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authoritative.
NO. COA04-119
NORTH CAROLINA COURT OF
APPEALS
JAMES
CARNELL WALKER, JR.,
Plaintiff-Appellee,
v.
PENN
NATIONAL SECURITY INSURANCE COMPANY,
Defendant-Appellant
Appeal by defendant from
judgment dated 1 December 2003 by Judge William C. Griffin, Jr. in Superior
Court, Beaufort County. Heard in the
Court of Appeals 13 October 2004.
Gaskins & Gaskins,
P.A., by Herman E. Gaskins, Jr., for plaintiff-appellee.
McDaniel & Anderson,
L.L.P., by William E. Anderson and John M. Kirby, for defendant-appellant.
McGEE, Judge.
James Carnell Walker,
Jr. (plaintiff) was injured in a motor vehicle collision on 1 August 2000. The accident was caused by the negligence of
Troy Walker. At the time of the
accident, plaintiff was working in the scope and course of his employment and
operating a vehicle owned and insured by his employer, SIA Group-Seashore
(SIA).
Troy Walker had
liability insurance coverage with Shelby National Insurance Company (the
liability carrier). The liability
insurance coverage limit was $30,000 per person and $60,000 per accident. The vehicle in which plaintiff was injured
was also covered by an underinsured motorist (UIM) policy with Penn National
Security Insurance Company (defendant).
The UIM policy coverage limit was $1,000,000.
Plaintiff recovered the
full $30,000 allowable from the liability carrier. The workers’ compensation carrier for plaintiff’s employer also
paid a total of $81,948.37, as follows: $24,201.54 for plaintiff’s medical
expenses, $51,547.88 to plaintiff as compensation, and $6,198.95 to Hoover
Rehabilitation. Pursuant to a clincher
agreement, the workers’ compensation carrier asserted a lien in the amount of
$35,000 on any recovery plaintiff received from third parties.
Plaintiff and defendant
submitted the issue of the value of plaintiff’s personal injury claim to
arbitration on 2 October 2002. The
arbitrator found that the value of plaintiff’s personal injury claim was
$129,524. The parties thereafter agreed
that the award should be modified to $126,874.
The arbitrator did not resolve coverage issues or amounts to be
credited.
Following the
arbitration, plaintiff and defendant were unable to agree on the amount payable
by defendant under the UIM policy.
Specifically, the parties were unable to resolve how the 1999 amendment
to the UIM statute, N.C. Gen. Stat. §20-279.21(e) (2003), would affect the
relationship between the award amount and the workers’ compensation lien,
thereby determining the amount payable by defendant. Defendant contended that the statute required that the
arbitration award be offset by plaintiff’s recovery from the workers’
compensation carrier.
Plaintiff filed a
complaint for a declaratory judgment on 2 April 2003, asking the trial court to
declare the rights and liabilities of the parties and to declare that defendant
pay plaintiff $96,874: the difference between the arbitration award and the
$30,000 recovered from the liability carrier.
Defendant’s answer asked that the trial court require defendant to pay
plaintiff an amount not greater than $50,874.
Defendant calculated this amount by subtracting the sum of $30,000
recovered from the liability carrier and $46,000[Note 1] workers’
compensation benefits from the $126,874 total value of plaintiff’s injury.
While the declaratory
judgment action was pending in the trial court, this Court, in Austin v.
Midgett (Austin I), 159 N.C. App. 416, 583 S.E.2d 405 (2003),
resolved the confusion surrounding the 1999 amendment to the UIM statute. We held that the 1999 amendment “requires
UIM carriers to insure the amount of the employer’s workers’ compensation lien
on UIM proceeds received by the employee in addition to the damages
uncompensated by workers’ compensation benefits.” Id. at 421, 583 S.E.2d at 409. As a result, a UIM carrier is entitled to a credit for the amount
of workers’ compensation benefits that are not subject to a workers’
compensation lien. Id. at 421,
583 S.E.2d at 409. However, our Court
did not consider the amount paid by the liability carrier and did not credit
the UIM carrier with this amount.
In accordance with our
holding in Austin I, the trial court credited defendant with the amount
paid by the workers’ compensation carrier, less the amount of the workers’
compensation lien. However, the trial
court reduced the amount of workers’ compensation benefits by $6,198.95, the
amount paid to Hoover Rehabilitation.
In addition, under the guidance from Austin I, the trial court
did not credit defendant with the $30,000 plaintiff received from the liability
carrier. The resulting judgment ordered
defendant to pay plaintiff $86,124.58, plus interest.
