Appellate Cases of Interest

Synopsis provided by Michael W. Ballance, Dickey, McCamey & Chilcote, PC

Luon Nay v. Cornerstone Staffing
(Court of Appeals - Unpublished – 18 August 2020

Facts: The employer Cornerstone was a staffing agency that provided employees to companies in “temp-to-perm” placements with the expectation of long-term employment. At least 95% of the positions filled by the employer were temp-to-perm positions. Plaintiff was employed by Cornerstone and on placement with a company when he injured his back in 2015. He had earned a total of $5,805.25 while working for Cornerstone. A dispute subsequently arose about how to properly calculate plaintiff’s average weekly wage (AWW).

Cornerstone claimed that plaintiff was a “temporary” employee, and as such, plaintiff’s AWW should be calculated by using Method 5 and dividing the total wages earned by 52 weeks under the decision in Tedder v. A&K Enterprises. This resulted in an AWW of $111.64. Plaintiff argued that, because he was a temp-to-perm employee with an expectation of continued employment, Method 3 should be used. This method resulted in an AWW of $419.20.

Both the Deputy Commissioner and Full Commission held that Method 5 was appropriate. Plaintiff appealed to the Court of Appeals.

Ruling: The Court of Appeals reversed the Commission and held Method 3 was correct.

Reasoning: In determining which of the five methods should be used in calculating AWW under N.C.G.S. § 97-2(5), the Court noted that there are two overriding concerns. First, the AWW should reflect what the plaintiff would have been earning had the injury never occurred. Second, the AWW must be fair and just to both parties.

The Court then distinguished this case from Tedder. In Tedder, the plaintiff was hired for a specific period of only seven weeks to fill in while an employee was undergoing surgery. There was no expectation of employment beyond seven weeks, and but for his injury, plaintiff would not have worked for the employer more than seven weeks. Therefore, it would have been unfair to the employer to pay plaintiff an AWW contemplated by a regular employee, so Method 5 was appropriate.

In this case, plaintiff worked for a temporary agency, but there was no “definitive employment end date” set with Cornerstone. Had his injury not occurred, plaintiff could have continued to work for Cornerstone indefinitely as any other at-will employee in North Carolina. Thus, Method 3 would most accurately reflect what plaintiff would have made if the injury had never occurred.

Practical Impact: This was an unpublished opinion, so the precedential authority of the case is limited. However, I think it is an interesting decision that helps further define when an employee is a “temporary” employee under the Court’s prior decision in Tedder. When deciding how to calculate the AWW of a “temporary” employee, the Court seems to be signaling that the employer’s designation of the employee as a “temp” does not necessarily control. The Court here stated there must be a “definitive employment end date” before Tedder applies and it is appropriate to use Method 5. Therefore, if your employer clients use temporary workers, it is essential to counsel them on the importance of establishing in writing the beginning and ending dates of their employment at the outset of the employment relationship. Failure to do so could result in employers paying substantially higher compensation rates to an injured worker.

#workerscomp

Governmental Immunity
Meinck v. City of Gastonia

 

In a personal injury case involving a city owned building leased to a non-profit group, the trial court granted summary judgment upon a finding of immunity. The Court of Appeals reversed finding immunity does not apply. The NC Supreme Court concluded defendant was entitled to governmental immunity and reversed the decision of the Court of Appeals and remand the case back to determine whether the immunity waiver applied. The Supreme Court noted that it is a case-by-case basis and courts should look to the purpose of the government actor’s actions when making a determination. The NCADA filed an amicus jointly with the NC League of Municipalities in support of the city’s position.

 
Andrew Santaniello, Clawson and Staubes, PLLC authored the amicus brief on behalf of the NCADA along with NCLM counsel.

This case was recently litigated at the North Carolina Supreme Court.  The issue before the Supreme Court was the Industrial Commission’s authority to create the “Medical Benefits Only” section of the Form 63 (Section 2).   The Form 63, Section 2 allows an employer pay medical compensation only, rather than both medical compensation and indemnity compensation, without prejudice to later deny the compensability of an employee’s claim. 

Plaintiff Richard O’Neal, an employee at Inline Fluid Power and Automotive Parts Co., was delivering boxes in May 2011 when he sustained an injury by accident arising out of, and in the course of his employment.   Defendants filed a Form 63, Section 2, agreeing to pay medical benefits only without prejudice to later deny Plaintiff’s claim.

