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to modification and technical correction prior to official publication in the
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NO.
COA04-886
NORTH
CAROLINA COURT OF APPEALS
Filed: 19 July 2005
JAMES GOODSON,
Employee-Plaintiff
and
N.C. DEPARTMENT OF
INSURANCE, ex rel. JAMES
LONG, Commissioner,
Intervenor
v. North
Carolina Industrial Commission
I.C.
File No. 944502
P. H. GLATFELTER CO.,
Employer-Defendant
LANGDON M. COOPER, Trustee
in Bankruptcy for RFS
ECUSTA, INC.,
Defendant
and
NORTH CAROLINA SELF-
INSURANCE GUARANTY
ASSOCIATION,
Defendant
Appeal
by P. H. Glatfelter Co. and Langdon M. Cooper, trustee in bankruptcy for RFS
Ecusta, Inc. from order entered 12 February 2004 by the North Carolina Industrial
Commission. Heard in the Court of
Appeals 2 March 2005.
Neill
S. Fuleihan and Timothy L. Finger, for employee-plaintiff.
Young,
Moore, and Henderson, P.A., by Robert C. Paschal, John N. Fountain, and Michael
W. Ballance, for employer-defendant.
Stuart
Law Firm, P.L.L.C., by Catherine R. Stuart and Charles C. Kyles, for the North
Carolina Self-Insurance Guaranty Association.
Mullen,
Holland, & Cooper, P.A., by Langdon M. Cooper, Jesse V. Bone, Jr., and
Jason R. Shoemaker, for Langdon M. Cooper, Trustee in Bankruptcy for RFS
Ecusta, Inc.
Attorney
General Roy Cooper, by Assistant Attorney General E. Clementine Peterson, for
intervenor North Carolina Department of Insurance.
CALABRIA,
Judge.
P.
H. Glatfelter Co. (“Glatfelter”) appeals an opinion and award entered by the
North Carolina Industrial Commission (“Commission”), in which the Commission
found James Goodson (“plaintiff”) was entitled to have Glatfelter pay his
workers’ compensation claim and ordered Glatfelter to (1) pay compensation to
plaintiff pending appeal and (2) secure its obligations under the Workers’
Compensation Act by either re-qualifying as a self-insurer or posting an
appropriate special release bond. We
affirm in part and reverse in part.
From
24 June 1987 until 9 August 2001, Glatfelter operated a paper mill, known as
the Ecusta Division, where plaintiff was employed. On 17 January 1992, the North Carolina Department of Insurance
(“DOI”) licensed Glatfelter to self-insure its workers’ compensation
liabilities, and Glatfelter posted a commercial surety bond issued by Travelers
Casualty and Surety Company of America to satisfy certain statutory bond
requirements. The bond was originally
for $500,000.00 but was increased to $1.6 million as liabilities grew. Glatfelter remained self-insured until 24
August 2001 and was a member of the North Carolina Self-Insurance Guaranty
Association (“SIGA”), a statutorily created legal entity created to pay
“covered claims” against insolvent member self-insurers. During this period of time, plaintiff
sustained a compensable injury by accident and began receiving temporary total
disability compensation.
In
2001, Donald Bowman (“Bowman”), Corporate Insurance and Credit Manager for
Glatfelter, became aware of efforts by Glatfelter to sell the Ecusta Division,
including its liabilities. On 18 June
2001, Bowman wrote Ronald Ennis (“Ennis”), senior financial analyst responsible
for supervising the self-insured workers’ compensation unit with DOI. In the letter, Bowman explained that
Glatfelter was “in the process of selling its Ecusta Division along with the
Workers Compensation liabilities[,] . . . no longer want[ed] or need[ed] to be
Self-Insured[,] . . . and [desired] to cancel the [existing] Surety
Bond[.]” Bowman requested information
on “exactly what . . . is needed from [Glatfelter in order] to withdraw from
being Self-Insured.”
