Court Opinion

ID: 4150525
Source: CourtListenerOpinion
Date Created: 2017-03-07 14:08:26.624839+00
Date Added: 2024-06-11T07:46:30.530352
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA16-763

                                  Filed: 7 March 2017

Wilson County, No. 13 CVS 1154

ROBERT MURRAY, Plaintiff,

              v.

JOSEPH CLIFTON MOODY, Defendant.

        Appeal by defendant from order entered 31 March 2016 by Judge Reuben F.

Young in Wilson County Superior Court. Heard in the Court of Appeals 29 November

2016.

        Cranfill Sumner & Hartzog LLP, by Scott H. Dunnagan, for unnamed workers’
        compensation defendants-appellees.

        Law Office of Robert E. Ruegger, by Robert E. Ruegger, for defendant-appellant.

        ZACHARY, Judge.

        Pursuant to the North Carolina Workers’ Compensation Act, an employer and

its workers’ compensation carrier are entitled to a lien on an injured employee’s

recovery in an action against a third-party tortfeasor. This lien extends to all benefits

paid to an employee for injuries caused by the third party.

        In this case, plaintiff Robert Murray was injured in an automobile accident in

the course of his employment with unnamed defendant Evans MacTavish Agricraft,

Inc. (Evans). Defendant Joseph Moody caused the accident. Evans and its workers’
                                 MURRAY V. MOODY

                                 Opinion of the Court

compensation    carrier,   unnamed   defendant     Cincinnati   Insurance   Company

(collectively with Evans, unnamed defendants) paid medical and indemnity benefits

to Murray, who later brought a personal injury action against Moody. The action was

tried to a jury, which heard evidence concerning Murray’s injuries and the amount of

workers’ compensation benefits that he received. The jury returned a verdict against

Moody and awarded Murray money damages.

      The trial judge entered a final judgment in favor of Murray that, pursuant to

N.C. Gen. Stat. § 97-10.2(e), reduced the damage award by the amount of workers’

compensation benefits he received from unnamed defendants. Four days later, the

trial judge entered an amended judgment that did not reduce the damage award but

instead specifically granted judgment in favor of Evans for the exact amount of

workers’ compensation benefits that were paid to Murray, and that granted judgment

in favor of Murray for the balance of the damage award.

      Roughly a year later, Moody filed a motion in Wilson County Superior Court

pursuant to N.C. Gen. Stat. § 97-10.2(j), which allows a superior court judge, in his

or her discretion, to determine the amount of an employer’s lien after an injured

employee has obtained a judgment against or settled a claim with a third party. The

superior court entered an order denying Moody’s motion, holding that the amount of

unnamed defendants’ lien had been determined by the prior court’s amended

judgment, and that the same was res judicata and could not be relitigated. As a

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                                   Opinion of the Court

result, the superior court concluded that it lacked jurisdiction to determine unnamed

defendants’ lien pursuant to subsection 97-10.2(j).

      Moody now appeals the superior court’s order, and he argues that the court

had jurisdiction to set the amount of the lien. For the reasons that follow, we agree.

Accordingly, we reverse the superior court’s order denying Moody’s motion and

remand for further proceedings.

                                   I. Background

      On 3 August 2010, Murray was driving on Highway 86 near Hillsborough,

North Carolina, when his truck, a company vehicle owned by Evans, was struck in

the rear by a car being driven by Moody. The rear impact caused Murray’s truck to

strike another vehicle, and Murray sustained a compensable neck injury in the

accident.   Murray’s neck injury required extensive medical treatment, including

physical and medication therapy.

      Unnamed defendants accepted Murray’s workers’ compensation claim and

paid a total of $7,432.13 in benefits (comprised of $5,247.23 in medical benefits and

$2,184.90 in indemnity payments). On 2 August 2013, Murray filed a personal injury

action against Moody in Wilson County Superior Court. The complaint alleged that

Moody negligently caused the August 2010 car accident and sought damages for

Murray’s pain and suffering, medical expenses, and permanent injury. The case

proceeded to trial in March 2015, the Honorable Robert H. Hobgood presiding.

