{ "id": 8527036, "name": "STEVE W. ALLEN, Plaintiff v. STAMY LINCOLN RUPARD, Defendant", "name_abbreviation": "Allen v. Rupard", "decision_date": "1990-10-30", "docket_number": "No. 9021SC146", "first_page": "490", "last_page": "497", "citations": [ { "type": "official", "cite": "100 N.C. App. 490" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "138 S.E.2d 801", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1964, "opinion_index": 0 }, { "cite": "263 N.C. 86", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567355 ], "year": 1964, "opinion_index": 0, "case_paths": [ "/nc/263/0086-01" ] }, { "cite": "57 S.E.2d 377", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1950, "opinion_index": 0 }, { "cite": "231 N.C. 354", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8629801 ], "year": 1950, "opinion_index": 0, "case_paths": [ "/nc/231/0354-01" ] }, { "cite": "290 S.E.2d 599", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "305 N.C. 478", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571152 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc/305/0478-01" ] }, { "cite": "168 S.E.2d 497", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1969, "pin_cites": [ { "page": "499" } ], "opinion_index": 0 }, { "cite": "5 N.C. App. 439", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550627 ], "year": 1969, "pin_cites": [ { "page": "443" } ], "opinion_index": 0, "case_paths": [ "/nc-app/5/0439-01" ] }, { "cite": "9 Wheat., 738", "category": "reporters:scotus_early", "reporter": "Wheat.", "case_ids": [ 1421282 ], "opinion_index": 0, "case_paths": [ "/us/22/0738-01" ] }, { "cite": "80 S.E. 154", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1913, "opinion_index": 0 }, { "cite": "164 N.C. 148", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656744 ], "year": 1913, "opinion_index": 0, "case_paths": [ "/nc/164/0148-01" ] }, { "cite": "5 F.2d 188", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1678743 ], "year": 1925, "pin_cites": [ { "parenthetical": "emphasis supplied" } ], "opinion_index": 0, "case_paths": [ "/f2d/5/0188-01" ] }, { "cite": "243 S.E.2d 338", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "pin_cites": [ { "page": "349", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "294 N.C. 503", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8574036 ], "year": 1978, "pin_cites": [ { "page": "520", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/294/0503-01" ] }, { "cite": "379 S.E.2d 30", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "37" } ], "opinion_index": 0 }, { "cite": "324 N.C. 373", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2483734 ], "year": 1989, "pin_cites": [ { "page": "384" } ], "opinion_index": 0, "case_paths": [ "/nc/324/0373-01" ] }, { "cite": "162 S.E.2d 481", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1968, "pin_cites": [ { "page": "483" }, { "page": "588" } ], "opinion_index": 0 }, { "cite": "274 N.C. 256", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8559737 ], "year": 1968, "pin_cites": [ { "page": "260" } ], "opinion_index": 0, "case_paths": [ "/nc/274/0256-01" ] }, { "cite": "166 S.E.2d 671", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1969, "pin_cites": [ { "page": "679" } ], "opinion_index": 0 }, { "cite": "275 N.C. 215", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8558315 ], "year": 1969, "pin_cites": [ { "page": "226" } ], "opinion_index": 0, "case_paths": [ "/nc/275/0215-01" ] }, { "cite": "378 S.E.2d 771", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1989, "pin_cites": [ { "page": "772" } ], "opinion_index": 0 }, { "cite": "324 N.C. 424", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2485437 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "426" } ], "opinion_index": 0, "case_paths": [ "/nc/324/0424-01" ] }, { "cite": "369 S.E.2d 84", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1988, "pin_cites": [ { "page": "85-86" }, { "page": "85" } ], "opinion_index": 0 }, { "cite": "90 N.C. App. 585", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525523 ], "weight": 2, "year": 1988, "pin_cites": [ { "page": "588" } ], "opinion_index": 0, "case_paths": [ "/nc-app/90/0585-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 97-10.2", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 7, "pin_cites": [ { "page": "(j)" }, { "page": "(j)" }, { "page": "(f)" }, { "page": "(j)" }, { "page": "(j)" }, { "page": "(j)" }, { "page": "(j)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 760, "char_count": 16903, "ocr_confidence": 0.755, "pagerank": { "raw": 7.92880419353425e-07, "percentile": 0.9731009414062364 }, "sha256": "a9ae496c2d1d0b7362ebe2c8603e3651d93eb067444153aec3b79d4e89da390d", "simhash": "1:1b6cd5fb561aa5ae", "word_count": 2733 }, "last_updated": "2023-07-14T14:37:10.855162+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Wells and Lewis concur." ], "parties": [ "STEVE W. ALLEN, Plaintiff v. STAMY LINCOLN RUPARD, Defendant" ], "opinions": [ { "text": "COZORT, Judge.