arising in North Carolina proceedings concerning injuries

       suffered in South Carolina have come before this Court on numerous occasions. In

       such cases, under well-settled conflict-of-laws principles, “the tort law of South

       Carolina governs the substantive issues of liability and damages, while procedural

       rights are determined by the laws of North Carolina.” Robinson v. Leach, 133 N.C.

       App. 436, 438, 514 S.E.2d 567, 568, disc. review denied, 350 N.C. 835, 539 S.E.2d 293

       (1999).

¶ 21         Of particular relevance here, this Court has previously addressed the issue of

       “what law applies to [a] trial court’s authority to adjust [a] North Carolina lien on [a]

       plaintiff’s UIM funds, despite their origin” from a South Carolina insurance policy.

       Anglin, 226 N.C. App. at 206, 742 S.E.2d at 207. In Anglin, the plaintiff sought the

       “reduction or elimination of [a workers’ compensation] subrogation lien pursuant to

       N.C. Gen. Stat. § 97-10.2(j)” on South Carolina UIM funds. Id. at 209, 742 S.E.2d at

       209. In that “N.C. Gen. Stat. § 97-10.2(j) is remedial in nature and remedial rights

       are determined by the law of the forum,” we concluded that “the trial court did not

       err in applying N.C. Gen. Stat. § 97-10.2(j) to [the] plaintiff’s UIM funds received

       under a South Carolina insurance policy[,]” thus allowing the subrogation lien to be

       asserted against the UIM proceeds. Id. at 209–10, 742 S.E.2d at 209 (citation and

       internal quotation marks omitted).
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                                         Opinion of the Court

¶ 22          In Walker I, Defendants relied on these choice-of-law precedents to argue that

       they were entitled to satisfy their subrogation lien against the commercial UIM

       proceeds pursuant to N.C. Gen. Stat. § 97-10.2 because “the commercial UIM policy

       purchased by K&W is not a South Carolina UIM policy. Specifically, they point[ed]

       out that the parties stipulated before the Commission that the commercial UIM policy

       was purchased and entered into in North Carolina.” 375 N.C. at 259, 846 S.E.2d at

       683.

¶ 23          However, rather than viewing this as “an abstract choice of law issue[,]” our

       Supreme Court concluded that this issue was “properly analyzed under contract law

       interpreting a choice-of-law clause.” Id. at 259, 846 S.E.2d at 682. Crucial to our

       Supreme Court’s consideration of this issue in Walker I was “the effect of the

       endorsement that was added to the commercial UIM policy on 7 July 2011 . . . . The

       clear intent and effect of this endorsement was to provide for the application of South

       Carolina law to all UIM payments under the policy.” Id. at 260, 846 S.E.2d at 683.

       Our Supreme Court then reasoned that:

                    [T]he vehicle operated by [D]ecedent at the time of the
                    accident fell within the categories of vehicles for which the
                    policy endorsement intended to apply South Carolina law.
                    The endorsement modified the insurance policy for “a
                    covered ‘auto’ licensed or principally garaged in” South
                    Carolina. As found by the Commission in the 10 July 2017
                    Opinion and Award, the vehicle [D]ecedent was driving at
                    the time of the accident was registered, garaged, and
                    driven in South Carolina. These factors, and the fact that
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                                         Opinion of the Court

                    the policy endorsement explicitly provided as a matter of
                    contract that South Carolina UIM law would apply to
                    payments made under the commercial UIM policy,
                    demonstrate that South Carolina law should apply here.
                    Accordingly, we hold that the endorsement requires South
                    Carolina UIM law to apply here.

       Id.

¶ 24         “[H]aving concluded that South Carolina law applie[d] to proceeds paid under

       Liberty Mutual’s UIM insurance policy,” our Supreme Court held that “[D]efendants’

       subrogation lien under N.C.G.S. § 97-10.2 cannot be satisfied by the UIM proceeds

       that [P]laintiff received as part of the wrongful death settlement.” Id. at 261, 846

       S.E.2d at 683–84. Our Supreme Court thus reversed and remanded to the

       Commission for further proceedings. Id. at 261, 846 S.E.2d at 684.

