SHONDA ALSTON, Plaintiff-Appellee v. FEDERAL EXPRESS CORP. and
SEDGWICK CMS, Defendants-Appellants
NO. COA09-115
(Filed 20 October 2009)
1.
Workers’ Compensation – statutory lien – amount – subject matter jurisdiction
– Rule 60(b) relief
The trial court had subject matter jurisdiction to enter an amended order
in an action to determine the amount of defendants’ statutory workers’
compensation lien. Rule 60(b) relief is within the sound discretion of the trial
court, the court’s intentions about the distribution of attorney fees is not clear
from the record, and subsequent correspondence by the parties suggested that
neither the parties nor the Industrial Commission could agree on how to
interpret the court’s order.
2.
Workers’ Compensation – lien –statutory – attorney fees
The trial court erred in an action to determine the amount of a workers’
compensation lien by awarding attorney fees under N.C.G.S. § 97-10.2(j).
Attorney fees are not allowed as a part of the costs in civil actions or special
proceedings without express statutory authority and N.C.G.S. § 97-10.2(j) does
not authorize an award of attorney fees as part of the costs of third-party
litigation.
3.
Workers’ Compensation – lien – findings
The trial court erred by failing to consider and make findings as to factors
that must be considered pursuant to N.C.G.S. § 97-10.2(j). Although the statute
gives the court the discretion to adjust the amount of a workers’ compensation
lien, the court must make findings and conclusions sufficient for meaningful
appellate review.
Appeal by defendants from order entered 17 July 2008 by Judge
A. Leon Stanback, Jr. in Durham County Superior Court.
Heard in
the Court of Appeals 20 August 2009.
James E. Rogers, P.A., by James E. Rogers, for plaintiffappellee.
Cranfill, Sumner & Hartzog, LLP, by Roy G. Pettigrew and
Meredith Taylor Berard, for defendants-appellants.
CALABRIA, Judge.
-2Federal Express Corp. (“FedEx”) and Sedgwick CMS (collectively
“defendants”) appeal from an amended order entered 17 July 2008,
setting
the
amount
of
defendants’
workers’
compensation
pursuant to N.C. Gen. Stat. § 97-10.2(j) (2007).
lien
We vacate in
part, reverse in part, and remand for further findings.
I.
Procedural History
Shonda Alston (“plaintiff”) was working as a courier for FedEx
when she was involved in an automobile collision in Durham County
on 24 November 2004.
The driver of the other automobile, an
employee with the North Carolina Department of Transportation
(“NCDOT”), failed to reduce his speed and crashed into the rear of
plaintiff’s FedEx vehicle.
Plaintiff sustained multiple injuries,
including an injury to her left knee.
treating
physician,
she
will
According to plaintiff’s
eventually
need
a
total
knee
defendants
paid
replacement.
As
a
result
of
plaintiff’s
injuries,
$51,789.06 in medical expenses, $32,886.78 in wage benefits, and
a
$142,500.00
settlement
of
the
workers’
compensation
claim.
Plaintiff resolved her State Tort Claim against NCDOT by entering
into a settlement agreement for $300,000.00 (“the third-party
settlement”). After deducting attorney’s fees, plaintiff estimated
the amount of her recovery was $198,400.00.
On 16 August 2007,
plaintiff filed an application in Durham
County Superior Court, pursuant to N.C. Gen. Stat. § 97-10.2(j)
(2007), to determine the amount, if any, of defendants’ statutory
lien.
On 12 October 2007, the trial court entered an order
-3reducing defendants’ lien to $50,000.00. The order did not mention
any amount for attorney’s fees.
Plaintiff
submitted
to
the
North
Carolina
Industrial
Commission (“the Commission”) a proposed order to distribute the
third-party settlement proceeds.
On 20 March 2008, the Commission
entered an order finding and concluding that defendants were
entitled to a statutory lien of $50,000.00.
Plaintiff filed a
Motion for Reconsideration with the Commission on 28 March 2008,
asserting that it was the intention of the trial court to reduce
defendants’ lien by the amount of plaintiff’s attorney’s fees.