\nOn 26 June 1987, plaintiff Steve Allen was injured when the truck he was driving collided with a truck operated by Stamy Rupard. The negligence of Mr. Rupard is not at issue in this appeal; he tendered the policy limits of his liability insurance coverage to the plaintiff. Plaintiff applied to the trial court for a determination of the distribution of the $25,000 settlement proceeds from the defendant\u2019s liability insurance carrier. The trial court awarded $12,500 to the plaintiff and $12,500 to Pilot Freight Carriers [hereinafter Pilot], plaintiff\u2019s employer, and Protective Insurance Company [hereinafter Protective], Pilot\u2019s workers\u2019 compensation insurer. Protective and Pilot appealed to this Court.\nThe two issues presented on appeal are (1) whether the trial court was required to distribute all the settlement proceeds to the insurer; and (2) whether it is unconstitutional to give the trial court discretion as to the distribution of settlement proceeds. We hold (1) that the trial court was not required to distribute all the settlement proceeds to the insurance carrier and (2) that the trial court\u2019s decision to equally divide the settlement proceeds was an appropriate exercise of the trial court\u2019s discretion. Pertinent facts and procedural history follow.\nPlaintiff was injured on 26 June 1987 while he was operating a truck within the scope of his employment. Plaintiff\u2019s injuries include a crushed vertebrae. He has had three operations requiring insertion and removal of hooks and rods in his back. Protective has paid over $40,000 in workers\u2019 compensation payments.\nOn 24 June 1988, plaintiff filed suit against defendant Rupard. Rupard\u2019s insurer tendered $25,000, his policy limit, to plaintiff. Both plaintiff and Protective agreed to this lump sum settlement and release of defendant Rupard. The parties agree that Rupard was essentially judgment proof, with no additional available funds. Plaintiff also had underinsured motorist coverage. His insurer paid him $15,000, again with Protective\u2019s consent. On appeal, Pilot and Protective do not contest plaintiff\u2019s right to receive this $15,000.\nPlaintiff applied to the trial judge scheduled to hear the case between plaintiff and defendant Rupard for a determination of the distribution of the $25,000 settlement proceeds from Rupard\u2019s insurer. This application was made pursuant to N.C. Gen. Stat. \u00a7 97-10.2(j) which provides:\n[I]n the event that a settlement has been agreed upon by the employee and the third party when said action is pending on a trial calendar and the pretrial conference with the judge has been held, either party may apply to the resident superior court judge . . . for determination as to the amount to be paid to each [the employee and the workers\u2019 compensation insurance carrier] by such third party tort-feasor. \u25a0\nThe court heard arguments from plaintiff\u2019s attorney and from Protective\u2019s attorney. The trial court concluded that the General Assembly granted to the superior court the discretion to determine the amount to be paid to each when there are insufficient funds to compensate both. The court ordered that $12,500 of the $25,000 tendered by the tortfeasor be paid to Protective and that the remaining $12,500 be paid to plaintiff for the \u201cinjuries suffered at the hands of the third party tort-feasor.\u201d\nOn appeal, Protective first contends that the trial court erred in not awarding all of the settlement proceeds to the carrier because Protective\u2019s subrogation lien (over $40,000) exceeded the amount of the settlement ($25,000). Protective argues that N.C. Gen. Stat. \u00a7 97-10.2(j) should be construed in conjunction with subsection (f) to require the trial court to follow the order of priority for distribution established in subsection (f). Under subsection (f), any amount obtained by the plaintiff by settlement with the tortfeasor must be disbursed by the Industrial Commission as follows:\na. First to the payment of actual court costs taxed by judgment.