All
opinions are subject to modification and technical correction prior to official
publication in the
NO.
COA08-306
Filed:
6 January 2009
MICHAEL DEWAYNE PUTMAN,
Employee,
Plaintiff,
v.
I.C.
File Nos. 540906 & PH-1669
RANDY ALEXANDER AND/OR
MAJESTIC MOUNTAIN CONSTRUCTION, INC.,
Employers
(Noninsured),
and
MARSHA PATTERSON–JONES,
Individually,
and/or
RANDY ALEXANDER,
Defendants.
_________________________
NO.
COA08-332
Filed:
6 January 2009
DARRELL THOMPSON,
Employee, Plaintiff,
v.
I.C.
File Nos. 559307 & PH-1669
RANDY ALEXANDER AND/OR
MAJESTIC MOUNTAIN CONSTRUCTION, INC.,
Employers
(Noninsured),
and
MARSHA PATTERSON–JONES,
Individually,
and/or
RANDY ALEXANDER,
Defendants.
Appeal
by defendants from Opinions and Awards entered 5 December 2007 by the
North Carolina Industrial Commission.
Heard in the Court of Appeals 22 September 2008.
Judith C. Fraser,
for plaintiff-appellee Michael Dewayne Putman.
Melrose, Seago
& Lay, P.A., by Kimberly C. Lay, for plaintiff-appellee Darrell Thompson.
Leicht &
Olinger, by Gene Thomas Leicht, for defendants-appellants Majestic Mountain
Construction, Inc. and Marsha Patterson–Jones.
MARTIN,
Chief Judge.
Majestic
Mountain Construction, Inc. and Marsha Patterson–Jones (collectively “defendants”)
appeal from Opinions and Awards by the North Carolina Industrial Commission (“Commission”)
(1) awarding disability benefits, medical expenses, and attorney’s fees
and costs to Michael Dewayne Putman and Darrell Thompson (collectively “plaintiffs”)
and (2) assessing additional civil penalties against defendant Marsha
Patterson–Jones. We affirm each of the
Commission’s awards.
While
defendants have maintained separate appeals, both appeals involve common
questions of law, as evidenced by defendants’ decision to submit virtually
identical appellate briefs in each case.
Therefore, upon our own initiative, we consolidate these appeals for the
purpose of rendering a single opinion on all issues properly before the
Court. See N.C.R. App. P. 40
(2008) (“Two or more actions which involve common questions of law may be
consolidated for hearing . . . upon the initiative of th[e appellate]
court.”).
On
16 June 2005, plaintiffs were injured by an accident arising out of and in
the course of their employment with Randy Alexander. Plaintiffs were doing carpentry work “on a
second-story deck that collapsed and broke away from [a] town home [that was
under construction], causing plaintiff[s] to fall approximately 15 to
16 feet onto a lower deck, then fall to the ground approximately
10 feet below the lower deck, and then down an embankment.” Both plaintiffs sustained injuries which
required varying degrees of continued medical treatment and rehabilitative or
therapeutic care, and which restricted their ability to return to work. At the time of the accident, plaintiffs’ employer,
Randy Alexander, did not have workers’ compensation insurance.
In
June 2005, plaintiffs were working on the construction site for a
residential development project named the Villas of Provence in
On
23 October 2006, both plaintiffs’ cases were presented in one hearing
before a deputy commissioner. On 30 May
2007, the deputy commissioner filed Opinions and Awards which determined that
plaintiffs sustained compensable injuries by an accident arising out of and in
the course of their employment with Randy Alexander. The deputy commissioner concluded that MMC
was the general contractor on the job where plaintiffs were injured and that
Randy Alexander was a subcontractor to MMC.
He also concluded that:
(1) MMC was plaintiffs’ statutory employer pursuant to N.C.G.S. §97-19;
(2) MMC was “required to have workers’ compensation insurance to cover
their subcontractors’ employees since they did not require proof of insurance
from subcontractor Randy Alexander”; and (3) a civil penalty should be
assessed against Mrs. Patterson–Jones pursuant to N.C.G.S. §97-94(d) for her
failure to bring MMC into compliance under N.C.G.S. §97-93 when she had the
ability and authority to do so.
