North Carolina Work Comp Subrogation Re-re-reverses Course
The subject of North Carolina Work Comp subrogation has frustrated carrier and Third Party Administrator claims staffs over the years. This case could be a model for changing subrogation laws in other states – possibly.
One of my concerns is that Workers Comp adjusters have not been trained that well in liability claims. This is understandable but sometimes funds can be left on the table, so to speak. Subrogation is one of the areas of concerns that pops up in our claims reviews.
This case has virtually nothing to do with an adjuster mistake of any kind. I try to inform the WC community on a case that may make a difference or be used in future ligation.
97-10.2 is the North Carolina Statute for subrogation.
The case is Dion v. Batten, No. COA16-63. The North Carolina Court of Appeals published the case on 08/02/2016. The case can be found at this link. It is a PDF file 2016-16-63
As I am not an attorney, I do not ever try to comment on legal matters. Below are a few excerpts from the NC Appeals Court decision. It may be a great idea to download the case from the link above and read the complete decision.
The file was an accepted file involving a traffic accident with heavy subrogation potential.
“Plaintiff was employed by Neuwirth as a servicing agent. In the course and scope of his employment with Neuwirth, Plaintiff was driving on Oriole Drive in Wilmington, North Carolina on 20 March 2008, when the vehicle he was driving was struck by a vehicle driven by Defendant, who had failed to stop at a red light. As a result of the crash, Plaintiff sustained multiple injuries. Because the crash occurred during the course and scope of Plaintiff’s employment with Neuwirth, Plaintiff was entitled to, and filed a claim for, workers’ compensation benefits pursuant to Chapter 97 of the North Carolina General Statutes.”
The trial court performed a series of very interesting calculations.
The trial court further concluded that although Neuwirth and Brentwood paid workers’ compensation benefits to Plaintiff totaling $528,665.61, “their workers[’] compensation subrogation lien [could not] exceed $285,000.00, that being the total amount of the [j]udgment obtained by [Plaintiff] in this lawsuit in compensation for his injuries.” Accordingly, the trial court found the amount of the workers’ compensation subrogation lien to be “$190,000.000, which is calculated by subtracting attorney’s fees ($95,000.00), interest ($74,291.50) and court costs ($160.00) from the judgment amount obtained by Plaintiff  by [j]udgment in this lawsuit ($359,451.50).” Plaintiff, Brentwood, and Neuwirth appeal.
There was a standing case on subrogation that reversed the prior case law.
An examination of Easter-Rozelle reveals that the quote Appellant’s urge us to follow is obiter dictum.
The NC Court of Appeals agreed with the trial court.
Appellants contend that N.C.G.S. § 97-10.2(j) mandates a finding by the trial court regarding the “amount of costs of the third party litigation to be shared between the employee and employer” (the “cost sharing consideration”), and that, in the present case, the trial court’s order is incomplete for failing to make any findings of fact regarding the cost sharing consideration. While we agree with Appellants that, under our precedents, an order must contain a finding of fact regarding the cost of the third party litigation to be shared between the employee and employer, we conclude that the trial court’s order in the present case adequately addressed this required consideration.
As mentioned previously, this is a case to print out and read if you as an adjuster have any North Carolina Work Comp subrogation files that you are handling, or as an employer involved with a subrogation case. You may hear of this case again in the near future.
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