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                                  Opinion of the Court

      At trial, the jury heard evidence of the medical and indemnity payments that

Evans made to Murray due to the compensable injury he sustained in the August

2010 automobile accident. This evidence established that Murray had received a total

of $7,432.13 in workers’ compensation benefits. The jury returned a verdict finding

Moody to be negligent and awarding Murray damages in the amount of $11,000.00.

Consequently, on 16 March 2015, Judge Hobgood entered a final judgment consistent

with the jury’s verdict.   Judge Hobgood then reduced Murray’s recovery by the

amount of workers’ compensation benefits paid to Murray. The final judgment reads

as follows:

              And the Court having reduced said verdict by $7,423.13,
              pursuant to the North Carolina Workers[’] Compensation
              Act and in accordance with N.C.G.S. § 97-10.2;

              IT IS THEREFORE ORDERED, ADJUDGED AND
              DECREED that judgment be had against the Defendant in
              the amount of $3,576.87, together with interest from the
              date of filing hereof and costs taxed to the Defendant
              herein, including reasonable attorney fees to Plaintiff’s
              counsel pursuant to N.C.G.S. § 6-21.1.

The final judgment complied with N.C. Gen. Stat. § 97-10.2(e) (2015), which

provides that

              the amount of compensation and other benefits paid or
              payable on account of such injury or death shall be
              admissible in evidence in any proceeding against the third
              party. In the event that said amount of compensation and
              other benefits is introduced in such a proceeding the court
              shall instruct the jury that said amount will be deducted
              by the court from any amount of damages awarded to the

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                                  Opinion of the Court

             plaintiff.

      For reasons not apparent in the record, Judge Hobgood entered an amended

final judgment (amended judgment) on 20 March 2015, which expressly provided that

“judgment be had against the Defendant in the amount of $7,423.13 in favor of Evans

Mactavish Agricraft to be distributed in accordance with N.C.G.S. § 97-10.2(f).”

Another portion of the amended judgment granted “judgment . . . in favor of [Murray]

in the amount of $3,576.87[,]” the remainder of the jury’s damages award. As a result,

while the sum of $7,423.13 was simply deducted from Murray’s recovery in the initial

judgment, the sum of $7,423.13 was specifically awarded to Evans in the amended

judgment. Murray’s damage award was unchanged by the amended judgment.

      On 14 May 2015, Moody appealed to this Court from the amended judgment

and other pre- and post-trial orders entered in the negligence action. Roughly three

months later, Murray and Moody entered into a settlement that was memorialized in

a document entitled “Release of All Claims-Civil Action Pending” (the release).

Pursuant to the release, Moody and his liability insurance carrier agreed to pay

Murray the lump sum of $15,654.25 in consideration for Murray’s agreement to

release any “claims resulting or to result” from the August 2010 automobile accident.

However, the release expressly preserved unnamed defendants’ rights “to enforce the

[amended] judgment obtained in favor of [Evans] in [the negligence] action for

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                                 Opinion of the Court

[workers’ compensation] benefits paid . . . to . . . Robert Murray for his personal

injuries.”

       On 2 September 2015, unnamed defendants served a Notice of Appearance and

Claim of Lien as well as a motion pursuant to N.C. Gen. Stat. § 97-10.2(j) seeking

determination of the amount of their lien on Murray’s recovery.           Unnamed

defendants’ motion, however, was never scheduled for hearing. The record suggests

that unnamed defendants did not go forward with their motion once they learned that

the amended judgment setting the specific amount they could recover had been

entered in the negligence action. On 10 September 2015, Moody filed a motion to

withdraw his appeal from, inter alia, the amended judgment. This Court granted the

motion to withdraw the appeal four days later.

       In February 2016, Moody filed his own Motion for Determination of Workers’

Compensation Lien in superior court pursuant to N.C. Gen. Stat. § 97-10.2(j). On 22

February 2016, the Honorable Reuben F. Young heard Moody’s motion in Wilson

County Superior Court. At the hearing, unnamed defendants argued that Judge

Hobgood’s amended judgment had decided the issue and amount of their lien. As

such, unnamed defendants argued, the determination of the lien was res judicata and

Judge Young had no statutory authority under N.C. Gen. Stat. § 97-10.2(j) to revisit

the issue. On 31 March 2016, Judge Young entered an order that denied Moody’s

motion on the following the grounds:

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                                  Opinion of the Court

             [T]his Court lacks jurisdiction to determine the Workers’
             Compensation [Defendants’] subrogation lien under
             N.C.G.S. § 97-10.2(j) and the same is res judicata. This
             Court further finds that the Amended Final Judgment
             entered on March 20, 2015 in the above-captioned case
             remains undisturbed, specifically including, but not
             limited to, payment of $7,423.13 by Defendant Joseph
             Clifton Moody to the Workers’ Compensation Defendants
             to be distributed in accordance with N.C.G.S. § 97-10.2(f).

