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IN THE SUPREME
COURT OF NORTH CAROLINA
No. 321PA04
FILED: 7
OCTOBER 2005
SANDRA
J. CLARK, Employee
v.
WAL-MART,
Employer,
INSURANCE
COMPANY OF THE STATE OF PENNSYLVANIA, Carrier
On discretionary review pursuant to N.C.G.S. §7A-31 of a unanimous decision of the Court of Appeals, 163 N.C. App. 686, 594 S.E.2d 433 (2004), affirming an opinion and award filed 31 January 2002 and an order filed 21 November 2002 by the North Carolina Industrial Commission. Heard in the Supreme Court 16 May 2005.
The Deuterman
Law Group, PA, by Daniel L. Deuterman, for plaintiff-appellee.
Young Moore and
Henderson P.A., by Michael W. Ballance and Jennifer T. Gottsegen, for
defendant-appellants.
Jay A. Gervasi,
Jr., Counsel for the North Carolina Academy of Trial Lawyers, amicus curiae.
LAKE, Chief Justice.
This case arises from proceedings before the North Carolina Industrial Commission (the Commission) and raises the issue whether the Commission erred in awarding plaintiff, Sandra J. Clark, ongoing benefits for total and permanent disability as a result of her 21 December 1998 work-related injury.
The record
shows that plaintiff was employed by Wal-Mart Stores, Inc. (defendant-employer)
on 16 July 1998 as a greeter. On 21
December 1998, plaintiff was straightening merchandise when she was asked to
move a sled that was used for displays during the holidays. The sled was on a high shelf, and plaintiff
had to use a ladder to get to it. When
she began to move the sled, plaintiff found that it was heavy, and it started
to slip. As plaintiff grabbed the sled
to keep it from falling, she felt a sharp pain in her lower back. Plaintiff suffered compression fractures at
L1 and L2, which were either caused or significantly aggravated by the
incident.
Defendant-employer
and Insurance Company of the State of Pennsylvania (collectively, defendants)
admitted plaintiff’s right to receive compensation pursuant to N.C.G.S.
§97-18(b) and completed Form 33R, “RESPONSE TO REQUEST THAT CLAIM BE ASSIGNED
FOR HEARING,” in response to plaintiff’s request for a hearing to determine the
issue of permanent total disability.
Prior to the evidentiary hearing before Deputy Commissioner Kim L.
Cramer, the parties entered into an agreement in which they stipulated that
defendants had accepted liability for the injury and had paid temporary total
disability benefits since the date of the accident. Following the hearing, the deputy commissioner awarded ongoing
benefits to plaintiff, and defendants appealed. The Full Commission affirmed the award and stated: “As plaintiff has been receiving ongoing
benefits, the burden is on defendants to show that she is capable of returning
to gainful employment.” The Full
Commission also concluded that plaintiff was totally and permanently disabled
and entitled to lifetime benefits. Defendants
appealed to the Court of Appeals, which affirmed the opinion and award of the
Full Commission by holding that defendants’ admission of compensability gave
rise to a presumption of continuing disability in favor of plaintiff. This Court allowed defendants’ petition for
discretionary review. For the reasons
stated, we reverse the Court of Appeals’ decision and remand with instructions.
The Commission,
possessing exclusive original jurisdiction over workers’ compensation cases,
has the duty to hear the evidence and file its award, “together with a
statement of the findings of fact, rulings of law, and other matters pertinent
to the questions at issue.” N.C.G.S.
§97-84 (2003). Appellate review of an
award from the Industrial Commission is generally limited to two issues: (1) whether the findings of fact are
supported by competent evidence, and (2) whether the conclusions of law are
justified by the findings of fact. Hendrix
v. Linn-Corriher Corp., 317 N.C. 179, 186, 345 S.E.2d 374, 379 (1986). If the conclusions of the Commission are
based upon a deficiency of evidence or misapprehension of the law, the case
should be remanded so “that the evidence [may] be considered in its true legal
light.” McGill v. Town of Lumberton,
215 N.C. 752, 754, 3 S.E.2d 324, 326 (1939).
The North
Carolina General Statutes and ample case law distinguish between the separate
concepts of “compensability” and “disability.”
See N.C.G.S. §97-2(9), (11) (2003). To establish “compensability” under the North Carolina Workers’
Compensation Act (the Act), a “claimant must prove three elements: (1) [t]hat the injury was caused by an
accident; (2) that the injury arose out of the employment; and (3) that the
injury was sustained in the course of employment.” Gallimore v. Marilyn’s Shoes, 292 N.C. 399, 402, 233
S.E.2d 529, 531 (1977). This Court has
previously held that whether an injury is “compensable” is resolved only by the
question of whether an employee has an injury which would entitle her to
compensation if she could also show that it had “disabled” her within the
meaning of the Act. Hendrix, 317 N.C. at 185, 345 S.E.2d at 378.
“Disability,”
within the North Carolina Workers’ Compensation Act, “means incapacity because
of injury to earn the wages which the employee was receiving at the time of
injury in the same or any other employment.”
N.C.G.S. §97-2(9). The employee
seeking compensation under the Act bears “the burden of proving the existence
of [her] disability and its extent.” Hendrix,
317 N.C. at 185, 345 S.E.2d at 378. In
order to support a conclusion of disability, whether temporary or permanent,
the Commission must find that the employee has shown:
(1) that [she]
was incapable after h[er] injury of earning the same wages [s]he had earned
before h[er] injury in the same employment, (2) that [she] was incapable after
h[er] injury of earning the same wages [s]he had earned before h[er] injury in
any other employment, and (3) that [her] incapacity to earn was caused by [her]
injury.
Hilliard v.