Three
days later, Ennis responded to Bowman’s letter “notifying [DOI] of
[Glatfelter’s] voluntary termination of self-insured status . . . effective 24
August 2001.” Ennis’ letter noted that
the Ecusta Division was “being acquired by a third party that is assuming all
past workers’ compensation liabilities accrued during the Company’s operation
of the division.” Ennis informed Bowman
that the surety bond could be cancelled “by giving the Commissioner 60 days
written notice” but warned that the surety would “remain liable for all
obligations and liabilities . . . that arose under Chapter 97 of the North
Carolina General Statutes.”
Nonetheless, Ennis went on to state that if “the acquiring company
provides a replacement bond, then the Department will release the Surety
Company of any past, present or future liabilities.”
In
August 2001, Glatfelter entered into a written acquisition agreement with, inter
alia, RFS Ecusta, Inc. (“RFS”) for the sale of the Ecusta Division. The acquisition agreement purportedly
transferred certain liabilities, including workers’ compensation claims, of the
Ecusta Division. RFS deposited a $1.6
million certificate of deposit with DOI, and, on 24 August 2001, Ennis wrote
Bowman and informed him that DOI had received confirmation that RFS deposited
$1.6 million “to secure the assumption of liabilities of [Glatfelter’s]
worker’s compensation reserve loss claims” thus purportedly “discharg[ing] . .
. all past, present, existing and potential liability for [Glatfelter’s surety
company].” Ennis also noted that
Glatfelter had voluntarily terminated their status as a self-insured employer
in North Carolina. DOI released
Glatfelter’s bond. In a subsequent
memorandum regarding self-insured corporations, Ennis noted Glatfelter sold the
Ecusta Division to RFS, who assumed all liabilities and posted a $1.6 million
certificate of deposit as a “dollar for dollar exchange with [Glatfelter’s]
surety bond [and Glatfelter’s] surety bond company was granted a full release
from liability.” A second memorandum by
Ennis the following month added that DOI “notified the Industrial Commission of
the transfer of the loss claims to [RFS] to ensure the appropriate legal
responsibility for their discharge.”
As
noted previously, RFS assumed control of the operations of the Ecusta
Division. Besides the certificate of
deposit with DOI, RFS was insured at all times from 8 August 2002 to 23
September 2003 for claims arising during that period but not for prior pending
claims. DOI did not require RFS to
become self-insured when it posted the bond.
In October 2002, RFS filed petitions in bankruptcy. RFS made no payments for plaintiff’s
admittedly compensable claim after 30 September 2002 yet failed to follow
statutory procedures to terminate compensation.
Glatfelter
and SIGA denied liability for payments on plaintiff’s claim. North Carolina Chief Deputy Commissioner
Stephen Gheen initiated a proceeding ex mero motu concerning continued
payments of workers’ compensation benefits from RFS and/or Glatfelter, and in
an order entered 3 December 2002, the deputy commissioner added Glatfelter,
SIGA, and DOI as parties. After a
hearing on the matter and completion of the record, Deputy Commissioner George
R. Hall, III, entered an opinion and award providing, in relevant part, as
follows: (1) there were no additional necessary parties; (2) the acquisition
agreement did not effectuate a valid transfer of Glatfelter’s workers’ compensation
liabilities to RFS by virtue of N.C. Gen. Stat. §97-6 (2003) and the lack of a
statutory scheme permitting a self-insured employer to transfer liabilities for
workers’ compensation claims by private contractual agreement; (3) Glatfelter,
as plaintiff’s self-insured employer at the time of the injury, was responsible
for paying the compensable claim; (4) DOI erroneously released Glatfelter’s
bond because no “special release bond” as required by N.C. Gen. Stat. §
97-185(g) (2003) had been posted and Glatfelter had not fully discharged its
obligations under the Workers’ Compensation Act; (5) the certificate of deposit
posted by RFS did not qualify as a “special release bond” because RFS was not a
corporate surety as defined by N.C. Gen. Stat. §97-165(5) (2003); and (6)
SIGA’s liability was not at issue since RFS’ certificate of deposit was not
implicated.
