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NO. COA06-1397
NORTH CAROLINA COURT OF APPEALS
Filed: 19 June 2007
PHILLIP OXENDINE,
Plaintiff-Appellee,
v. North
Carolina Industrial Commission
I.C.
File No. 269421
TWL, INC.,
Defendant-Appellee,
and
CANAL INSURANCE COMPANY,
Defendant-Appellant.
Appeal by defendant Canal Insurance Company from opinion and
award entered 27 June 2006 by Chairman Buck Lattimore of the Full North
Carolina Industrial Commission. Heard
in the Court of Appeals 9 May 2007.
Van
Camp, Meacham & Newman, PLLC, by Thomas M. Van Camp, for
plaintiff-appellee.
Hester,
Grady, and Hester, P.L.L.C., by H. Clifton Hester, for defendant-appellee.
McAngus,
Goudelock & Courie, PLLC, by Trula R. Mitchell, for defendant-appellant.
ELMORE, Judge.
The present appeal stems from the workers’ compensation
insurance contract between TWL, Inc. (TWL) and Canal Insurance Company
(Canal). Canal and TWL entered into an
insurance contract in March, 2002; the policy’s effective dates were 20 March
2002 through 20 March 2003. On 18
September 2002, Canal prepared a “Notice of Cancellation of Insurance.” The notice stated that TWL’s policy would be
cancelled, effective 7 December 2002, for “underwriting reasons.” On 25 November 2002, Patty Watts, who worked
for Canal’s managing agent, Golden Isle Underwriting, Inc. (Golden), sent TWL a
letter thanking TWL for its recent payment and stating that TWL’s policy would
be cancelled 7 December 2002 due to “underwriting reasons.” TWL had paid its premiums through 7 December
2002. All parties agree that the notice
of cancellation was sent via regular mail, and that the reason given for the purported
cancellation was “underwriting reasons.”
On 31 January 2003, Phillip Oxendine (plaintiff) was
involved in a car accident. At that
time, plaintiff worked for TWL; the accident arose out of his employment with
the company. Plaintiff suffered serious
injuries and incurred medical expenses in excess of $200,000.00. All parties agree that plaintiff’s injury
was compensable. However, as a result
of the dispute as to insurance coverage, plaintiff’s payments were
significantly delayed. Accordingly, plaintiff
filed a motion to join Canal as a party on 20 April 2004, which Chief Deputy
Commissioner Stephen T. Gheen granted in an order filed 28 April 2004.
On 27 June 2006, Chairman Buck Lattimore, on behalf of the
Full Commission, filed an opinion and award affirming Deputy Commissioner
George R. Hall, III’s 22 August 2005 opinion and award.[1] Canal appealed.
On appeal, Canal argues that TWL made material
misrepresentations in its application to Canal for insurance, and that those
material misrepresentations prevent recovery under the insurance contract under
N.C. Gen. Stat. §58-3-10 and related case law.
See, e.g., Bell v. Nationwide Ins. Co., 146 N.C. App. 725, 726,
554 S.E.2d 399, 401 (2001) (noting, “It is a basic principle of insurance law
that the insurer may avoid his obligation under the insurance contract by a
showing that the insured made representations in his application that were
material and false.”) (quotations and citations omitted). Accordingly, argues Canal, the Full
Commission erred in holding that cancellation of the policy was required
pursuant to N.C. Gen. Stat. §58-36-105.
Canal’s argument is without merit.
Our standard of review for cases originating in the
Industrial Commission is well established:
Our review of
the Commission’s opinion and award is limited to determining whether competent
evidence of record supports the findings of fact and whether the findings of
fact, in turn, support the conclusions of law.
If there is any competent evidence supporting the Commission’s findings
of fact, those findings will not be disturbed on appeal despite evidence to the
contrary. However, the Commission’s
conclusions of law are reviewed de novo.