Plaintiff contended that the Industrial Commission acted beyond the scope of its authority by creating Section 2, the “Medical Benefits Only” section of the Form 63.  Plaintiff argued that the Form 63 “Medical Benefits Only” section allowed the employer to escape the provisions of N.C. Gen. Stat. § 97-18(d), which provide that an employer waives its right to contest the compensability of a claim if not contested within 90 days from the date the employer receives notice of the injury. 

In an unpublished opinion, the North Carolina Court of Appeals held that the Industrial Commission did not exceed its authority by creating the Form 63, Section 2.    The Court of Appeals held that the legislature had always provided for two distinct components under the Workers’ Compensation Act: (1) payment of medical compensation, and (2) general compensation for financial loss other than medical expenses, which includes payment to compensate for an employee’s lost earning capacity.  Form 63, Section 1 concerns the payment of “Compensation” as defined in N.C. Gen. Stat. § 97-2(11) and in accordance with N.C. Gen. Stat. § 97-18(d), while Section 2 concerns the payment of “medical compensation.”  The Court stated that N.C. Gen. Stat. § 97-18(d) concerns claims for “compensation” and not claims for “medical compensation.” 

The Court of Appeals held that the procedure reflected in Form 63, Section 2, is both permitted by statute and allows an injured employee an opportunity to expeditiously receive medical compensation payments.   As a result, the Court of Appeals concluded that the Industrial Commission did not exceed its authority when it created Form 63, Section 2.

Plaintiff filed a Petition for Discretionary Review with the Supreme Court.  The Supreme Court granted Plaintiff’s Petition for Discretionary Review on the Form 63 issue.  Duane Jones of Hedrick, Gardner, Kincheloe & Garofalo, LLP filed an Amicus Curiae Brief on behalf of NCADA.  Following the submission of briefs and oral arguments, the Supreme Court issued an Opinion on December 21, 2016, stating that Discretionary Review was improvidently granted.  This was a favorable outcome for the defense bar in that it allows employers in certain claims to continue to pay medical benefits only without prejudice to later deny the compensability of the employee’s claim.  

Submitted by Viral Mehta, McAngus Goudelock & Courie

Limitation in Application of Wilkes v. City of Greenville 777 S.E.2d 282, 287 (2015) Pending North Carolina Supreme Court Review

An accident occurred resulting in an admitted low back injury. Plaintiff alleged that the accident resulted in additional injuries. Plaintiff argued that Defendants’ Form 60 as to the low back resulted in a presumption that additional medical treatment for all other alleged injuries is also compensable.

Defendants argued that Parsons and its progeny, including Wilkes, deal only with claims for additional medical compensation under N.C. Gen. Stat. § 97-25; not claims for additional injury arising out of the accident itself. The Court of Appeals agreed holding “the Parsons presumption was not applicable to plaintiff's wholly separate physical injuries until defendants either admitted they were compensable or the Commission found a causal relationship exists between the accident and that specific injury”.

Henderson v. Goodyear Tire & Rubber Co., 786 S.E.2d 433 (2016)(unpublished)

Synopsis provided by Matthew Ledwith, Hedrick Gardner Kincheloe & Garofalo, LLP

The case arose from a medical malpractice complaint filed without the requisite boilerplate language in Rule 9(j) of the Rules of Civil Procedure which requires a plaintiff to specifically assert that “the medical care and all medical records pertaining to the alleged negligence . . . have been reviewed” by someone reasonably expected to qualify as an expert. Plaintiff had actually had a medical expert review her medical records as required by state law but did not follow the technical requirements of Rule 9(j). Plaintiff conceded that her 9(j) certification omitted the required assertion that “all medical records pertaining to the alleged negligence that are available to plaintiff after reasonable inquiry” were reviewed by the medical expert.

After the plaintiff’s statute of limitations expired, Chip Holmes, who represented the defendants, appropriately filed a motion to dismiss pursuant to Rule 12(b)(6) based on the plaintiff’s technical failures to comply with Rule 9(j). Plaintiff then sought to amend her complaint to comply with Rule 9(j). The trial court granted the defendant’s motion to dismiss and denied plaintiff’s motion to amend. Plaintiff appealed.

