{
  "id": 11655824,
  "name": "UNITED STATES FIDELITY AND GUARANTY COMPANY, Plaintiff v. NANCY O. JOHNSON, EXECUTRIX of the Estate of MELVIN MILLER JOHNSON and TERESA TORGERSON, Defendant AND NANCY O. JOHNSON, Executrix of the Estate of MELVIN MILLER JOHNSON, Plaintiff v. TILLET MARK GREEN and BILL LUCK SAND AND GRAVEL, INC., Defendant",
  "name_abbreviation": "United States Fidelity & Guaranty Co. v. Johnson",
  "decision_date": "1998-02-03",
  "docket_number": "No. COA97-292",
  "first_page": "520",
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  "provenance": {
    "date_added": "2019-08-29",
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  "casebody": {
    "judges": [
      "Judges EAGLES and MARTIN, Mark D., concur."
    ],
    "parties": [
      "UNITED STATES FIDELITY AND GUARANTY COMPANY, Plaintiff v. NANCY O. JOHNSON, EXECUTRIX of the Estate of MELVIN MILLER JOHNSON and TERESA TORGERSON, Defendant AND NANCY O. JOHNSON, Executrix of the Estate of MELVIN MILLER JOHNSON, Plaintiff v. TILLET MARK GREEN and BILL LUCK SAND AND GRAVEL, INC., Defendant"
    ],
    "opinions": [
      {
        "text": "WYNN, Judge.\nWhen an employee receives workers\u2019 compensation from an employer for injuries and also receives a compensatory payment from a third party, to the extent that it provided benefits the employer has a lien on the third party\u2019s payment. However, where the third party payment is the result of a settlement, the legislature has left in the discretion of the superior court the amount of the lien. In the present case, after the decedent employee\u2019s estate reached a settlement, the superior court determined the employer\u2019s lien to be nothing. We affirm this decision, as the trial court could have reasonably concluded that such a result was equitable, because the funds available were insufficient to compensate for the decedent\u2019s death.\nMelvin Miller Johnson, an employee of the Department of Transportation, died in an automobile accident when the personal vehicle that he drove while on State business was struck by a truck owned by Bill Luck Sand and Gravel, Inc., and driven by its employee, Tillet Mark Green. A passenger in Mr. Johnson\u2019s vehicle, his coworker Teresa Torgerson, was injured in the accident.\nThe Department of Transportation agreed to provide compensation under the North Carolina Workers\u2019 Compensation Act to Mr. Johnson\u2019s eligible family. The Industrial Commission approved the agreement, which provided that over a period of several years the Department of Transportation would make payments to Mr. Johnson\u2019s wife and child totaling $148,955.\nMrs. Johnson qualified as executrix of her husband\u2019s estate and sued Mr. Green and the Bill Luck Company to recover wrongful death damages. The insurer of the driver and Bill Luck, United States Fidelity and Guaranty Company, thereafter filed an interpleader action and deposited the limit of its coverage, $497,100, with the Moore County Clerk of Superior Court.\nSome time after the accident, the Bill Luck Company declared bankruptcy. Ultimately, Mrs. Johnson settled with the driver and the Bill Luck Company for $372,825, which represented 75% of the available insurance proceeds. Under another agreement, the passenger in Mr. Johnson\u2019s vehicle, Teresa Torgerson, received the remaining 25% of the available funds.\nAt the time of the settlement, the Department of Transportation had paid $47,045.51 in workers\u2019 compensation. Following the settlement, under the authorization given by N.C. Gen. Stat. \u00a7 97-10.2Q) (1991), Mrs. Johnson moved the superior court to determine the amount that the Department of Transportation should recover on its lien on the $372,825 settlement from the insurance proceeds.\nAfter a hearing, the trial court concluded, inter alia, that \u201cfair compensation for the injuries and damages received by Nancy O. Johnson, Executrix, far exceed all forms of assets available to compensate her including both liability coverage by [United States Fidelity and Guaranty Company] and workers\u2019 compensation benefits\u201d and that \u201cto allow the [Department of Transportation] to recover the workers\u2019 compensation lien for funds paid to or [to] be paid in this particular case would be inequitable under the particular facts and circumstances of this case.\u201d The court ordered that the Department of Transportation would recover nothing on its lien against the settlement funds. The Department of Transportation appeals.\nThe Department of Transportation first argues that the trial court erred by denying any recovery on its lien because N.C. Gen. Stat. \u00a7 97-10.2(j) does not grant to the trial court discretion to eliminate an employer\u2019s lien where the settlement amount exceeds the lien amount. We disagree.\nIn general, an employer has a lien upon any payment made by a third party to compensate for injury or death to the extent that the employer has provided workers\u2019 compensation benefits for the injury. N.C. Gen. Stat. \u00a7 9740.2(f)(1)(c), (h) (1991). However, N.C. Gen. Stat. \u00a7 97-10.2Q) (1991) permits a party to have a superior court judge determine the subrogation amount that an employer is entitled to \u201cin the event that a settlement has been agreed upon by the employee and the third party.\u201d That section further provides that \u201cthe judge shall determine, in his discretion, the amount, if any, of the employer\u2019s lien.\u201d (emphasis added).