The
Commission affirmed the opinion and award on appeal but modified certain
provisions, in relevant part, as follows: (1) the agreements between Glatfelter
and RFS, to the extent they purported to transfer workers’ compensation
liabilities, were void ab initio as a matter of law and public policy;
(2) Glatfelter negotiated its workers’ compensation liabilities into the sales
price of the Ecusta Division, and the purpose of the certificate of deposit
posted by RFS was “to secure . . . the self-insurer’s claims liability to
insure that injured workers’ injuries on the job will be properly compensated,
irrespective of the employer’s financial condition”; and (3) Glatfelter
erroneously relied on the posting of the certificate of deposit by RFS to bring
Glatfelter into compliance with the “special release bond” provisions. In its award, the Commission ordered the use
of the certificate of deposit posted by RFS based on the purpose stated in the
award and opinion. The Commission
further ordered Glatfelter to secure its obligations under the Act by either
re-qualifying as a self-insurer or posting an appropriate special release bond
as well as to make appropriate workers’ compensation payments to
plaintiff. Finally, the Commission
ordered Glatfelter to pay compensation to plaintiff pending appeal pursuant to
N.C. Gen. Stat. §97-86.1 (2003) and dismissed SIGA as a party in the
action. Both Glatfelter and RFS gave notice
of appeal to this Court.
I. Standard of Review
Our
Supreme Court has recently re-iterated that the Workers’ Compensation Act is
designed “‘to provide compensation for injured employees’”; therefore, its
provisions should be “‘liberally construed’” and “‘its benefits should not be
denied by a technical, narrow, and strict construction.’” McRae v. Toastmaster, Inc., 358 N.C.
488, 496, 597 S.E.2d 695, 701 (2004) (quoting Hollman v. City of Raleigh,
273 N.C. 240, 252, 159 S.E.2d 874, 882 (1968)). In reviewing an opinion and award by the Commission, we must
determine “whether any competent evidence supports the Commission’s findings of
fact and whether [those] findings . . . support the Commission’s conclusions of
law.” Deese v. Champion Int’l Corp.,
352 N.C. 109, 116, 530 S.E.2d 549, 553 (2000).
We view the evidence in the light most favorable to the plaintiff,
giving him the benefit of every reasonable inference. Adams v. AVX Corp., 349 N.C. 676, 681,
509 S.E.2d 411, 414 (1998). Findings of
fact are conclusive on appeal when supported by competent evidence, despite
evidence that would support contrary findings, and conclusions of law are
reviewed de novo. McRae,
358 N.C. at 496, 597 S.E.2d at 700-01 (citations omitted). As to the Commission’s findings of
jurisdictional fact, such findings “are not conclusive on appeal, even
if supported by competent evidence[,]” and the reviewing court has a duty to
make independent findings of jurisdiction considering all the evidence of
record. Perkins v. Arkansas Trucking
Servs., Inc., 351 N.C. 634, 637, 528 S.E.2d 902, 903-04 (2000).
II. Jurisdiction
In
the first assignment of error, Glatfelter asserts the Commission “lack[ed] the
jurisdiction to address the issue [presented] because Glatfelter is not an
‘employer’ subject to the Workers’ Compensation Act.” Specifically, Glatfelter argues that, following RFS’ purchase of
Ecusta, Glatfelter was not an employer as defined by N.C. Gen. Stat. §97-2(3)
(2003) and was not subject to the jurisdiction of the Commission. However, the subsequent sale of the Ecusta
Division to RFS does not, standing alone, divest the Commission of jurisdiction
over Glatfelter as plaintiff’s employer at the time of the accident. See Lucas v. Stores, 289 N.C. 212,
218, 221 S.E.2d 257, 261 (1976) (noting that the Commission’s jurisdiction over
issues of compensation under the Act depends on whether there existed, “at the
time of the accident[,]” an employer-employee relationship between the claimant
and the party from whom compensation is sought). The parties stipulated that this relationship existed between
plaintiff and Glatfelter on 23 May 1999, the date of the accident. This assignment of error is overruled.
III. Validity of Transfer of Liabilities
A. Jurisdiction over Glatfelter
In
the first argument contained in Glatfelter’s second assignment of error,
Glatfelter, citing (1) its inquiries and dealings with DOI in selling the
Ecusta Division, (2) the subsequent notification to the Commission, and (3)
RFS’ payment of plaintiff’s compensation benefits after the sale, asserts that
“[u]nder such circumstances, the combined actions of [DOI] and the [Commission]
served to strip the [Commission] of jurisdiction over Glatfelter in this
matter, and Glatfelter should be dismissed.”