In a June 21, 2016 opinion, the Court of Appeals reluctantly agreed with the trial court and affirmed the trial court’s dismissal of the plaintiff’s complaint on the basis that the plaintiff’s original complaint and certification did not track the statutory language of Rule 9(j). The Court of Appeals felt “compelled by precedent to reach ‘a harsh and pointless outcome’ as a result of ‘a highly technical failure’ by [plaintiff’s trial counsel.”

However, 10 days later on July 1, 2016, the Court of Appeals withdrew its opinion dismissing the medical malpractice lawsuit in response to plaintiff’s motion. The Court of Appeals did not provide any reasoning for its decision to withdraw its opinion. It now appears that defendants can no longer rely on the technicalities of 9(j) compliance as a basis for having a case dismissed where the evidence shows that the plaintiff did in fact secure an expert review prior to the filing of the compliant.

Synopsis provided by Erin M. Young, Hall Booth Smith, P.C.

Blackmon v. TRI-ARC Food Systems, Inc., No. COA15-721, 2016 N.C. App. LEXIS 246 (March 1, 2016)

Plaintiff was injured while making a report to a police officer in front of a Bojangles. The accident occurred when an SUV struck Plaintiff’s vehicle and pinned Plaintiff between his vehicle and the police vehicle. The driver of the SUV pleaded guilty to careless and reckless driving. The Court of Appeals held that the Bojangles could not be found liable for negligent design of its parking lot because of the SUV driver’s unforeseeable criminal conduct. The Court also found that the Plaintiff was contributorily negligent for his choice to park in an unmarked spot on the roadway.

http://caselaw.findlaw.com/nc-court-of-appeals/1727630.html

Synopsis provided by Joe Budd, McAngus Goudelock & Courie, LLC

Can we recover our attorney fees if we win a contract case?  For most of my practicing career, I have had to answer that very common client question with a "no" or "probably not."  In 2011, the General Assembly passed NCGS 6-21.6, which authorizes reciprocal attorney fee provisions in business contracts - so now for those of us in the business litigation field the answer to that client question may very well be "yes."  Construction lawyers, though, have long been able to give at least a "maybe" answer to that question where the plaintiff's complaint seeks to enforce a lien or bond claim, under the provisions of NCGS 44A-35 that allow for the winner to recover attorneys fees (in the judge's discretion) under the right circumstances.

Whatever the statutory basis of an attorney fees award, what exactly does the judge need to include in the order regarding the reasonableness of the amount?  There had been some debate about this issue before the recent Court of Appeals decision of Browns Builders Supply v. Johnson, but the opinion written by Judge Dillon has now clarified the law supporting these awards.  As far as factors go, four is the number we shall count, and the number of the counting shall be four.  (I have thus set up a series of jokes for Monty Python fans, which they can now gleefully perform while the rest of us read on.)

The plaintiff in Brown prevailed on its lien claim, then sought attorney fees under Chapter 44A.  The trial judge awarded attorney fees and make certain findings to support the amount of the award.  Arguing the findings insufficient under Supreme Court precedent, the defendant appealed.  In 1995, the Supreme Court had affirmed per curiam the Court of Appeals decision in NC Department of Corrections v. Myers, requiring the amount of an attorney fees award to be justified by findings in the order as to 1) the time and labor expended by the attorney, 2) the skill required to perform the legal services, 3) the customary fee for like legal work, and 4) the experience or ability of the attorney.  However, in 1992, the Supreme Court in Dyer v. State of NC had approved of an order for fees that did not include express findings about the ability of the attorney or the customary fee for like work.  To resolve this tension in the precedent, Judge Dillon reasoned that given the number of decisions since 1995 applying the four-factor test outlined in Myers, this more stringent and more recent test must be the law.  Because the order in Brown did not check the boxes for all four factors, the case was remanded to the trial court to make the relevant findings.

((For those readers who still have in their inbox last month's Resource, pull it back up and compare/contrast how this decision dealt with incongruent precedent versus how the Graham case about continuing trespass was decided.  You will find it interesting.))