Defendants appealed to the Full Commission. On 5 December 2007, the Commission
entered Opinions and Awards which adopted the deputy commissioner’s decisions,
with minor modifications. This appeal
follows.
_________________________
We
first consider plaintiff Thompson’s motion to this Court to dismiss defendants’
appeal on the grounds that defendants failed to timely serve their notice of appeal
on plaintiff Thompson pursuant to Rule 3 of the North Carolina Rules of
Appellate Procedure. We also consider
defendants’ petition for writ of certiorari filed in response to plaintiff
Thompson’s motion to dismiss. For the
reasons discussed below, we grant plaintiff Thompson’s motion to dismiss
defendants’ appeal, and we grant defendants’ petition for writ of certiorari.
“In
order to confer jurisdiction on the state’s appellate courts, appellants of
lower court orders must comply with the requirements of Rule 3 of the
North Carolina Rules of Appellate Procedure.”
Bailey v. State, 353 N.C. 142, 156, 540 S.E.2d 313, 322
(2000). “The provisions of Rule 3
are jurisdictional, and failure to follow the rule’s prerequisites mandates
dismissal of an appeal. In addition, the
rules of the Supreme Court that regulate appeals, such as Rule 3, are
mandatory and must be observed.”
Rule 3(c)
of the North Carolina Rules of Appellate Procedure requires that, within the
time limitations specified by the rule, “a party must file and serve a notice
of appeal.” N.C.R. App. P. 3(c)
(2008). According to Appellate
Rule 3(e), “[s]ervice of copies of the notice of appeal may be made as
provided in Rule 26 of [the appellate] rules,” see N.C.R. App. P. 3(e),
and that service “may be so made upon a party or upon his attorney of
record.” See N.C.R. App.
P. 26(c) (2008) (emphasis added).
In the
present case, defendants timely filed their notice of appeal to this Court from
the 5 December 2007 Opinion and Award in favor of plaintiff Thompson on
18 December 2007. However, instead
of mailing a copy of that notice to plaintiff Thompson’s counsel of record, who
appeared on his behalf before both the deputy commissioner and the Full
Commission, service was made upon plaintiff Putman’s counsel of record. Plaintiff Thompson subsequently moved to
dismiss defendants’ notice of appeal on 6 February 2008 for failing to
comply with the service requirements of Appellate Rule 3. Although defendants filed a second “amended”
notice of appeal on 7 February 2008 which complied with the service
requirements of Rule 3, the “amended” notice of appeal was untimely. See N.C.R. App. P. 3(c)(1) (“In
civil actions and special proceedings, a party must file and serve a notice of
appeal . . . within 30 days after entry of judgment if the party
has been served with a copy of the judgment within the three-day period
prescribed by Rule 58 of the Rules of Civil Procedure
. . . .”). Therefore,
defendants’ appeal from the Opinion and Award entered as to plaintiff Thompson’s
claims must be dismissed.
Nevertheless,
this Court may issue a writ of certiorari “when the right to prosecute an
appeal has been lost by failure to take timely action.” N.C.R. App. P. 21(a)(1) (2008). Having determined that defendants lost their
right to prosecute their appeal as to plaintiff Thompson by their failure to
file a timely notice of appeal that fully complies with Appellate
Rule 3(c), we exercise our discretion to grant defendants’ petition for
writ of certiorari.
_________________________
The
issues before this Court are as follows:
(I) whether the Commission erred by concluding that MMC was
plaintiffs’ statutory employer under N.C.G.S. §97-19; (II) whether the
Commission erred by assessing civil penalties against Mrs. Patterson–Jones
under N.C.G.S. §97-94(d); and (III) whether the Commission erred by
decreeing that the amount of the civil penalty assessed against Mrs.
Patterson–Jones could be determined based on both plaintiffs’ disability
compensation and plaintiffs’ compensation for medical expenses.
I.
Defendants
first contend the Commission erred by concluding that MMC was plaintiffs’
statutory employer under N.C.G.S. §97-19.
