Lipe v. Starr Davis Co., Inc. ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA14-90
NORTH CAROLINA COURT OF APPEALS
Filed: 1 July 2014
SHIRLEY LIPE, Widow and Executrix
of the Estate of ROSS IDDINGS
LIPE, Deceased Employee,
Plaintiff
v. North Carolina
Industrial Commission
I.C. No. 429068
STARR DAVIS COMPANY, INC.,
Employer, TRAVELERS CASUALTY &
SURETY (as Successor to AETNA
CASUALTY & SURETY COMPANY),
Carrier,
Defendants.
Appeal by Defendant from opinion and award entered 30
September 2013 by the North Carolina Industrial Commission.
Heard in the Court of Appeals 5 May 2014.
Wallace and Graham, P.A., by Michael B. Pross, for
Plaintiff.
Hedrick Gardner Kincheloe & Garofalo, LLP, by Hatcher
Kincheloe, Sarah P. Cronin, and M. Duane Jones, for
Defendant Travelers Casualty & Surety.
DILLON, Judge.
Travelers Casualty & Surety (“Defendant”) appeals from an
opinion and award of the Full Commission of the North Carolina
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Industrial Commission (“Full Commission” or “Commission”)
ordering that Defendant pay death benefits to Shirley Lipe
(“Plaintiff”), widow of Ross Iddings Lipe (“Decedent”). For the
following reasons, we affirm.
I. Factual & Procedural Background
Decedent was employed by Starr Davis Company, Inc. (“SDC”)1
from 10 March 1975 to 1 July 1991, when Decedent became disabled
due to multiple sclerosis and was no longer able to work. In
January 1994, Decedent was diagnosed with asbestosis. Decedent
filed an occupational disease claim with the Commission, which,
by opinion and award entered 24 August 1999, awarded Decedent
benefits of $404.24 per week, based on an average weekly wage of
$606.36. The Full Commission did not base Decedent’s average
weekly wages upon his wages at the time he was diagnosed with
asbestosis in 1994 – which would have been zero, as Decedent had
been out of work since July 1991 – but instead calculated
Decedent’s average weekly wages based upon his wages earned
during his last full year of employment with SDC. This Court
affirmed the Full Commission’s 24 August 1999 opinion and award
in Lipe v. Starr Davis Co., 142 N.C. App. 213, 543 S.E.2d 533(2001).
1
SDC is no longer in existence, and is thus only nominally a
Defendant for purposes of this appeal.
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In February 2010, Decedent was diagnosed with lung cancer.
He died less than two months later, as a result of his lung
cancer, on 11 April 2010. Plaintiff thereafter filed a claim
with the Commission seeking death benefits based on Decedent’s
development of lung cancer through his asbestos exposure while
working at SDC. Defendant conceded the compensability of
Plaintiff’s claim, but agreed to payments of only $30.00 per
week, the statutory minimum under N.C. Gen. Stat. § 97-38.
Defendant believed, and maintains, that the statutory minimum
payout is appropriate given that Decedent was not working – and
thus had earnings of zero – at the time he was diagnosed with
lung cancer.
Plaintiff’s claim was addressed on stipulated facts by
Deputy Commissioner J. Brad Donovan. The Deputy Commissioner
entered an opinion and award on 14 March 2013 in which he
determined that Plaintiff was entitled under N.C. Gen. Stat. §
97-2(5) to benefits of $404.24 per week for 400 weeks.
Defendant appealed to the Full Commission, which, following a
hearing on the matter, entered an opinion and award consistent
with the Deputy Commissioner’s decision in all material
respects. The Full Commission articulated two alternative bases
for its decision: (1) that the question concerning the manner of
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calculating Decedent’s average weekly wages had been previously
raised and addressed in its 24 August 1999 opinion and award,
and Defendant was thus collaterally estopped from re-litigating
the issue; and (2) that, even if collateral estoppel did not
apply, the fifth of the five permissible methods of calculating
average weekly wages under N.C. Gen. Stat. § 97-2(5) permitted
the Full Commission to reach the same result – specifically, to
calculate Decedent’s average weekly wages based on his last full
year of employment with SDC. From this opinion and award,
Defendant appeals.