Following the trial
court’s declaratory judgment, this Court granted a petition for rehearing in Austin
I. We subsequently clarified the Austin
I holding in Austin v. Midgett (Austin II), ___ N.C. App.
___, 603 S.E.2d 855 (2004). In Austin
II, we held that Austin I resulted in an incorrect computation of
the amount the UIM carrier owed to the plaintiff. Austin II, ___ N.C. App. at ___, 603 S.E.2d at 856. Our Court determined that, in order to avoid
a windfall to the plaintiff, the UIM carrier was entitled to a credit for
payments made by the liability carrier.
Id. at ___, 603 S.E.2d at 856-57.
Our Court also outlined
a two-step process for determining the amount due to a plaintiff from an UIM
carrier. Id. at ___, 603 S.E.2d
at 856. First, the limit of the UIM coverage
is determined by subtracting the amount paid by the liability carrier from the
UIM policy limit. Id. at ___,
603 S.E.2d at 856; see also N.C. Gen. Stat. §20-279.21(b)(4)
(2003). Second, the amount a plaintiff
is entitled to recover from the UIM carrier must be determined. Austin II, ___ N.C. App. at ___, 603
S.E.2d at 856. This figure is
calculated by subtracting from the total value of the plaintiff’s loss, the
amount of workers’ compensation benefits (not including the amount of the
workers’ compensation lien) and the amount received from the liability
carrier. Id. at ___, 603 S.E.2d
at 857.
Defendant first assigns
error to the trial court’s failure to credit defendant with the amount
plaintiff received from the liability carrier.
Defendant argues that by failing to credit defendant with this amount,
plaintiff has received a windfall and a net recovery in excess of his actual
damages. We agree. Under Austin II, a UIM carrier is
entitled to a credit for payments made by the liability carrier. Austin II, ___ N.C. App. at ___, 603
S.E.2d at 856. Therefore, we hold that
the trial court erred in failing to credit defendant with the $30,000 paid by
the liability carrier.
Defendant next assigns
error to the trial court’s calculation of the amount of benefits plaintiff
received from the workers’ compensation carrier. Defendant argues that the trial court erred by excluding the
costs for Hoover Rehabilitation’s services from the total amount of workers’
compensation benefits plaintiff received.
The trial court’s order
contains the following finding of fact:
7. The sum
paid to Hoover Rehabilitation was for a nurse to accompany plaintiff to his
doctor visits and plaintiff received no benefit from this service. The sum paid to Hoover Rehabilitation was
not compensation to plaintiff.
Our standard of review
of a declaratory judgment is the same as in other cases. N.C. Gen. Stat. §1-258 (2003); Integon
Indem. Corp. v. Universal Underwriters Ins. Co., 131 N.C. App. 267, 270,
507 S.E.2d 66, 68 (1998). Therefore, in
an action for a declaratory judgment where the trial court decides questions of
fact, our standard of review is whether the trial court’s findings of fact are
supported by competent evidence. Insurance
Co. v. Allison, 51 N.C. App. 654, 657, 277 S.E.2d 473, 475, disc. review
denied, 303 N.C. 315, 281 S.E.2d 652 (1981). If supported by competent evidence, the trial court’s findings of
fact are conclusive on appeal. Finch
v. Wachovia Bank & Tr. Co., 156 N.C. App. 343, 346‑47, 577 S.E.2d
306, 308-09 (2003) (citing Miesch v. Ocean Dunes Homeowners Assn., 120
N.C. App. 559, 562, 464 S.E.2d 64, 67 (1995), disc. review denied, 342
N.C. 657, 467 S.E.2d 717 (1996)).
Defendant argues that
there was no evidence on which the trial court could base its finding that
plaintiff received no benefit from Hoover Rehabilitation. However, defendant has failed to present any
evidence in the record tending to show that plaintiff received any
benefit from Hoover. “‘The burden is on
an appealing party to show, by presenting a full and complete record, that the
record is lacking in evidence to support the [trial court’s] findings of
fact.’“ Davis v. Durham Mental
Health/Development, ___ N.C. App. ___, ___, 598 S.E.2d 237, 245, (2004)
(alteration in original) (quoting Dolbow v. Holland Industrial, 64 N.C.
App. 695, 696, 308 S.E.2d 335, 336 (1983), disc. review denied, 310 N.C.
308, 312 S.E.2d 651 (1984)). Our Rules
of Appellate Procedure state: “The record on appeal in civil actions
. . . shall contain . . . so much of the evidence
. . . as is necessary for an understanding of all errors
assigned[.]” N.C.R. App.