Moody appeals from Judge Young’s order.

                                  II. Discussion

      A. Standard of Review

      Ordinarily, the trial court’s ruling on a motion pursuant to N.C. Gen. Stat. §

97-10.2(j) is reviewed for an abuse of discretion. Cook v. Lowe’s Home Centers, Inc.,

209 N.C. App. 364, 367, 704 S.E.2d 567, 570 (2011). However, the principal question

presented here is whether Judge Young had jurisdiction to rule on the merits of

Moody’s motion. “[W]hether a trial court has subject matter jurisdiction is a question

of law, which is reviewable on appeal de novo.” Ales v. T.A. Loving Co., 163 N.C. App.

350, 352, 593 S.E.2d 453, 455 (2004) (citation omitted).

      B. Analysis

      Moody’s sole argument on appeal is that Judge Young erred in denying Moody’s

motion to determine the amount of unnamed defendants’ lien on the ground that the

amended judgment was res judicata as to the lien issue. We agree.

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                                    Opinion of the Court

       “Under the doctrine of res judicata or ‘claim preclusion,’ a final judgment on

the merits in one action precludes a second suit based on the same cause of action

between the same parties or their privies[,]” and the doctrine precludes the

relitigation of “all matters that were or should have been adjudicated in the prior

action.” Whitacre P’ship v. Biosignia, Inc., 358 N.C. 1, 15, 591 S.E.2d 870, 880 (2004)

(citations omitted). For unnamed defendants to establish that Moody’s claim (or

motion) is barred by res judicata, they “must show (1) a final judgment on the merits

in an earlier suit, (2) an identity of the cause of action in both the earlier and the later

suit, and (3) an identity of parties or their privies in the two suits.” Erler v. Aon Risks

Servs., Inc., 141 N.C. App. 312, 316, 540 S.E.2d 65, 68 (2000), disc. review denied, 548

S.E.2d 738 (2001).

       It is well established that our Workers’ Compensation Act was never intended

to provide an employee with a windfall recovery from both the employer and a third

party who is legally responsible for causing the employee’s compensable injuries.

Radzisz v. Harley Davidson of Metrolina, Inc., 346 N.C. 84, 89, 484 S.E.2d 566, 569

(1997). Where “[t]here is one injury, [there is] still only one recovery.” Andrews v.

Peters, 55 N.C. App. 124, 131, 284 S.E.2d 748, 752 (1981), disc. rev. denied, 305 N.C.

395, 290 S.E.2d 364 (1982). To that end, N.C. Gen. Stat. § 97-10.2 defines the rights

and remedies of employees and employers against third-party tortfeasors. Radzisz,

346 N.C. at 89, 484 S.E.2d at 569. “Section 97-10.2 and its statutory predecessors

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                                   Opinion of the Court

were designed to secure prompt, reasonable compensation for an employee and

simultaneously to permit an employer who has settled with the employee to recover

such amount from a third-party tort-feasor.” Id. (citation omitted).

      In the first twelve months following an injury, an injured employee has the

“exclusive right” to enforce the liability of a third party. N.C. Gen. Stat. § 97-10.2(b)

(2015). Pursuant to subsection 97-10.2(h) (2015), “[i]n 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 . . . upon any payment made by the third party by

reason of such injury or death[.]” “An employer’s statutory right to a lien on a

recovery from the third-party tort-feasor is mandatory in nature[.]” Radzisz, 346 N.C.

at 89, 484 S.E.2d at 569.