II. Analysis
A. Standard of Review
In reviewing an opinion and award of the Full Commission,
this Court must determine whether competent evidence supports
the Commission’s findings of fact and whether those findings so
supported are sufficient, in turn, to support the Commission’s
conclusions of law. Legette v. Scotland Mem’l Hosp., 181 N.C.
App. 437, 442, 640 S.E.2d 744, 748 (2007). Findings supported
by competent evidence are binding on appeal, “even if the
evidence might also support contrary findings. The Commission’s
conclusions of law are reviewable de novo.” Id. at 442-43, 640
S.E.2d at 748 (citations omitted).
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B. Decedent’s “Average Weekly Wages”
Defendant contends that the Commission erred in its
computation of Decedent’s average weekly wages for purposes of
Plaintiff’s death benefits claim. Specifically, Defendant
contends that the Commission should have determined Decedent’s
compensation rate based on his earnings at the time of his
injury – i.e., in 1994 when he was diagnosed with asbestosis –
of zero. Accordingly, Defendant argues, the applicable
compensation rate used to determine Plaintiff’s benefits should
have been the statutory minimum of $30.00 per week. We
disagree.
N.C. Gen. Stat. § 97-38 provides that death benefits are
payable to a person “wholly dependent for support upon the
earnings of the deceased employee” as follows:
If death results proximately from a
compensable injury or occupational disease
and within six years thereafter, or within
two years of the final determination of
disability, whichever is later, the employer
shall pay or cause to be paid, subject to
the provisions of other sections of this
Article, weekly payments of compensation
equal to sixty-six and two-thirds percent
(66 ⅔ %) of the average weekly wages of the
deceased employee at the time of the
accident, but not more than the amount
established annually to be effective October
1 as provided in G.S. 97-29, nor less than
thirty dollars ($30.00), per week[.]
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N.C. Gen. Stat. § 97-38(1) (2013) (emphasis added). The
employee’s “average weekly wages” may be calculated using one of
the five methods described under N.C. Gen. Stat. § 97-2(5):
. . . “Average weekly wages” shall mean the
earnings of the injured employee in the
employment in which the employee was working
at the time of the injury during the period
of 52 weeks immediately preceding the date
of the injury, . . . divided by 52; but if
the injured employee lost more than seven
consecutive calendar days at one or more
times during such period, although not in
the same week, then the earnings for the
remainder of such 52 weeks shall be divided
by the number of weeks remaining after the
time so lost has been deducted. Where the
employment prior to the injury extended over
a period of fewer than 52 weeks, the method
of dividing the earnings during that period
by the number of weeks and parts thereof
during which the employee earned wages shall
be followed; provided, results fair and just
to both parties will be thereby obtained.
Where, by reason of a shortness of time
during which the employee has been in the
employment of his employer or the casual
nature or terms of his employment, it is
impractical to compute the average weekly
wages as above defined, regard shall be had
to the average weekly amount which during
the 52 weeks previous to the injury was
being earned by a person of the same grade
and character employed in the same class of
employment in the same locality or
community.
But where for exceptional reasons the
foregoing would be unfair, either to the
employer or employee, such other method of
computing average weekly wages may be
resorted to as will most nearly approximate
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the amount which the injured employee would
be earning were it not for the injury.
N.C. Gen. Stat. § 97-2(5) (2013). Our Supreme Court has stated
that “[t]his statute sets forth in priority sequence five
methods by which an injured employee’s average weekly wages are
to be computed” and that it “establishes an order of preference
for the calculation method to be used,” with the “primary
method” being that “set forth in the first sentence, [i.e.,] to
calculate the total wages of the employee for the fifty-two
weeks of the year prior to the date of injury and to divide that
sum by fifty-two.” McAninch v. Buncombe County Sch., 347 N.C.
