Hefner v. Hefner Plumbing Co.

WiNborne, C. J.:

This is the determinative question on this appeal: May an employee injured in the course of his employment by the negligent act of a third party, after settlement with the third party for an amount in excess of his employer’s liability, and after disbursement of the proceeds of such settlement, recover compensation from his employer in a proceeding under the Workman’s Compensation Act. In the light of the provisions of the Act as interpreted by this Court, the answer is “No.”

An action under the North Carolina Workman’s Compensation Act, where a third party tort-feasor is involved, is governed by Section 10 of Chapter 97 of the General Statutes. While this section was deleted by Chapter 1324 of the 1959 Session Laws and new provisions inserted in lieu thereof, the new provisions were expressly made inapplicable to any injury occurring before the ratification of said chapter, which was 20 June, 1959. Therefore the provsions of G.S. 97-10 as they existed prior to the 1959 Act will be applied.

G.S. 97-10 provided in pertinent part as follows: “The rights and remedies herein granted to an employee where he and his employer have accepted the provisions of this article, respectively, to pay and accept compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee * * * as against his employer at common law, or otherwise, on account of such injury * " * Provided, however, that in any case where such employee * * * may have a right to recover damage for such injury * * * from any person other than the employer, compensation shall be paid in accordance with the provisions of this chapter: Provided, further, that after the Industrial Commission shall have issued an award, or the employer or his carrier has admitted liability in writing and filed same with the Industrial Commission, the employer or his carrier shall have the exclusive right to commence an action in his own name and/or in the name of the injured employee * * * for damages on account of such injury or death, and any amount recovered by the employer shall be applied as follows: First, to the payment of actual court costs, then to the payment of attorneys’ fees when approved by the Industrial Commission; the remainder or so much thereof as is necessary shall be paid to the employer to reimburse him for any amount paid and/or to be paid by him under the award of the Industrial Commission; if there then remain any excess, the amount thereof shall be paid to the injured employee or other person entitled thereto: Provided further, that the amount of attorneys’ fees paid out in the distribution of the above recovery shall be a charge against the amount due and payable to the employer and employee in proportion to the amount each shall receive out of the recovery. If, however, the employer does not commence such action within six months from the date of such injury or death, the employee, or his personal representative, .shall thereafter have the right to bring the action in his own name, and any amount recovered shall be paid in the same manner as if the employer had brought the action.”

Under the language of the deleted statute, G.S. 97-10, it appears that several courses of action are open to an employee who is injured, in the course of his employment by the negligent act -of a person other than his employer. Among the remedies, he may waive his claim against his employer and pursue his remedy against the third party. Ward v. Bowles, 228 N.C. 273, 45 S.E. 2d 354. This is the course taken by plaintiff here. But he argues that he had no intention of giving up his right to file claim under the Act, and therefore that there was no waiver. This argument is untenable because his own actions have placed him outside the purview of the statute whose protection he seeks. He received $10,600 in his settlement with the third party, which amount was disbursed prior to the filing of his claim. This is approximately $2600 more, according to his argument, than his injury would have entitled him to in an award from the Commission. If he had received compensation under the Act and made a settlement with the third party, he would have been required to reimburse his employer for such compensation. Apparently the only relief sought by him and the only gain that could accrue to him in his proceeding against his employer was a proportionate payment of attorney’s fee by the employer. However, the provision for proportionate charge of the attorney’s fee against the employer and employee applies only in the distribution of the amount recovered in an action against the third party by the employer or employee, and where the amount of recovery is applied in accordance with the terms of the statute, including approval of attorney’s fees by the Industrial Commission. Here, there being no such amount recovered requiring distribution, nor possibility of such, the provision is inapplicable. Indeed the applicable statute contemplates that where employee pursues his remedy against the employer and against the third party, a determination of benefits due under the Act must be made prior to the payment of funds recovered from the third party. G.S. 97-10. Lovette v. Lloyd, 236 N.C. 663, 73 S.E. 2d 886.

Other points raised by the appellant have been duly considered, and are found to be not in conflict herewith.

The judgment below is Affirmed.