Mullinax v. Fieldcrest Cannon, Inc. ( 1990 )

395 S.E.2d 160 (1990) 100 N.C. App. 248

Ralph MULLINAX, Plaintiff,
v.
FIELDCREST CANNON, INCORPORATED, Employer,
Self-Insured, Carrier, Defendants.

No. 8910IC1367.

Court of Appeals of North Carolina.

September 4, 1990.

Lore & McClearen by R. James Lore, Raleigh, Taft, Taft, & Haigler by Thomas F. Taft, Greenville, and Taft, Taft & Haigler by Robin E. Hudson, Raleigh, for plaintiff, appellant.

Smith Helms Mulliss & Moore by J. Donald Cowan and Jeri L. Whitfield, Greensboro, for defendant, appellee.

HEDRICK, Chief Judge.

The Full Commission correctly stated, "[t]he issue in this case is whether [to allow] a motion to set aside a Form 21 Agreement on the grounds of error due to mutual mistake, misrepresentation, or excusable neglect, per G.S. 97-17." Thus, the only issue before us is whether the Full Commission erred in setting aside the Form 21 settlement agreement entered into between plaintiff and defendant, and approved by the Commission, because of the "mutual mistake" of the parties.

G.S. 97-17 in pertinent part provides:

... [N]o party to any agreement for compensation approved by the Industrial Commission shall thereafter be heard to deny the truth of the matters therein set forth, unless it shall be made to appear to the satisfaction of the Commission that there has been error due to fraud, misrepresentation, undue influence or mutual mistake, in which event the Industrial Commission may set aside such agreement.

There is no evidence, contention, or finding in this record that the agreement, Industrial Commission Form 21, was obtained by "fraud, misrepresentation, or undue influence." The Commission set the agreement aside on the grounds of "mutual mistake of fact." Our courts have long held that:

... [A] contract may be avoided on the ground of mutual mistake of fact where the mistake is common to both parties and by reason of it each has done what neither intended ... however, in order to affect the binding force of a contract, the mistake must be of an existing or past fact which is material; it must be as to a fact which enters into and forms the basis of the contract, or in other words, it must be of the essence of the agreement, the sine qua non, or, as is sometimes said, the efficient cause of the agreement, and must be such that it animates and controls the conduct of the parties.

Financial Services v. Capitol Funds, 288 N.C. 122, 135-36, 217 S.E.2d 551, 560 (1975); In re Will of Baity, 65 N.C.App. 364, 367, 309 S.E.2d 515, 517 (1983).

Plaintiff contends that there was no "mutual mistake of fact" in entering into the settlement agreement. Defendant, on the other hand, argues the "mutual mistake" was "the erroneous belief that plaintiff had asbestosis." The Full Commission stated, "[p]laintiff does not have the disease, that is the mistake of fact." This statement, whether it be a conclusion of law or a finding of fact, is not supported by the record. Defendant may have entered into the agreement on the "mistaken belief" that plaintiff had compensable asbestosis, but that was not the motivation for plaintiff's entering into the agreement. The Commission seemed to conclude or find as a fact that plaintiff did not have compensable asbestosis because the Advisory Medical Committee of the Industrial Commission stated that "plaintiff did not have compensable asbestosis." That question, however, was never decided by the Commission because there has never been a hearing or decision with respect to whether plaintiff has compensable asbestosis. The report of the Advisory Medical Committee with respect to this issue is and could be only evidentiary.

The issue of whether plaintiff has compensable asbestosis was decided by the parties when they entered into the settlement agreement. No party will be allowed "to deny the truth of the matters" set out in the settlement agreement except where such agreement has been obtained by "fraud, misrepresentation, undue influence or mutual mistake." G.S. 97-17.

In the present case, the record simply does not disclose that the settlement agreement was entered into because of a mistake of fact common to both plaintiff and defendant. The decision of the Full Commission will be reversed and the matter remanded to the Full Commission for reinstatement of the Form 21 Agreement entered into by the parties and approved by the Commission. Defendant should be required to pay interest on all sums which should have been paid since the parties entered into the settlement agreement. G.S. 97-86.2.

Plaintiff further contends that he "should be awarded attorney's fees for the defendant's appeal under G.S. 97-88." We agree.

G.S. 97-88 provides:

If the Industrial Commission at a hearing on review or any court before which any proceedings are brought on appeal under this Article, shall find that such hearing or proceedings were brought by the insurer and the Commission or court by its decision orders the insurer to make, or to continue payments of benefits, including compensation for medical expenses, to the injured employee, the Commission or court may further order that the cost to the injured employee of such hearing or proceedings including therein reasonable attorney's fee to be determined by the Commission shall be paid by the insurer as part of the bill of costs.

Our decision requires "the insurer to make, or to continue payments of benefits," and we hold plaintiff is entitled to have his attorney's fee paid by defendant as part of the costs of plaintiff's defending defendant's appeal from the Deputy Commissioner to the Full Commission and the appeal to this Court. Defendant, in our opinion, had no reasonable basis for appealing the decision of the Deputy Commissioner to the Full Commission and requiring plaintiff to appeal to this Court to obtain the benefits under the settlement agreement approved by the Commission.

With respect to this matter, we remand the case to the Industrial Commission for the entry of an order requiring defendant to pay to plaintiff's attorney, as a part of the costs, a reasonable fee for representing plaintiff in the appeal from the Deputy Commissioner to the Full Commission and thence to this Court.

Reversed and remanded.

ARNOLD and GREENE, JJ., concur.