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Levasseur v. Lowery8/1/2000
rs.
In McMillian v. N.C. Farm Bureau Mut. Ins. Co., 347 N.C. 560, 565, 495 S.E.2d 352, 354-55 (1998), our Supreme Court held that UM carriers are entitled under N.C. Gen. Stat. § 20-279.21(e) to reduce coverage by the amount of workers' compensation benefits received by the employee. The plaintiff in McMillian filed a declaratory judgment action to determine the coverage available under a UM policy and a policy which provided UM and UIM coverage. The McMillian court held that "UM carriers are entitled to reduce coverage ... by the amount of workers' compensation ... already received." Id. In so holding, the McMillian court rejected the analysis of Ohio Casualty Group v. Owens, 99 N.C. App. 131, 392 S.E.2d 647, disc. review denied, 327 N.C. 484, 396 S.E.2d 614 (1990), which focused on the entity who provided the UM/UIM policies. See Liberty Mutual, 348 N.C. at 252, 499 S.E.2d at 767 (noting that McMillian overruled Ohio Casualty "in part").
However, the Ohio Casualty Court also interpreted N.C. Gen. Stat. § 97-10.2, and stated that:
N.C. Gen. Stat. § 97-10.2 provides for the subrogation of the workers' compensation insurance carrier ... to the employer's right, upon reimbursement of the employee, to any payment, including uninsured/underinsured motorist proceeds, made to the employee by or on behalf of a third party as a result of the employee's injury . Ohio Casualty, 99 N.C. App. at 134, 392 S.E.2d at 649 (emphasis added).
Additionally, this Court in McMillian, 125 N.C. App. 247, 254, 480 S.E.2d 437, 441 (1997), interpreted N.C. Gen. Stat. § 97-10.2 such that:
the workers' compensation insurance carrier ... is entitled to be subrogated, upon reimbursement of the employee, to any payment, including UM/UIM motorist insurance proceeds, made to the employee by or on behalf of a third party as a result of the employee's injury .
These constructions of N.C. Gen. Stat. § 97-10.2 by this Court were not addressed by our Supreme Court in McMillian. Accordingly, pursuant to N.C. Gen. Stat. § 97-10.2, McMillian, and Ohio Casualty, Beam's workers' compensation lien attached to plaintiff's settlement proceeds from Travelers.
Plaintiff argues that his UIM benefits have already been reduced by the amount of the lien and to now allow Beam's lien would result in a double penalty.
Plaintiff and Travelers reached a settlement as to the amount of UIM proceeds to which plaintiff was entitled. Travelers did not reduce its liability by operation of its policy provisions or the law. Rather, plaintiff's settlement with Travelers allowed the insurance carrier to reduce the arbitration award by the amount of the employer's workers' compensation lien. Since plaintiff and Travelers settled, the issue of whether Beam was entitled to a workers' compensation lien on the UIM proceeds in addition to Travelers reducing the UIM proceeds by the lien amount is irrelevant. Plaintiff cannot now contend that his private settlement with Travelers operated to extinguish his employer's workers' compensation lien.
Next, Beam contends that the trial court abused its discretion in eliminating the lien. Under N.C. Gen. Stat. § 97-10.2(j), the "judge shall determine, in his discretion, the amount, if any, of the employer's lien ...." However, this Court has held that "the power given the trial court in N.C. Gen. Stat. § 97-10.2(j) is not unbridled or unlimited," rather:
the trial court is to make a reasoned choice, a judicial value judgment, which is factually supported. We hold that the trial court, in considering a request for disbursement under subsection (j), must enter an order with findings of fact and conclusions of law suffic
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