¶ 25         On remand, in its Amended Opinion and Award, the Commission concluded

       that, pursuant to Walker I, “proceeds recovered in the third-party action from the two

       UIM policies are governed by South Carolina law and may not be used to satisfy

       Defendants’ workers’ compensation lien under N.C. Gen. Stat. § 97-10.2. See S.C.

       Code § 38-77-160 (2015).” However, Defendants correctly note that our Supreme

       Court did not indicate whether “its reasoning applied to both the personal UIM policy

       and the commercial UIM policy.” Because Walker I relied on the commercial UIM

       policy as “a contract to which [D]efendants are party[,]” 375 N.C. at 258, 846 S.E.2d

       at 682, in deciding to analyze the issue at bar as one of contract interpretation,
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                                          Opinion of the Court

       Defendants argue in the present appeal that “the Supreme Court’s analysis, on its

       face, does not extend to the personal UIM policy[.]” Further, Defendants also suggest

       that “the factors cited by the Supreme Court to support its outcome – the conformity

       endorsement and the contractual relationship between Defendants and the UIM

       carrier – do not extend to the personal UIM policy.”

¶ 26         Defendants’ argument is persuasive; the contractual analysis undertaken by

       our Supreme Court in Walker I is inapplicable to the instant case. We thus return to

       the choice-of-law principles articulated in Anglin.

¶ 27         It is well established that subrogation pursuant to N.C. Gen. Stat. § 97-10.2 “is

       remedial in nature and that remedial rights are determined by the law of the forum.”

       Anglin, 226 N.C. App. at 207, 742 S.E.2d at 208 (citation and internal quotation

       marks omitted). As in Anglin, the forum in this case is North Carolina. See id. at 209,

       742 S.E.2d at 209. Accordingly, § 97-10.2 applies to the $12,500.00 in proceeds from

       the personal UIM policy, and the Commission erred by concluding otherwise.

¶ 28         Having so determined, and with Defendants’ subrogation interest in the

       $12,500.00 in personal UIM proceeds in mind, we next review the Commission’s

       distribution of costs and attorneys’ fees.

       B. Distribution of Costs and Attorneys’ Fees

¶ 29         Defendants next contend that the Commission erred in its distribution award.

¶ 30         The Commission ordered that Plaintiff’s counsel disburse the $900,000.00 in
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                                             Opinion of the Court

       commercial UIM proceeds and the $12,500.00 in personal UIM proceeds “free and

       clear of Defendants’ subrogation interests under N.C. Gen. Stat. § 97-10.2.” With

       regard to the liability policy proceeds, the Commission ordered that Plaintiff’s counsel

       disburse the $50,000.00 in liability policy proceeds according to the following

       distribution:

                             $5,921.91 to Plaintiff’s counsel for costs and
                              expenses incurred in the litigation of the Third-
                              Party Action,

                             $16,666.67 to Plaintiff’s counsel for attorneys’ fees in
                              the Third-Party Action, and

                             $27,411.42 to Defendants towards Defendants’
                              subrogation lien.

¶ 31         In addition to the erroneous exclusion of the $12,500.00 in personal UIM

       proceeds from Defendants’ subrogation interest, Defendants argue that the

       Commission’s distribution contravenes the purpose of the Workers’ Compensation

       Act by inequitably ordering the disbursement of costs and expenses from the

       $50,000.00 in liability policy proceeds rather than against Plaintiff’s total

       $962,500.00 recovery, when “most of these costs did not go toward the fraction of the

       recovery that is subject to the lien.” We disagree.