The parties agree that Ben Jones hired Randy Alexander who, in turn,
hired plaintiffs to work on the Villas of Provence development project. However, defendants assert that no employment
relationship existed between plaintiffs and MMC to implicate N.C.G.S. §97-19
and, thus, argue that the Commission lacked subject matter jurisdiction to hear
plaintiffs’ claims against MMC and Mrs. Patterson–Jones. We do not agree.
When
it has jurisdiction to hear the claims before it, “‘[t]he findings of fact by
the Industrial Commission are conclusive on appeal if supported by any
competent evidence.’” Adams v. AVX
Corp., 349 N.C. 676, 681, 509 S.E.2d 411, 414 (1998) (quoting Gallimore
v. Marilyn’s Shoes, 292 N.C. 399, 402, 233 S.E.2d 529, 531
(1977)), reh’g denied, 350 N.C. 108, 532 S.E.2d 522 (1999); see
also N.C. Gen. Stat. §97-86 (2007) (providing, in part, that an award of
the Industrial Commission “shall be conclusive and binding as to all questions
of fact”).
However,
“[w]hether a defendant is a statutory employer within the meaning of [N.C.G.S.]
§97-19 is a jurisdictional matter.” Masood
v. Erwin Oil Co., 181 N.C. App. 424, 426, 639 S.E.2d 118, 120
(citing Cook v. Norvell–Mackorell Real Estate Co., 99 N.C. App.
307, 309, 392 S.E.2d 758, 759 (1990)), aff’d by an equally divided
court, 361 N.C. 579, 650 S.E.2d 595 (2007). Accordingly, because “the Commission has no
jurisdiction to apply the [Workers’ Compensation] Act to a party who is not
subject to its provisions,” Williams v. ARL, Inc., 133 N.C. App.
625, 628, 516 S.E.2d 187, 190 (1999) (citing Youngblood v. North State
Ford Truck Sales, 321 N.C. 380, 364 S.E.2d 433, reh’g denied,
322 N.C. 116, 367 S.E.2d 923 (1988)), “[n]otwithstanding [N.C.G.S.
§] 97-86, the finding of a jurisdictional fact by the Industrial
Commission is not conclusive upon appeal even though there be evidence in the record
to support such finding.” Lucas v. Li’l
Gen. Stores, 289 N.C. 212, 218, 221 S.E.2d 257, 261 (1976). Instead, “[t]he reviewing court has the
right, and the duty, to make its own independent findings of such
jurisdictional facts from its consideration of all the evidence in the record.” Id.; see also Cook,
99 N.C. App. at 309, 392 S.E.2d at 759 (“[W]e are required to review
the evidence of record and make independent findings of jurisdictional facts
established by the greater weight of the evidence with regard to plaintiff’s
employment status.”).
N.C.G.S.
§97-19 provides, in relevant part:
Any principal contractor, intermediate
contractor, or subcontractor who shall sublet any contract for the performance
of any work without requiring from such subcontractor or obtaining from the
Industrial Commission a certificate, issued by a workers’ compensation
insurance carrier, or a certificate of compliance issued by the Department of
Insurance to a self-insured subcontractor, stating that such subcontractor has
complied with [N.C.G.S. §] 97-93 hereof, shall be liable, irrespective of
whether such subcontractor has regularly in service fewer than three employees
in the same business within this State, to the same extent as such
subcontractor would be if he were subject to the provisions of this Article for
the payment of compensation and other benefits under this Article on account of
the injury or death of any employee of such subcontractor due to an accident
arising out of and in the course of the performance of the work covered by such
subcontract. If the principal
contractor, intermediate contractor or subcontractor shall obtain such
certificate at the time of subletting such contract to subcontractor, he shall
not thereafter be held liable to any employee of such subcontractor for
compensation or other benefits under this Article.
N.C. Gen. Stat. §97-19
(2007). This statute “is an exception to
the general definitions of ‘employment’ and ‘employee’ set forth in [N.C.G.S.] §97-2,
and provides that a principal contractor, intermediate contractor, or
subcontractor may be held liable as a statutory employer where two conditions
are met.” Williams, 133 N.C.