In support of this argument, Glatfelter cites Bryant v. Dougherty,
267 N.C. 545, 148 S.E.2d 548 (1966); N.C. Gen. Stat. §97-185(g) and (h); and
N.C. Gen. Stat. §58-2-1.
North
Carolina General Statutes §58-2-1 statutorily creates DOI and charges it “with
the execution of laws relating to insurance and other subjects placed under
[it].” Our Supreme Court’s holding in Bryant
merely concerned whether an employee could bring a malpractice claim against
physicians who treat an employee’s compensable injury and whether the
Commission had “jurisdiction to hear and determine such action.” Bryant, 267 N.C. at 552, 148 S.E.2d
at 554. North Carolina General Statutes
§97-185 contains, in relevant part, certain provisions concerning how DOI is to
handle securities of self-insured employers.
The instant case does not concern a plaintiff attempting to bring suit
against his physician for alleged malpractice, and none of the above cited
authority supports an argument that a course of conduct by DOI or the
Commission somehow divests the Commission of jurisdiction. Moreover, we have found no support for the
proposition that a course of action by DOI or the Commission could divest it of
the jurisdiction which has been conferred upon it by statute. In any event, Glatfelter’s objections to the
Commission’s jurisdiction over it conflict with the pre-trial agreement entered
into, inter alios, by Glatfelter.
The pre-trial agreement provided that Glatfelter agreed to certain
stipulations from which the Commission could make findings of fact and
conclusions of law. Included in such
stipulations was that Glatfelter was subject to and bound by the applicable
provisions of the Act. This assignment
of error is overruled.
B. Jurisdiction over Adjudication of the
Validity of the Agreement
Glatfelter
alternatively argues that, even if the Commission had jurisdiction over
Glatfelter, it did not have jurisdiction to adjudicate the validity of the
terms of the acquisition agreement purporting to transfer the workers’
compensation liability for the Ecusta Division from Glatfelter to RFS. Citing TIG Ins. Co. v. Deaton, Inc.,
932 F. Supp. 132 (W.D.N.C. 1996), Glatfelter contends the agreement was a
discreet contract over which the Commission had no jurisdiction. We disagree.
The
Commission is expressly vested with jurisdiction to determine “[a]ll questions
arising under” the Workers’ Compensation Act, see N.C. Gen. Stat. §97-91
(2003), and “is charged with the duty of administering provisions of the Act
such as to provide speedy, substantial and complete relief to all parties bound
by the Act.” N.C. Ins. Guar. Ass’n
v. International Paper Co., 152 N.C. App. 224, 226, 569 S.E.2d 285, 286
(2002). The jurisdiction conferred by
statute to the Commission also includes “such judicial power as is necessary to
administer the Workers’ Compensation Act.”
Hogan v. Cone Mills Corp., 315 N.C. 127, 138, 337 S.E.2d 477, 483
(1985), appeal after remand, 94 N.C. App. 640, 381 S.E.2d 151 (1989),
reversed on other grounds, 326 N.C. 476, 390 S.E.2d 136 (1990).
In
the instant case, the Commission considered the acquisition agreement to
determine whether Glatfelter could validly transfer its workers’ compensation
liabilities under the Act to RFS. North
Carolina General Statutes §97-6 (2003) provides as follows: “No contract or
agreement, written or implied, no rule, regulation, or other device shall in
any manner operate to relieve an employer in whole or in part, of any
obligation created by this Article, except as herein otherwise expressly
provided.” We conclude that the portion
of the contract that attempted to transfer the workers’ compensation
liabilities of Glatfelter to RFS was the type of device contemplated by N.C.
Gen. Stat. §97-6 such that adjudication of the validity of that device fell
within the scope of the Commission’s delegated authority under N.C. Gen. Stat.
§97-91.