¶ 32         The Workers’ Compensation Act specifically addresses the payment of costs

       and attorneys’ fees from a third-party recovery:

                       [A]ny amount obtained by any person by settlement with,
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                                          Opinion of the Court

                    judgment against, or otherwise from 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:

                           a. First to the payment of actual court costs taxed by
                           judgment and/or reasonable expenses incurred by
                           the employee in the litigation of the third-party
                           claim.

                           b. Second to the payment of the fee of the attorney
                           representing the person making settlement or
                           obtaining judgment, and except for the fee on the
                           subrogation interest of the employer such fee shall
                           not be subject to the provisions of G.S. 97-90 but
                           shall not exceed one third of the amount obtained or
                           recovered of the third party.

                           c. Third to the reimbursement of the employer for all
                           benefits by way of compensation or medical
                           compensation expense paid or to be paid by the
                           employer under award of the Industrial
                           Commission.

                           d. Fourth to the payment of any amount remaining
                           to the employee or his personal representative.

       N.C. Gen. Stat. § 97-10.2(f)(1).

¶ 33         As regards attorneys’ fees, § 97-10.2(f)(2) provides that “[t]he attorney fee paid

       under (f)(1) shall be paid by the employee and the employer in direct proportion to

       the amount each shall receive under (f)(1)c and (f)(1)d hereof and shall be deducted

       from such payments when distribution is made.” Id. § 97-10.2(f)(2).

¶ 34         Defendants assert that § 97-10.2(f)(1)’s “distribution scheme breaks down”

       following Walker I because “[b]y statute, the lien attaches to ‘any amount obtained by
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                                          Opinion of the Court

       any person.’ But here, the vast majority of the third-party recovery cannot be used to

       satisfy Defendants’ lien.” Instead, Defendants propose that the equitable approach

       would be “to employ a pro rata distribution of the costs and attorneys’ fees that

       accounts for the disparity between the total recovery and the amount subject to the

       lien.”

¶ 35            Regarding costs, the Commission noted that “[t]he parties stipulated that

       Plaintiff’s attorneys incurred a total of $5,921.91 in actual costs and reasonable

       expenses in pursuing her claim against the Third Parties.” Walker I makes clear that

       under South Carolina law, $900,000.00 of the $962,500.00 recovery is not subject to

       Defendants’ subrogation lien, leaving $62,500.00 to distribute pursuant to § 97-

       10.2(f)(1). See Walker I, 375 N.C. at 261, 846 S.E.2d at 683–84. Section 97-10.2(f)(1)a

       gives the reimbursement of the “actual court costs taxed by judgment and/or

       reasonable expenses incurred by the employee in the litigation of the third-party

       claim” priority over a subrogation lien. N.C. Gen. Stat. § 97-10.2(f)(1)a. As the parties

       stipulated, the costs and expenses were incurred in the litigation of the liability claim.

       Accordingly, the sum of $5,921.91 should be disbursed from the $50,000.00 in

       proceeds of the personal liability policy.

¶ 36            Continuing with the distribution scheme laid out by § 97-10.2(f), we next

       address the disbursement of attorneys’ fees. Here, the Commission found that

       “[u]nder the provisions of the attorney’s fee agreements stipulated into the record
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                                          Opinion of the Court

       herein and N.C. Gen. Stat. § 97-10.2(f)(1)b, Plaintiff’s attorneys are entitled to a fee

       of one[-]third, or 33 1/3 percent, of any sum recovered from the liability policy

       proceeds, which amounts to $16,666.67.” However, the Commission did not address

       the disbursement of attorneys’ fees from the $12,500.00 in personal UIM policy

       proceeds.

¶ 37         Section 97-10.2(f)(2) requires that the parties shall pay attorneys’ fees “in

       direct proportion to the amount each shall receive under (f)(1)c and (f)(1)d hereof[.]”