\nb. Second to the payment of the fee of the attorney representing the person making settlement or obtaining judgment, and except for the fee on the subrogation interest of the employer such fee shall not be subject to the provisions of \u00a7 90 of this Chapter [G.S. 97-90] but shall not exceed one third of the amount obtained or recovered of the third party.\nc. Third to the reimbursement of the employer for all benefits by way of compensation or medical treatment expense paid or to be paid by the employer under award of the Industrial Commission.\nd. Fourth to the payment of .any amount remaining to the employee or his personal representative.\nProtective argues that judges of the superior court should adhere to the same priority schedule which binds the Industrial Commission. Under subsection (f), Protective would have received the entire $25,000 as compensation for the medical expenses it paid on behalf of plaintiff.\nIn Pollard v. Smith, 90 N.C. App. 585, 369 S.E.2d 84 (1988), rev\u2019d on other grounds, 324 N.C. 424, 378 S.E.2d 771 (1989), this Court addressed the issue of whether the trial court has the discretion to distribute all the settlement or judgment proceeds to the injured party giving the carrier nothing on its subrogation lien. In Pollard, we specifically held:\nSubsection (j) is clear and unambiguous, and must be given effect. Judicial interpretation of a statute is inappropriate when the Legislature has made clear its intent. Pipeline Co. v. Clayton, Comr. of Revenue, 275 N.C. 215, 226, 166 S.E.2d 671, 679 (1969). The section clearly provides for a different standard for disbursement when the case is before the Superior Court than that for cases before the Industrial Commission. When the General Assembly added subsection (j), it made no reference to subsection (f).\nWhen the General Assembly amends an existing statute, as opposed to merely clarifying existing law, a presumption arises that the Legislature intended to change existing law by creating or taking away rights or duties. Childers v. Parker\u2019s, Inc., 274 N.C. 256, 260, 162 S.E.2d 481, 483 (1968).\nWe realize that subsection (j) allows plaintiff a double recovery at the expense of the employer or carrier, in the discretion of the Superior Court judge. Nonetheless, since the language is clear and unambiguous, we must hold that the Legislature intended this possible result.\nId. at 588, 369 S.E.2d at 85-86. When Pollard reached the Supreme Court, that court decided the case on the issue of whether it was error for the superior court to order disbursement of the proceeds from a settlement made without the written consent of the employer. Pollard, 324 N.C. at 426, 378 S.E.2d at 772. The issue to be decided in this case, the interpretation of subsection (j), was not reached by the Supreme Court. Thus, we are bound by the prior Pollard ruling by a panel of this Court. In re Harris, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989). We hold that the trial court did not have to follow the distribution priority set forth in N.C. Gen. Stat. \u00a7 97-10.2(f).\nProtective\u2019s second argument here raises an issue not decided by either court in Pollard, i.e., whether the discretion given the trial court by \u00a7 97-10.2(j) violates the United States and North Carolina Constitutions. Protective argues that the statute violates the due process clause of the Fifth Amendment of the United States Constitution, violates the \u201cLaw of the Land\u201d clause of Article 1, Section 19 of the North Carolina Constitution, and is unconstitutionally vague.\nIn State v. Fulcher, our Supreme Court stated:\nIt is well settled that if a statute is reasonably susceptible of two constructions, one of which will raise a serious question as to its constitutionality and the other will avoid such question, the courts should construe the statute so as to avoid the constitutional question.\n294 N.C. 503, 520, 243 S.E.2d 338, 349 (1978) (citations omitted). Thus, if N.C. Gen. Stat. \u00a7 97-10.2(j) is susceptible of a constitutional construction, we shall adopt that construction.\nProtective contends that the statute in question is flawed because it gives the trial court \u201cunlimited\u201d discretion, \u201cunbridled\u201d discretion, the ability to make the distribution without standards, guidelines, and definitions. We do not read N.C. Gen. Stat. \u00a7 97-10.2(j) in the manner suggested by Protective.