\nThus, while the Department of Transportation advances several policy arguments that the superior court judge did not have discretion to deny the employer\u2019s lien, the plain language of section 97-10.20) does authorize such discretion. Accordingly, the Department of Transportation\u2019s policy arguments are meritless; and we hold, as the statute plainly states, that the trial court did have discretion to eliminate the lien.\nThe Department of Transportation next argues that N.C. Gen. Stat. \u00a7 97-10.20) is unconstitutional as applied to this case. However, our review of the record reveals that this contention was not raised before the trial court. An \u201cappellate court will not decide a constitutional question which was not raised or considered in the trial court. The record must affirmatively show that the question was raised and passed upon in the trial court.\u201d Midrex Corp. v. Lynch, Sec. of Revenue, 50 N.C. App. 611, 618, 274 S.E.2d 853, 858, appeal dismissed and disc. review denied, 303 N.C. 181, 280 S.E.2d 453 (1981). Because the record does not reflect such a showing, we do not consider this argument.\nThe Department of Transportation also contends that the trial court abused its discretion by totally eliminating the lien where the settlement was in an amount greater than the lien. However, as was discussed supra, under section 97-10.20) the trial court had discretion to determine the amount, if any, of the Department of Transportation\u2019s lien. When a judge makes a ruling committed to his or her discretion, the law requires that a reasoned choice be made.\nIn this case, the trial court found that Mrs. Johnson, as the executrix of her husband\u2019s estate, would be entitled to damages for wrongful death. Mr. Johnson was 45 years old at the time of his death, had an income of over $30,000 in the year proceeding his death, and was survived by his wife and two daughters. Furthermore, the trial court found as fact that the $372,825 in insurance proceeds were the only funds available to compensate for Mr. Johnson\u2019s death. The trial court could have reasonably concluded the funds obtained from the settlement inadequately compensated Mr. Johnson\u2019s family for his death and that equity called for reduction of the lien. Based on these conclusions, a reasoned choice would be to reduce the lien to nothing. Accordingly, we hold that the trial court properly exercised its discretion.\nFinally, the Department of Transportation argues that the trial court\u2019s order is not supported by its findings and conclusions or by applicable law. We disagree. Having reviewed the record, we find ample support for the trial court\u2019s conclusions of fact. Further, as discussed supra, we hold that those conclusions did support the trial court\u2019s exercise of discretion.\nFor the reasons given above, Superior Court Judge Donald R. Huffman\u2019s decision to deny the Department of Transportation any recovery on its lien in this case is,\nAffirmed.\nJudges EAGLES and MARTIN, Mark D., concur.",
        "type": "majority",
        "author": "WYNN, Judge."
      }
    ],
    "attorneys": [
      "Attorney General Michael F. Easley, by Assistant Attorney General D. Sigsbee Miller, for appellant.",
      "West & Smith, L.L.P., by Stanley W West, for appellee."
    ],
    "corrections": "",
    "head_matter": "UNITED STATES FIDELITY AND GUARANTY COMPANY, Plaintiff v. NANCY O. JOHNSON, EXECUTRIX of the Estate of MELVIN MILLER JOHNSON and TERESA TORGERSON, Defendant AND NANCY O. JOHNSON, Executrix of the Estate of MELVIN MILLER JOHNSON, Plaintiff v. TILLET MARK GREEN and BILL LUCK SAND AND GRAVEL, INC., Defendant\nNo. COA97-292\n(Filed 3 February 1998)\n1. Workers\u2019 Compensation \u00a7 85 (NCI4th)\u2014 wrongful death\u2014 employer\u2019s lien \u2014 settlement inadequate \u2014 lien eliminated\u2014 discretion of court\nThe trial court had discretion to eliminate the Department of Transportation\u2019s workers\u2019 compensation lien on settlement proceeds in a wrongful death action arising from the death of a DOT employee in an automobile accident with a third party. Although DOT advances several policy arguments that the superior court judge did not have discretion to deny the employer\u2019s lien, the plain language of N.C.G.S. \u00a7 97-10.2Q) authorizes such discretion.\n2. Appeal and Error \u00a7 447 (NCI4th)\u2014 constitutional issue\u2014 raised at trial \u2014 not considered\nThe Court of Appeals did not consider the Department of Transportation\u2019s argument that N.C.G.S. \u00a7 97-10.2Q) was unconstitutional as applied in this case where the record does not affirmatively show that the question was raised and passed upon in the trial court.\n3. Workers\u2019 Compensation \u00a7 85 (NCI4th)\u2014 wrongful death\u2014 employer\u2019s lien \u2014 settlement inadequate \u2014 lien eliminated\u2014 discretion of court \u2014 properly exercised\nThe trial court properly exercised its discretion pursuant to N.C.G.S. \u00a7 97-10.2Q) in denying an employer\u2019s lien to the Department of Transportation for workers\u2019 compensation benefits paid to the estate of a DOT employee killed in a car accident where the court\u2019s order was supported by its findings, conclusions, and applicable law. When a judge makes a ruling committed to the court\u2019s discretion, the law requires a reasoned choice; the reasoned choice based on the court\u2019s conclusions here would be to reduce the lien to nothing.\nAppeal by North Carolina Department of Transportation from order entered 20 November 1996 by Judge Donald R. Huffman in Moore County Superior Court. Heard in the Court of Appeals 28 October 1997.\nAttorney General Michael F. Easley, by Assistant Attorney General D. Sigsbee Miller, for appellant.\nWest & Smith, L.L.P., by Stanley W West, for appellee."
  },
  "file_name": "0520-01",
  "first_page_order": 556,
  "last_page_order": 560
}