Synopsis provided by David W. Hood, Patrick Harper & Dixon, LLP

Well...as it turns out, sometimes one panel of the Court of Appeals sees things differently from another panel.  As a general rule, the three judges hearing an appeal must respect precedent established in an earlier Court of Appeals case, even if that precedent seems flawed.  It is the Supreme Court's job to overturn a bad decision by a Court of Appeals panel, not the job of a more-enlightened panel of the same Court.  At times this can lead to some interesting and creative attempts by one panel to distinguish the holding of a panel from an earlier case that would otherwise seem to dictate a contrary result.  In a recent Court of Appeals decision written by Judge Mark Davis, his panel was presented with a continuing trespass claim by a landowner against her neighbor resulting from an encroaching building - and a Court of Appeals decision from 2006 which seemed to require a dismissal of that claim because the plaintiff was not the property owner at the time the encroaching building was constructed. In Graham v. Deutsche Bank National Trust Co., the Court of Appeals first issued an opinion reversing the trial court and denying relief to the plaintiff based upon the 2006 decision in Woodring v. Swieter.  In Woodring, the Court of Appeals had held that even a continuing trespass claim cannot be sustained if the plaintiff were not the property owner at the time the trespass was committed.  The Graham court, however, realized after the fact that there were previous Court of Appeals cases (and arguably one Supreme Court case, but that was less clear) that went the other way - that since the trespass in a continuing trespass case, well, continues, then a plaintiff can seek redress for each day of trespass that has occurred since the plaintiff became the property owner.  In a rare move, the Graham court withdrew its first opinion and, upon rehearing, issued a different opinion that found for the plaintiff.  So, what did the Court do with the Woodring decision?  Judge Davis cited authority that, when faced with conflicting decisions of the Court of Appeals, a panel should follow the older of the two lines of authority.  In this case, that led the Court to side with the plaintiff.   While both legally correct and respective of precedent, this is an interesting point given that practicing lawyers often use the exact reverse argument when dealing with apparently conflicting lines of case law - that a judge should pay attention to the most recent opinion because that reflects the more modern thinking on that legal issue! Synopsis provided by David W. Hood, Patrick Harper & Dixon, LLP

About a year ago, The Resource reported on a coverage case of particular interest to NCADA members who practice in the area of automobile insurance.  The North Carolina Court of Appeals had decided a case involving whether a particular injured minor had been a resident of her grandfather's household so as to allow her to claim underinsured motorist benefits under the grandfather's policy.  In that case, North Carolina Farm Bureau v. Paschal, the court had found coverage by interpreting the definition of "household" more broadly than in past decisions.   Even though technically the grandfather and the injured granddaughter did not reside under the exact same roof, that court had determined that since the grandfather owned the house where she lived and acted as a parent would have, both emotionally and financially, that was enough to implicate his UIM coverage. 

The Court of Appeals decision went up on a granted petition for discretionary review, but the North Carolina Supreme Court recently determined that the petition had been improvidently allowed.  There are a number of coverage cases being appealed right now in which the broad holding and language of Paschal constituted the primary battleground - now parties resisting the expanded UIM coverage are going to have to try to distinguish the facts in their cases from those in Paschal since the Supreme Court did not provide any alternative thinking about this issue, as had been hoped by some. 

One important fact in Paschal that could be unique was the fact that the house in which the grandfather lived and the different house in which the granddaughter lived were part of a "family compound" of adjacent properties.  In addition, the fact that the grandfather played so much of a parental role because the parents themselves did not would be another possibly distinguishing factor.  Any way you slice it, however, the days of deciding these coverage cases based just on how much personal stuff a claimant left at any particular house on a regular basis is gone.  Instead, practitioners are going to need to delve deeper into the family dynamics, the emotional bonds between family members, and the subjective expectations and opinions of those family members in order to prepare these coverage cases for summary judgment and, as is more likely now, trial.   

Synopsis provided by David W. Hood, Patrick Harper & Dixon, LLP

The NC Court of Appeals again stressed the importance of compliance with appellate rules.  On October 4, 2014 in Henderson v. Garcia Motorrad, et.al. (Stroud, J., unpublished), the North Carolina Court of Appeals dismissed an entire appeal due to a procedural compliance issue.  The Court dismissed plaintiff's appeal as interlocutory because plaintiff neglected to assert in his brief that delayed appeal would impair a substantial interest.  Even though the order from which plaintiff appealed was a motion to dismiss, and perhaps appeared on its face to be a "final judgment," since the dismissal order did not address the claims raised in the third-party complaint, it was deemed to be interlocutory such that plaintiff was required to take that extra step or risk a dismissal.  This case is another example of a recent trend in which the Court shows strict intolerance of procedural slip-ups.

Update provided by Tara Muller, Teague Campbell Dennis & Gorham, LLP