      When an injured employee is entitled to compensation from a third-party

judgment or settlement, N.C. Gen. Stat. § 97-10.2(j) (2015) grants the superior court

limited jurisdiction to determine the amount of an employer’s or workers’

compensation carrier’s subrogation lien:

             (j) Notwithstanding any other subsection in this section, in
             the event that a judgment is obtained by the employee in
             an action against a third party, or in the event that a
             settlement has been agreed upon by the employee and the
             third party, either party may apply to the resident superior
             court judge of the county in which the cause of action arose
             or where the injured employee resides, or to a presiding
             judge of either district, to determine the subrogation
             amount. After notice to the employer and the insurance
             carrier, after an opportunity to be heard by all interested

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                                   Opinion of the Court

             parties, and with or without the consent of the employer,
             the judge shall determine, in his discretion, the amount, if
             any, of the employer’s lien, whether based on accrued or
             prospective workers’ compensation benefits, and the
             amount of cost of the third-party litigation to be shared
             between the employee and employer. The judge shall
             consider the anticipated amount of prospective
             compensation the employer or workers’ compensation
             carrier is likely to pay to the employee in the future, the
             net recovery to plaintiff, the likelihood of the plaintiff
             prevailing at trial or on appeal, the need for finality in the
             litigation, and any other factors the court deems just and
             reasonable, in determining the appropriate amount of the
             employer’s lien. If the matter is pending in the federal
             district court such determination may be made by a federal
             district court judge of that division.

Pursuant to the statute’s plain language, there are two instances in which the

superior court is given jurisdiction: (1) when the employee has obtained a judgment

against the third party, and (2) when the employee has settled with the third party.

      “There is no mathematical formula or set list of factors for the trial court to

consider in making its determination . . . ; the statute plainly affords the trial court

discretion to determine the appropriate amount of [a] lien.” Wood v. Weldon, 160 N.C.

App. 697, 700, 586 S.E.2d 801, 803 (2003) (internal citation omitted), disc. rev. denied,

358 N.C. 550, 600 S.E.2d 469 (2004). The discretionary authority granted to the

superior court under subsection 97-10.2(j) is rather broad, but it “is not unlimited[.]”

In Re Biddix, 138 N.C. App. 500, 504, 530 S.E.2d 70, 72 (2000). Rather, “ ‘the trial

court is to make a reasoned choice, a judicial value judgment, which is factually

supported . . . [by] findings of fact and conclusions of law sufficient to provide for

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                                   Opinion of the Court

meaningful appellate review.’ ” Id. (quoting Allen v. Rupard, 100 N.C. App. 490, 495,

397 S.E.2d 330, 333 (1990)). It is also “clear from the use of the words ‘shall’ and ‘and’

in subsection (j), that the trial court must, at a minimum, consider the factors that

are expressly listed in the statute.” Estate of Bullock v. C.C. Mangum Co., 188 N.C.

App. 518, 526, 655 S.E.2d 869, 874 (2008).

      The gravamen of Moody’s argument is that the doctrine of res judicata is

inapplicable here, as subsection 97-10.2(j) allows him “to challenge the amount the

workers’ compensation carrier is entitled to recover after a jury trial and entry of

judgment” in the negligence action. “If this were not the case,” Moody argues, “the

ability of a party to challenge the amount of a workers’ compensation lien” pursuant

to subsection 97-10.2(j) would be limited “only to those situations where a pre-trial

settlement was reached.”

      In response, unnamed defendants argue that because the “amount” of their

lien was previously determined . . . by way of Judge Hobgood’s Amended Final

Judgment,” res judicata bars the relitigiation of this matter. Unnamed defendants

further argue that even if the doctrine of res judicata does not apply, “both law and

equity” require remand for entry of an order consistent with the amended judgment.

Unnamed defendants assert that Judge Hobgood’s amended judgment secures the

amount they are owed and that amount should not be disturbed. This contention is

based on the rule that “ordinarily one judge may not modify, overrule, or change the

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                                   Opinion of the Court

judgment of another Superior Court judge previously made in the same action.”

Calloway v. Ford Motor Co., 281 N.C. 496, 501, 189 S.E.2d 484, 488 (1972).

      After carefully reviewing the decisions of this Court and our Supreme Court in

Hieb v. Lowery, 121 N.C. App. 33, 464 S.E.2d 308 (1995), aff’d, 344 N.C. 403, 474

S.E.2d 323 (1996), we conclude that Moody’s argument must prevail.