Rose
v. City of Rocky Mount, ___ N.C. App. ___, ___, 637 S.E.2d 251, 254
(2006) (internal quotations, alterations, and citations omitted). “A question of statutory interpretation is
ultimately a question of law for the courts.”
Brown v. Flowe, 349 N.C. 520, 523, 507 S.E.2d 894, 896 (1998)
(citation omitted). We therefore review
this issue, which is controlled by statute, de novo.
The crux of Canal’s argument is that the insurance contract
at issue was void ab initio due to alleged misrepresentations TWL made
in its application for insurance.
Because the contract was never valid to begin with, argues Canal, the
requirements for cancellation found in N.C. Gen. Stat. §58-36-105 do not
apply. Instead, Canal would have this
Court apply N.C. Gen. Stat. §58-3-10 and hold that no contract was ever formed. We hold that N.C. Gen. Stat. §58-36-105 does
apply; a workers’ compensation insurance contract will therefore never be void ab
initio, but must be cancelled in the manner prescribed by N.C. Gen. Stat.
§58-36-105.
N.C. Gen. Stat. §58-3-10 reads: “All statements or descriptions in any application for a policy
of insurance, or in the policy itself, shall be deemed representations and not
warranties, and a representation, unless material or fraudulent, will not
prevent a recovery on the policy.” N.C.
Gen. Stat. §58-3-10 (2005).
N.C. Gen. Stat. §58-36-105 is titled “Certain workers’
compensation insurance policy cancellations prohibited.” N.C. Gen. Stat. §58-36-105 (2005). It reads, in pertinent part:
(a) No policy
of workers’ compensation insurance . . . shall be cancelled by the insurer
before the expiration of the term or anniversary date stated in the policy and
without the prior written consent of the insured, except for any one of the
following reasons:
***
(2) An act or
omission by the insured or the insured’s representative that constitutes
material misrepresentation or nondisclosure of a material fact in obtaining the
policy, continuing the policy, or presenting a claim under the policy.
N.C.
Gen. Stat. §58-36-105 (2005).
It is a general rule of statutory construction that
[w]here one of
two statutes might apply to the same situation, the statute which deals more
directly and specifically with the situation controls over the statute of more
general applicability. When two
statutes apparently overlap, it is well established that the statute special
and particular shall control over the statute general in nature . . . unless it
clearly appears that the legislature intended the general statute to control.
Fowler
v. Valencourt, 334 N.C. 345, 349, 435 S.E.2d 530, 532-33 (1993) (quoting Trustees
of Rowan Tech. v. Hammond Assoc., 313 N.C. 230, 238, 328 S.E.2d 274, 279
(1985)) (internal quotations and citations omitted).
In this case, §58-3-10 is the more general statute, applying to “any application for a policy of insurance.” N.C. Gen. Stat. §58-3-10 (2005). In contrast, §58-36-105 applies specifically to workers’ compensation insurance. As §58-36-105 contemplates the very sort of “material misrepresentation or nondisclosure of a material fact in obtaining the policy” that Canal alleges in this case, it clearly governs our review of the matter. N.C. Gen. Stat. §58-36-105(a)(2) (2005).
Having established that N.C. Gen. Stat. §58-36-105 applies, we must consider whether Canal’s attempted cancellation of the policy was effective. N.C. Gen. Stat. §58-36-105 provides in pertinent part:
(b) Any
cancellation permitted by subsection (a) of this section is not effective
unless written notice of cancellation has been given by registered or certified
mail, return receipt requested, to the insured not less than 15 days before
the proposed effective date of cancellation. . . . The notice shall state the precise reason for cancellation.
Whenever notice of intention to cancel is required to be given by registered or
certified mail, no cancellation by the insurer shall be effective unless and
until such method is employed and completed.
N.C.
Gen. Stat. §58-36-105(b) (2005) (emphasis added).