App. at 629, 516 S.E.2d at 190.
First, “‘the injured employee must be working for a subcontractor doing
work which has been contracted to it by a principal contractor,’ and[, second,]
‘the subcontractor does not have workers’ compensation insurance coverage
covering the injured employee.’” Id.
(quoting Rich v. R.L. Casey, Inc., 118 N.C. App. 156, 159,
454 S.E.2d 666, 667, disc. review denied, 340 N.C. 360,
458 S.E.2d 190 (1995)). Since the
parties do not dispute that Randy Alexander did not have workers’ compensation
insurance at the time of the accident, we need only examine whether the first
condition has been met.
A.
In
their brief, defendants do not contest the determination that Randy Alexander
worked as a subcontractor, rather than as an independent contractor. So, in order to determine that the Commission
correctly concluded that MMC was plaintiffs’ statutory employer, after our
consideration of all of the evidence in the record, we must find (1) that
Mrs. Patterson–Jones, on behalf of MMC, entered into an agreement with Mr.
Patterson, which provided that MMC would serve as the general contractor for the
project, and (2) that Ben Jones worked for MMC and hired Randy Alexander
as a subcontractor for MMC, rather than for Mr. Patterson.
1.
Although
she was present during the proceedings, Mrs. Patterson–Jones did not testify at
the 23 October 2006 hearing. However, Mr. Patterson, her father, and Ben
Jones, her husband, each gave testimony before the deputy commissioner. Both Mr. Patterson and Ben Jones testified
that Mrs. Patterson–Jones was the sole owner and “qualifier” of MMC, that a
contractor’s license for the State of
In
addition, Mr. Patterson testified that his daughter formed MMC at least two
years before construction began on the Villas of Provence project
in 2004. Mr. Patterson further
testified that he knew he needed a licensed contractor on the project, and that
neither he nor Ben Jones hold a general contractor’s license. Mr. Patterson testified that he wanted his
daughter’s company to take on that role because “[s]he’s had her [general
contractor’s] license for a number of years . . . [and t]here’s a
benefit to the Villas of Provence that she has, through her corporation, a
contractor’s license.” (Emphasis
added.) Mr. Patterson also testified
that, in exchange for receiving the benefit of his daughter’s license and labor
through MMC as the general contractor, they both agreed that Mrs.
Patterson–Jones, MMC’s owner, would be compensated only upon the sale of each
unit.
After
reviewing all of the evidence in the record, we find from that evidence and by
its greater weight, as did the Commission, that Mrs. Patterson–Jones, on behalf
of and through her company MMC, agreed to and did serve as the general
contractor on the Villas of Provence project.
2.
Defendants
also assert that Ben Jones did not work for MMC, but instead served as Mr.
Patterson’s “independent construction management consultant” on the
project. They claim that Ben Jones was
paid for his work by checks drawn from Mr. Patterson’s bank account. However, the record contains no evidence—e.g.,
copies of bank statements or cancelled checks payable from Mr. Patterson to Ben
Jones, or payable from Ben Jones to Randy Alexander or plaintiffs—that Randy
Alexander was paid by monies from an account owned by Mr. Patterson. In fact, evidence was presented that,
although Ben Jones signed the checks, Randy Alexander thought he remembered
that the checks were drawn from an account belonging to MMC, where “Majestic
Mountain Construction” may have been printed on the top of the checks.
The
evidence in the record also tended to show that both plaintiffs believed that
Ben Jones worked for MMC. Plaintiffs
also testified that, to their knowledge, the other carpentry crews with whom
they worked on the same units were working for MMC. Plaintiff Thompson further testified that he
understood that he was “working for Ben Jones and Majestic Mountain
Construction” and that he thought Ben Jones actually owned MMC. When questioned about why plaintiff Thompson
may have thought Ben Jones was working for MMC, Mr. Jones said, “No. I mean, I guess he—I don’t know. I mean—.”