      In Hieb, the plaintiff, who was gravely injured in an automobile accident and

who received workers’ compensation benefits from St. Paul Fire and Marine

Insurance Company (St. Paul), filed an action against the third-party defendant

together with unnamed defendant Hartford Accident and Indemnity Company

(Hartford), the plaintiff’s underinsured motorist (UIM) insurance carrier. Hieb, 121

N.C. App. at 34, 464 S.E.2d at 309. The personal injury action was tried to a jury,

which returned a verdict against the defendants and awarded the plaintiff

$1,279,000.00 in damages. Id. at 34, 464 S.E.2d at 309. Judge Robert Gaines entered

judgment upon the jury verdict, and the judgment contained findings that referenced

a declaratory judgment action that the plaintiff had filed before trial:

             7. The Plaintiffs have instituted a second action against
             St. Paul Fire and Marine and Hartford Insurance Company
             . . . to determine the respective rights of the parties to the
             benefits of the Hartford underinsured motorist coverage
             and to determine the amount of such coverage.

             8. That on or about August 28, 1992, an order was entered
             in that action by the Honorable Robert P. Johnston which
             holds that . . . Hartford is allowed to reduce its limits by
             the amount of worker[s’] compensation paid or to be paid

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                                   Opinion of the Court

             to Plaintiff and further holding that the proceeds of the
             Hartford underinsured policy are subject to the lien of St.
             Paul Insurance Company pursuant to North Carolina
             General Statute[s] [s]ection 97-10.2. That action is now on
             appeal to the North Carolina Court of Appeals. This Court
             is bound by the Order of Judge Johnston unless and until
             said Order is modified by the Court of Appeals or any other
             Court of competent jurisdiction. This Court has not
             addressed the issues raised in that action.

Id. at 35, 464 S.E.2d at 309-10 (first alteration added).

      Based on these findings, Judge Gaines determined that St. Paul was entitled

to a lien on all workers’ compensation benefits it had paid, and would pay, to the

plaintiff. Id. at 35, 464 S.E.2d at 310. As noted in Judge Gaines’ judgment, Judge

Johnston’s order allowed Hartford to reduce its limits by the amount of workers’

compensation paid or to be paid to the plaintiff, and held that the Hartford UIM

policy’s proceeds were subject to the lien of St. Paul for all amounts paid or to be paid

to the plaintiff. Id. This Court reversed the former portion of that order but affirmed

the latter portion of the order allowing St. Paul’s lien against the Hartford UIM

benefits. Hieb v. St. Paul Fire & Marine Ins. Co., 112 N.C. App. 502, 435 S.E.2d 826

(1993) (Hieb I ). Shortly after the decision in Hieb I, Hartford tendered its UIM policy

limit of $475,000.00 in accordance with the orders of Judges Johnston and Gaines.

Hieb, 121 N.C. App. at 36, 464 S.E.2d at 310 (hereinafter referred to as Hieb II).

However, the plaintiff and St. Paul could not agree on the distribution of those

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                                       Opinion of the Court

proceeds, as St. Paul asserted that none of the Hartford money could be disbursed to

the plaintiff until St. Paul’s lien was set and paid in full. Id.

       Consequently, the plaintiff moved Judge Claude Sitton to determine the

amount of St. Paul’s lien pursuant to subsection 97-10.2(j). Id. According to the

version of subsection 97-10.2(j) in effect at that time, a superior court judge’s

authority to determine the amount of a workers’ compensation lien was triggered only

by (1) a judgment that was insufficient to compensate the workers’ compensation

carrier’s subrogation claim1 or (2) a settlement. Id. at 37, 464 S.E.2d at 311 (citing

N.C. Gen. Stat. § 97-10.2(j) (1991) (“[I]n the event that a judgment is obtained which

is insufficient to compensate the subrogation claim of the Workers’ Compensation

Insurance Carrier, or in the event that a settlement has been agreed upon by the

employee and the third party, either party may apply. . . .”) (emphasis added).

Exercising his discretion under subsection 97-10.2(j), Judge Sitton ordered that St.