It is uncontested that Canal failed to send its purported
notice of cancellation via registered or certified mail. Despite this, Canal argues that “[t]he
legislative intent of N.C. Gen. Stat. §58-36-105 was fulfilled” by TWL’s actual
receipt of the notice more than fifteen days prior to cancellation.
As plaintiff points out in his brief, “If the North Carolina
Legislature intended to forego the requirement of service by registered or
certified mail, it would not have provided language in the statute which
specifically states that a cancellation is not effective until service by
certified or registered mail is ‘employed and completed.’” “[A] statute must be considered as a whole
and construed, if possible, so that none of its provisions shall be rendered
useless or redundant. It is presumed
that the legislature intended each portion to be given full effect and did not
intend any provision to be mere surplusage.” R.J. Reynolds Tobacco Co. v. N.C. Dep’t of Env’t & Natural
Res., 148 N.C. App. 610, 616, 560 S.E.2d 163, 168 (2002) (quoting Builders,
Inc. v. City of Winston-Salem, 302 N.C. 550, 556, 276 S.E.2d 443, 447
(1981)) (internal quotations and citations omitted) (alteration in
original). Canal’s argument regarding
substantial compliance therefore must fail.
Moreover, even if this Court were to agree on that issue, we
could not hold that the bald assertion of “underwriting reasons” constitutes a
“precise reason for cancellation.”[2] No court has interpreted the meaning of
“precise reason.” As our Supreme Court
recently stated, however, “When the language of a statute is clear and without
ambiguity, it is the duty of this Court to give effect to the plain meaning of
the statute, and judicial construction of legislative intent is not
required.” Patronelli v. Patronelli,
360 N.C. 628, 631, 636 S.E.2d 559, 561 (2006) (quoting Diaz v. Div. of Soc.
Servs., 360 N.C. 384, 387, 628 S.E.2d 1, 3 (2006)). The term “precise” is defined as “[c]learly
expressed or delineated; definite,” or “[e]xact, as in performance or amount;
accurate or correct . . . .” The Am.
Heritage Coll. Dictionary 1076 (3rd ed. 1997).
We think it clear that a vague assertion of “underwriting reasons” fails
to meet that standard. Furthermore, we
observe that our legislature demands, “[i]n the event of an adverse
underwriting decision,” that an insurance company “provide[] the applicant,
policyholder, or individual proposed for coverage with the specific reason
or reasons for the adverse underwriting decision . . .” N.C. Gen. Stat. §58-39-55 (2005) (emphasis
added). As noted, we “presume[] that
the legislature intended each portion [of a statute] to be given full effect and
did not intend any provision to be mere surplusage.” R.J. Reynolds Tobacco Co., 148 N.C. App.
at 616, 560 S.E.2d at 168. If the
legislature believed that the phrase “underwriting reasons” was precise, it is
unlikely that it would have included a requirement that insurance companies
provide “specific reason or reasons” for adverse underwriting decisions. Accordingly, Canal’s purported notice of
cancellation stumbles over another statutory hurdle.
Canal concedes that it failed to follow the procedure outlined by N.C. Gen. Stat. §58-36-105. Accordingly, the insurance contract was in
effect at the time of the compensable injury as a matter of law. Canal’s remaining arguments on appeal are
therefore irrelevant, and the Full Commission’s opinion and award are affirmed.
Affirmed.
Judges HUNTER and GEER concur.
[1] The earlier opinion and
award does not appear to be a part of the record on appeal.
[2] We note that Canal’s only treatment of this issue in its brief is
a statement that “[t]he reason for cancellation was noted.” We will not consider unsupported contentions
in the absence of legal argument or authority.
See, e.g., Animal Legal Def. Fund v. Woodley, ___, N.C. App. ___,
___, 640 S.E.2d 777, 779 (2007) (“Assignments of error not set out in
the appellant’s brief, or in support of which no reason or argument is stated
or authority cited, will be taken as abandoned.”) (quotations and citations
omitted).