Sprinkle v. Lilly Industries, Inc.

2. This claim is the subject of an April 25, 2002, Opinion and Award by the Full Commission pursuant to which plaintiff was awarded ongoing total disability and medical compensation.

3. The parties stipulated into evidence before the Deputy Commissioner the following documentary exhibits:

a. Stipulated Exhibit #1: Pre-Trial Agreement

b. Stipulated Exhibit #2: Packet of Industrial Commission Forms and Filings

4. In addition to Stipulated Exhibits, the following Exhibits were admitted into evidence before the Deputy Commissioner:

a. Plaintiff's Exhibit #1: Defendants' Responses to Plaintiff's Interrogatories

b. Plaintiff's Exhibit #2: Defendants' Supplemental Answers to Plaintiff's Interrogatories 18 through 21

c. Plaintiff's Exhibit #3: Plaintiff's Pre-Hearing Contentions and Analysis in Support of Motion to Compel and for Attorney's Fees

5. The main issue to be determined is whether plaintiff is entitled to be paid interest by defendants on the medical compensation portion of the previous final award, or whether no interest is payable where third-party health insurers originally paid plaintiff's medical bills. Each side has also moved for the award of attorney's fees pursuant to N.C. Gen. Stat. § 97-88.1. *Page 3

2. Plaintiff was readmitted to the hospital as the result of his injuries in July 1998, October 1999, and July 2000. Plaintiff has remained under active medical care since his accident.

3. Defendants denied plaintiff's claim, contending that it occurred outside the course and scope of his employment pursuant to the "coming and going" rule.

4. Former Deputy Commissioner W. Bain Jones, Jr., conducted a hearing in this matter on January 24, 2001, and filed an Opinion and Award on May 31, 2001, allowing plaintiff's claim for ongoing total and medical compensation and finding that plaintiff's injury arose out of and in the course and scope of his employment with defendant. Defendants then appealed the decision to the Full Commission. On April 25, 2002, the Full Commission filed an Opinion Award affirming former Deputy Commissioner Jones's Opinion and Award. Next, defendants appealed the Full Commission's Opinion and Award to the North Carolina Court of Appeals, which also affirmed the decision that the claim was compensable in a decision filed December 16, 2003. *Page 4

5. Pursuant to the Court of Appeals decision in this case, defendants paid plaintiff past due total disability compensation with interest from the date of the initial hearing until paid, pursuant to N.C. Gen. Stat. § 97-86.2.

6. During the period of defendants' denial of plaintiff's claim, plaintiff's medical expenses were initially paid through his employer-provided, third-party health insurance plan whose premiums were partially paid by plaintiff. After plaintiff's discharge from employment in March 1999 and the expiration of his health insurance coverage through his employer under COBRA in or about September 2000, plaintiff's medical expenses were paid through his wife's health insurance plan. At a point subsequent to the Court of Appeals' decision in the case sub judice, defendants began paying for the medical expenses associated with plaintiff's injury by accident.

7. Plaintiff estimated that his out of pocket expenditures were approximately $8,000.00. Defendants have reimbursed plaintiff for his mileage and out-of-pocket medical expenses as well as all other medical expenses related to this claim. Based on plaintiff's testimony, it is hereby found that there are no outstanding medical expenses.

8. Neither plaintiff nor defendants prosecuted or defended this matter without reasonable grounds.

2. Historically, an award of interest pursuant to N.C. Gen. Stat. §97-86.2 has been granted to a plaintiff on an award of indemnity benefits. N.C. Gen. Stat. § 97-86.2 states that

In any workers' compensation case in which an order is issued either granting or denying an award to the employee and where there is an appeal resulting in an ultimate award to the employee, the insurance carrier or employer shall pay interest on the final award or unpaid portion thereof from the date of the initial hearing on the claim, until paid at the legal rate of interest provided in G.S. 24-1.

The first appellate case to address whether interest is payable on an award of medical expenses was Childress v. Trion, Inc.,125 N.C. App. 588, 481 S.E.2d 697, disc. review denied, 346 N.C. 276,487 S.E.2d 541 (1997).