\nIn Pollard, we held that subsection (j) did give the trial court \u201cdiscretion\u201d in deciding how to distribute the settlement proceeds. Pollard, 90 N.C. App. at 588, 369 S.E.2d at 85. We do not, however, equate \u201cdiscretionary\u201d with arbitrary or capricious. \u201c[Jjudicial discretion is not the indulgence of a judicial whim, but is the exercise of judicial judgment based on facts and guided by law.\" Smith v. Hill, 5 F.2d 188 (3d Cir. 1925) (emphasis supplied). This Court, through Chief Judge Mallard, has defined the exercise of discretion:\nThe exercise of judicial discretion by a judge is not an arbitrary power, and is not one to be used to gratify the passion, partiality, whim, vindictiveness, or idiosyncracies of the individual judge. In the case of Hensley v. Furniture Co., 164 N.C. 148, 80 S.E. 154 (1913), in discussing the nature of judicial discretion Justice Walker said:\n\u201cJudicial discretion, said Coke, is never exercised to give effect to the mere will of the judge, but to the will of the law. The judge\u2019s proper function, when using it, is to discern according to law what is just in the premises. \u2018Discernere per legem quid sit justum.\u2019 Osborn v. Bank, 9 Wheat., 738. When applied to a court of justice, said Lord Mansfield, discretion means sound discretion guided by law. It must be governed by rule, not by humor; it must not be arbitrary, vague, and fanciful, but legal and regular. 4 Burrows, 2539. While the necessity for exercising this discretion, in any given case, is not to be determined by the mere inclination of the judge, but by a sound and enlightened judgment, in an effort to attain the end of all law, namely, the doing of even and exact justice, we will yet not supervise it, except, perhaps, in extreme circumstances, not at all likely to arise; and it is therefore practically unlimited. We do not interfere unless the discretion is abused.\u201d\nMusgrave v. Savings and Loan, 5 N.C. App. 439, 443, 168 S.E.2d 497, 499 (1969). Therefore, the power given the trial court in N.C. Gen. Stat. \u00a7 97-10.2(j) is not unbridled or unlimited. Rather, the trial court is to make a reasoned choice, a judicial value judgment, which is factually supported. We hold that the trial court, in considering a request for disbursement under subsection (j), must enter an order with findings of fact and conclusions of law sufficient to provide for meaningful appellate review. See Worthington v. Bynum, 305 N.C. 478, 290 S.E.2d 599 (1982); Veazey v. Durham, 231 N.C. 354, 57 S.E.2d 377 (1950), and Martin v. Martin, 263 N.C. 86, 138 S.E.2d 801 (1964).\nIn its order distributing the funds equally between plaintiff and Protective, the trial court below made these pertinent findings of fact:\n3. Mr. Allen sustained a crushed vertebrae in the wreck, necessitating three (3) surgical procedures to his back. His treating physician, Dr. Joseph Nicastro of Bowman Gray School of Medicine is of the opinion that a fourth surgical procedure will be necessary, and that a permanent partial impairment rating will likely result.\n4. The Employer and Protective Insurance Company have a subrogation lien against any third party recovery in the sum of at least $40,000.00 through the date of this hearing. The parties anticipate, in light of the necessity for a fourth surgical procedure and the anticipated permanent partial impairment rating, that the subrogation lien will be substantially in excess of $40,000.00.\n5. Prior to the institution of this law suit, the Third Party Tort Feasor and Defendant herein, Stamy Lincoln Rupard, had tendered the policy limits of his liability insurance coverage in the amount of $25,000.00. Both the Employee and Employer are satisfied that the Defendant Rupard does not have sufficient personal assets from which to recover in the event of a Judgment in excess of the liability insurance limits.\n% * * *\n7. The law firm of Michael Lewis, Attorneys at Law, has rendered valuable services on behalf of Mr. Allen in the prosecution of this action, but is seeking no recovery for attorney fees out of the proceeds of the $25,000.00 liability insurance coverage tendered by the insurance carrier for the Defendant Stamy Lincoln Rupard.