{
  "id": 11867281,
  "name": "RONALD McGEE, EMPLOYEE, Plaintiff v. ESTES EXPRESS LINES, EMPLOYER, and PROGRESSIVE INSURANCE COMPANY, CARRIER, Defendants",
  "name_abbreviation": "McGee v. Estes Express Lines",
  "decision_date": "1997-02-04",
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  "casebody": {
    "judges": [
      "Judges EAGLES and MARTIN, John C., concur."
    ],
    "parties": [
      "RONALD McGEE, EMPLOYEE, Plaintiff v. ESTES EXPRESS LINES, EMPLOYER, and PROGRESSIVE INSURANCE COMPANY, CARRIER, Defendants"
    ],
    "opinions": [
      {
        "text": "GREENE, Judge.\nEstes Express Lines (the employer) and Progressive Insurance Company (carrier) (collectively defendants), appeal from Opinion and Award for the North Carolina Industrial Commission (the Commission) denying the defendants\u2019 request to terminate payment of temporary total disability benefits to Ronald McGee (employee) previously agreed to by the defendants and the employee in a Form 21 Agreement and approved by the Commission on 30 June 1992.\nIt is undisputed that on 3 January 1990 the employee sustained an injury to his right knee arising out of and in the course of his employment with employer. Prior to his injury the employee operated a tax-filing service out of his home as part-time secondary employment. After his injury the employee expanded his tax-filing service and rented an office space outside the home and employed others to work in the business. The employee works up to four to five hours a day in the business but has not received any wages from the business and minimal distribution of profits.\nUpon the request of the defendants, the Commission conducted a hearing to determine whether the employee\u2019s disability was continuing. The defendants argued that the employee was no longer disabled because he was engaged in gainful employment as the owner of a tax preparation business. The Commission concluded that the defendants \u201cdid not meet their burden of proof in establishing that [the employee] is actually earning wages and is gainfully employed\u201d and ordered that the defendants continue to pay temporary total disability benefits to the employee \u201cuntil further order of the Commission, or [the employee] returns to work earning the same or greater wages.\u201d\nThe dispositive issue is whether an employee continues to be disabled, within the meaning of N.C. Gen. Stat. \u00a7 97-2(9), if he actively engages in a business owned by him.\nWhen any of the parties to a Form 21 Agreement \u201cdisagree as to the continuance of any weekly payment under such agreement, either party may make application to the . . . Commission for a hearing.\u201d N.C.G.S. \u00a7 97-83 (1991); see Worker\u2019s Compensation Rules of the Industrial Commission Rule 404. If the disagreement relates to the continued disability of the employee, the Commission must resolve that issue based on the evidence presented and determine if the employee is capable of earning the same wages he had earned before his injury in the same or other employment. See Hilliard v. Apex Cabinet Co., 305 N.C. 593, 595, 290 S.E.2d 682, 683 (1982); N.C.G.S. \u00a7 97-2(9) (1991) (defining disability). It is an employee\u2019s \u201cpost-injury earning capacity\u201d rather than an employee\u2019s actual wages which are relevant in assessing the disability. Saums v. Raleigh Community Hosp., 124 N.C. App. 219, 221, 476 S.E.2d 372, 374 (1996). If the employee has the capacity to earn some wages, but less than he was earning at the time of the injury, he is entitled to partial disability benefits under section 97-30. Gupton v. Builders Transp., 320 N.C. 38, 42, 357 S.E.2d 674, 678 (1987). If the employee\u2019s earning capacity has been \u201ctotally obliterated,\u201d he is entitled to benefits under section 97-29. Id.\nAn employee\u2019s earning capacity must be measured \u201cby the employee\u2019s own ability to compete in the labor market.\u201d Peoples v. Cone Mills Corp., 316 N.C. 426, 437, 342 S.E.2d 798, 805 (1986). In other words, an employee\u2019s earning capacity is based on his ability to command a regular income in the labor market. See Larson\u2019s Workmen\u2019s Compensation Law \u00a7 57.51(e) (1996). Thus employee ownership of a business can support a finding of earning capacity only to th2e extent the employee is actively involved in the personal management of that business and only to the extent that those management skills are marketable in the labor market. Id. (income received from business owned by employee cannot be used to reduce a previously established disability unless the income is the \u201cdirect result of the [employee\u2019s] personal management and endeavor\u201d); Peoples, 316 N.C. at 438, 342 S.E.2d at 806 (emphasizing importance of employee\u2019s ability \u201cto earn wages competitively\u201d).