22
April
2008,
disbursement
the
order
Commission
pending
a
filed
further
an
order
ruling
staying
on
the
On
its
proper
distribution of the third-party settlement funds.
On 28 May 2008, plaintiff filed a Motion to Clarify the Order
Setting the Amount of Workers’ Compensation Lien (“Motion to
Clarify”) in Durham County Superior Court.
On 17 July 2008, the
trial court entered an Amended Order. The only change from the
original order was the addition of a single conclusion of law, that
defendants “shall pay [their] share of attorney fees.”
Defendants
appeal.
II.
Jurisdiction
[1] Defendants argue that the trial court was without subject
matter jurisdiction to enter its amended order. We disagree.
“[W]hether a trial court has subject matter jurisdiction is a
question of law, which is reviewable on appeal de novo.”
Ales v.
-4T. A. Loving Co., 163 N.C. App. 350, 352, 593 S.E.2d 453, 455
(2004).
Although plaintiff does not cite any particular rule of civil
procedure in her “Motion to Clarify,” it appears to be a motion for
relief from the trial court’s original order.
Rule 60(b) of the
North Carolina Rules of Civil Procedure allows the trial court,
upon appropriate motion, to:
relieve a party or his legal representative
from a final judgment, order, or proceeding
for the following reasons: (1) Mistake,
inadvertence, surprise, or excusable neglect;
(2) Newly discovered evidence which by due
diligence could not have been discovered in
time to move for a new trial under Rule 59(b);
(3) Fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation, or
other misconduct of an adverse party; (4) The
judgment is void;
(5) The judgment has been
satisfied, released, or discharged, or a prior
judgment upon which it is based has been
reversed or otherwise vacated, or it is no
longer equitable that the judgment should have
prospective application; or (6) Any other
reason justifying relief from the operation of
the judgment.
N.C. Gen. Stat. § 1A-1, Rule 60(b) (2007).
Additionally,
If the motion does not allege factual
allegations corresponding to the specific
situations contemplated in clauses (1) through
(5), subsection (6) serves as a grand
reservoir of equitable power by which a court
may grant relief from an order or judgment.
The expansive test by which relief can be
given under subsection (6) is whether (1)
extraordinary circumstances exist and (2)
there is a showing that justice demands it.
In re Oxford Plastics v. Goodson, 74 N.C. App. 256, 259, 328 S.E.2d
7, 9 (1985) (internal quotations and citations omitted).
“The
purpose of Rule 60(b) is to strike a proper balance between the
-5conflicting
principles
of
finality
and
relief
from
unjust
judgments. Generally, the rule is liberally construed.” Carter v.
Clowers, 102 N.C. App. 247, 254, 401 S.E.2d 662, 666 (1991)
(citations omitted).
The motion for relief from a judgment or
order made pursuant to Rule 60(b) is within the sound discretion of
the
trial
court
and
the
trial
court's
decision
will
not
be
disturbed absent an abuse of that discretion. Oxford, 74 N.C. App.
at 259, 328 S.E.2d at 9.
In the instant case, it is unclear
whether the trial court’s initial order intended the reduction of
the lien to $50,000.00 as a final reduction or whether the lien was
to be further reduced for attorney’s fees.
Although the
trial
court’s intentions regarding the distribution of attorney’s fees is
not clear from the record, subsequent correspondence by the parties
suggested that neither the parties nor the Commission could agree
on how to interpret the trial court’s order.
Pursuant to Rule
60(b)(6)'s “grand reservoir of equitable power,” the trial court
had jurisdiction to revisit its order so that its intentions could
be made clear.
This assignment of error is overruled.
III.
Attorney’s Fees
[2] Defendants argue that an award of attorney’s fees is not
authorized by N.C. Gen. Stat. § 97-10.2(j).
We agree.
“[A] successful litigant may not recover attorneys' fees,
whether as costs or as an item of damages, unless such a recovery
is expressly authorized by statute.”
Southland Amusements &
Vending, Inc. v. Rourk, 143 N.C. App. 88, 94, 545 S.E.2d 254, 257
(2001)(internal quotations omitted).