Paul was entitled to recover “$241,677.77 as full satisfaction of any workers[’]

compensation lien it may have on . . . benefits paid or to be paid” to the plaintiff, and

that the plaintiff receive the remainder of the Hartford UIM proceeds. Id. at 36-37,

464 S.E.2d at 310-11.

       1  Subsection 97-10.2(j) was amended in June 1999. N.C. S.L. 1999-194, s.2. The amendment
eliminated the requirement that a third-party judgment be insufficient to compensate the workers’
compensation carrier before the superior court could exercise its discretion and determine the
subrogation amount. As noted above, a third-party judgment for any amount of damages will now
trigger the superior court’s authority to determine the amount of a workers’ compensation lien. See
N.C. Gen. Stat. § 97-10.2(j) (2015).

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       St. Paul appealed and a divided panel of this Court reversed. After stating

that one superior court judge generally may not overrule or modify the judgment of

another superior court judge (“the superior court judge rule”), the Hieb II Court

recognized that subsection 97-10.2(j) provided an exception to this rule.              Id. at 37,

464 S.E.2d at 311 (“There are, however, some statutory exceptions to [the superior

court judge] rule. See, e.g., North Carolina General Statutes §§ 97-10.2 (1991) and

1A-1, Rule 60 (1990).”). However, the Hieb II Court ultimately held that subsection

97-10.2(j) had not been “call[ed] . . . into play” and that Judge Sitton lacked the

authority to modify the other superior court judges’ orders because the “ ‘judgment’

(in excess of $1.25 million) exceeded any amount necessary to reimburse” St. Paul at

that time.2 Id. at 38, 464 S.E.2d at 311. The plaintiff appealed this Court’s decision

in Hieb II to the North Carolina Supreme Court. Hieb, 344 N.C. at 407, 474 S.E.2d

at 325.

       On appeal to the North Carolina Supreme Court, the plaintiff argued, inter

alia, that the superior court judge rule was not implicated because “the issue

previously decided by Judges Gaines and Johnston was whether a workers’

compensation carrier could assert a lien, pursuant to N.C.G.S. § 97-10.2, against the

proceeds of UIM insurance purchased by someone other than the insured party’s

employer, while the issue before Judge Sitton was the amount of such workers’

       2 When Hieb II was decided, “St. Paul had paid [the plaintiff] approximately $266,400.00 in
workers’ compensation benefits.” 121 N.C. App. at 38, 464 S.E.2d at 311.

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compensation lien that should be allowed.” Hieb, 344 N.C. at 408, 474 S.E.2d at 326.

After noting that “Judge Gaines’ conclusions of law explicitly state in accordance with

Judge Johnston’s order that ‘St. Paul Fire and Marine Insurance Company is entitled

to a lien against the proceeds of the Hartford underinsured motorist policy for all

amounts paid, or to be paid, to [the p]laintiff . . . as worker[s’] compensation

benefits[,]’ ” our Supreme Court rejected the plaintiff’s argument and held that the

superior court judge rule applied:

             [I]t is clear that the amount of the lien is to be the total of
             all amounts paid or to be paid to plaintiff as workers’
             compensation benefits. Additionally, the Court of Appeals
             issued a unanimous opinion [(in Hieb I)] affirming that
             portion of Judge Johnston’s order relating to the workers’
             compensation lien of St. Paul. . . . Thus, the issue of
             amount was dealt with and decided three times prior to
             plaintiffs presenting the matter to Judge Sitton. Judge
             Sitton’s order, setting a lesser amount of the lien to be
             repaid, does not address a different issue than that
             previously decided by Judges Johnston and Gaines.

Id. Even so, the Supreme Court went on to consider the plaintiff’s argument that

subsection 97-10.2(j) gave Judge Sitton the authority to determine the amount of St.

Paul’s lien. Id. The Court, however, rejected this contention based upon the rationale

stated in Hieb II:

             Th[e] judgment [obtained by the plaintiff] is greater than
             the amount of St. Paul’s lien at the time of Judge Sitton’s
             order and therefore is not “insufficient to compensate the
             subrogation claim.” On this record, we hold that the Court
             of Appeals did not err in concluding that Judge Sitton did
             not have authority under the provisions of N.C.G.S. § 97-

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                                   Opinion of the Court

             10.2(j) to modify the previous judgments.

Hieb, 344 N.C. at 410, 474 S.E.2d at 327.