126, 129, 489 S.E.2d 375, 377 (1997). Notwithstanding, “[t]he
Commission always retains the right . . . to utilize the final
method [under N.C. Gen. Stat. § 97-2(5)] of calculating an
employee’s average weekly wage, which allows the use of whatever
computation method would ‘most nearly approximate the amount
which the injured employee would be earning were it not for the
injury,’ in extraordinary circumstances in which the use of the
first four methods will produce an unfair result.” Pope v.
Manville, 207 N.C. App. 157, 163, 700 S.E.2d 22, 27 (2010).
Should the Commission seek to utilize this fifth method,
however, our Courts have made clear that the Commission must
make specific findings indicating, essentially, that it has
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adopted that method only after its careful consideration of the
other methods:
The final method, as set forth in the last
sentence [of N.C. Gen. Stat. § 97-2(5)],
clearly may not be used unless there has
been a finding that unjust results would
occur by using the previously enumerated
methods. Ultimately, the primary intent of
this statute is that results are reached
which are fair and just to both parties.
“Ordinarily, whether such results will be
obtained . . . is a question of fact; and in
such case a finding of fact by the
Commission controls decision.”
McAninch, 347 N.C. at 130, 489 S.E.2d at 378 (citations omitted)
(ellipsis in original).
In Pope v. Manville, 207 N.C. App. 157, 700 S.E.2d 22, this
Court considered the Commission’s use of the fifth method – and
the findings required of the Commission to support use of that
method – under circumstances similar to those presented in the
instant case. The Pope “Defendants contended that, because
Plaintiff had not been diagnosed with asbestosis until after his
retirement, he was not entitled to any disability compensation
whatsoever.” Id. at 160, 700 S.E.2d at 25 (emphasis in
original). This Court stated that “for purposes of determining
disability benefits for asbestosis, the ‘time of the injury’ is
deemed to be the date that a claimant is diagnosed with the
disease” and, further, that “the proper date for determining the
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average weekly wage of a plaintiff . . . was as of the time of
injury, which was deemed to be the date of diagnosis of
silicosis or asbestosis.’” Id. at 166, 700 S.E.2d at 28-29(citations omitted) (emphasis added) (ellipsis in original). We
reasoned that the Commission had not erred in calculating the
plaintiff’s average weekly wages based on the last full year of
his employment – in accordance with the fifth method under N.C.
Gen. Stat. § 97-2(5) – rather than based on his wages at the
time of his diagnosis, as “‘it would be obviously unfair to
calculate plaintiff’s benefits based on his income upon the date
of diagnosis because he was no longer employed and was not
earning an income.’” Id. at 168, 700 S.E.2d at 30 (citation
omitted). Notwithstanding the foregoing analysis, however, we
ultimately remanded the case back to the Commission on grounds
that its opinion and award did “not contain findings indicating
that it considered using the other methods for computing the
average weekly wage and stating the reason that it declined to
use them in determining the amount of weekly disability
benefits” and “lack[ed] the required finding that use of the
first four methods of calculating average weekly wages set out
in N.C. Gen. Stat. § 97–2(5) ‘would be unfair, either to the
employer or employee.’” Id. at 168-69, 700 S.E.2d at 30
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(quoting N.C. Gen. Stat. § 97-2(5)). Pope thus stands for the
proposition that the Commission may properly employ the fifth
method under N.C. Gen. Stat. § 97–2(5) to calculate the
employee’s average weekly wages in cases where the employee was
diagnosed with a compensable occupational disease after
retirement, so long as the Commission sets forth the requisite
findings in its opinion and award.
In the present case, as in Pope, the employee (Decedent)
developed a compensable occupational disease years after his
retirement, when he was no longer earning wages. Unlike in
Pope, however, we believe that in this case the Commission
included sufficient supportive findings in its opinion and award
concerning its decision to utilize the fifth method of
calculating Plaintiff’s average weekly wages under N.C. Gen.
Stat. § 97–2(5). Specifically, in addition to the parties’
stipulation that Decedent had been employed by SDC from 10 March
1975 through 1 July 1991, the Commission made the following
pertinent findings:
1. The current matter before the Full
Commission involves a claim for death
benefits due to lung cancer resulting from
[Decedent’s] exposure to asbestos while in
the employment of [SDC]. On February 24,
2010, Decedent was diagnosed with lung
cancer. On April 11, 2010, Decedent died as
a result of his lung cancer.