When asked, “Did you tell him that?,” Ben Jones responded, “Not that—not
to my knowledge. No.” However, when asked about whether he “had
that authority from Majestic Mountain Construction on [the Villas of Provence]
project” to discharge individual workers from any of the subcontractors’ crews,
Ben Jones admitted, “Anybody that I work for. I have to have that.” (Emphasis added.)
Plaintiff
Thompson’s wife also testified that, while Ben Jones and Mrs. Patterson–Jones
waited with her at the hospital for news about her husband, Ben Jones “give
[sic] me a business card the night of the accident, with the construction name,
his name, address, phone numbers, and told me to call him if I needed anything.” When asked what information was on the
business card, she testified that the card said, “‘Majestic Mountain
Construction, Incorporated. Ben Jones,’
has their physical address, cell number and office number.” She also testified that she took Ben Jones’s
comment and the information on the card to mean that MMC “was his employer and
that he would have workman’s comp or, if there was anything further that we
needed, to contact him.” On cross-examination,
Ben Jones admitted that the business card he gave to plaintiff Thompson’s wife
shows his name, the name of Majestic Mountain Construction, Inc., the physical
address for MMC, MMC’s company office number, and his cell phone number. When asked in what capacity he used the
business card, Ben Jones said, “That one there, I use—I gave it—made it up and
put it in the office at Majestic Mountain office so if people comes [sic] in
there, wants [sic] a house built” “that maybe they could call me and, you know,
I could tell them what I do and they could hire me.”
After
considering all of the evidence in the record, we find by the greater weight
thereof that Ben Jones worked for MMC.
Accordingly, since Ben Jones hired Randy Alexander to serve as a
subcontractor for MMC, and since both conditions of N.C.G.S. §97-19 were met, see
Williams, 133 N.C. App. at 629, 516 S.E.2d at 190, we hold
that the Commission correctly determined that MMC was plaintiffs’ statutory
employer.
B.
Defendants
further assert that MMC was not plaintiffs’ statutory employer because they
claim that, in addition to her ownership of MMC, Mrs. Patterson–Jones was a “part
owner” of the Villas of Provence development project. Thus, defendants argue that Mrs. Patterson–Jones
could not have “contracted with herself as principal of [MMC] to legally force
herself to build a house on the property of the Villas of Provence.” Accordingly, defendants argue that the
Commission’s application of N.C.G.S. §97-19 was erroneous under Purser v.
Heatherlin Properties, 137 N.C. App. 332, 527 S.E.2d 689, disc.
review denied, 352 N.C. 676, 545 S.E.2d 428 (2000). However, we conclude that Purser does
not control in the present case.
In Purser,
Mr. and Mrs. McMahan “rented properties and constructed new homes under the
business name of Heatherlin Properties,” which “employed” Mr. McMahan, who held
his general contractor’s license. See
Purser, 137 N.C. App. at 333, 527 S.E.2d at 690. “When building a house, Mr. McMahan listed
himself as the general contractor on the building permit and listed Heatherlin
Properties as the owner of the property . . . .”
In our
analysis in Purser, this Court emphasized that “it is unreasonable to
assume that a person could contract with himself to do something for his own
benefit, thereby making himself a general contractor if he should then contract
that job to another person.”
In the
present case, there was no evidence in the record to document that Mrs.
Patterson–Jones was a part owner of the Villas of Provence at the time
plaintiffs were injured. The evidence
tended to show that the property was never titled in Mrs. Patterson–Jones’s
name, and no evidence was presented to demonstrate that Mrs. Patterson–Jones
contributed any monies to the purchase of the property. While Mr. Patterson testified that ownership
of the property was transferred to Provence Villas, LLC—a company for which Mr.
Patterson served as the managing member and Mrs. Patterson–Jones served as a
member—he also conceded that this company was not registered with the Secretary
of State until July 2005, less than one month after the accident in
which plaintiffs were injured.
Mr.
