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IN THE SUPREME COURT OF NORTH CAROLINA

No. 415PA05

FILED: 18 AUGUST 2006

CAROLINE D’AQUISTO, Employee

v.

MISSION ST. JOSEPH’S HEALTH SYSTEM, Employer,

CAMBRIDGE INTEGRATED SERVICES, Servicing Agent

On discretionary review pursuant to N.C.G.S. §7A-31 of a unanimous decision of the Court of Appeals, 171 N.C. App. 216, 614 S.E.2d 583 (2005), affirming an opinion and award filed on 20 May 2004 by the North Carolina Industrial Commission. Heard in the Supreme Court 18 April 2006.

The Sumwalt Law Firm, by Vernon Sumwalt, and Ganly & Ramer, PLLC, by Thomas F. Ramer, for plaintiff-appellee.

Van Winkle Buck Wall Starnes & Davis, PA, by Allan R. Tarleton, for defendant-appellant Mission St. Joseph’s Health System.

PER CURIAM.

As to whether the Court of Appeals erred by affirming the imposition of sanctions against defendant under N.C.G.S. §97-88.1, we hold that based upon the specific facts of this case, defendant’s defense of plaintiff’s claims was not without reasonable grounds. We further conclude that the petition for discretionary review as to additional issues was improvidently allowed.

Thus we reverse that portion of the Court of Appeals opinion affirming the imposition of sanctions and remand this case to the Court of Appeals for remand to the Industrial Commission for further proceedings not inconsistent with this opinion.

REVERSED IN PART AND REMANDED; DISCRETIONARY REVIEW IMPROVIDENTLY ALLOWED IN PART.