Nor
is our conclusion affected by the reasoning in TIG, which involved a
dispute between an insurance company that provided workers’ compensation
coverage and an insurance company that provided excess workers’ compensation
coverage. TIG, 932 F.Supp. at
135. Neither TIG nor Clark v.
Ice Cream Co., 261 N.C. 234, 134 S.E.2d 354 (1964), upon which the TIG
opinion relied, implicated the operation of N.C. Gen. Stat. §97-6 but, rather,
concerned whether coverage ever arose under the terms of the contract for
excess workers’ compensation insurance.
This assignment of error is overruled.
IV. Purported Transfer of Liabilities
Having
determined the Commission had jurisdiction to make a determination with respect
to the validity of the purported transfer of liabilities by Glatfelter to RFS,
we now turn to whether the Commission properly decided the question. The Commission concluded that “to the extent
the agreements purported to transfer Glatfelter’s workers’ compensation
liabilities” under the Act, the agreement violated N.C. Gen. Stat. §97-6 and
was void ab initio. As this
issue concerns statutory interpretation of the Act, it is a question of law we
review de novo.
We
have previously stated that an employer is “primarily liable to an employee for
a workers’ compensation award” and “‘must pay benefits to its employees,
whether the employer has the necessary insurance, is self‑insured, or has
no insurance at all.’” Tucker v.
Workable Company, 129 N.C. App. 695, 700, 501 S.E.2d 360, 364 (1998)
(quoting Ryles v. Durham County Hospital Corp., 107 N.C. App. 455, 461,
420 S.E.2d 487, 491 (1992)). Every
employer is required to secure its obligations under the Act by either insuring
its workers’ compensation liability or self-insuring where it has the financial
ability to pay for benefits. N.C. Gen.
Stat. §97-93 (2003). Noticeably absent
in the Act, however, is a provision allowing one employer to effectively escape
any obligation under the Act by transferring en toto all of its
obligations to another employer by contract or otherwise. Moreover, we agree with the Commission that
any attempt to do so would conflict with the plain language of N.C. Gen. Stat.
§97-6 as an attempt to “relieve an employer [by contract] . . . of an[]
obligation created” by the Workers’ Compensation Act.
This
does not mean, of course, that an employer is precluded from selling a division
of a company to another. In such
circumstances, the selling employer remains primarily liable for any workers’
compensation liability arising during the time of ownership, and the selling
employer is free to recover the costs associated with securing that liability
in the purchase price of the division.
Moreover, a selling employer may freely cease to self-insure if it
complies with the following mandatory provision of N.C. Gen. Stat. §97-185(g)
(2003):
If a self-insurer ceases to self-insure . . . the self-insurer shall notify the Commissioner [of Insurance], and may recover all or a portion of the securities deposited with the Commissioner [of Insurance] upon posting instead an acceptable special release bond issued by a corporate surety in an amount equal to the total value of the securities. The special release bond shall cover all existing liabilities under the Act plus an amount to cover future loss development and shall remain in force until all obligations under the Act have been discharged fully.
Subsection
(h) prohibits release of a self-insurer’s deposits by the Commissioner upon
cessation of self-insurance “until the self-insurer has discharged fully all
the self-insurer’s obligations under the Act.”
As
noted supra, the Commission determines an employer’s liability under the
Act by virtue of N.C. Gen. Stat. §97-91.
While we agree that DOI has the authority to administer and govern
self-insurers’ methods of securing their liabilities under the Workers’
Compensation Act, nothing in the statutory scheme grants DOI the Commission’s
authority to determine what those liabilities are. In short, subsections (g) and (h) of N.C.
Gen. Stat. §97-185 do not, either by implication or expression, allow DOI to
make determinations regarding whether a self-insurer has fully discharged its
workers’ compensation obligations. That
determination has been, and remains, the province of the Commission.
It
is undisputed that no special release bond was posted by Glatfelter. Additionally, RFS’ certificate of deposit
cannot be considered a special release bond because RFS is not a “corporate
surety.” See N.C. Gen. Stat.
§97-165(5) (2003) (defining a corporate surety as “an insurance company
authorized by the Commissioner to write surety business” in North Carolina);
N.C. Gen. Stat. §97-185(g).