Patterson testified that Mrs. Patterson–Jones was an “undisclosed principal” in
the property prior to the formation of Provence Villas, LLC, and that she
acquired a fifteen-percent interest in the property prior to the time of the
accident, “somewhere in 2004.” However,
when asked “what, if anything, was significant in 2004 that [Mr. Patterson]
decided to verbally tell [Mrs. Patterson–Jones] that she had this fifteen-percent
interest in land,” Mr. Patterson testified that “[i]t was basically because we
were formulating our plans as to what we were going to do with the property,
and [Mrs. Patterson–Jones] was involved.”
He also testified that “I didn’t—we didn’t—we didn’t transfer anything
and—. . . [i]t was purely a personal quasi-business situation,” which
he stated meant that “[i]t was business and it was personal and it was done in
2004.” Nonetheless, after our
consideration of all of the evidence in the record, we cannot find by its
greater weight that Mrs. Patterson–Jones was a part owner in the Villas of
Provence at the time of the accident; rather, we find that she was not. Therefore, we conclude that Purser
does not control the present case, and hold that the Commission correctly
determined that MMC was plaintiffs’ statutory employer pursuant to N.C.G.S. §97-19.
II.
Defendants
next contend the Commission erred by assessing civil penalties against Mrs.
Patterson–Jones under N.C.G.S. §97-94(d).
Defendants do not deny that Mrs. Patterson–Jones was the person “with
the ability and authority to bring [MMC] in compliance with [N.C.G.S. §] 97-93,”
see N.C. Gen. Stat. §97-94(d) (2007), but instead argue that a statutory
employer is not subject to the civil penalty provision of N.C.G.S. §97-94(d). We disagree.
N.C.G.S.
§97-94 provides, in part:
(a) Every employer subject to the
compensation provisions of this Article shall file with the Commission
. . . evidence of its compliance with the provisions of G.S. 97-93
and all other provisions relating thereto.
. . . .
(d) Any person who, with the ability and
authority to bring an employer in compliance with G.S. 97-93, willfully fails
to bring the employer in compliance, shall be guilty of a Class H felony. Any person who, with the ability and
authority to bring an employer in compliance with G.S. 97-93, neglects to bring
the employer in compliance, shall be guilty of a Class 1 misdemeanor. Any person who violates this subsection may
be assessed a civil penalty by the Commission in an amount up to one hundred percent
(100%) of the amount of any compensation due the employer’s employees injured
during the time the employer failed to comply with G.S. 97-93.
N.C. Gen. Stat. §97-94(a),
(d). In other words, based on its “clearly
expressed language,” see Deese v. Se. Lawn & Tree Expert Co., 306 N.C.
275, 277, 293 S.E.2d 140, 143, reh’g denied, 306 N.C. 753,
303 S.E.2d 83 (1982), the civil penalty provision of N.C.G.S. §97-94(d)
may be applied when an employer fails to comply with the requirements of
N.C.G.S. §97-93. Similarly, when a
statutory employer fails to insist on the compliance of its subcontractors with
the requirements of N.C.G.S. §97-93, it, too, is liable under the Act “to the
same extent as such subcontractor would be if he were subject to the provisions
of this Article.” See N.C. Gen.
Stat. §97-19.
In
their brief, defendants assert that N.C.G.S. §97-94(d) is not applicable to
statutory employers because N.C.G.S. §97-19 does not “magically transform” the
relationship between plaintiffs and MMC into that of employer–employee. Nevertheless, as we discussed in
section I above, an examination of whether one party is another’s
statutory employer “raises the jurisdictional question of whether an employment
relationship within the Act existed” at the time of the injury giving rise
to the action. See Cook,
99 N.C. App. at 309, 392 S.E.2d at 759 (emphasis added).
In
addition, N.C.G.S. §97-19 “was enacted by the Legislature to deliberately
bring specific categories of conceded nonemployees within the coverage of the
Act for the purpose of protecting such workers from ‘financially
irresponsible sub-contractors who do not carry workmen’s compensation
insurance,’” and “to prevent principal contractors . . . from
relieving themselves of liability under the Act by doing through sub-contractors
what they would otherwise do through the agency of direct employees.’” Id. at 310, 392 S.E.2d at 759
(emphasis added) (quoting Withers v. Black, 230 N.C. 428,
53 S.E.2d 668 (1949)); see also Greene v. Spivey,
236 N.C. 435, 443, 73 S.E.2d 488, 494 (1952) (“[The] manifest purpose
of . . . [N.C.G.S. §97-19] is to protect employees of irresponsible
and uninsured subcontractors by imposing ultimate liability on principal
contractors . . . who, presumably being financially responsible, have
it within their power, in choosing subcontractors, to pass upon their financial
responsibility and insist upon appropriate compensation protection for their
workers.”).