\n* * * *\n12. That considering the nature and circumstances of the incident, the nature and extent of the Plaintiff\u2019s injury, the fact that Plaintiff is seeking no attorney fee to be paid out of the $25,000.00 proceeds to be paid by Stamy Lincoln Rupard, and other circumstances in the case, the Court finds that it has authority, pursuant to G.S. 97-10.2(j) to determine the amount of recovery to be paid to both the Employee and Employer, and the Court finds that it is fair, equitable, and just that one-half (1/2) of said sum, or $12,500.00 be paid to Steve W. Allen, the Plaintiff-Employee, and that the remaining one-half (1/2) of said sum or $12,500.00 be paid to Pilot Freight Carriers, the Employer and its insurance carrier, Protective Insurance Company.\nThe trial court then concluded:\n[T]hat it has authority, pursuant to the provisions of G.S. 97-10.2(j), when read in conjunction with the other provisions of said statute, to determine the amount to be paid to the Employee and Employer by a Third Party Tort Feasor; that it is fair and equitable and just that the Employee and Employer divided equally the $25,000.00 proceeds to be paid herein by the third party tort feasor ....\nWe find the trial court\u2019s decision to be a reasoned choice which is factually supported. Furthermore, we cannot say that the trial court abused its discretion in determining that it is fair, equitable, and just for the plaintiff and Protective to share equally the proceeds which fall far short of being sufficient to reimburse plaintiff for his pain, suffering, and other losses; or to reimburse Protective for its payment of plaintiff\u2019s extensive medical bills.\nWe hold, therefore, that the trial court\u2019s order was a proper, constitutional exercise of its discretionary authority under N.C. Gen. Stat. \u00a7 97-10.2(j). The order is\nAffirmed.\nJudges Wells and Lewis concur.", "type": "majority", "author": "COZORT, Judge." } ], "attorneys": [ "Michael Lewis for plaintiff appellee.", "Bell, Davis & Pitt, P.A., by Joseph T. Carruthers, for appellant." ], "corrections": "", "head_matter": "STEVE W. ALLEN, Plaintiff v. STAMY LINCOLN RUPARD, Defendant\nNo. 9021SC146\n(Filed 30 October 1990)\n1. Master and Servant \u00a7 89.4 (NCI3d)\u2014 workers\u2019 compensation\u2014 settlement with tortfeasor \u2014 distribution to employee and compensation insurer \u2014 discretion of court\nThe superior court was not required to follow the priority schedule for the Industrial Commission set forth in N.C.G.S. \u00a7 97-10.2(f) when disbursing the proceeds of a settlement with a tortfeasor to an injured employee and the employer\u2019s compensation insurer pursuant to subsection (j). Rather, subsection (j) gave the court discretion to determine how the settlement proceeds should be distributed and did not require that the entire proceeds of a $25,000 settlement be distributed to an insurance carrier which had paid over $40,000 in compensation benefits and medical expenses to and for the injured employee.\nAm Jur 2d, Workmen\u2019s Compensation \u00a7\u00a7 627, 651, 681, 682.\n2. Master and Servant \u00a7 89.4 (NCI3d)\u2014 workers\u2019 compensation\u2014 settlement with tortfeasor \u2014 discretion of court \u2014 due process\u2014 necessity for findings\nN.C.G.S. \u00a7 97-10.2(j) does not give the trial court unbridled or unlimited discretion to decide how to distribute settlement proceeds between an injured employee and the employer\u2019s compensation insurer so as to violate due process. Rather, the trial court, in exercising such discretion, must enter an order with findings of fact and conclusions of law sufficient to provide for meaningful appellate review. Fifth Amendment to the U. S. Constitution; Art. I, \u00a7 19 of the N. C. Constitution.\nAm Jur 2d, Workmen\u2019s Compensation \u00a7\u00a7 553-560.\n3. Master and Servant \u00a7 89.4 (NCI3d) \u2014 workers\u2019 compensation-settlement with tortfeasor \u2014 equal division between employee and compensation insurer\nThe trial court did not abuse its discretion in dividing a $25,000 settlement with a tortfeasor equally between the injured employee and the employer\u2019s compensation insurer where the amount of the settlement was insufficient to reimburse plaintiff for his pain, suffering and other losses and to reimburse the insurer for its payment of over $40,000 in compensation and medical expenses.\nAm Jur 2d, Workmen\u2019s Compensation \u00a7\u00a7 681, 682.\nAPPEAL by Pilot Freight Carriers and Protective Insurance Company from order entered on 29 November 1989 by Judge W. Steven Allen, Sr., in FORSYTH County Superior Court. Heard in the Court of Appeals 18 September 1990.\nMichael Lewis for plaintiff appellee.\nBell, Davis & Pitt, P.A., by Joseph T. Carruthers, for appellant." }, "file_name": "0490-01", "first_page_order": 522, "last_page_order": 529 }