Salvie v. Med. Ctr. Pharmacy of Concord, Inc. , 235 N.C. App. 489 ( 2014 )

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.
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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,
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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.
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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
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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.
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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.
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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,
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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,
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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).
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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.
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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,
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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.