As to whether the Court of Appeals erred by affirming the imposition of sanctions against defendant under N.C.G.S. § 97-88.1, we hold that based upon the specific facts of this case, defendant's defense of plaintiff's claims was not without reasonable grounds. We further conclude that the petition for discretionary review as to additional issues was improvidently allowed.

Thus we reverse that portion of the Court of Appeals opinion affirming the imposition of sanctions and remand this case to the Court of Appeals for remand to the Industrial Commission for further proceedings not inconsistent with this opinion.

REVERSED IN PART AND REMANDED; DISCRETIONARY REVIEW IMPROVIDENTLY ALLOWED IN PART.