      Our review of the decisions in Hieb reveals that the superior court judge rule

does not apply in the present case. As noted above, the Hieb II Court recognized that

subsection 97-10.2(j) provides a specific statutory exception to this rule. 121 N.C.

App. at 37, 464 S.E.2d at 311. Likewise, the clear implication of the Supreme Court’s

analysis in Hieb is that subsection 97-10.2(j) would have provided an exception to the

superior court judge rule had the plaintiff’s judgment been insufficient to compensate

St. Paul’s subrogation claim, thereby triggering Judge Sitton’s authority to

determine, in his discretion, the amount of the workers’ compensation lien. See Hieb,

344 N.C. at 409-10, 474 S.E.2d at 326-27 (addressing whether Judge Sitton’s

authority under subsection 97-10.2(j) had been triggered); see also Johnson v. S.

Indus. Constructors, Inc., 347 N.C. 530, 534, 538, 495 S.E.2d 356, 358-59, 361 (1998)

(citing the Supreme Court’s decision in Hieb and holding that “since the judgment for

plaintiff against the third-party tort-feasor in this case, in the amount of $219,052.20,

is greater than the amount of the lien at the time of the trial court’s order and is thus

not ‘insufficient to compensate the subrogation claim,’ the trial court did not have

jurisdiction to determine the amount of the lien pursuant to N.C.G.S. § 97-10.2(j)”).

      Against this backdrop, we also conclude that subsection 97-10.2(j) provides a

statutory exception to the doctrine of res judicata. Under subsection 97-10.2(j)’s plain

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                                 Opinion of the Court

language, the lien amount is to be determined at a later, separate proceeding, one

that occurs after an employee has “obtained” a judgment against (or settled with) the

third party, and after one of the parties has elected to “apply” for such a

determination. See N.C. Gen. Stat. § 97-10.2(j). Use of the words “obtained” (past

tense and past participle of the verb “obtain”) and “apply” (present tense) in the

statute indicates that the legislature intended subsection 97-10.2(j) to operate as

follows: Once an employee has obtained a judgment against a third party, either

party may apply to the appropriate superior court judge to determine the subrogation

amount. At that point, a determination may be made, in the judge’s discretion, after

the employer and insurance carrier have been given notice and after all interested

parties have been given the opportunity to be heard on the matter. See id. Case law

from this Court supports this interpretation. See, e.g., Dion v. Batten, __ N.C. App.

__, __, 790 S.E.2d 844, 850 (2016) (“In the present case, a judgment was obtained by

Plaintiff against Defendant, and [Defendant’s UIM carrier] applied . . . for a

determination of the subrogation amount. Under the plain language of [subsection

97-10.2(j)], the authority of the trial court was triggered, allowing it to exercise

discretion in determining the subrogation amount.”); Wood, 160 N.C. App. at 700, 586

S.E.2d at 804 (considering whether the superior court abused its discretion in

reducing the defendants’ workers’ compensation lien after the plaintiff obtained a

default judgment against a third-party tortfeasor and applied for determination of

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                                  MURRAY V. MOODY

                                   Opinion of the Court

the lien amount). Because the statute specifically contemplates that a judgment will

be issued in an action between the employee and a third party before “either party”

may “apply” to determine the subrogation amount, see N.C. Gen. Stat. § 97-10.2(j), it

would be nonsensical to hold that the prior judgment bars further litigation of the

lien issue. See Helms v. Powell, 32 N.C. App. 266, 269, 231 S.E.2d 912, 914 (1977)

(“Under the normal rules of statutory construction, the language of a statute will be

interpreted to avoid absurd or illogical consequences.”) (citation omitted).

      It is also significant that subsection “97-10.2(j) grants limited jurisdiction to

the superior court to determine the amount of the employer’s lien[.]” Leggett v. AAA

Cooper Transp., Inc., 198 N.C. App. 96, 99, 678 S.E.2d 757, 760 (2009) (emphasis

added). The statute “provides a ‘procedural remedy’ and not a substantive claim.”

Anglin v. Dunbar Armored, Inc., 226 N.C. App. 203, 207, 742 S.E.2d 205, 208 (2013).

As such, the second element of res judicata, “an identity of the cause of action in both

the earlier and the later suit,” cannot be proven in the present case. Erler, 141 N.C.

