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Levasseur v. Lowery8/1/2000
Appeal by intervenors from order entered 15 January 1999 by Judge Jesse B. Caldwell, III, in Gaston County Superior Court. Heard in the Court of Appeals 22 February 2000.
Plaintiff, an employee of appellant Beam Electric Co., Inc. (Beam), was injured in an automobile accident in the course of his employment. Defendant Lowery, the negligent third party, was covered by a liability automobile insurance policy in the amount of $25,000.00, issued by State Farm Mutual Automobile Insurance Company (State Farm). At the time of the accident, plaintiff was operating a vehicle owned by Beam which was insured by an underinsured motorist (UIM) policy from Travelers Insurance Companies (Travelers), with policy limits of $1,000,000.00. Appellant Key Risk Management Services, Inc. (Key Risk) administers Beam's workers' compensation claims.
As a result of plaintiff's injuries, Beam paid $92,723.45 in medical expenses, $5,754.93 in rehabilitation expenses, and $92,625.58 in indemnity benefits, for a total workers' compensation lien of $191,103.96, as it appeared on Form 28B dated 9 December 1998. Plaintiff received $65,000.00 in workers' compensation benefits for his permanent partial disability ratings from the injuries. Additionally, plaintiff's attorney was awarded a fee of $16,250.00 from the Industrial Commission (Commission) based on the $65,000.00 benefit payment.
On 1 July 1997, plaintiff filed suit against defendant Lowery and unnamed defendant Travelers. Prior to the filing of the lawsuit, State Farm tendered its policy limits of $25,000.00. The $25,000.00 was then advanced by Travelers to protect its subrogation rights under N.C. Gen. Stat. § 20-279.21(b)(4). Pursuant to N.C. Gen. Stat. § 97-10.2, Beam gave notice of appearance and notice of lien to the trial court on 17 October 1997. The Commission distributed the $25,000.00 recovery one-third ($8,333.33) to plaintiff, one-third to Beam, and one-third to plaintiff's counsel for attorney fees.
On 11 March 1998, plaintiff moved the case against Travelers to binding arbitration. Plaintiff and Travelers agreed that the arbitrators would not decide:
the issue of what amount is recoverable under the UIM policy issued by Travelers because they will not decide any offsets for credits for payment by any liability carrier and any offsets for any credit for payments by the carrier pursuant to any workers' compensation claim [plaintiff] has made, or the limits of the UIM policy, if any.
Instead, the issue of damages was limited to "what amount is the plaintiff entitled to recover as damages for his personal injuries from Travelers?" The arbitration resulted in an award of $625,000.00 to plaintiff.
Thereafter, Travelers took the position that no UIM proceeds were payable to plaintiff until his workers' compensation claim was "closed." On 29 September 1998, plaintiff moved, in the underlying action (97 CVS 2452), for a judgment on the arbitration award and to extinguish Beam's workers' compensation lien.
On 29 December 1998, prior to a hearing on plaintiff's motion, plaintiff and Travelers entered into an agreement whereby Travelers would reduce its payment of the arbitration award by the amount of Beam's workers' compensation lien, receive credit for the $25,000.00 recovery from State Farm, and make a net payment of $450,000.00 to plaintiff in full payment of the arbitration award. The parties determined Beam's lien to be $185,349.03, as opposed to the $191,103.96 appearing on the Form 28B. All the parties, including Beam, stipulated that plaintiff, Travelers and State Farm "resolved all matters and things in dispute between them" through this agreement.
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