Dunbar v. ACME S.

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA19-1153

Filed: 17 November 2020

North Carolina Industrial Commission, File No. 869769

DERRICK DUNBAR, Plaintiff

v.

ACME SOUTHERN, Employer, HARTFORD UNDERWRITERS INSURANCE

COMPANY (THE HARTFORD), Carrier, Defendants.

Appeal by Plaintiff from Opinion and Award entered 3 September 2019 by

Commissioner Charlton L. Allen for the North Carolina Industrial Commission.

Heard in the Court of Appeals 23 September 2020.

Seth M. Bernanke for the Plaintiff-Appellant.

Hedrick Gardner Kincheloe & Garofalo LLP, by M. Duane Jones and Michael

F. Hedgepeth, for Defendants-Appellees.

DILLON, Judge.

Derrick Dunbar (“Plaintiff”) was injured in 1998 and received medical

compensation from his employer’s insurer for over a decade. Plaintiff appeals from

an order entered last year by the North Carolina Industrial Commission (the

“Commission”) in which the Commission concluded that Plaintiff was no longer

entitled to medical compensation for that injury. The Commission based its

determination on the fact that no claim had been made to the insurer for medical

compensation for over two years. For the reasoning explained below, we affirm.

DUNBAR V. ACME SOUTHERN

Opinion of the Court

I. Factual and Procedural Background

In 1998, Plaintiff was injured in a workplace accident. He entered into a

settlement agreement with his employer, Defendants Acme Southern, Inc., and the

employer’s insurer, Hartford Underwriters Insurance Company (“Hartford”) as to

Plaintiff’s indemnity compensation. However, the parties did not reach a settlement

agreement as to Plaintiff’s medical compensation.

While Plaintiff’s claim for medical compensation remained pending, Plaintiff’s

medical providers billed Hartford for Plaintiff’s medical treatment related to his

injuries, and Hartford paid the submitted bills.

However, sometime around 2013, Plaintiff’s medical providers began billing

Medicare for reimbursement rather than billing Hartford. Neither Plaintiff nor

Hartford knew of this change in billing by the medical providers, so Plaintiff was

unaware that Hartford was no longer paying for his medical treatment, and Hartford

was unaware that Plaintiff continued to receive medical treatment. Hartford made

no payments for Plaintiff’s treatment after October 2013.

In 2017, Plaintiff was referred to a medical provider for pain management. He

sought authorization from Defendants for this treatment, which was denied.

Therefore, on 15 February 2018, more than four years after Hartford last paid any

medical compensation for Plaintiff’s 1998 injuries, Plaintiff filed a request with the

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Opinion of the Court

Commission for a hearing to determine whether he was entitled to further medical

compensation from Defendants.

After a hearing on the matter, a deputy commissioner concluded that Plaintiff

was not entitled to continued medical compensation because he had not submitted a

request for more than two years since Hartford’s last payment. Plaintiff appealed to

the Full Commission, which affirmed the deputy commissioner’s ruling. Plaintiff

timely appeals. After careful review, we affirm.

II. Analysis

Plaintiff makes several arguments on appeal, which we address in turn.

A. Notice Requirement

Plaintiff’s main argument is that his claim should not be barred by the fact

that Hartford did not make any payments for his medical compensation for a two-

year period.

The issue presented by Plaintiff is one of statutory construction, which, as a

question of law, we review de novo. Wood v. J.P. Stevens & Co., 297 N.C. 636, 642,

256 S.E.2d 692, 696 (1979) (recognizing that “the construction of a statute is

ultimately a question of law for the courts”). Specifically, Plaintiff’s argument

concerns the interplay of two statutes – Section 97-25.1 and Section 97-18(h) – both

which are part of our Workers’ Compensation Act (the “Act”).

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Opinion of the Court

The Commission denied Plaintiff’s claim based on N.C. Gen. Stat. Section 97-

25.1, which provides that “[t]he right to medical compensation shall terminate two

years after the employer’s last payment of medical or indemnity compensation

unless” the employee’s right to further compensation is preserved in one of two ways,

neither of which apply in the present case. N.C. Gen. Stat. § 97-25.1 (2018).1

In the present case, Hartford last made a payment for Plaintiff’s medical

compensation in October 2013, after it received its last bill from Plaintiff’s medical

provider.2 The parties stipulate that Plaintiff was not aware that Hartford was no

longer being billed after October 2013 for his care.