Accordingly, DOI improperly released Glatfelter’s bond under N.C. Gen.
Stat. §97-185(h) since Glatfelter had not secured its obligations under the Act
in a manner compliant with N.C. Gen. Stat. §97-185(g).
V. Ratification
Glatfelter
asserts the actions of DOI and the Commission after the purported assignment of
liability to RFS ratified the acquisition agreement. Glatfelter fails to cite any legal authority or even a legal
definition of the term ratification in its brief to this Court. It is not the duty of this Court to
supplement an appellant’s brief with legal authority or arguments not contained
therein. This assignment of error is
deemed abandoned by virtue of N.C. R. App. P. 28(b)(6) (2005).
VI. Estoppel
In
its next argument, Glatfelter “emphatically contends that both [DOI] and the
[Commission] are estopped from entering any order that requires Glatfelter to
fund the workers’ compensation claim[] at issue . . . .” No order of DOI enforcing Glatfelter’s
liability to plaintiff under the Act is contained in the record or pending
before this Court; therefore, we need not address any argument concerning
whether DOI is estopped in the instant case.
Moreover, Glatfelter cannot assert estoppel against the Commission.
The
common law doctrine of equitable estoppel serves “to aid the law in the
administration of justice when without its intervention injustice would
result[,]” see Thompson v. Soles, 299 N.C. 484, 486, 263 S.E.2d 599, 602
(1980), and prevents one from asserting a right otherwise available to him
against another if his own conduct would render such an assertion of that right
against the other unfair. LSB Fin.
Servs., Inc. v. Harrison, 144 N.C. App. 542, 548, 548 S.E.2d 574, 579
(2001). “Equitable estoppel is
established by evidence that an individual . . . induces another to believe
that certain facts exist and that other person rightfully relies on those facts
to his detriment.” Bunn Lake Prop.
Owner’s Ass’n v. Setzer, 149 N.C. App. 289, 297, 560 S.E.2d 576, 582 (2002)
(citations and internal quotation marks omitted).
Assuming
arguendo that Glatfelter could otherwise use the doctrine of estoppel to
preclude the Commission from carrying out its duties under the Act, the actions
necessary to effectuate the intended transfer of liabilities occurred before
the Commission was involved in this action in any way or was even informed that
the transfer was being attempted.
Notably, no action by the Commission occurred until after the attempted
transfer was complete. Accordingly,
Glatfelter cannot, under these facts, show any action on the part of the
Commission inducing Glatfelter to undertake the attempted transfer. Our research reveals no analogous
application of the doctrine, nor are we persuaded the doctrine operates under
these facts. This assignment of error
is overruled.
VII. N.C. Gen. Stat. §97-93
Glatfelter
next asserts the Commission erred in ordering it to “secure its obligations
under the Workers’ Compensation Act as required by N.C. Gen. Stat. §97-93”
because “self-insured employers are regulated exclusively by the Commissioner
of Insurance” and the Commission has no “jurisdiction to require Glatfelter to
secure any obligations that the [Commission] finds to exist.” Under N.C. Gen. Stat. §97-94, employers
bound by the compensation provisions of the Act are required to file with the
Commission, as opposed to DOI, evidence of compliance with N.C. Gen. Stat.
§97-93 as often as deemed necessary by the Commission. The statute goes on to expressly grant the
Commission, as opposed to DOI, the authority to penalize any employer “who
refuses or neglects to secure such compensation . . . .” N.C. Gen. Stat. § 97-94. Moreover, once the Commission determined
Glatfelter remained liable to plaintiff after the failed attempt to transfer
its liability to RFS, it had the authority to order Glatfelter to take steps to
secure that liability in a manner consistent with the Act and to impose
penalties on Glatfelter for failure to do so.
We hold the Commission properly exercised its authority in determining
Glatfelter was an employer subject to the Act, and Glatfelter must secure its
obligation to plaintiff by one of the permitted statutory methods in order to
accomplish the opinion and award. This
assignment of error is overruled.