3. Childress is distinguishable from the case sub judice. The underlying facts in Childress dealt with outstanding medical expenses. In this case, there are no outstanding medical expenses. Outstanding or unpaid medical expenses are those medical expenses that have not yet been paid. Stevenson v. Noel Williams Masonry, Inc., 148 N.C. App. 90, 96,557 S.E. 2d 554, 558 (2001). In *Page 6 this case, plaintiff's medical expenses were paid through plaintiff's and his wife's third-party health insurance plans. Awarding interest to an employee on medical expenses which are not outstanding and for which the employee did not pay out of pocket but rather were paid by a third-party health insurance carrier was not the scenario referenced inChildress. In the case at hand, a third-party health insurance plan assumed liability for plaintiff's medical treatment and, once it was judicially determined that defendants were liable under the Workers' Compensation Act, defendant-employer and its workers' compensation insurance carrier assumed liability for plaintiff's medical treatment. In this scenario, the two insurance carriers provided cohesive coverage for plaintiff's medical treatment in such a way that plaintiff was not at risk of failing to receive medical treatment due to an inability to pay. The undersigned conclude that plaintiff is not entitled to interest on medical expenses which were paid by his and his wife's third-party health insurance plans and were thus not outstanding. However, plaintiff is entitled to interest on the approximately $8,000.00 plaintiff incurred in out-of-pocket medical expenses.

4. Because neither plaintiff nor defendants prosecuted or defended this matter without reasonable grounds, neither party is entitled to the award of attorney's fees pursuant to N.C. Gen. Stat. § 97-88.1. Sparks v.Mountain Breeze Restaurant, 55 N.C. App. 663, 286 S.E.2d 575 (1982).

2. Defendants shall pay the costs.

This the 18^th day of October, 2007.

S/______________________

DIANNE C. SELLERS

COMMISSIONER

CONCURRING:

S/______________________ BUCK LATTIMORE COMMISSIONER

CONCURRING IN PART AND DISSENTING IN PART:

S/______________________ LAURA KRANIFELD MAVRETIC COMMISSIONER

I respectfully dissent from the majority's opinion that plaintiff is not entitled to interest on medical expenses that were paid by his and his wife's third-party health insurance carriers. I do, however, agree that neither plaintiff nor defendants are entitled to attorney's fees pursuant to N.C. Gen. Stat. § 97-88.1.

In any workers' compensation case with an appeal resulting in an ultimate award to plaintiff, the carrier or employer shall pay interest on the final award or unpaid portion from the date of the initial hearing on the claim until paid. N.C. Gen. Stat. § 97-86.2. In Childress v.Trion, Inc., 125 N.C.App. 588, 481 S.E.2d 697 (1997), disc. rev. den.,346 N.C. 276, 487 S.E.2d 541 (1998), the Court of Appeals noted that in contested cases, plaintiffs often incur liability for all medical expenses if they lose, often paying significant out of pocket expenses for prescription drugs, travel, health insurance deductibles, or actual payment of medical expenses. Id. at 591, 481 S.E.2d at 699. The Court held that because the factual scenarios to determine plaintiff's out of pocket expenses are so numerous in workers' compensation cases, "the only reasonable construction is that any award of medical compensation for the plaintiff's benefit is covered by G.S. 97-86.2." Id.

The Court also cited Powe v. Odell, 312 N.C. 410, 413, 322 S.E.2d 762, 764 (1984), stating, [T]he North Carolina Supreme Court commented that the goals of awarding interest include the following: "(a)[T]o compensate a plaintiff for loss of the use value of a damage award or compensation for delay in payment; (b) to prevent unjust enrichment to a defendant for the use value of the money, and (c) to promote settlement." All of these goals are met by the payment of *Page 9 interest on an award of medical expenses to workers' compensation claimants. Childress v. Trion, Inc. at 592, 481 S.E.2d at 699.

In the case at bar, the record is not clear when and what medical expenses were paid by plaintiff, his or his wife's third-party health insurance, or defendant-carrier. In fact, both parties argued before Deputy Commissioner Houser that they knew what medical expenses had been paid by defendants, but that they did not know if there were any outstanding medical expenses that remained unpaid. Defendant-carrier could not provide information regarding which medical expenses were outstanding at the time the initial Opinion and Award from Deputy Commissioner Jones was entered. Thus, under this complex factual scenario, Childress requires the payment of interest on all of plaintiff's unpaid medical expenses from the date of the initial hearing until paid.

The majority finds that plaintiff's medical expenses were not outstanding and that the payment of interest would constitute an unjustified benefit for plaintiff and would be far removed from the goals of the Act. I respectfully disagree. The lack of information regarding when and what medical expenses were paid, or that the medical bills were paid by non-party health insurers while defendants defended against their own liability, should not relieve defendants from the provisions of the statute under Childress and Powe.

Therefore, for the above reasons, I would hold that plaintiff is entitled to interest pursuant to the terms of N.C. Gen. Stat. § 97-86.2 for the entire medical compensation portion of the Full Commission's final award from the date of the initial hearing until paid.

S/______________________

LAURA KRANIFELD MAVRETIC

COMMISSIONER