App. at 316, 540 S.E.2d at 68. Murray’s negligence action against Moody involved a

civil claim for money damages, a full trial in which factual issues were resolved by a

jury, and a judgment entered upon the jury’s verdict. In contrast, Moody’s motion to

determine the amount of the workers’ compensation lien is purely statutory and

narrow in scope. Once the superior court’s limited jurisdiction under subsection 97-

10.2(j) is properly invoked, the court simply performs a judicial act in which it “must

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                                    Opinion of the Court

. . . consider the factors that are expressly listed in the statute[,]” Estate of Bullock,

188 N.C. App. at 526, 655 S.E.2d at 874, and make “a judicial value judgment, which

is factually supported . . . [by] findings of fact and conclusions of law[.]” In Re Biddix,

138 N.C. App. at 504, 530 S.E.2d at 72.

      This Court has held that “orders entered in a [statutory] proceeding . . . in

which an executor must show cause why he should not be removed, do not constitute

res judicata as to a later civil action for damages between the parties or collaterally

estop the bringing of such an action.” Shelton v. Fairley, 72 N.C. App. 1, 5, 323 S.E.2d

410, 414 (1984). In support of its holding, the Shelton Court observed that “ ‘[t]he res

judicata doctrine precluding relitigation of the same cause of action has been held

inapplicable where the performance of an act was sought in one action and a money

judgment in the other.’ ” Id. at 8, 323 S.E.2d at 414 (citation omitted). There is no

reason why this general principle should not apply in reverse here, as there is a

substantial distinction between Murray’s civil negligence action for damages and

Moody’s later motion to determine the amount of the workers’ compensation lien. The

amended judgment, therefore, cannot be res judicata as to the final amount of the

workers’ compensation lien.      Rather, that determination must be made by the

superior court upon consideration of the mandatory statutory factors contained in

subsection 97-10.2(j).

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                                   MURRAY V. MOODY

                                   Opinion of the Court

       To sum up, Murray (the employee) obtained a judgment against Moody (the

third-party defendant) in the negligence action. Moody later applied—as he was

entitled—for a determination of the amount of the workers’ compensation lien.

Unnamed defendants were then given notice and an opportunity to be heard on the

matter. Under subsection 97-10.2(j)’s plain language, the superior court’s authority

was triggered by Moody’s motion. Judge Young should have exercised his discretion

and determined the subrogation amount, as Judge Hobgood’s amended order in the

negligence action was not res judicata to Moody’s present action. Accordingly, Judge

Young erred in concluding that he did not have jurisdiction to consider Moody’s

motion for the determination of unnamed defendants’ lien pursuant to subsection 97-

10.2(j).

       For the reasons stated above, we reverse Judge Young’s order denying Moody’s

motion and remand to the trial court for proper determination of the amount of the

workers’ compensation lien on Murray’s recovery from Moody in the negligence

action. On remand, the superior court should receive evidence “as to matters which

must be considered” under subsection 97-10.2(j) and enter an order with findings that

reflect full consideration of the mandatory factors. Hill v. Hill, 229 N.C. App. 511,

530, 748 S.E.2d 352, 365 (2013) (addressing remand in equitable distribution when

trial court failed to make statutorily-required findings of fact); see Alston v. Fed. Exp.

Corp., 200 N.C. App. 420, 425, 684 S.E.2d 705, 708 (2009) (reversing and remanding

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                                  MURRAY V. MOODY

                                  Opinion of the Court

for additional findings when “no findings of fact in the trial court’s order [addressed

certain] mandatory statutory factors” contained in subsection 97-10.2(j)).

      Finally, we note that this case is unique in the context of subsection 97-10.2(j)

because unnamed defendants have not simply asserted a lien on Murray’s recovery;

instead, the subrogation amount they seek to recover is memorialized in a judgment

granted in favor of Murray and Evans. If the trial court decides to reduce the lien

amount, it may be necessary for Moody to file an appropriate motion to set aside the

amended judgment.

                                  III. Conclusion

      We reverse the trial court’s order and remand for further proceedings

consistent with this opinion.

      REVERSED AND REMANDED.

      Judges CALABRIA and INMAN concur.

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