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. . . .
12. With respect to [Decedent’s] lung
cancer, the facts are analogous to his prior
asbestos claim, with the exception that the
lung cancer took a longer period to develop.
[Decedent] was last injuriously exposed to
the hazards of asbestos while employed by
[SDC]. [Decedent’s] lung cancer was caused
by the same period of asbestos exposure that
caused his compensable occupational disease
of asbestosis. [Decedent] was not diagnosed
with lung cancer until after his retirement
from [SDC]. At the time of his diagnosis,
[Decedent] had already been disabled by
unrelated multiple sclerosis that forced him
to retire from [SDC] in 1991. [Decedent]
amended the Form 18B originally filed on
April 18, 1994 to include a claim for lung
cancer due to asbestos exposure and
Defendants accepted the lung cancer claim as
compensable.
. . . .
15. Based upon the preponderance of evidence
in view of the entire record, the Full
Commission finds that the first three
methods of determining average weekly wage
pursuant to N.C. Gen. Stat. § 97-2(5) are
not applicable because they are based on the
earnings of an injured employee during the
fifty-two weeks preceding the date of injury
or disability and [Decedent] had been
retired for many years prior to his
diagnosis of lung cancer and his death. The
Full Commission further finds no evidence
was presented by the parties regarding the
average weekly wage earned by a similarly-
situated employee; therefore, the fourth
method of calculating average weekly wage
cannot be used. Additionally, the Full
Commission finds that it would be unfair and
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unjust to calculate [Decedent’s] average
weekly wage based upon his date of diagnosis
or date of death as he was no longer
employed and was not earning any income at
either of those times. Therefore, using the
first four methods to determine [Decedent’s]
average weekly wage would result in
[Decedent’s] dependents receiving no
benefits (except the $30.00 weekly statutory
minimum) and the Full Commission finds that
such a result would be unfair and unjust.
16. Since the utilization of the first four
methods for determining average weekly wages
enunciated in N.C. Gen. Stat. § 97-2(5) are
not applicable, the Full Commission finds
that the fifth method under the statute,
which allows “any other method of
calculation,” is the most appropriate method
to calculate [Decedent’s] average weekly
wage. Due to the exceptional reasons and
circumstances of this claim, [Decedent’s]
average weekly wage should be calculated
based upon the earnings of [Decedent] during
his last year of employment with [SDC],
divided by fifty-two weeks, as it would most
nearly approximate the amount which
[Decedent] would have earned if not for his
injury while working for [SDC] and is fair
and just. During the last full year of his
employment with [SDC], [Decedent] earned
$31,530.89 resulting in an average weekly
wage of $606.36 and a weekly compensation
rate of $404.24.
The foregoing findings of fact reflect the Commission’s
careful consideration in determining which of the five methods
of calculating Decedent’s average weekly wages was appropriate
under the circumstances. These findings also disclose the
Commission’s reasoned justification for choosing to employ the
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fifth method over the first four. Guided by Pope, we hold that
these findings are sufficient to support the Commission’s
calculation method and, moreover, that the Commission correctly
determined Decedent’s average weekly wages to be $606.36,
yielding a corresponding weekly compensation rate of $404.24.
Defendant’s contentions are accordingly overruled.2
III. Conclusion
In light of the foregoing, we affirm the Commission’s 30
September 2013 opinion and award.
AFFIRMED.
Chief Judge MARTIN and Judge STEELMAN concur.
Report per Rule 30(e).
2
We note the Commission’s alternative basis for its calculation
of Decedent’s wages, namely, that it had employed the same
method in deriving Decedent’s wages in connection with his
asbestos claim; that this Court had affirmed the Commission’s
opinion and award pertaining to that claim; and that Defendant
here is essentially re-litigating the same calculation issue.
We do not reject this alternative basis as meritless, but
instead decline to reach the issue in light of our holding,
which we believe rests firmly upon Pope, a case decided
subsequent to the 2001 decision in which we upheld Decedent’s
asbestos claim.