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N.C. high court clarifies intersection of comp and civil cases

N.C. high court clarifies intersection of comp and civil cases

The North Carolina Supreme Court on Friday overturned a state appeals court decision that caused civil cases statewide to fall stagnant as lawyers grappled with injuries involving both civil litigation and workers compensation, according to one legal expert.

The case of Easter-Rozzelle v. City of Charlotte called into question whether an injured worker has rights to civil actions involving third parties and whether a worker gives up the right to comp if he or she sues a third party, said Edward Pauley, an attorney with Wallace and Graham P.C. in Salisbury, North Carolina.

“Because of this (earlier) Court of Appeals ruling we couldn’t settle civil claims; a lot of (workers comp) insurers were using this case as leverage,” said Mr. Pauley, who filed an Amicus brief on behalf of North Carolina Advocates for Justice when the case went to the state Supreme Court, a final destination following years of back-and-forth between the state’s comp commission and the courts. “It hampered our ability to settle civil claims because we didn’t want to jeopardize your workers comp claim.”

The case involves City of Charlotte employee David Easter-Rozzelle, who injured his neck and shoulder when he slipped while handling a manhole cover in 2009, according to court documents. His doctor restricted him from work for 11 days, at which point Mr. Easter-Rozzelle contacted and informed his employer that “he was still in too much pain to report to work,” per court records. The city instructed him to contact the doctor for an “out-of-work note.” On his way to the doctor to retrieve the note, Mr. Easter-Rozzelle was in a car accident and suffered a traumatic brain injury, which spurred a civil lawsuit, according to court documents.

In 2011, he settled his civil suit against the driver of the vehicle and continued to receive treatment under workers compensation. When his employer discovered the settlement, and that he had been injured on his way to the doctor’s appointment, it attempted to deny the comp claim.

“(The City of Charlotte) asserted that (Mr. Easter-Rozzelle) should be stopped from claiming compensation for the head injury because ‘the motor vehicle accident resulted in a settlement with a third party and the distribution of the settlement funds without preserving defendant's lien,’” court records state.

In 2014, the state’s deputy insurance commissioner agreed with the city’s claim. On appeal in 2015, the full commission reversed that ruling. The North Carolina Court of Appeals in 2015 reversed the commission’s ruling. Mr. Easter-Rozzelle’s lawyers took the issue before the state Supreme Court, which ruled on Dec. 8 that the injured worker had not waived his right to workers compensation and that the city is entitled to reimbursement of its lien from benefits due to the worker per state law.

“The bottom line is the Court of Appeals reached a decision that was opposite the state law,” said Vernon Sumwalt, partner of Sumwalt Law Firm in Charlotte, North Carolina, which represented Mr. Easter-Rozzelle before the Supreme Court. “There’s a statute that controlled the issue and nobody studied it at the Court of Appeals, which is why the (state) Supreme Court overturned it.”

The City of Charlotte’s attorney did not return phone calls for comment.

The state high court’s ruling will help speed things along for injured workers waiting on financial remedies from civil litigation, said Mr. Pauley.

“There was $100,000 to $200,000 in accounts (from resolved civil suits) that couldn’t be disbursed because of this case,” he said. “It was creating an era of uncertainty. What this does now is protect the employee and the employer. I can settle a case, a civil case, and proceed with the workers comp claim. (The state Supreme Court is) saying you can never waive your worker comp rights, but if you recover (in a civil case), your employer has a right to a lien.” 




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