Accordingly,
we conclude that, when circumstances arise that implicate N.C.G.S. §97-19
because a subcontractor fails to comply with the requirements of N.C.G.S. §97-93,
the Industrial Commission may assess civil penalties pursuant to N.C.G.S. §97-94(d)
against the person who had the ability and authority to bring a statutory
employer in compliance with N.C.G.S. §97-93 but who willfully failed or
neglected to do so. Therefore, we hold
that the Commission did not err by assessing civil penalties against Mrs.
Patterson–Jones under N.C.G.S. §97-94(d) for failing to bring MMC in compliance
with N.C.G.S. §97-93.
III.
Finally,
defendants contend the Commission erred by decreeing that the amount of the
civil penalty assessed against Mrs. Patterson–Jones could be determined based
on plaintiffs’ disability compensation and plaintiffs’ compensation for medical
expenses. Defendants argue that amounts
due for plaintiffs’ medical expenses may not be included in the Commission’s
determination of the amount of the civil penalty assessed under N.C.G.S. §97-94(d).
Defendants
assert that N.C.G.S. §97-94(d) “unambiguously” states that a civil penalty may
be assessed “based upon ‘compensation’ due to the employee.” Consequently, defendants argue that the
Legislature meant only to grant the Industrial Commission the discretion to
assess civil penalties based on “compensation,” as defined in N.C.G.S. §97-2(11),
and purposely withheld from the Commission the power to include any amounts
based also on “medical compensation,” as defined in N.C.G.S. §97-2(19). Compare N.C. Gen. Stat. §97-2(11)
(2007) (“The term ‘compensation’ means the money allowance payable to an
employee or to his dependents as provided for in this Article, and includes
funeral benefits provided herein.”), with N.C. Gen. Stat. §97-2(19) (“The
term ‘medical compensation’ means medical, surgical, hospital, nursing, and
rehabilitative services, and medicines, sick travel, and other treatment,
including medical and surgical supplies, as may reasonably be required to
effect a cure or give relief and for such additional time as, in the judgment
of the Commission, will tend to lessen the period of disability
. . . .”). Defendants
claim that if the Legislature had intended to allow the Commission to include
medical compensation as part of the amount assessed for civil penalties under
N.C.G.S. §97-94(d), then it would have expressly referenced “medical
compensation” in the statute. For the
reasons discussed below, we disagree.
N.C.G.S.
§97-94(d) confers upon the Commission the discretion to assess civil penalties
in an amount, not based merely on “compensation” due to the injured employee,
but rather based on “any compensation” due to the injured employee. More specifically, N.C.G.S. §97-94 provides
that any person who violates subsection (d) “may be assessed
a civil penalty by the Commission in an amount up to one hundred percent
(100%) of the amount of any compensation due the employer’s
employees injured during the time the employer failed to comply with G.S. 97-93.” N.C. Gen. Stat. §97-94(d) (emphasis added).
As we
consider the interpretation of this provision, we are mindful that “the Workers’
Compensation Act should be liberally construed,” see Deese,
306 N.C. at 277, 293 S.E.2d at 142–43, and that “the underlying
purpose of the North Carolina Workers’ Compensation Act is to ‘provide
compensation to workers whose earning capacity is diminished or destroyed by
injury arising from their employment.’” See
McRae v. Toastmaster, Inc., 358 N.C. 488, 493, 597 S.E.2d 695,
699 (2004) (quoting Seagraves v. Austin Co. of Greensboro, 123 N.C.
App. 228, 233, 472 S.E.2d 397, 401 (1996)).