       Id. § 97-10.2(f)(2). As the Commission correctly concluded:

                    The proportion of the amount Defendants were disbursed
                    under N.C. Gen. Stat. § 97-10.2(f)(1)c ($[41,282.13]) to the
                    amount Plaintiff was disbursed under N.C. Gen. Stat. § 97-
                    10.2(f)(1)d ($0) is 100% to 0%. Defendants are therefore
                    responsible for paying 100% of the $[20,833.33] attorney’s
                    fee pursuant to N.C. Gen. Stat. § 97-10.2(f)(2).

¶ 38         “Where a statute’s language is clear and unambiguous, we are not at liberty to

       divine a different meaning through other methods of judicial construction. This Court

       must apply the law as enacted by the legislature.” Stahl v. Bowden, 274 N.C. App.

       26, 31, 850 S.E.2d 588, 592 (2020) (citation and internal quotation marks omitted).

       The language of § 97-10.2(f)(2) is “clear and unambiguous,” and with the exception of

       the particular amounts in error due to the Commission’s exclusion of the personal

       UIM proceeds from its calculation, the Commission correctly applied the statutory

       scheme in determining the proper distribution of the proceeds.
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                                          Opinion of the Court

¶ 39         Accordingly, the sum of $5,921.91 shall be disbursed in reimbursement of the

       costs and reasonable expenses from the $50,000.00 in liability insurance policy

       proceeds. The sum of $16,666.67 in attorneys’ fees shall be disbursed from the

       $50,000.00 in liability insurance policy proceeds, and the sum of $4,166.67 in

       attorneys’ fees shall be disbursed from the $12,500.00 in personal UIM policy

       proceeds, for a total of $20,833.33 in attorneys’ fees from these two policy proceeds.

       The sums remaining from the third-party recovery proceeds ($62,500.00 - $5,921.91

       - $20,833.33 = $35,744.76) shall be disbursed to Defendants to satisfy their workers’

       compensation subrogation lien pursuant to N.C. Gen. Stat. § 97-10.2(f)(1)c.

                                            Conclusion

¶ 40         Plaintiff’s argument on appeal that the Commission erred by imposing a

       workers’ compensation lien against that portion of a wrongful death recovery that

       would have been distributed to heirs who did not receive any part of the workers’

       compensation award for the Decedent’s death is foreclosed by precedent. See Bullock,

       188 N.C. App. at 524–25, 655 S.E.2d at 873. Thus, that portion of the Commission’s

       Amended Opinion and Award is affirmed.

¶ 41         The Commission erred by concluding that the proceeds of the personal UIM

       policy are not subject to Defendants’ subrogation lien pursuant to Walker I. However,

       the Commission properly ordered that the costs and reasonable expenses be

       distributed from the proceeds of the liability policy, and that one-third of the proceeds
                            WALKER V. K&W CAFETERIAS

                                   2022-NCCOA-219

                                  Opinion of the Court

of each policy be distributed as attorneys’ fees. Accordingly, we reverse that portion

of the Amended Opinion and Award and remand to the Commission with instructions

to enter an award distributing the proceeds as follows:

      1) Plaintiff’s counsel shall disburse the $900,000.00 in commercial UIM
         proceeds “free and clear of Defendants’ subrogation interests under N.C.
         Gen. Stat. § 97-10.2.”

      2) Counsel shall disburse the $50,000.00 in third-party liability policy
         proceeds as follows:

                a. $5,921.91 to Plaintiff’s counsel for costs and
                   expenses incurred in the litigation of the Third-
                   Party Action,

                b. $16,666.67 to Plaintiff’s counsel for attorneys’ fees,
                   and

                c. $27,411.42 to Defendants              in   satisfaction   of
                   Defendants’ subrogation lien.

      3) Counsel shall disburse the $12,500.00 in Decedent’s personal
         UIM proceeds as follows:

                a. $4,166.67 to Plaintiff’s counsel for attorneys’ fees,
                   and

                b. $8,333.33 to Defendants in                 satisfaction   of
                   Defendants’ subrogation lien.

      AFFIRMED IN PART; REVERSED IN PART AND REMANDED.

      Judges WOOD and GRIFFIN concur.