The general rule in North
-6Carolina is that attorney’s fees are not allowed as a part of the
costs in civil actions or special proceedings, unless there is
express statutory authority for fixing and awarding the attorney's
fees.
Bowman v. Chair Co., 271 N.C. 702, 704, 157 S.E.2d 378, 379
(1967) (citations omitted).
Plaintiff’s action was brought pursuant to N.C. Gen. Stat.
§ 97-10.2(j), which states, in relevant part: “the judge shall
determine, in his discretion, the amount, if any, of the employer's
lien, whether based on accrued or prospective workers' compensation
benefits, and the amount of cost of the third-party litigation to
be shared between the employee and employer.”
97-10.2(j) (2007).
N.C. Gen. Stat. §
There is no express authority in N.C. Gen.
Stat. § 97-10.2(j) that provides an award of attorney’s fees as
part of the costs of third-party litigation.
In
the
attorney’s
instant
fees
case,
because
the
it
trial
considered
court
awarded
attorney’s
plaintiff
fees
to
be
included in the cost of the plaintiff’s third-party settlement
litigation.
In the absence of any express authority to award
attorney’s fees, this portion of the trial court’s order was
erroneous as a matter of law.
The portion of the trial court’s
order granting plaintiff the payment of a portion of her attorney’s
fees by defendants is vacated.
IV.
Remainder of the Amended Order
[3] Defendants argue the trial court erred by failing to
consider and make findings in its order as to factors that must be
considered pursuant to N.C. Gen. Stat. § 97-10.2(j).
We agree.
-7The trial court has discretion under N.C. Gen. Stat. § 9710.2(j) to adjust the amount of a workers' compensation lien, even
if the result is a double recovery for the plaintiff.
Boone,
153
N.C.
App.
254,
257,
569
S.E.2d
711,
Holden v.
713
(2002).
However, “the discretion granted [to the trial court] under G.S. §
97-10.2(j) is
not unlimited; ‘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.’”
In re
Biddix, 138 N.C. App. 500, 504, 530 S.E.2d 70, 72 (2000) (quoting
Allen v. Rupard, 100 N.C. App. 490, 495, 397 S.E.2d 330, 333
(1990)).
Pursuant to N.C. Gen. Stat. § 97-10.2(j),
[t]he judge shall consider the anticipated
amount
of
prospective
compensation
the
employer or workers' compensation carrier is
likely to pay to the employee in the future,
the net recovery to plaintiff, the likelihood
of the plaintiff prevailing at trial or on
appeal,
the
need
for
finality
in
the
litigation, and any other factors the court
deems just and reasonable, in determining the
appropriate amount of the employer's lien.
N.C. Gen. Stat. § 97-10.2(j)(2007)(emphasis added).
Although we have held that there is no
mathematical formula or set list of factors
for the trial court to consider in making its
determination, it is clear from the use of the
words "shall" and "and" in subsection (j),
that the trial court must, at a minimum,
consider the factors that are expressly listed
in the statute. Otherwise, such words are
rendered meaningless.
In re Estate of Bullock, 188 N.C. App. 518, 526, 655 S.E.2d 869,
874 (2008)(internal citation omitted)(emphasis added).
In the
instant case, there are no findings of fact in the trial court’s
-8order for the following mandatory statutory factors: (1) the net
recovery to plaintiff; (2) the likelihood of plaintiff prevailing
at trial or on appeal; and (3) the need for finality in the
litigation.
The findings provided in the trial court’s order are
insufficient to determine “whether the court properly exercised its
discretion or if it acted under a misapprehension of law” when it
reduced the amount of defendants’ lien.
875.
Id. at 527, 655 S.E.2d at
As a result, the trial court’s order must be reversed and
remanded for additional findings.
The record on appeal includes an additional assignment of
error by defendants and a cross-assignment of error by plaintiff
not addressed in their respective briefs to this Court.
Pursuant
to N.C.R. App. P. 28(b)(6) (2008), we deem them abandoned and need
not address them.
Vacated in part, reversed in part, and remanded for additional
findings.
Judges BRYANT and ELMORE concur.