The term
“compensation” was already among the list of defined terms in Article 1 of
the Workers’ Compensation Act when the term “medical compensation” was added to
N.C.G.S. §97-2 in 1991. See
ch. 703, §1, 1991 N.C. Sess. Laws 2268. Subsection (d) of N.C.G.S. §97-94 was
added three years later when the General Assembly amended this and other
provisions of Chapter 97 by the Workers’ Compensation Reform Act of
1994. See ch. 679, §8.1,
1994 N.C. Sess. Laws 412.
Further, although N.C.G.S. §97-94 has been amended twice since
subsection (d) was first added, the Legislature has never amended the “any
compensation” language. See
ch. 215, §115, 1998 N.C. Sess. Laws 1388; ch. 353, §2,
1997 N.C. Sess. Laws 869.
Since, at the time the Legislature added N.C.G.S. §97-94(d), both “medical
compensation” and “compensation” were among the existing defined terms for the
Act, we find it relevant that the Legislature chose to expressly provide that “any
compensation” may be considered in determining the amount of the civil penalty,
rather than stating that the penalty could be determined based only on
what would have been the more limiting term of “compensation.” Consequently, we conclude that it does not “enlarge
the ordinary meaning of the terms used by the [L]egislature” to interpret the
term “any compensation” in N.C.G.S. §97-94(d) to allow the inclusion of amounts
due for “medical compensation.” See
Deese, 306 N.C. at 277, 293 S.E.2d at 143.
Moreover,
while we recognize that the Commission’s legal interpretation of a particular
provision is not binding, see id. at 278, 293 S.E.2d at 143,
the Commission’s decisions in this and other cases to assess civil penalties
pursuant to N.C.G.S. §97-94(d) that include medical compensation in its
determinations of the amounts to be assessed are persuasive authority on the
issue. See, e.g., Earl
Williams v. James Lloyd, I.C. Nos. 652563 & PH-1785, 2008
WL 2764610 (July 10, 2008); Kirk Sprinkles v. Dinnertainment, Inc.,
I.C. Nos. 542926 & PH-1538, 2008 WL 2764604 (July 2, 2008); Michael
Grouse v. DRB Baseball Mgmt., Inc., I.C. Nos. 832331 & PH-1715,
2007 WL 4415478 (Dec. 4, 2007); Carlton Boone v. A.D. Vinson, Sr.,
I.C. Nos. 513936 & PH-1346, 2007 WL 4375806 (Nov. 6, 2007); Brenda
D. Boisvert v. IFE, Inc., I.C. Nos. 582866 & PH-1607, 2007 WL 2385997
(July 18, 2007); Billy Clark v. Henry Locklear, I.C. Nos. 450535
& PH-1334, 2006 WL 2993091 (Sept. 19, 2006); Billy Marshall v.
Larry Pleasants, I.C. Nos. 365891 & PH-0983, 2006 WL 2388220
(July 13, 2006); Latasha Lowe v. R “N” S Enter., Inc., I.C.
Nos. 259365 & PH-0910, 2006 WL 1355458 (Apr. 12, 2006); Sherron
Rae Beatty v. Michelle Loftis, I.C. Nos. 274571 & PH-0905, 2005
WL 630205 (Feb. 10, 2005); Kenneth Hayes v. Derek Fozart, I.C.
Nos. 231326 & PH-0673, 2003 WL 22753373 (Oct. 20, 2003); N.C.
Indus. Comm’n v. Herbie’s Place, L.L.C., I.C. No. PH-0307, 2001
WL 1614076 (Nov. 16, 2001).
Therefore,
we conclude that N.C.G.S. §97-94(d) allows the Commission the discretion to
assess civil penalties against persons who violate that subsection based upon any
compensation, including medical compensation, due the injured employee and hold
that the Commission did not err when it assessed civil penalties against Mrs.
Patterson–Jones based on amounts calculated from both plaintiffs’ disability
compensation and compensation for medical expenses.
Accordingly,
we affirm the Commission’s Opinions and Awards.
Affirmed.
Judges
MCGEE and STEPHENS concur.