Apex Cabinet Co., 305 N.C. 593, 595, 290 S.E.2d 682, 683 (1982).
In the case at
hand, defendants fully admitted the compensability of the plaintiff’s injury,
leaving her only to prove her disability in order to receive continued
compensation. However, plaintiff was relieved of this burden. Contrary to the decisions of the Commission
and the Court of Appeals in the instant case, the law in North Carolina is well
settled that an employer’s admission of the “compensability” of a workers’
compensation claim does not give rise to a presumption of “disability” in favor
of the employee.
In Johnson
v. Southern Tire Sales & Serv., 358 N.C. 701, 599 S.E.2d 508 (2004),
this Court expressly stated that “a presumption of disability in favor of an
employee arises only in limited circumstances.” Id. at 706, 599 S.E.2d at 512. Those limited circumstances are (1) when there has been an
executed Form 21, “AGREEMENT FOR COMPENSATION FOR DISABILITY”; (2) when there
has been an executed Form 26, “SUPPLEMENTAL AGREEMENT AS TO PAYMENT OF
COMPENSATION”; or (3) when there has been a prior disability award from
the Industrial Commission. Id. Otherwise, the burden of proving
“disability” remains with plaintiff, even if the employer has admitted
“compensability.”
In Johnson,
neither a Form 21 nor a Form 26 had been filed and approved by the Commission,
nor had there been a prior award by the Industrial Commission. Accordingly, this Court held that the
employer’s admission of compensability and payment of disability benefits to
the employee did not give rise to a presumption of continuing disability in
favor of the employee. Id. Similarly, in the present case, neither a
Form 21 nor a Form 26 has been filed, nor has a prior award by the Industrial
Commission been entered. Thus,
plaintiff is not entitled to a presumption of continuing disability as a matter
of law. The Commission erred in
presuming plaintiff was disabled merely as a result of her receipt of ongoing
benefits arising from defendants’ admission of compensability. Accordingly, the Commission also erred in
shifting the burden to defendants to prove that plaintiff was not capable of
returning to gainful employment.
“Because the burden remained on plaintiff to prove [her] disability, the
Commission was obligated to make specific findings regarding the existence and
extent of any disability suffered by plaintiff.” Id. at 707, 599 S.E.2d at 512-13.
In affirming
the decision of the Full Commission in this case, the Court of Appeals not only
ignored the precedent of this Court, but also the precedent established by its
own recent decisions. See Cialino v.
Wal-Mart Stores, Inc., 156 N.C. App. 463, 471, 577 S.E.2d 345, 351 (2003)
(“Neither [the Court of Appeals] nor [the] Supreme Court has ever applied a
continuing presumption of disability in a context other than an award by the
Industrial Commission, a Form 21, or a Form 26 settlement agreement.”); Parker
v. Wal-Mart Stores, Inc., 156 N.C. App. 209, 211-12, 576 S.E.2d 112, 113-14
(2003) (stating that the Commission’s findings must sufficiently reflect that
the employee carried the burden of proving disability by all three Hilliard
factors in a claim in which defendants had admitted compensability under
N.C.G.S. §97-18(d) through payment of compensation beyond ninety days);
Gilberto v. Wake Forest Univ., 152 N.C. App. 112, 115, 566 S.E.2d 788, 791
(2002) (stating that although the employee established temporary total
disability, she retained the burden of proving a continuing total disability);
Effingham v. Kroger Co., 149 N.C. App. 105, 108, 112, 561 S.E.2d 287, 290,
292 (2002) (stating that even though the employee was awarded temporary total
disability benefits and her injury was accepted as compensable by defendants
pursuant to the filing of a Form 60, she was not entitled to “a presumption of
continuing disability”); Sims v. Charmes/Arby’s Roast Beef, 142 N.C.
App. 154, 159-60, 542 S.E.2d 277, 281-82, disc. rev. denied, 353 N.C.
729, 550 S.E.2d 782 (2001) (“[A]dmitting compensability and liability, whether
through notification of the Commission by the use of a Form 60 or through
paying benefits beyond the statutory period provided for in [N.C.]G.S.
§97-18(d), does not create a presumption of continuing disability as does a
Form 21 agreement.”); Royce v. Rushco Food Stores, Inc., 139 N.C. App.
322, 330-31, 533 S.E.2d 284, 289 (2000) (stating that the employee retained the
burden of proof and was not entitled to a presumption of continuing disability
as a result of the Commission’s earlier determination that she was temporarily
and totally disabled); Olivares-Juarez v. Showell Farms, 138 N.C. App.
663, 666, 532 S.E.2d 198, 201 (2000) (stating that “the Commission erred in
placing the initial burden on [defendants] . . . without first requiring
plaintiff to establish the existence and extent of his disability” when
compensation was initiated without prejudice under N.C.G.S. §97-18(d));
Demery v. Converse, Inc., 138 N.C. App. 243, 252, 530 S.E.2d 871, 877
(2000) (noting that plaintiff is not entitled to a presumption of total
disability without a Form 21 agreement); Brice v. Sheraton Inn, 137 N.C.
App. 131, 137, 527 S.E.2d 323, 327-28 (2000) (stating that although plaintiff
had met her burden of proving temporary total disability, she failed to prove
permanent and total disability; thus, no burden to refute such a claim shifted
to defendant).
For the
foregoing reasons, we reverse the decision of the Court of Appeals affirming
the Industrial Commission’s opinion and award of complete and total disability
compensation to plaintiff by use of presumption. This case is remanded to the Court of Appeals for further remand
to the Industrial Commission with instructions to find new facts and make new
conclusions of law in accordance with the proper burden of proof.
REVERSED AND
REMANDED.