VIII. Necessary Parties
In
its next assignment of error, Glatfelter asserts the Commission erred in
determining no other parties were necessary to the action on the grounds that
the acquisition agreement listed additional purchasing parties who were to be
assuming Glatfelter’s workers’ compensation obligations. In the pre-trial agreement, one of the
stipulated facts reads as follows: “On August 9, 2001, Glatfelter and [RFS]
executed an Assumption Agreement, whereby RFS purported to assume the
self-insured workers’ compensation liabilities of certain Glatfelter employees,
including [plaintiff].” There is no
error in relying on the parties’ stipulation that the assumption of
Glatfelter’s workers’ compensation obligations to plaintiff was by RFS. Therefore, all necessary parties were before
the Commission, and this assignment of error is overruled.
IX. Statutory Mechanism for Transfer of
Liabilities
Glatfelter
asserts, in its next assignment of error, that the Act does permit the
attempted transfer of liabilities.
Specifically, Glatfelter contends N.C. Gen. Stat. §§97-6, 97-185 and 97-51
(2003), “when read together, provide a logical and effective mechanism for the
release and discharge of Glatfelter’s liability” for plaintiff’s claim. Glatfelter directs the attention of this
Court to the last portion of N.C. Gen. Stat. § 97-6, which allows employers to
use devices to relieve themselves of workers’ compensation obligations where
“otherwise expressly provided” in the Act.
Glatfelter’s
citation to the other two aforementioned provisions as expressly providing for
the transfer contemplated in the instant case cannot be sustained. North Carolina General Statutes §97-51
concerns liabilities between joint employers of an injured employee. It has no application in the instant case as
Glatfelter and RFS were never joint employers of plaintiff. Glatfelter’s reliance on subsections (g) and
(h) of N.C. Gen. Stat. §97-185 harken back to arguments already rejected herein
and are likewise unavailing. There are
no “expressly provided” mechanisms satisfying the requirements of N.C. Gen.
Stat. §97-91 that sanction Glatfelter’s attempt to transfer its obligations to
RFS under the facts of the instant case, and this assignment of error is
overruled.
X. N.C. Gen. Stat. §97-185(f)
In
its last assignment of error, Glatfelter asserts the Commission erred in
failing to order plaintiff to levy upon RFS’ certificate of deposit under N.C.
Gen. Stat. §97-185(f) (2003), which provides as follows: “No judgment creditor,
other than a claimant entitled to benefits under the Act, may levy upon any
deposits made under this section.”
While subsection (f) endorses levying on applicable deposits by
claimants entitled to benefits under the Act, nothing in the provision
indicates that a claimant must levy on such a deposit or that the Commission
has the authority to force a claimant to do so. Moreover, Glatfelter’s assertion is premised on the incorrect
supposition that, upon “[l]evying on RFS’ certificate of deposit[,] . . .
[l]iability would fall upon the appropriate entity, and other claimants could
avail themselves of this remedy.”
However, as our holding makes clear, Glatfelter and not RFS is the
employer that is liable to plaintiff.
For these reasons, we overrule this assignment of error.
XI. Appeal by RFS
RFS
appeals that portion of the Commission’s opinion and award that reads as
follows: “Since the purpose of the surety bond was to insure Glatfelter’s
workers’ compensation obligations, the bond monies should be available for that
purpose and therefore the parties shall immediately take the necessary steps to
effectuate the underlying purpose for which the bond was issued.”[Note 1] RFS asserts the certificate of deposit
cannot be retained by DOI “to ‘insure’ obligations that the Full Commission
held could not be transferred by Glatfelter and remained the sole responsibility
of Glatfelter.” We agree.
The
Commission determined that RFS was not liable for Glatfelter’s workers’
compensation obligations as a result of the attempted transfer. Having determined the issue of liability,
the method of handling the certificate of deposit belonging to RFS, when it had
no obligations under the Act, falls within the ambit of DOI’s
jurisdiction. Accordingly, we reverse
that portion of the opinion and award of the Commission ordering DOI to retain
RFS’ certificate of deposit.
Affirmed
in part and reversed in part.
Judges
HUNTER and JACKSON concur.
1. RFS
actually posted a certificate of deposit as opposed to a bond.