If you were involved in an automobile wreck, not your fault, while workering for your employer in North Carolina, you may not have to pay the workers’ compensation back the full amount of their lien. Often the question comes down to fairness and the amount of the recovery, the relative fairness of the recovery and the the future medical expenses are just some of what must be considered. If you are in such an accident, please see an attorney who handles both workers’ compensation and personal injury law as per N.C.G.S. 97-10.2 often a hearing can be held with your local judge to determine what, if any, that judge would require you to repay workers’ compensation. N.C.G.S. §97-10.2(j) gives the trial court discretion to determine how settlement proceeds are to be distributed. The trial court may reduce or even completely eliminate a workers’ compensation lien if the facts warrant, and appellate courts may not interfere with such an exercise of discretion — except in extreme circumstances in which discretion has been abused. Allen v. Rupard, 100 N.C. App. 490, 397 S.E.2d 330 (1990); Sherman v. Home Depot, 160 N.C.App. 404, 588 S.E.2d 478, Rev. Den.; 358 N.C. 156, 592 S.E.2d 696 (2004). LEGGETT v. AAA COOPER TRANSPORTATION INC was one of the most recent cases on this issue and handled by O'Malley Tunstall, PLLC. In this case the workers’ compensation carreir had their lien reduced to zero and appealed. The North Carolina Court of Appeals upheld the judges’ ruling. In deciding whether to reduce or eliminate a workers’ compensation lien, the trial court “is to make a reasoned choice, a judicial value judgment which is factually supported…[by] findings of fact and conclusions of law sufficient to provide for meaningful appellate review.” Id. Our Supreme Court has often stated the test to be used when determining whether discretion has been abused: Generally, ‘[t]he test for abuse of discretion is whether a decision’ is manifestly unsupported by reason.’ White v. White, 312 N.C.770, 777, 324 S.E.2d 829, 833 (1985), or, ‘so arbitrary that it could not have been the result of a reasoned decision[,] State v. Wilson, 313 N.C. 516, 538,330 S.E.2d 450, 465 (1985).’ Little v. Penn Ventilator Company, 317 N.C. 206,218,345 S.E.2d 204, 212 (1986). Most recently the Court found no abuse in discretion in Sherman v. Home Depot, 160 N.C.App. 404, 588 S.E.2d 478, Rev. Den.; 358 N.C. 156, 592 S.E.2d 696 (2004). In Sherman, the lien was $168,000.00 and the plaintiff had expended $169,806.00 in recovering $1,300,000.00 – the trial court reduced the lien to $55,667 (a third) and required the workers’ compensation carrier pay their fair share of the costs in the amount of $56,602. Id. In Allen v. Rupard, 100 N.C. App 490, 397 S.E.2d 330 (1990), rev. allowed, 328 N.C. 270, 400 S.E.2nd 449 (1991), the lien amount was $40,000.00; and the settlement was $25,000.00. The court divided the settlement in half, with $12,500.00 going to the workers’ compensation carrier and $12,500.00 going to the employee. The Allen court considered the nature and the circumstances of the incident in which Plaintiff was injured, the nature and extent of Plaintiff’s injury (a crushed vertebra which necessitated three surgical procedures on his back), and other circumstances in rendering its decision. The Supreme Court found no abuse of discretion. In Wiggins v. Busranger Fence Co., 126 N.C. App. 74, 483 S.E.2d 450 (1997), Travis Wiggins was killed when a gate fell on him at the Raleigh-Durham International Airport. It was anticipated that Mr. Wiggins’ family would receive approximately $200,000.00 from his employer in workers’ compensation benefits. Mr. Wiggins’ estate sued two fence companies claiming that their negligence proximately caused Mr. Wiggins’ death. The case settled for $900,000.00 prior to trial. The trial court held that Mr. Wiggins’ employer could not recover anything from the settlement and had no lien on the third party settlement funds. The Court of Appeals found no abuse of discretion. In United States Fidelity and Guar. Co. v. Johnson, 128 N.C. App 520, 495 S.E.2d 388 (1998), Melvin Johnson, an employee of the Department of Transportation, died in an automobile accident during the course and scope of his employment. The Department of Transportation provided workers’ compensation benefits to Mr. Johnson’s family totaling $148,955.00. Mr. Johnson’s estate filed suit against the third-party tort-feasor to recover damages for his wrongful death. Mr. Johnson’s estate received a total of $372,825.00 in settlement. At the time of the settlement, the Department had paid $47,045.51 in workers’ compensation benefits to Mr. Johnson’s family. The trial court completely extinguished the Department of Transportation’s lien, finding that it would be inequitable under the facts and circumstances of the case to allow the Department of Transportation to recover the workers’ compensation lien from the settlement proceeds. The Court of Appeals found no abuse of discretion. In the case of In re Biddix, 138 N.C. App. 500, 530 S.E.2d 70 (2000), Kimberly Biddix was injured in an automobile collision caused by the negligence of a third party. Ms. Biddix received workers’ compensation benefits in the amount of $16,844.03 and temporary total disability benefits in the amount of $1,874.40. Ms. Biddix subsequently entered into a settlement with the third party tort-feasor for $25,000.00, which were the limits of the tort-feasor’s automobile liability insurance. The trial court entered an order finding that the settlement did not adequately compensate Ms. Biddix for her injuries and eliminated her employer’s lien. On appeal, the Court of Appeals found no abuse of discretion.
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