Plaintiff argues, though, that Section 97-25.1 should be read in pari materia

with Section 97-18(h), which requires an insurer that provides coverage to an injured

employee to promptly notify the employee and the Commission when it has made its

“final” payment. This Section further provides that the failure by the insurer to

provide this required notice will result in a $25.00 penalty, to be paid to the

Commission. Specifically, Section 97-18(h) provides that

Within 16 days after final payment of compensation has

been made, the employer or insurer shall send to the

Commission and the employee a notice . . . stating that such

1 Specifically, Section 97-25.1 provides that an employee’s right to further medical

compensation may be preserved, notwithstanding any payments being made in a two year period if,

within the two year period, either (1) “the employee files with the Commission an application for

additional medical compensation which is thereafter approved by the Commission” or (2) “the

Commission on its own motion orders additional medical compensation.” N.C. Gen. Stat. § 97-25.1.

2 There is no indication that any payment was made towards Plaintiff’s indemnity

compensation claim after 2013, as Plaintiff’s claim for indemnity compensation was settled in 2003.

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Opinion of the Court

final payment has been made . . . . If the employer or

insurer fails to so notify the Commission or the employee

within such time, the Commission shall assess against

such employer or insurer a civil penalty in the amount of

twenty-five dollars ($25.00). . . .

N.C. Gen. Stat. § 97-18(h).

Specifically, Plaintiff argues that Hartford should not be deemed to have made

its “last” payment under Section 97-25.1, thus starting the two-year clock, unless and

until Hartford provided notice to Plaintiff that it had made its “final” payment under

Section 97-18(h). We disagree.

Our Supreme Court has provided five guides for courts when construing the

Act, imploring that the Act should be construed liberally, but that a court should not

engage in “judicial legislation” by enlarging coverage beyond the plain meaning of the

terms used by our General Assembly:

First, the Workers’ Compensation Act should be liberally

construed, whenever appropriate, so that benefits will not

be denied upon mere technicalities or strained and narrow

interpretations of its provisions.

Second, such liberality should not, however, extend beyond

the clearly expressed language of those provisions, and our

courts may not enlarge the ordinary meaning of the terms

used by the legislature or engage in any method of “judicial

legislation.”

Third, it is not reasonable to assume that the legislature

would leave an important matter regarding the

administration of the Act open to inference or speculation;

consequently, the judiciary should avoid ingrafting upon a

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Opinion of the Court

law something that has been omitted, which it believes

ought to have been embraced.

Fourth, in all cases of doubt, the intent of the legislature

regarding the operation or application of a particular

provision is to be discerned from a consideration of the Act

as a whole — its language, purposes and spirit.

Fifth, and finally, the Industrial Commission's legal

interpretation of a particular provision is persuasive,

although not binding, and should be accorded some weight

on appeal and not idly cast aside, since that administrative

body hears and decides all questions arising under the Act

in the first instance.

Deese v. Southeastern Law and Tree Expert Co., 306 N.C. 275, 277-78, 293 S.E.2d 140,

142-43 (1982) (emphasis added) (citations and quotation marks omitted).

Applying Deese, we conclude that the notice requirement in Section 97-18(h)

regarding a “final payment” is unrelated to the two-year provision in Section 97-25.1

regarding a “last payment.”

The plain language of Section 97-25.1 bars compensation beyond the two-year

period following the last payment of either medical or indemnity compensation, and

contains no language suggesting that any “notice” is a condition to the accrual of the

limitation period. Our appellate courts have always construed the term “last

payment” as the date of the last actual payment made by the insurer (or employer).

See Busque v. Mid-America Apartment Cmtys., 209 N.C. App. 696, 707, 707 S.E.2d

692, 700 (2011) (determining that the “last payment” was the most recent payment

that was issued to the injured party); Harrison v. Gemma Power Sys., LLC, No.

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COA13-1358, 2014 WL 2993853, at *4 (N.C. Ct. App. July 1, 2014) (unpublished)

(defining “last payment” as the “the most recent payment of medical or indemnity

benefits that has actually been paid”). Section 97-18(h) does not refer to the “last”

payment, but rather the “final” payment.