\nIn this case, the Commission denied the defendants\u2019 section 97-83 request to modify the disability payments on the basis that the defendants had not shown that the employee had earned any wages from his business. Because the employee\u2019s continued entitlement to benefits must be based on his post-injury earning capacity, not his post-injury wages, the Commission erred. Accordingly, this case must be remanded to the Commission for reconsideration. On remand the Commission must determine the employee\u2019s earning capacity based on the principles stated in this opinion.\nOn remand the Commission shall receive new evidence, if tendered by either party. We note that because the employee has the benefit of a presumption of total disability arising because of the Form 21 Agreement, Franklin v. Broyhill Furniture Indus., 123 N.C. App. 200, 205, 472 S.E.2d 382, 386 (1996), the burden on remand must rest with the defendants to rebut that presumption. In the event it is determined that the employee has post-injury wages, a presumption shall arise that he has earning capacity consistent with those wages, Tyndall v. Walter Kidde Co., 102 N.C. App. 726, 730, 403 S.E.2d 548, 550, disc. rev. denied, 329 N.C. 505, 407 S.E.2d 553 (1991), which presumption is rebuttable by either party. Id.\nReversed and remanded.\nJudges EAGLES and MARTIN, John C., concur.",
        "type": "majority",
        "author": "GREENE, Judge."
      }
    ],
    "attorneys": [
      "Samuel H. Long, III, for plaintiff-appellee.",
      "Hedrick, Eatman, Gardner & Kincheloe, L.L.P., by Thomas W. Page and Jennifer Ingram Mitchell, for defendant-appellants."
    ],
    "corrections": "",
    "head_matter": "RONALD McGEE, EMPLOYEE, Plaintiff v. ESTES EXPRESS LINES, EMPLOYER, and PROGRESSIVE INSURANCE COMPANY, CARRIER, Defendants\nNo. COA96-401\n(Filed 4 February 1997)\n1. Workers\u2019 Compensation \u00a7 230 (NCI4th)\u2014 earning capacity \u2014 ownership of business \u2014 involvement in management\u2014 marketable skills\nAn employee\u2019s earning capacity is based on his ability to command a regular income in the labor market. Thus employee ownership of a business can support a finding of earning capacity only to the extent the employee is actively involved in the personal management of the business and only to the extent that those management skills are marketable in the labor market.\nAm Jur 2d, Workers\u2019 Compensation \u00a7\u00a7 395-397.\n2. Workers\u2019 Compensation \u00a7 230 (NCI4th)\u2014 temporary total disability \u2014 Form 21 agreement \u2014 denial of modification\u2014 wages earned improper basis\nThe Industrial Commission erred by denying defendant employer\u2019s request to modify disability payments required by a Form 21 agreement on the basis that defendant had not shown that plaintiff employee had earned any wages in a tax preparation business that he owned because plaintiff\u2019s continued entitlement to compensation benefits must be based on his post-injury earning capacity rather than on his post-injury wages.\nAm Jur 2d, Workers\u2019 Compensation \u00a7\u00a7 379, 395, 397.\n3. Workers\u2019 Compensation \u00a7 254 (NCX4th)\u2014 temporary total disability \u2014 Form 21 agreement \u2014 presumption of continuing disability \u2014 burden of rebuttal\nThe employee has the benefit of a presumption of continuing total disability arising because of a Form 21 agreement, and the burden is on the employer to rebut that presumption. If it is determined that the employee has post-injury wages, a presumption arises that he has earning capacity consistent with those wages, which presumption is rebuttable by either party.\nAm Jur 2d, Workers\u2019 Compensation \u00a7\u00a7 397, 431.\nAppeal by defendants from Opinion and Award for the Full Commission entered 27 November 1995. Heard in the Court of Appeals 7 January 1997.\nSamuel H. Long, III, for plaintiff-appellee.\nHedrick, Eatman, Gardner & Kincheloe, L.L.P., by Thomas W. Page and Jennifer Ingram Mitchell, for defendant-appellants."
  },
  "file_name": "0298-01",
  "first_page_order": 336,
  "last_page_order": 339
}