9(a)(1)(e). Furthermore, “[w]here the
evidence is not in the record, it will be assumed that there was sufficient
evidence to support the findings. In
other words, when the evidence is not in the record the matter is not
reviewable.” 1 Strong’s North Carolina
Index 4th Appeal and Error §489 (1990) (footnotes omitted) (citing Leasing,
Inc. v. Dan-Cleve Corp., 31 N.C. App. 634, 638, 230 S.E.2d 559, 562 (1976),
disc. review denied, 292 N.C. 265, 233 S.E.2d 393 (1977) (“The rule is
well established that when the evidence is not included in the record, it will
be assumed that there was sufficient evidence to support the findings by the
trial court.”)); see also Forrest v. Pitt County Bd. of Education, 100
N.C. App. 119, 123, 394 S.E.2d 659, 662 (1990), aff’d, 328 N.C. 327, 401
S.E.2d 366 (1991) (holding that, without transcripts, depositions, or other
necessary documents “it is presumed that the findings of fact are supported by
competent evidence, and [the findings of fact] are therefore conclusive on
appeal”). Since the record on appeal is
devoid of evidence regarding the services provided by Hoover Rehabilitation, we
are unable to determine what evidence was before the trial court and are unable
to perform a meaningful review of this assignment of error.
In the alternative,
defendant argues that, as a matter of law, rehabilitation costs are a part of
the workers’ compensation benefits received by an injured worker. In support of its argument, defendant cites Roberts
v. ABR Associates, Inc., 101 N.C. App. 135, 398 S.E.2d 917 (1990), superseded
by statute on other grounds as stated in Franklin v. Broyhill Furniture
Industries, 123 N.C. App. 200, 472 S.E.2d 382, cert. denied, 344
N.C. 629, 477 S.E.2d 39 (1996). We
disagree with defendant’s interpretation of Roberts. In Roberts, the workers’ compensation
carrier claimed that it was entitled to a lien in the amount that it paid for
rehabilitation services. Id. at
137, 398 S.E.2d at 918. We held that
before the Industrial Commission (the Commission) can determine that a workers’
compensation carrier is entitled to a lien, “the Commission must first find as
fact . . . that the services were rehabilitative in nature
. . . and reasonably ‘required to effect a cure or give relief’
to the plaintiff.” Id. at
140-41, 398 S.E.2d at 920 (citing N.C. Gen. Stat. §97-25 (1985)). Contrary to defendant’s contention, Roberts
states that rehabilitation services are not a benefit to a plaintiff as a
matter of law, but rather must be subject to a fact-specific determination as
to whether the services conferred a benefit to a plaintiff. We hold that the trial court did not err in
excluding the cost of Hoover Rehabilitation’s services when it computed the
amount of workers’ compensation benefits received by plaintiff.
Having determined the
foregoing, we proceed to the two-step inquiry outlined in Austin II to
calculate the amount payable to plaintiff by defendant. See Austin II, ___ N.C. App. at ___,
603 S.E.2d at 856. We first subtract
the amount paid to plaintiff by the liability carrier ($30,000) from the UIM
policy limit ($1,000,000) and find that the UIM coverage limit is $970,000. We next determine the amount plaintiff is
entitled to recover from the UIM carrier.
Plaintiff’s total loss was valued at $126,874. From this amount we subtract the amount of workers’ compensation
benefits, not including the amount of the workers’ compensation lien,
($40,749.42[Note 2]) and the amount plaintiff received from the
liability carrier ($30,000). The
resulting figure representing the total amount of plaintiff’s uncompensated
loss is $56,789.68. Thus, we hold that
the amount payable by the UIM carrier to plaintiff is $56,789.68, plus interest.
Since we have held that,
under Austin II, defendant is entitled to a credit for the amount
plaintiff received from the liability carrier, we need not consider defendant’s
remaining assignments of error regarding this issue.
We remand this matter
for entry of judgment in the above calculated amount.
Reversed and remanded.
Judges McCULLOUGH and
ELMORE concur.
1. The figure $46,000 was reached by
subtracting $35,000 (the amount of the worker’s compensation carrier’s lien)
from $81,000 (the total paid out by the worker’s compensation carrier). Defendant now admits, and the trial court
found, that the total paid out by the worker’s compensation carrier was
$81,948.37: $24,201.54 in medical expenses; $51,547.88 to plaintiff in
compensation; and $6,198.95 to Hoover Rehabilitation.
2. This figure was reached by subtracting the amount paid to Hoover Rehabilitation ($6,198.95) and the amount of the worker’s compensation lien ($35,000) from the total amount paid by the worker’s compensation carrier ($81,948.37).