Further, Section 97-18(h) plainly states the appropriate sanction for failing to

provide a required notice of a “final” payment is a nominal civil fine. Had the General

Assembly intended that providing notice under Section 97-18(h) was a condition to

bar future claims under Section 97-25.1, that body would have said so: “the

legislature would [not] leave [this] important matter . . . open to inference or

speculation[.]” Deese, 306 N.C. at 278, 293 S.E.2d at 143. We are further persuaded

by the holding of our Court in Hunter v. Perquimans County Board of Education that

the failure to provide notice when required by Section 97-18(h) has no impact on the

operation of the limitations period for termination of indemnity compensation under

Section 97-47. 139 N.C. App. 352, 357, 533 S.E.2d 562, 566 (2000) (stating that “the

Form 28B notice required by N.C. Gen. Stat. § 97-18(h) is actually a reminder and

not a notification. Neither our General Assembly nor our case law has interpreted

an employer’s failure to file such notice as providing an employee with a right to

remedy.” (citation omitted)).

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Opinion of the Court

In any event, Section 97-18(h) does not apply in this case. There is no way

Hartford could have known within 16 days of providing coverage in October 2013 that

this payment would be the last payment Plaintiff would have sought.

B. Estoppel

Plaintiff argues that even if his claim for further compensation is barred by

Section 97-25.1, Defendants should be equitably estopped from asserting this Section

as a defense in this case. On the facts of this case, we disagree.

Plaintiff points to no evidence that Hartford was aware that Plaintiff was

continuing to incur medical expenses after October 2013. There is no indication that

Hartford acted in bad faith or acted in any way to induce Plaintiff into a false sense

of security regarding its willingness to continue providing medical compensation.

Therefore, we hold that Plaintiff’s estoppel argument fails.

While our courts have recognized that equitable doctrines are available in

workers’ compensation cases, we express no view as to whether estoppel would ever

apply with respect to Section 97-25.1. See Biddix v. Rex Mills, Inc., 237 N.C. 660,

665, 75 S.E.2d 777, 781 (1953); Daugherty v. Cherry Hospital, 195 N.C. App. 97, 102,

670 S.E.2d 915, 919 (2009). It could be argued that estoppel should apply where an

insurer was continuing to be billed but was not making payments, though acting in a

way to suggest that they would make said payments. But such is not the case here.

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Opinion of the Court

Our holding is limited to situations where the two-year gap was caused by the fact

that the insurer was not being billed.

C. Due Process

Plaintiff contends that if the Act does not require that Defendants provide

Plaintiff with notice, the Act then violates our North Carolina Constitution by

unfairly taking away Plaintiff’s property right to medical compensation.

Notice is a due process consideration, required under the Fourteenth

Amendment to the United States Constitution and article. 1, Section. 19 of the state

constitution. City of Randleman v. Hinshaw, 267 N.C. 136, 139-40, 147 S.E.2d 902,

904-05 (1966). “No person shall be . . . deprived of his life, liberty, or property, but by

the law of the land.” N.C. CONST. art. I, § 19. “Procedural due process protection

ensures that when government action deprives a person of life, liberty, or

property . . . that action is implemented in a fair manner.” State v. Thompson, 349

N.C. 483, 491, 508 S.E.2d 277, 282 (1998) (quotation marks omitted) (citing U.S. v.

Salerno, 481 U.S. 739, 746 (1987); Mathews v. Eldridge, 424 U.S. 319, 335 (1976)).

With procedural due process questions, this Court must first “determine whether

there exists a liberty or property interest which has been interfered with by the

State . . .” In re W.B.M., 202 N.C. App. 606, 615, 690 S.E.2d 41, 48 (2010) (citing Bd.

of Regents v. Roth, 408 U.S. 564, 571 (1972)).

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Opinion of the Court

Here, the Act does not deprive Plaintiff of an existing liberty or property

interest or of a “vested right.” Plaintiff is only entitled to medical compensation as

far as the Act defines the scope of that compensation. Section 97-25.1 states that a

plaintiff is no longer entitled to compensation after two years have passed since the

employer’s last payment. Once that period expires, the property interest terminates.

The statute itself also provides Plaintiff with notice of termination of the right

to medical compensation because “[a]ll citizens are presumptively charged with

knowledge of the law.” Atkins v. Parker, 472 U.S. 115, 130 (1985). For these reasons,

the Act does not violate Plaintiff’s due process rights.3

IV. Conclusion

We conclude that the Commission did not err in determining that Plaintiff was

not entitled to further medical compensation where more than two years elapsed

since Defendants last made a compensation payment, notwithstanding that

Defendants never provided notice that its last payment would be the “final” payment.

We further conclude that neither Plaintiff’s vested rights nor constitutional rights

were violated by the Commission’s order.

AFFIRMED.

Judges INMAN and YOUNG concur.

3 Based on our holding, we need not address Defendants’ argument concerning the

Commission’s failure to find that Plaintiff knew of Defendants’ termination of payments.

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